Silence Therapeutics plc 
Annual report and financial statements 2014
Silence Therapeutics plc Annual report and financial statements 2014 Strategic report
01 Introduction
02 Chairman’s statement
03 Silence Therapeutics at a glance
04 Our business
06  Chief Executive’s review
10  Financial review
11 Risk factors
Corporate governance
12  Board of Directors
14 Corporate governance report
19 Directors’ remuneration report
21  Directors’ report
23 Statement of Directors’ responsibilities
Financial statements
24  Independent auditor’s report
26  Consolidated income statement
26  Consolidated statement of 
comprehensive income
27  Consolidated balance sheet
28  Consolidated statement of changes 
in equity
29  Company balance sheet
30  Company statement of changes 
in equity
31  Cash flow statements
32  Notes to the financial statements
IBC Company information and advisers
Contents
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silence-therapeutics.com Silence Therapeutics plc Annual report and financial statements 2014 01
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Investment case
The discovery of RNA interference (RNAi) is one of the most important medical breakthroughs 
in recent years. Silence Therapeutics has developed its own RNAi technology, along with 
proprietary delivery systems. Combined, these enable the development of therapeutics for 
diseases with high unmet medical need.
Silence is one of very few listed 
companies with the ability to modulate 
gene expression both up and down, 
in vivo.
The RNA therapeutics field has high 
barriers to entry, with much investment 
and know‑how required to develop RNA 
drugs effectively. Our technology is 
already in the clinic and has been used 
in Phase 2 trials. It is also protected by 
a robust IP estate.
Our proprietary gene silencing technology 
can be designed to regulate expression 
of potentially any gene, and we have our 
own delivery systems targeting a variety 
of organs and cell types. Effective delivery 
capability is key for the next stage in 
genetic medicine, targeting disease right 
at the cause.
Silence has an expanding early stage 
pipeline and an embedded algorithm 
for cost effective pre‑clinical drug 
development with clear go/no‑go 
milestones. 
We take pride in our research 
collaborations with world leading research 
institutions such as Oxford University, 
Cambridge University and Imperial College 
London, to develop the most promising 
drug candidates.
Silence Therapeutics is a leader in the 
development and delivery of novel 
RNA therapeutics. 
Our proprietary RNA technology harnesses  
the body’s natural mechanisms to create 
therapeutic effects within its own cells.
This technology can selectively silence or 
mimic virtually any gene in the genome, 
modulating gene expression up as well as 
down, in vivo, allowing the development 
of therapeutics for diseases with high  
unmet clinical need.
Strategic report
Introduction Silence Therapeutics plc Annual report and financial statements 2014 02
www.silence-therapeutics.com
We are investing in the development of our staff, 
investing in supporting and prosecuting our IP portfolio 
and investing in our product research and development.
Overview
We have made great strides in 
demonstrating the strength of our IP 
and our R&D capability during the year. 
We now have the prospect of applying 
our proprietary delivery systems to 
both short interfering RNA (siRNA) for 
gene knock down and messenger RNA 
(mRNA) for gene product enhancement. 
We recently also reported very 
encouraging early data from the trial 
of Atu027 in patients with late stage 
pancreatic cancer. 
This progress and the possibilities 
it opens up have enabled us to raise 
sufficient capital from high quality 
investors to support the long term 
development of our portfolio. 
These exciting developments lay the 
foundations for Silence to be a major 
player in the field of genetic medicine. 
The key focus now is to continue to build 
quality into our Company and we have 
the resources to do this for the medium 
and long term. We are investing in the 
development of our staff, investing 
in supporting and prosecuting our IP 
portfolio and investing in our product 
research and development. 
This will ensure the continuing success 
of the Company and the translation of 
that into shareholder value. I look forward 
to being a part of this enterprise as we 
make this transition from a technology 
platform company to a therapeutic 
focused company.
In January 2015, Simon Sturge stepped 
down as Chairman due to the increasing 
demands on his time from his role with 
Merck Serono in Switzerland. I am 
pleased he has been able to remain on 
the Board as Non‑Executive Director and 
Chair of the Remuneration Committee; 
we have essentially swapped roles. 
I am also pleased to welcome Dr Lars 
Karlsson to the Board as Executive 
Director and Head of Research and 
Development who joined us in January 
and brings significant relevant industry 
experience from his career with Johnson 
& Johnson and more recently with 
Regulus Therapeutics and Novo Nordisk. 
As the new Chairman I am pleased to 
have been able to spend more time with 
the CEO and his team to assist with the 
next phase in the continuing progress 
of the Company’s management and 
product development.
Dr Alastair Riddell 
Chairman
27 April 2015
“We have made 
great strides in 
demonstrating the 
strength of our IP and 
our R&D capability 
during the year.”
Strategic report
Chairman’s statement Silence Therapeutics plc Annual report and financial statements 2014 03
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
The prospects for Silence have never been greater than today. 
RNA therapeutics has made significant technology strides and is now 
able to attract enough capital to transition its technology to the clinic.
Strategic report
Silence Therapeutics at a glance
Highlights
•	 Established new mRNA capability 
with mRNA delivery producing 
therapeutic levels of protein in 
pre‑clinical in vivo animal models
•	 Delivery progress with DACC delivery 
system achieving knockdown of 
target genes in the lung vascular 
endothelium of non‑human 
primates (NHPs)
•	 Completed Phase 2a safety trial 
using Atu027 in combination with 
gemcitabine for pancreatic cancer, 
follow up data due in 2016
•	 Fundraising in April 2015 to raise 
£40m gross proceeds to further 
develop RNA platform
•	 Early interim analysis of Phase 2a 
trial of Atu027 in pancreatic cancer 
shows positive signals
•	 European Patent Office upheld key 
RNAi trigger modification patent 
against challenges by four parties 
During the year Post year end events
•	 Collaborations with world leading 
research institutions to develop most 
promising drug candidates
•	 Internal algorithm for cost effective 
pre‑clinical drug development with 
clear go/no‑go milestones
•	 Continued to strengthen team with 
focus on industry experience
•	 Drug candidate Atu027 finished 
recruitment for Phase 2a clinical 
trial in metastatic pancreatic cancer 
during 2014, draft interim report 
shows early positive signals
•	 Safety and tolerability of AtuRNAi
®
 
well established with over 400 
patients dosed so far
•	 Phase 1b study of Atu027 in head 
and neck cancer planned for 2015
•	 Deliver both short interfering RNA 
(siRNA) and messenger RNA (mRNA)
•	 Strong potential with other payloads 
including microRNA and gene editing 
tools such as CRISPR/CAS9
•	 New mRNA technology replaces 
gene expression where it is missing
•	 mRNA delivery produces therapeutic 
levels of protein in pre‑clinical in vivo 
animal models
•	 Potential to be used in genetic 
deficiencies, vaccines and 
infectious diseases
•	 Patented RNA interference (RNAi) 
platform, known as AtuRNAi
®
•	 Proprietary modifications to improve 
the robustness of RNA sequences
About us
•	 £21.85m cash, cash equivalents 
and other financial assets at 
31 December 2014, fundraising to 
raise £40m (before expenses) during 
April 2015
Gene silencing
Gene replacement 
Delivery systems 
Clinical stage 
Research and development
Cash resources
•	 Equity placing in April 2014 raised 
gross proceeds of £11.4m 
•	 Appointed Lars Karlsson as Head 
of Research and Development
•	 Loss for the year of £11.1m, 
reflecting increased investment 
in R&D Silence Therapeutics plc Annual report and financial statements 2014 04
www.silence-therapeutics.com
Our genetic toolkit
Strategic report
Our business
Payload Delivery system Translation 
Development 
programme
+ + =
Targeted tissue:  
Vascular 
endothelium
Stage:  
Atu027 1b/2a
AtuPLEX
AtuPLEX2
DACC
HepaPLEX
MacPLEX
Targeted tissue:  
Vascular 
endothelium
Stage:  
Pre‑clinical, PoC 
in mice
Targeted tissue:  
Pulmonary 
vasculature
Stage:  
Pre‑clinical, PoC 
in NHP
Targeted tissue:  
Liver
Stage:  
Pre‑clinical, PoC 
in NHP
Targeted tissue:  
Macrophages
Stage:  
Pre‑clinical, PoC 
in mice
siRNA
(short interfering)
miRNA
(micro)
mRNA
(messenger)
Gppp AAAA
Gppp AAAA
Gene editing payloads
(CRIPSR/Cas9, ZFN)
Silence Therapeutics has a genetic toolkit with our own therapeutic payloads to modulate 
gene expression up as well as down in pre‑clinical in vivo models, and unique delivery systems 
for a variety of organs and cell types. With an established international network of leading 
academic collaborators, we continue to explore potential indications for our therapeutics and 
other genetic payloads that our delivery technology can be used with, including microRNA and 
CRISPR/Cas9. Silence Therapeutics plc Annual report and financial statements 2014 05
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Our technology
We have developed proprietary 
modifications to improve the robustness 
of RNA sequences, together with 
advanced liposomal chemistries to 
enhance the delivery of therapeutic 
RNA molecules. Our technology can 
selectively silence or replace the 
expression of virtually any gene in the 
genome, modulating expression up as 
well as down in a variety of organs and 
cell types, in vivo.
This allows the development of 
therapeutics for diseases with high 
unmet clinical need. Silence’s technology 
is currently in the clinic in a Phase 2a 
pancreatic cancer trial.
RNA interference
RNA is one of the two types of nucleic 
acids found in all cells – the other 
being DNA. RNA is the messenger that 
takes a copy of the genetic information 
stored in DNA within a cell’s nucleus 
and translates it into instructions for the 
manufacture of proteins in that cell.
RNAi is a method of regulating or 
‘silencing’ gene expression. This 
technology can be engineered to 
selectively silence potentially any 
gene in the genome, preventing 
the overexpression of that gene 
and reducing the production of 
disease‑causing proteins.
Our patented RNAi platform is known 
as AtuRNAi
®
. It is based on specific, 
proprietary siRNA modules, stabilisation 
technology and exclusive tailored 
features. siRNA requires delivery systems 
in order to enable it to enter into target 
cells within the body. Silence has its own 
delivery systems focused on a variety 
of organs.
Messenger RNA
Messenger RNA (mRNA) delivery is an 
exciting new method of introducing 
messenger RNA activity into the cell and 
stimulating it to produce a target protein 
in conditions where it is low or missing, 
including genetic deficiencies. 
This way improved gene expression 
is achieved without having to make 
permanent changes to the genome, thus 
avoiding safety concerns. It has potential 
for use in genetic deficiencies, vaccines 
and infectious diseases.
We have already demonstrated our ability 
to deliver functional mRNA in vivo and 
are actively exploring new opportunities 
in this space.
RNA interference pathway Messenger RNA pathway
Our genetic toolkit Silence Therapeutics plc Annual report and financial statements 2014 06
www.silence-therapeutics.com
We are in a unique position to capitalise on what is fast 
becoming a tidal wave of interest and enthusiasm for 
genetic medicine.
2014 was a year of significant progress 
for Silence Therapeutics, achieving 
important technological advances in new 
capabilities and in the development of 
existing technology. As well as the ability 
to switch genes off using our modified 
siRNA and delivery systems, we added 
the ability to switch genes on using 
messenger RNA (mRNA). We were also 
successful in translating the efficacy of 
our DACC lung delivery system from 
rodents to non‑human primates (NHPs). 
We now have a versatile modular genetic 
toolkit that combines unique delivery 
systems, targeting a variety of organs, 
with different RNA payloads, enabling 
efficient gene expression modulation up 
as well as down. 
Our well‑established and embedded 
algorithm for high throughput pre‑clinical 
drug development has allowed us to take 
advantage of the highly specific nature 
of our technology, with the synthesis 
of a therapeutic RNA molecule and 
formulation into the appropriate delivery 
system being fast and affordable. This 
has enabled our ‘multiple shots at goal’ 
approach, which incorporates clear 
go/no‑go milestones prior to clinical 
development. 
Following the year end, we announced 
highly encouraging data from our 
Phase 2a pancreatic cancer trial and also 
won a European Patent Office appeal 
on our AtuRNAi
®
 trigger modifications. 
These combined successes have since 
led to a material capital raise and we are 
in a unique position to capitalise on what 
is fast becoming a tidal wave of interest 
and enthusiasm for genetic medicine.
A key objective was achieved in April 
2014 when we confirmed successful 
target gene knockdown in NHPs using 
our lung‑targeted delivery system, 
DACC, to deliver AtuRNAi
®
 siRNA 
molecules. These results demonstrate 
that we have crossed the translation 
gap between rodents and NHPs with 
the DACC system, achieving sustained 
knockdown for three weeks after a 
single dose. 
The technology translation of DACC to 
NHPs provides further validation of our 
delivery platform, adding to the existing 
translation evidence on AtuPLEX
®
, 
which targets the systemic vascular 
endothelium and is currently in the clinic. 
Broadening the number of organs and 
cell types which we can address remains 
a key focus for us and we are actively 
advancing earlier stage systems to the 
NHP stage.
During the year, we made exciting 
progress in delivering mRNA to induce 
protein generation, demonstrating that 
therapeutically relevant levels of protein 
are generated from the delivered mRNA 
cargo in vivo. We also established 
that our proprietary liposomal delivery 
formulations are capable of carrying 
a RNA payload far larger and more 
structurally complex than previously 
thought. Liposomal delivery systems 
are well suited to mRNA in comparison 
to other delivery technologies which 
are limited to smaller payloads. We 
have been able to rapidly optimise our 
lipoplexes for mRNA delivery and our 
expertise and know‑how in delivering 
RNAi triggering molecules has been vital 
in enabling us to make this progress. 
This technology breakthrough will greatly 
increase the range of indications which 
Silence can address. 
Strategic report
Chief Executive’s review
“2014 was a year of 
significant progress for 
Silence Therapeutics, 
achieving important 
technological 
advances in new 
capabilities and in 
the development of 
existing technology.” Silence Therapeutics plc Annual report and financial statements 2014 07
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
With this ability to modulate gene 
expression both up and down in 
pre‑clinical animal models, we aim to 
fundamentally change the timelines, 
costs and risks of a traditional 
biotechnology business model. Our 
partnerships with some of the world’s 
leading academic institutions mean 
we are well positioned to advance the 
field of cutting edge therapeutics. We 
also continue to explore the potential of 
microRNA delivery and therapeutics.
In July 2014, we completed recruitment 
for the Phase 2a pancreatic cancer 
study for Atu027 in combination with 
the standard of care, gemcitabine. 
Atu027 is our leading siRNA based 
drug candidate. It uses our proprietary 
AtuPLEX
®
 technology to broadly deliver 
PKN3 targeting AtuRNAi
®
 molecules to 
the vascular endothelium. The primary 
objective of this trial was to assess 
safety and pharmacokinetics.
Post the year end, a preliminary 
analysis of this study indicated that 
the subjects who were exposed to a 
33% higher total dose of Atu027 had 
a longer duration of Progression Free 
Survival (median of 5.33 months) than 
patients on the lower exposure regimen 
(median of 1.81 months). This suggests 
a dose‑dependent beneficial effect 
of Atu027.
Even allowing for the small number of 
patients in the trial, these results show a 
clear positive early signal which requires 
further investigation. Atu027 has the 
potential to become a new therapeutic 
modality in oncology. This is an excellent 
outcome for Atu027 and the validation of 
our RNA therapeutics platform. In light 
of this data, we will be reviewing the 
protocol for the planned Phase 1b head 
and neck cancer study. 
Importantly, the safety data from this trial 
is consistent with the excellent tolerability 
observed in the more than 400 patients 
that have now been treated with our 
proprietary modified siRNA (AtuRNAi
®
). 
The study also provided further evidence 
of the favourable safety profile of 
Silence’s delivery platforms. 
Our pre‑clinical pipeline continues to 
develop. Encouraging results have 
been obtained in pulmonary arterial 
hypertension models, where our drug 
candidate was compared to the gold 
standard treatment. We are working on 
several further earlier stage projects and 
currently have collaborations in place 
with world leading academic institutions, 
including the University of Oxford, the 
University of Cambridge and Imperial 
College London.
Our partnerships with some of the world’s leading academic  
institutions mean we are well positioned to advance the field  
of cutting edge therapeutics. 
Our pipeline 
Atu027
Pancreatic cancer 
Atu027
Head and neck cancer 
Atu111
Lung indications
Pulmonary hypertension
PF-655 (Quark and Pﬁzer)
Diabetic macular edema
Phase 3 triggers 
c. £4m milestone
Phase 2b pending 
DME results
Phase 2 completed, favourable 
results, Quark reviewing
PF-655 (Quark and Pﬁzer)
Wet age-related macular degeneration
QPI 1002 (Quark and Novartis)
Kidney transplant (DGF)
Phase 1
Licencees of our siRNA trigger (AtuRNAi)
Phase 2
Phase 2
Phase 2
Phase 2
Phase 3 Pre-clinical Research
>
Find out more online at
silence‑therapeutics.com/pipeline Silence Therapeutics plc Annual report and financial statements 2014 08
www.silence-therapeutics.com
Global collaborative network
What do academic institutions get?
•	 Access to validated genetic toolkit
•	 Publication rights
•	 Impact pathways
What does Silence get?
•	 Rapid access to animal models of 
disease and KOL expertise
•	 Network of potential investigations 
for future clinical trials
•	 IP and therapeutic rights
Industry 
Partners
1 2 3 4 5 6 7 8 9 10 12 11 13 14
Strategic report
Chief Executive’s review continued
Our newest delivery formulation, 
MacPLEX, is making promising progress 
and has shown effective and cell type 
specific targeting of liver macrophages. 
Macrophages are key immune cells and 
MacPLEX has the potential to be an 
enabling platform to tackle new disease 
areas. Plans for Atu111, targeting acute 
lung injury, continue to be reviewed. 
Another significant post year end 
development was the successful 
outcome of a European Patent Office 
hearing on our AtuRNAi
®
 trigger 
modifications. 
The Board of Appeal upheld our key 
RNAi trigger modification patent 
against challenges by four parties 
including Alnylam Pharmaceuticals 
Inc, its subsidiary Sirna Therapeutics 
Inc, Alcon Laboratories Inc, and an 
independent attorney.
This was a very important victory for 
Silence. It strengthens our already broad 
IP portfolio covering both RNAi triggers 
and delivery. We will continue to protect 
our position robustly whilst always ready 
to engage in licensing discussions. 
We are continuing discussions with the 
company which approached Silence for 
a licence for its AtuRNAi
®
 modified siRNA 
trigger. We also await news of licensing 
developments at Quark Pharmaceuticals, 
following the favourable Phase 2b results 
it announced for delayed kidney graft 
function last year.  Silence Therapeutics plc Annual report and financial statements 2014 09
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
The prospects for Silence have 
never been greater than today. 
RNA therapeutics has made significant 
technology strides and as such, is 
now able to attract enough capital to 
transition its technology to the clinic. 
As a global leader in the field, Silence is a 
major beneficiary of this trend. Following 
our most recent fundraising, we will be 
investing in our delivery technologies and 
capabilities, expanding our pre‑clinical 
and clinical pipelines and will also 
explore the potential use of our mRNA 
delivery technology for gene editing 
applications such as CRISPR/Cas9. 
Drug development is entering the age of 
genetic medicine and through our leading 
technologies and collaborations, Silence 
is giving the UK and Europe a central role 
in this ground breaking area. 
We look forward to the future with 
great confidence.
Ali Mortazavi
Chief Executive
27 April 2015
New technology: mRNA replacement
125
siRNA [%ID/g tissue]
Tumor
Heart
Liver
Kidney
Blood
Lung
Spleen
Brain
Sk. Muscle
Pancreas
Prostate
100
75
50
25
0
1,000,000
100,000
10,000
1,000
100
10
1
hEPO [pg/mL]
MISSING
12h 24h 6h sucrose
80
siRNA [%ID/g tissue]
Tumor
Heart
Liver
Kidney
Blood
Lung
Spleen
Brain
Sk. Muscle
Pancreas
Prostate
60
40
20
0
1,000,000
100,000
10,000
1,000
100
10
1
hEPO [pg/mL]
MISSING
12h 24h 6h sucrose
DACC-targeted mRNA delivery  
to lung vasculature in rodents
Delivery Efficacy
HepaPLEX-targeted mRNA delivery  
to liver in rodents
DNA mRNA
Missing
Protein
X Silence Therapeutics plc Annual report and financial statements 2014 10
www.silence-therapeutics.com
Strategic report
Financial review
Research and development expenses during the 
year increased to £8.9m (2013: £5.6m). The increase 
reflects the rising spend on our clinical and pre‑clinical 
programmes. 
During 2014 Silence improved its 
cash position through the £10.8m net 
proceeds of its share placing in April 
2014. The funds raised have allowed 
the Company to expand development 
of its platform technology, in particular 
with strong progress in delivery of 
messenger RNA. 
Revenue
Revenue generated during the year 
reduced by £102k to £15k (2013: £117k). 
Research and 
development expenditure
Research and development expenses 
during the year increased to £8.9m 
(2013: £5.6m). The increase reflects 
the rising spend on our clinical and 
pre‑clinical programmes. 
Administrative expenses 
Administrative expenses during the 
year decreased slightly to £3.3m 
(2013: £3.5m), in part due to a decrease 
in the charge for share‑based payments.
Financial income
Bank interest was higher at £139k 
(2013: £70k) mainly due to higher 
average cash balances during the year.
Taxation
During the year we received a research 
and development tax credit of £0.9m 
(2013: nil) in the UK, in respect of R&D 
expenditure in 2013, whose cash value 
is reflected in the results for 2014. 
No deferred or current tax asset is 
recognised at present in respect of 2014 
R&D tax credits, pending establishing a 
record of successful claims. 
Liquidity, cash, cash equivalents 
and money market investments 
The Group’s cash, cash equivalents 
and money market investments at year 
end totalled £21.9m, which includes 
the £5.0m deposit at Investec Bank plc 
(included in the balance sheet within 
‘other financial assets’), which matured 
on 31 March 2015. At the end of 2013, 
Silence had cash, cash equivalents and 
money market investments of £20.9m. 
A total of £10.8m net was raised during 
2014 through the placing and exercise 
of options. 
In addition, in April 2015 we announced 
a fundraising to raise £40m (before 
expenses).
The net cash outflow from operating 
activities in 2014 was £9.5m 
(2013: £6.8m) against an operating 
loss of £12.0m (2013: £9.0m). 
Other balance sheet items
Trade and other receivables at year end 
were £375k (2013: £390k) and trade and 
other payables were £2.0m at year end 
(2013: £1.7m). The increase in payables 
reflects the rise in research spending at 
year end. 
Goodwill at year end was £7.1m 
(2013: £7.5m). The movement in 
goodwill during the year related to 
foreign exchange.
Timothy Freeborn
Finance Director
27 April 2015 Silence Therapeutics plc Annual report and financial statements 2014 11
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
The Group’s principal activity 
is biotechnology research and 
development. As with any business 
in this sector, there are risks and 
uncertainties relevant to the Group’s 
business. The Board has adopted a 
risk management strategy designed 
to identify, assess and manage the 
significant risks that it faces. While the 
Board aims to identify and manage such 
risks, no risk management strategy can 
provide absolute assurance against loss.
The management and mitigation of 
risks is a key focus for the Board. The 
Board reviews risks at its regular Board 
meetings, including but not limited to a 
financial update, corporate development 
update and update on operations to 
oversee the management and mitigation 
of the principal risks faced by the Group, 
as set out above. The operational update 
includes a review of both pre‑clinical and 
clinical activities.
The Board periodically reviews the 
significant risks facing the business; this 
review includes identifying operational 
risks, compliance risks, financial risks 
and risks to the achievement of goals 
and objectives. Set out above are the 
key risk factors associated with the 
business that have been identified 
through the Group’s approach to risk 
management. Some of these risk factors 
are specific to the Group, and others are 
more generally applicable to the biotech 
industry in which the Group operates. 
The Group considers that these risk 
factors apply equally and therefore all 
should be carefully considered before 
any investment is made in Silence.
Financial and non-financial key 
performance indicators (KPIs)
The Directors consider cash and 
research and development spend to be 
the Group’s financial KPIs at the current 
stage of the Company’s development. 
These are detailed in the financial review. 
The Directors consider that the most 
important non‑financial KPIs relate 
to the validation of our technologies, 
the number of drugs in development 
by stage of development and the 
number of research collaborations, 
all of which are discussed in the 
Chief Executive’s review.
This report was approved by the Board 
of Directors and signed on its behalf by:
Ali Mortazavi
Chief Executive
27 April 2015
Strategic report
Risk factors
The Board has adopted a risk management strategy designed to identify,  
assess and manage the risks that it faces. 
Principal risks: Action taken to manage these risks:
Economic and 
financial risk
•	 very high costs of product development, 
where products have lead times to market 
of many years;
•	 lack of substantial recurrent revenue stream;
•	 small portfolio of products; and
•	 subject to foreign currency 
exchange fluctuations.
•	 accounts are reviewed on a monthly basis;
•	 cash position reviewed regularly vs. the budget (budget approved 
by Board);
•	 all payments handled within framework of authorisation limits; and
•	 sizeable deposits held in euros and sterling.
Clinical and 
regulatory risk
•	 drug candidates may not be successful due 
to an inability to demonstrate in a timely 
manner the necessary safety and efficacy in 
a clinical setting to satisfaction of regulatory 
bodies (FDA, EMA); and
•	 reliance on third parties to conduct 
clinical trials.
•	 use of external third party regulatory experts; 
•	 use of the Scientific Advisory Board; 
•	 no materials released unless approved by Qualified Person at the 
suppliers; and
•	 the Company has taken out insurance against risks to patients. 
Competition 
risk and 
intellectual 
property risk
•	 intellectual property may expire before 
products are successful commercially; and
•	 increased interest and with that increased 
competition in the RNA technology sector.
•	 staff dedicated to monitoring market developments and providing 
competitor/peer analysis; and
•	 use of experienced IP advisers. Silence Therapeutics plc Annual report and financial statements 2014 12
www.silence-therapeutics.com
Annie Cheng – Chief Operating Officer
Annie Cheng served as Chief Operating Officer during the year, resigning from her role on 2 September 2014. 
Corporate governance
Board of Directors
Ali Mortazavi
Chief Executive
Ali joined Silence in 2012, leading its refinancing, and refocused the business. He has 
extensive expertise in UK small companies, particularly in biotechnology investment 
and ventures. Ali has over 17 years’ experience in finance having co‑founded 
Evolution Securities in 2001, heading up the Group’s principal trading division. 
Timothy Freeborn
Finance Director and Company Secretary
Timothy also joined Silence in 2012, bringing over 20 years’ experience in finance. 
After qualifying as a chartered accountant and specialising in corporate tax, he spent 
twelve years as a financial journalist on a national newspaper and eight years as a 
stockbroking analyst, covering electronics, chemicals and alternative energy. 
Dr Lars Karlsson
Head of Research and Development
Lars joined Silence in January 2015. He has over 20 years’ experience in biotech and 
pharmaceutical research and development. Previously VP for Auto‑Immune Disease 
Pharmacology at Novo Nordisk, Lars brings significant RNA sector knowledge, having 
been VP of Immunology and Fibrosis at US peer, Regulus Therapeutics. Prior to that, 
he spent 17 years at Johnson & Johnson in California.
Dr Michael Khan
Executive Director
With a doctorate in Developmental Neurobiology from University College London, 
Michael has over 30 years’ clinical experience in the NHS, including 17 as a 
consultant in General Medicine and Endocrinology. He is director of the largest 
screening service for hereditary disorders of lipid metabolism in England and was 
Head of Molecular Medicine and Associate Professor of Medicine at the University of 
Warwick. Michael is also an adviser to the European Commission and the National 
Institute of Clinical Excellence (NICE) in the UK. Silence Therapeutics plc Annual report and financial statements 2014 13
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Dr Alastair Riddell
Non‑Executive Chairman
Alastair has 32 years’ experience in the biopharmaceutical sector including directing 
clinical trials for Celltech and Centocor, international sales, marketing and product 
launches for Amersham International (now GE Healthcare) and 15 years as CEO 
and Chairman of several UK biotechs. As CEO of Pharmagene, he completed a 
successful flotation on the UK main list and as CEO of Paradigm Therapeutics 
executed a trade sale to Takeda. He is currently Chairman of a Cambridge University 
spin out, Definigen, and previously Chairman of Surface Therapeutics and Procure 
Therapeutics. He began his professional career as a physician.
Simon Sturge
Non‑Executive Director
Simon has over 32 years’ experience in pharma and biotech, and is currently head of 
biosimilars at Merck KGaA. He previously spent nine years at Celltech, latterly as a 
Group Board Director. He was previously CEO of Vernalis plc. 
Dr Stephen Parker
Non‑Executive Director
Stephen has extensive board level expertise, and is currently a Director of 
sp2 Consulting Limited. Previously a partner at Celtic Pharma, he was also Chief 
Financial Officer of Oxford GlycoSciences. He brings sector corporate finance 
experience having been an investment banker focusing on pharma and biotechnology 
with Barings, Warburg and Apax Partners. Silence Therapeutics plc Annual report and financial statements 2014 14
www.silence-therapeutics.com
Corporate governance
Corporate governance report
As Chairman, I would like to state my full commitment 
to maintaining high standards of corporate governance 
and to being transparent about our arrangements and 
intentions for future improvement.
Dear Shareholder, 
Principles of corporate governance
As a Board we recognise that applying 
sound governance principles in running 
the Company is essential to provide a 
solid platform for growth and to maintain 
the trust of our stakeholders. Without this 
the Company would be unable to deliver 
its objectives and strategy for developing 
the next generation of RNA therapeutics. 
The Company has given its commitment 
to consideration of the UK Corporate 
Governance Code (the UK Code) as 
a basis for guiding its governance 
structures. However, it is recognised 
that some aspects of the UK Code are 
not relevant for AIM companies such as 
Silence. We have decided, therefore, 
to also use the Quoted Companies 
Alliance Corporate Governance Code 
(the QCA Code) against which to 
measure our progress as the QCA Code 
is more applicable for small and medium 
sized companies. 
The Board
As Chairman, I would like to state my 
full commitment to maintaining high 
standards of corporate governance 
and to being transparent about our 
arrangements and intentions for 
future improvement. 
Dr Alastair Riddell 
Chairman
27 April 2015
“As a Board we 
recognise that 
applying sound 
governance 
principles in running 
the Company is 
essential to provide 
a solid platform 
for growth and to 
maintain the trust of 
our stakeholders.” Silence Therapeutics plc Annual report and financial statements 2014 15
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Operation of the Board and 
its Committees
The role of the Board
The key tasks of the Board are:
•	 setting the Company’s values 
and standards;
•	 approval of long‑term objectives 
and strategy;
•	 approval of revenue and capital 
budgets and plans;
•	 oversight of operations ensuring 
adequate systems of internal 
controls and risk management are 
in place, ensuring maintenance 
of accounting and other records 
and compliance with statutory and 
regulatory obligations;
•	 review of performance in light of 
strategy and budgets ensuring 
any necessary corrective actions 
are taken;
•	 approval of the annual report and 
financial statements, material 
contracts and major projects;
•	 changes to structure, size and 
composition of the Board;
•	 determining remuneration policy 
for the Directors and approval 
of the remuneration of the 
Non‑Executive Directors; and
•	 approval of communications with 
shareholders and the market.
Composition of the Board
The Board consists of seven Directors: 
four Executive Directors and three 
Non‑Executive Directors including the 
Chairman. The Board’s composition 
is geared towards its current stage of 
development and priorities. The skill 
set of the Board includes extensive 
knowledge of the pharmaceutical and 
biotechnology industries, financial 
services and corporate finance, and 
experienced researchers and clinicians. 
Details of each of the Directors’ 
experience and background are given in 
their biographies on pages 12 and 13.
Board meetings
Below is a table showing the number 
of different meetings which took place 
during 2014. The Board will continue to 
meet on a regular basis in order to review 
progress and agree strategy:
 Number of 
Type of meeting meetings in 2014
Board meeting 11
Audit Committee 4
Remuneration Committee 2
Nomination Committee 2
Appointments to the Board 
and re‑election
The Board has delegated the tasks of 
reviewing Board composition, searching 
for appropriate candidates and making 
recommendations to the Board on 
candidates to be appointed as Directors 
to the Nomination Committee. Further 
details on the role of the Nomination 
Committee may be found on page 18. 
With regard to re‑election of Directors, 
the Company is governed by its Articles 
of Association (Articles). Under the 
Articles, the Board has the power to 
appoint a Director during the year 
but any person so appointed must 
stand for election at the next Annual 
General Meeting. Any Director who 
has been a Director at each preceding 
two Annual General Meetings and has 
not been re‑appointed since, must 
retire from office at the next Annual 
General Meeting. The Director is then 
eligible to stand for re‑appointment by 
the shareholders. Lars Karlsson will 
stand for election at the 2015 Annual 
General Meeting having been appointed 
a Director since the last Annual 
General Meeting. 
The Board and its committees provide an effective management framework.
Audit Committee Remuneration Committee Nomination Committee
Board
Stephen Parker (Chairman)
Alastair Riddell
Simon Sturge
Simon Sturge (Chairman)
Stephen Parker 
Alastair Riddell
Alastair Riddell (Chairman)
Stephen Parker
Simon Sturge  Silence Therapeutics plc Annual report and financial statements 2014 16
www.silence-therapeutics.com
Operation of the Board and its Committees continued
Development, information and support
The Directors are encouraged to attend training and continuing professional development courses as required. Updates are given 
to the Board on developments in governance and regulations as appropriate. For example, a briefing on governance standards 
and key policies appropriate for an AIM company was given to the Board during the year. The Finance Director, Timothy Freeborn, 
is also the Company Secretary and supports the Chairman in ensuring that the Board receives the information and support they 
need in order to carry out their roles. 
Conflicts of interest
Under the Articles of Association the Directors may authorise any actual or potential conflict of interest a Director may have and 
may impose any conditions on the Director that are felt to be appropriate. Directors are not able to vote in respect of any contract, 
arrangement or transaction in which they have a material interest and they are not counted in the quorum. A process has been 
developed to identify any of the Directors’ potential or actual conflicts of interest. This includes declaring any new conflicts before 
the start of each Board meeting.
Performance evaluation
A formal performance evaluation has been carried out during the year. This was the basis for setting the bonus of the Chief 
Executive and the Finance Director. 
The Board Committees
Membership of all three Board Committees is composed of the Chairman and the two Non‑Executive Directors. As such they are 
compliant with both the UK and QCA Codes. All of the Board Committees are authorised to obtain, at the Company’s expense, 
professional advice on any matter within their terms of reference and to have access to sufficient resources in order to carry out 
their duties.
Audit Committee Report
Members of the Audit Committee
The Committee consists entirely of independent Non‑Executive Directors. The Chairman, Stephen Parker, is an affiliate of the 
Institute of Chartered Accountants in England and Wales and has extensive financial experience.
Stephen Parker (Chairman)
Alastair Riddell
Simon Sturge
Duties
The main duties of the Audit Committee are set out in its Terms of Reference and include:
•	 to monitor the integrity of the financial statements of the Company, including its annual and half year reports;
•	 to review and challenge where necessary any changes to, and consistency of, accounting policies, whether the Company has 
followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of 
the external auditor, the going concern assumption and all material information presented with the financial statements;
•	 to keep under review the effectiveness of the Company’s internal control systems (including financial, operational and 
compliance controls and risk management) and to review and approve the statements to be included in the annual report and 
financial statements concerning internal controls and risk management;
•	 to regularly assess the need for an internal audit function;
•	 to consider and make recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting, in 
relation to the appointment, re‑appointment and removal of the Company’s external auditor;
•	 to ensure that at least every ten years the audit services contract is put out to tender, in respect of the tender to oversee the 
selection process;
•	 to oversee the relationship with the external auditor including approval of their remuneration, approval of their terms of 
engagement, annual assessment of their independence and objectivity taking into account relevant professional and regulatory 
requirements and the relationship with the auditor as a whole, including the provision of any non‑audit services;
•	 to meet regularly with the external auditor and at least once a year, without any Executive Director or other member of 
management present to discuss any issues arising from the audit;
•	 to review and approve the annual Audit Plan and review the findings of the audit; and
•	 to review the Company’s arrangements for its employees and contractors to raise concerns in confidence about possible 
improprieties in financial reporting or other matters, the Company’s procedures for detecting fraud and the Company’s 
anti‑bribery procedures.
Corporate governance
Corporate governance report continued Silence Therapeutics plc Annual report and financial statements 2014 17
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Corporate governance Financial statements Strategic report
Activities in 2014
In 2014 the Audit Committee reviewed the preliminary announcement and the interim announcement. It also approved the formal 
appointment of PricewaterhouseCoopers LLP as auditor, replacing KPMG LLP. 
Role of the external auditor
The Audit Committee monitors the relationship with the external auditor, PricewaterhouseCoopers LLP, who were appointed 
in 2014, to ensure that auditor independence and objectivity are maintained. As part of its review the Committee monitors the 
provision of non‑audit services by the external auditor. The breakdown of fees between audit and non‑audit services is provided 
in note 5 to the financial statements. The Audit Committee also assesses the auditor’s performance. Having reviewed the auditor’s 
independence and performance the Audit Committee is recommending that PricewaterhouseCoopers LLP be re‑appointed as the 
Company’s auditor at the next Annual General Meeting.
Internal audit
At present the Company does not have an internal audit function. Given the current size of the Company and control systems 
that are in place the Committee believes that there is sufficient management oversight to highlight any areas of weaknesses in the 
financial reporting systems. The Committee will review the need for an internal audit function at least annually.
Audit process
The auditor prepares an Audit Plan for the audit of the full year financial statements. The Audit Plan sets out the scope of the 
audit, areas to be targeted and audit timetable. Following the audit, the auditor presented its findings to the Audit Committee for 
discussion. 
Remuneration Committee Report
Members of the Remuneration Committee
The Committee consists entirely of independent Non‑Executive Directors as follows: 
Simon Sturge (Chairman)
Alastair Riddell 
Stephen Parker
Duties
The main duties of the Remuneration Committee are set out in its Terms of Reference and include:
•	 setting the remuneration policy for the Executive Directors and the Company’s Chairman taking into account relevant legal 
and regulatory requirements, the provisions of the UK Corporate Governance Code and other guidance such as issued by the 
Association of British Insurers and the National Association of Pension Funds;
•	 within the agreed policy determining the total individual remuneration package of each Executive Director and Chairman;
•	 recommending and monitoring the level and structure of remuneration for senior management;
•	 to help it fulfil its remit to appoint remuneration consultants and commission any reports or surveys;
•	 approving the design of and determining the targets for any schemes of performance‑related remuneration;
•	 considering whether the Directors should be eligible for annual bonuses and, if so, to consider the upper limits for such 
bonuses;
•	 considering whether the Directors should be eligible for benefits under long‑term incentive schemes;
•	 agreeing the policy for authorising claims for expenses from the Executive Directors and Chairman; and
•	 ensuring that contractual terms on termination, and any payments made, are fair to the individual and the Company and 
that failure is not rewarded and that the duty to mitigate loss is fully recognised.
Activities in 2014
The Committee set the remuneration policy during the year and, more specifically, the targets used in assessing the bonus for the 
Chief Executive and other Executive Directors.  Silence Therapeutics plc Annual report and financial statements 2014 18
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Corporate governance
Corporate governance report continued
Nomination Committee Report
Members of the Nomination Committee
The Committee consists entirely of independent Non‑Executive Directors:
Alastair Riddell (Chairman)
Simon Sturge 
Stephen Parker
Duties
The main duties of the Nomination Committee are set out in its Terms of Reference and include:
•	 regularly review the structure, size and composition (including the skills, knowledge, experience and diversity) required of the 
Board compared to its current position and make recommendations to the Board with regard to any changes;
•	 give full consideration to succession planning for Directors and other senior Executives in the course of its work, taking into 
account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board 
in the future;
•	 be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when 
they arise;
•	 formulate plans for succession for both Executive and Non‑Executive Directors and in particular for the key roles of Chairman 
and Chief Executive;
•	 assess the re‑appointment of any Non‑Executive Director at the conclusion of their specified term of office having given 
due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and 
experience required; and
•	 assess the re‑election by shareholders of any Director having due regard to their performance and ability to continue to 
contribute to the Board in the light of the knowledge, skills and experience required and the need for progressive refreshing of 
the Board.
During the year, the Nomination Committee discussed and approved the appointment of Dr Lars Karlsson as Head of Research 
and Development from 5 January 2015.
Accountability 
Internal controls and risk management
The Company has in place a system of internal financial controls commensurate with its current size and activities, which is 
designed to ensure that the possibility of misstatement or loss is kept to a minimum. These procedures include the preparation 
of management accounts, forecast variance analysis and other ad hoc reports. A Financial Procedures Manual sets out minimum 
reporting standards. Risks throughout the Group are considered and reviewed on a regular basis. Risks are identified and 
mitigating actions put into place as appropriate. Principal risks identified are set out in the strategic report on page 11.
Internal control and risk management procedures can only provide reasonable and not absolute assurance against material 
misstatement.
Financial and business reporting
The Board seeks to present a balanced and understandable assessment of the Group’s position and prospects in all half year, final 
and price‑sensitive reports and other information required to be presented by statute. The Board receives a number of reports to 
enable it to monitor and clearly understand the Group’s financial position. A new Disclosure Policy was put in place during the year 
to enhance the process for ensuring that price‑sensitive information is identified effectively and all communications with the market 
are released in accordance with expected time scales.
Relations with shareholders
The Board is committed to maintaining an ongoing communication with its shareholders. The Directors are keen to build a 
mutual understanding of objectives with its institutional shareholders and a regular dialogue with institutional investors has been 
maintained throughout the year. The Directors also encourage communications with private shareholders and encourage their 
participation in the Company’s Annual General Meeting. 
The Company uses its corporate website (www.silence‑therapeutics.com) to communicate with institutional shareholders and 
private investors, and the website also contains the latest announcements, press releases, published financial information, current 
projects and other information about the Company. The annual report and financial statements is a key communication document 
and is also available on the Company’s website. 
This year’s Annual General Meeting of the Company will be held on 1 June 2015. The Notice of Annual General Meeting is included 
with the annual report and financial statements and is available on the Company’s website. Separate resolutions are provided 
on each issue so that they can be given proper consideration. Proxy votes are counted and the level of proxies lodged on each 
resolution reported after it has been dealt with on a show of hands.  Silence Therapeutics plc Annual report and financial statements 2014 19
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Corporate governance Financial statements Strategic report
Dear Shareholder,
One of the main purposes of the report is to support the Board’s goals of working towards best practice corporate governance 
standards. We are also keen to promote transparency about how our Directors are rewarded. 
The Remuneration Committee plays an increasingly important role in ensuring that remuneration policy underpins strategy and the 
long‑term visionary goals of the Company.
The Remuneration Committee
The Board has delegated certain responsibilities for executive remuneration to the Remuneration Committee. Details of the 
Remuneration Committee, its remit and activities are set out in the corporate governance report on pages 14 to 18.
Remuneration policy
The objective of the Company’s remuneration policy is to attract, retain and motivate executive management of the quality 
required to run the Company successfully without paying more than is necessary. 
Service agreements and termination payments
Details of the Executive Directors’ service agreements are set out below.
      Date of Notice period Notice period  
Director       initial contract by Company by Director
Ali Mortazavi, Chief Executive Officer     31.7.12 6 months 6 months
Timothy Freeborn, Finance Director     27.7.12 6 months 6 months
Michael Khan, Executive Director     1.10.12 6 months 6 months
Lars Karlsson, Head of Research and Development    8.12.14 3 months 3 months
There are no specific provisions under which Executive Directors are entitled to receive compensation upon early termination, 
other than in accordance with the notice period. On termination of an Executive Director’s service contract, the Remuneration 
Committee will take into account the departing Director’s duty to mitigate his/her loss when determining the amount of any 
compensation.
Non-Executive Directors
The remuneration payable to Non‑Executive Directors is decided on by the Chairman and Executive Directors.
Fees (£)
       2014 2013
Chairman       75,000 75,000
Non‑Executive Director fee (including chairmanship of Board committee)   35,000 35,000
Terms of appointment
Non‑Executive Director      Year appointed Start date Notice
Alastair Riddell      2013 18.11.13 3 months
Simon Sturge      2013 21.08.13 Immediate
Stephen Parker      2013 18.11.13 3 months
The appointments for each Non‑Executive Director may be terminated by either party giving notice as shown above. There are 
no arrangements under which any Non‑Executive Director is entitled to receive compensation upon the early termination of his 
appointment.
Corporate governance
Directors’ remuneration report Silence Therapeutics plc Annual report and financial statements 2014 20
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Annual remuneration report
The annual remuneration report sets out details of Directors’ remuneration payments during the year and information in respect of 
share awards and Directors’ shareholdings. Please see note 6 of the financial statements for Directors’ remuneration.
Share option awards table
  At    At  
  1 January     31 December Exercise Latest date  
Director  2014 Exercised Awarded Lapsed 2014 price p of exercise
Ali Mortazavi       
– Unapproved Scheme  1,728,078 — — — 1,728,078 25.0 31 Jul 24
Timothy Freeborn       
– Unapproved Scheme  190,000 — — — 190,000 25.0 27 Jul 24
– Unapproved Scheme  80,000 — — — 80,000 125.0 26 Jun 26
– Unapproved Scheme  40,000 — — — 40,000 282.0 20 Nov 26
Michael Khan       
– Unapproved Scheme  80,000 — — — 80,000 125.0 31 Dec 24
– Unapproved Scheme  80,000 — — — 80,000 125.0 26 Jun 26
Annie Cheng*       
– Unapproved Scheme  64,000 — — (64,000) — 125.0 26 Jun 26
– Unapproved Scheme  76,000 — — (76,000) — 282.0 20 Nov 26
Total  2,338,078 — — (140,000) 2,198,078
* Annie Cheng resigned as a Director on 2 September 2014
Directors’ interests in the share capital of the Company as at the date of this report
        Percentage  
       Number of of issued  
Director       ordinary shares share capital
Ali Mortazavi       1,777,399 3.41%
Timothy Freeborn       14,000 0.03%
Michael Khan       1,976 0.004%
Lars Karlsson       — —
Stephen Parker       — —
Alastair Riddell       — —
Simon Sturge       — —
The average share price for the year was 244.3p (2013: 228.9p).
This report was approved by the Board of Directors and signed on its behalf by:
Simon Sturge
Chairman of the Remuneration Committee
27 April 2015
Corporate governance
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Corporate governance Financial statements Strategic report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2014.
Principal activities
The Group is focused on the development of RNA therapeutics which incorporates its structural chemistry and delivery 
technologies. The Group’s lead clinical product, Atu027, recently completed a Phase 2a study in pancreatic cancer. 
Review of the business and future developments
The strategic report describes research and development activity during the year as well as outlining future planned developments. 
Details of the financial performance, including comments on the cash position and research and development expenditure, are 
given in the financial review. Principle risks and KPIs are given in the strategic report.
Health, safety and environment
The Directors are committed to ensuring the highest standards of health and safety, both for their employees and for the 
communities within which the Group operates. The Directors are also committed to minimising the impact of the Group’s 
operations on the environment. For example, the Group has paper recycling facilities at its head office.
Employees
The Directors are committed to continuing involvement and communication with employees on matters affecting both employees 
and the Company. Management conducts regular meetings with all employees on site.
Political contributions
Neither the Company nor any of its subsidiaries made any political donations or incurred any political expenditure during the year 
(2013: nil).
Research and development
In 2014, the Group spent £8.9m on research and development (2013: £5.6m).
Disclosure of information to the auditor
Each of the persons who is a Director at the date of approval of this report confirms that: 
•	 so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
•	 the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant 
audit information and to establish that the Company’s auditor is aware of that information. 
Subsequent events
A description of subsequent events is set out in note 26 to the financial statements.
Financial risk management
A description of financial risk management is set out in note 24 to the financial statements.
Results and dividends
The Group recorded a loss for the year before taxation of £12.0m (2013: £9.0m). Further details are given in the financial review. 
The Group is not yet in a position to pay a dividend and the loss for both periods has been added to the profit and loss reserve.
Directors
The Directors who served at any time during the year or since the year end were:
    Job title  Appointed  Resigned
Ali Mortazavi   Chief Executive
Timothy Freeborn   Finance Director
Michael Khan   Executive Director
Lars Karlsson  Head of Research and Development 5 January 2015
Annie Cheng   Chief Operating Officer  2 September 2014
Alastair Riddell     Chairman
Simon Sturge    Non‑Executive
Stephen Parker    Non‑Executive
Alastair Riddell and Simon Sturge exchanged roles on 5 January 2015, with Alastair becoming Non‑Executive Chairman 
of the Board and Chair of the Nominations Committee. Simon Sturge remains a Non‑Executive Director and Chair of the 
Remuneration Committee. On the same date, Lars Karlsson joined the Board as Head of Research and Development. The interests 
of the Directors in the share options of the Company are set out in the Directors’ remuneration report.
Corporate governance
Directors’ report Silence Therapeutics plc Annual report and financial statements 2014 22
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Corporate governance
Directors’ report continued
Substantial interests
At 31 December 2014 the Company had been informed of the following substantial interests of over 3% in the issued share capital 
of the Company:
       Number Percentage of 
       issued share capital
Richard Griffiths       13,014,018 24.99%
Robert Keith        12,133,545 23.29%
Henderson Global Investors       4,938,561 9.48%
Aviva        2,301,157 4.42%
Sarossa plc       2,189,467 4.20%
Ali Mortazavi       1,777,399 3.41%
Going concern
The financial statements have been prepared on a going concern basis that assumes that the Group will continue in operational 
existence for the foreseeable future.
The Group had a net cash inflow for 2014 of £1.2m (2013: £6.9m), principally £9.6m outflow from activities offset by £10.8m from 
share issues in the year, and at 31 December 2014 had cash balances of £16.9m and £5.0m on short‑term deposit (2013: £15.9m 
and £5.0m on deposit). Based on current forecasts the cash on hand at the date of this report will support operations into 2017.
This report was approved by the Board of Directors and signed on its behalf by:
Dr Alastair Riddell
Chairman
27 April 2015 Silence Therapeutics plc Annual report and financial statements 2014 23
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Corporate governance Financial statements Strategic report
The Directors are responsible for preparing the annual report, strategic report, the Directors’ report and the financial statements in 
accordance with applicable laws and regulations. 
Company law requires the Directors to prepare financial statements for each financial year. As required by the AIM Rules of the 
London Stock Exchange they are required to prepare the Group financial statements in accordance with International Financial 
Reporting Standards (IFRS) as adopted by the EU (EU IFRS) and applicable law and have elected to prepare the parent Company 
financial statements on the same basis.
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 parent Company and of their profit or loss for that period.
In preparing each of the Group and parent Company financial statements, the Directors are required to:
•	 select suitable accounting policies and then apply them consistently;
•	 make judgements and estimates that are reasonable and prudent;
•	 state whether they have been prepared in accordance with IFRS as adopted by the EU; and
•	 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent 
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent 
Company’s and Group’s transactions and disclose with reasonable accuracy at any time the financial position of the parent 
Company and Group and enable them to ensure that its financial statements and Directors’ remuneration report comply with the 
Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the 
assets of the Group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the 
Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions.
On behalf of the Board
Timothy Freeborn
Finance Director and Company Secretary
27 April 2015
Corporate governance
Statement of Directors’ responsibilities Silence Therapeutics plc Annual report and financial statements 2014 24
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Financial statements
Independent auditor’s report
to the members of Silence Therapeutics plc 
Report on the financial statements
Our opinion
In our opinion:
•	 the	financial	statements,	defined	below,	give	a	true	and	fair	view	of	the	state	of	the	Group’s	and	of	the	Company’s	affairs	as	
at	31	December	2014	and	of	the	Group’s	and	Company’s	loss	and	the	Group’s	and	the	Company’s	cash	flows	for	the	year	
then ended;
•	 the	Group	financial	statements	have	been	properly	prepared	in	accordance	with	International	Financial	Reporting	Standards	
(IFRS)	as	adopted	by	the	European	Union;
•	 the	Company	financial	statements	have	been	properly	prepared	in	accordance	with	International	Financial	Reporting	Standards	
(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.
This	opinion	is	to	be	read	in	the	context	of	what	we	say	in	the	remainder	of	this	report.
What we have audited
The	Group	financial	statements	and	Company	financial	statements	(the	“financial	statements”),	which	are	prepared	by	Silence	
Therapeutics	plc,	comprise:
•	 the	consolidated	income	statement	and	consolidated	statement	of	comprehensive	income	for	the	year	then	ended;
•	 the	consolidated	and	Company	balance	sheets	as	at	31	December	2014;
•	 the	consolidated	and	Company	statement	of	changes	in	equity	for	the	year	then	ended;	
•	 the	consolidated	and	Company	cash	flow	statements	for	the	year	then	ended;	and
•	 the	notes	to	the	financial	statements,	which	include	a	summary	of	significant	accounting	policies	and	other	
explanatory information.
The	financial	reporting	framework	that	has	been	applied	in	their	preparation	is	applicable	law	and	as	adopted	by	the	European	
Union	and,	as	regards	the	Company	financial	statements,	as	applied	in	accordance	with	the	provisions	of	the	Companies	
Act 2006.
In	applying	the	financial	reporting	framework,	the	Directors	have	made	a	number	of	subjective	judgements,	for	example	in	respect	
of	significant	accounting	estimates.	In	making	such	estimates,	they	have	made	assumptions	and	considered	future	events.
What an audit of financial statements involves
We	conducted	our	audit	in	accordance	with	International	Standards	on	Auditing	(UK	and	Ireland)	(ISAs	(UK	&	Ireland)).	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	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	financial	statements	2014	to	identify	
material	inconsistencies	with	the	audited	financial	statements	and	to	identify	any	information	that	is	apparently	materially	incorrect	
based	on,	or	materially	inconsistent	with,	the	knowledge	acquired	by	us	in	the	course	of	performing	the	audit.	If	we	become	aware	
of	any	apparent	material	misstatements	or	inconsistencies	we	consider	the	implications	for	our	report. Silence Therapeutics plc Annual report and financial statements 2014 25
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Corporate governance Financial statements Strategic report
Opinion on other matter prescribed by the Companies Act 2006
In	our	opinion	the	information	given	in	the	strategic	report	and	the	Directors’	report	for	the	financial	year	for	which	the	financial	
statements	are	prepared	is	consistent	with	the	financial	statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under	the	Companies	Act	2006	we	are	required	to	report	to	you	if,	in	our	opinion:
•	 we	have	not	received	all	the	information	and	explanations	we	require	for	our	audit;	or
•	 adequate	accounting	records	have	not	been	kept	by	the	Company,	or	returns	adequate	for	our	audit	have	not	been	received	
from	branches	not	visited	by	us;	or
•	 the	Company	financial	statements	are	not	in	agreement	with	the	accounting	records	and	returns.
We	have	no	exceptions	to	report	arising	from	this	responsibility.
Directors’ remuneration
Under	the	Companies	Act	2006	we	are	required	to	report	to	you	if,	in	our	opinion,	certain	disclosures	of	Directors’	remuneration	
specified	by	law	are	not	made.	We	have	no	exceptions	to	report	arising	from	this	responsibility.	
Responsibilities for the financial statements and the audit
Our responsibilities and those of the Directors
As	explained	more	fully	in	the	statement	of	Directors’	responsibilities	set	out	on	page	23,	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	ISAs	(UK	&	
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.
Stuart Newman 
Senior	Statutory	Auditor
for	and	on	behalf	of	PricewaterhouseCoopers	LLP
Chartered	Accountants	and	Statutory	Auditors
Abacus	House
Castle	Park
Cambridge
CB3	0AN
27	April	2015 Silence Therapeutics plc Annual report and financial statements 2014 26
www.silence-therapeutics.com
	 		 		 	 2014	 2013	
	 	 	 	 	 	 Note	 £000s	 £000s
Revenue	 					 3	 15	 117	
Research	and	development	costs	 	 	 	 	 	 (8,884)	 (5,648)
Administrative	expenses	 	 	 	 	 	 	 (3,258)	 (3,541)
Operating	loss	 	 	 	 	 	 5 (12,127)	 (9,072)
Finance	and	other	income	 	 	 	 	 	 7	 147	 70	
Loss for the year before taxation	 					 (11,980)	 (9,002)
Taxation		 	 	 	 	 	 8	 892	—
Loss for the year after taxation	 					 (11,088)	 (9,002)
Loss per ordinary equity share (basic and diluted)					 (22.0p)	 (20.0p)
Financial statements
Consolidated income statement
year ended 31 December 2014
Consolidated statement of comprehensive income
year ended 31 December 2014
	 		 		 	 2014	 2013	
	 		 		 		 £000s	 £000s
Loss	for	the	period	after	taxation	 	 	 	 	 	 (11,088)	 (9,002)
Other	comprehensive	income,	net	of	tax*:	 	
Exchange	differences	arising	on	consolidation	of	foreign	operations	 	 	 	 701	 292
Total comprehensive expense for the year 			 (10,387)	 (8,710)
*	 Items	that	may	be	reclassified	subsequently	to	profit	or	loss Silence Therapeutics plc Annual report and financial statements 2014 27
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Corporate governance Financial statements Strategic report
	 		 		 	 2014	 2013	
	 	 	 	 	 	 Note	 £000s	 £000s
Non‑current assets		
Property,	plant	and	equipment		 	 	 	 	 10	 458	 218	
Goodwill		 	 	 	 	 	 11	 7,077	 7,549	
Other	intangible	assets		 	 	 	 	 	 12	 2	 251	
		 						 7,537	 8,018	
Current assets		
Trade	and	other	receivables		 	 	 	 	 14	 375	 390	
Investments	held	for	sale		 	 	 	 	 	 	 2	 2	
Other	financial	assets	 	 	 	 	 	 15	 5,000	 5,000
Cash	and	cash	equivalents			 	 	 	 	 16	 16,857	 15,890	
	 						 22,234	 21,282	
Current liabilities		
Trade	and	other	payables		 	 	 	 	 	 17	 (2,013)	 (1,724)
Total assets less current liabilities 						 27,758	 27,576	
Net assets		 						 27,758	 27,576	
Capital and reserves attributable to the Company’s equity holders		
Share	capital		 	 	 	 	 	 19	 2,605	 2,353	
Capital	reserves		 	 	 	 	 	 21	 126,197	 114,478	
Translation	reserve		 	 	 	 	 	 	 1,914	 2,615	
Profit	and	loss	account	(deficit)	 	 	 	 	 	 (102,958)	 (91,870)
Total equity 	 						 27,758	 27,576	
The	financial	statements	were	approved	by	the	Board	on	27	April	2015.
Timothy Freeborn     Ali Mortazavi
Finance	Director	 	 	 	 Chief	Executive
Company	number:	02992058
Financial statements
Consolidated balance sheet
at 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 28
www.silence-therapeutics.com
Financial statements
Consolidated statement of changes in equity
year ended 31 December 2014
	 	 	 	 Share	 Capital		 Translation	 Profit	and	 Total	
	 	 	 	 capital	 reserves	 reserve	 loss	account	 equity	
	 	 	 	 £000s	 £000s	 £000s	 £000s	 £000s
At	1	January	2013	 	 	 	 1,872		 94,849		 2,323		 (82,928)	 16,116	
Recognition	of	share‑based	payments	 	 	 —	 1,386		 —	 —	 1,386	
Transfer	upon:	 	 	 	 	
–	exercise	of	warrants	 	 	 	 —	 (33)	 —	 33		 —	
–	lapse	of	vested	options	in	year	 	 	 —	 (27)	 —	 27		 —	
Shares	issued	in	year,	net	of	expenses	 	 	 481		 18,303		 —	 —		 18,784	
Transactions	with	owners	 	 	 	 481	 19,629		 —		 60		 20,170	
Loss	for	year	to	31	December	2013	 	 	 —	 —	 —	 (9,002)	 (9,002)
Other comprehensive income	 				
Exchange	differences	arising	on	consolidation	
of	foreign	operations	 	 	 	 —	 —	 292		 —	 292	
At	1	January	2014	 	 	 	 2,353		 114,478		 2,615		 (91,870)	 27,576
Recognition	of	share‑based	payments	 	 	 —	 1,127	 —	 —	 1,127
Shares	issued	in	year,	net	of	expenses	 	 	 252	 10,592	 —	 —	 10,844
Transactions	with	owners	 	 	 	 252	 11,719	 —	 —	 11,971
Loss	for	year	to	31	December	2014	 	 	 —	 —	 —	 (11,088)	 (11,088)
Other comprehensive income	 				
Exchange	differences	arising	on	consolidation		
of	foreign	operations	 	 	 	 —	 —	 (701)	 —	 (701)
At 31 December 2014    2,605 126,197 1,914 (102,958) 27,758 Silence Therapeutics plc Annual report and financial statements 2014 29
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Corporate governance Financial statements Strategic report
Financial statements
Company balance sheet
at 31 December 2014
	 		 		 		 31 December	 31	December	
	 		 		 		 2014	 2013	
	 	 	 	 	 	 Note	 £000s	 £000s
Non‑current assets
Property,	plant	and	equipment		 	 	 	 	 10	 18	6
Investment	in	subsidiaries	 	 	 	 	 		 13	 34,026	 33,908
	 						 34,044	 33,914
Current assets
Trade	and	other	receivables		 	 	 	 	 14	 225	 192
Other	financial	assets	 	 	 	 	 	 15	 5,000	 5,000
Cash	and	cash	equivalents			 	 	 	 	 16	 15,761	 15,600
	 						 20,986	 20,792
Current liabilities
Trade	and	other	payables	 	 	 	 	 		 17	 (1,033)	 (443)
Total assets less current liabilities 					 53,997	 54,263
Net assets 	 						 53,997	 54,263
Capital and reserves attributable to the Company’s equity holders
Share	capital		 	 	 	 	 	 19	 2,605	 2,353
Capital	reserves		 	 	 	 	 	 21	 126,013	 114,294
Profit	and	loss	account	(deficit)		 	 	 	 	 	 (74,621)	 (62,384)
Total equity 	 					 53,997	 54,263
The	financial	statements	were	approved	by	the	Board	on	27	April	2015.
Timothy Freeborn     Ali Mortazavi
Finance	Director	 	 	 	 Chief	Executive	
The	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements.
Company	number:	02992058	 Silence Therapeutics plc Annual report and financial statements 2014 30
www.silence-therapeutics.com
Financial statements
Company statement of changes in equity
year ended 31 December 2014
	 	 	 	 	 Share	 Capital	 Profit	and	 Total	
	 	 	 	 	 capital	 reserves	 loss	account	 equity	
	 	 	 	 	 £000s	 £000s	 £000s	 £000s
At	1	January	2013		 	 	 	 	 1,872	 94,665	 (53,982)	 42,555
Recognition	of	share‑based	payments		 	 	 	 —	 1,386	 —	 1,386
Transfer	to	capital	redemption	reserve		 	 	 	
–	exercise	of	warrants	 	 	 	 	 —	 (33)	 33	 —
–	lapse	of	vested	options	in	year		 	 	 	 —	 (27)	 27	 —
Shares	and	warrants	issued	in	year,	net	of	expenses		 	 	 481	 18,303	 —	 18,784
Transactions	with	owners		 	 	 	 	 481	 19,629	 60	 20,170
Loss	for	the	year	to	31	December	2013		 	 	 	 —	 —	 (8,462)	 (8,462)
At	31	December	2013		 	 	 	 	 2,353	 114,294	 (62,384)	 54,263
Recognition	of	share‑based	payments		 	 	 	 —	 1,127	 —	 1,127
Shares	and	warrants	issued	in	year,	net	of	expenses		 	 	 252	 10,592	 —	 10,844
Transactions	with	owners		 	 	 	 	 252	 11,719	 —	 11,971
Loss	for	the	year	to	31	December	2014		 	 	 	 —	 —	 (12,237)	 (12,237)
At 31 December 2014      2,605 126,013 (74,621) 53,997 Silence Therapeutics plc Annual report and financial statements 2014 31
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Corporate governance Financial statements Strategic report
Financial statements
Cash flow statements
year ended 31 December 2014
	 Consolidated	 Company
	
	 		 		 2014 	 2013		 2014	 2013	
	 		 		 £000s	 £000s	 £000s	 £000s
Cash flow from operating activities   
Loss before tax	 				 (11,980)	 (9,002)	 (13,129)	 (8,462)
Depreciation	charges	 	 	 	 	 90	 64		 3	 1	
Amortisation	charges		 	 	 	 	 242	 233		 —	 —	
Loss	on	abandonment	of	patents	 	 	 	 —	 80	 —	—
Charge	for	the	year	in	respect	of	share‑based	payments	 		 	 1,127	 1,386		 1,127	 1,386	
Charge	for	the	year	in	respect	of	NIC	on	share‑based	payments	 	 —	 200	 —	 200
Foreign	exchange	(gain)/loss	on	intra‑group	loan	 	 	 —	 	—	 859	 (362)
Finance	income	 	 	 	 	 (139)	 (70)	 (139)	 (70)
Corporation	tax	credits	 	 	 	 	 892	 —	 892	—
Non‑cash	and	other	movements	 	 	 	 260	 228	 273	8
	 			 (9,508)	 (6,881)	 (10,114)	 (7,299)
Increase	in	trade	and	other	receivables	 	 	 	 (15)	 (212)	 (33)	 (123)
Increase	in	trade	and	other	payables		 	 	 	 67	 337		 344	 82	
Net cash outflow from operating activities    (9,456)	 (6,756)	 (9,803)	 (7,340)	
Cash flow from investing activities 		 		 		 	
Decrease	in	other	financial	assets	 	 	 	 —	 (5,000)	 —	 (5,000)
Reduction/(increase)	in	loan	to	subsidiary	undertakings		 	 	 —	 —	 (1,002)	 658	
Interest	received		 	 	 	 	 137	 40		 137	 40	
Additions	to	property,	plant	and	equipment		 	 	 (337)	 (120)	 (15)	 (5)
Additions	to	intangible	assets		 	 	 	 (1)	 (18)	 —	 —	
Net cash outflow from investing activities  		 (201)	 (5,098)	 (880)	 (4,307)	
Cash flow from financing activities 	 	
Proceeds	from	issue	of	share	capital,	net	of	issue	costs		 	 	 10,844	 18,784		 10,844	 18,784	
Net cash inflow from financing activities	 		 10,844	 18,784	 10,844	 18,784
Increase in cash and cash equivalents 				 1,187	 6,930		 161	 7,137	
Cash and cash equivalents at start of year 	 		 15,890	 8,909		 15,600	 8,463	
Net	increase	in	the	year	 	 	 	 	 1,187	 6,930	 161	 7,137
Effect	of	exchange	rate	fluctuations	on	cash	held		 	 (220)	 51		 —	—
Cash and cash equivalents at end of year  		 16,857	 15,890		 15,761	 15,600	
The	accompanying	accounting	policies	and	notes	form	an	integral	part	of	these	financial	statements. Silence Therapeutics plc Annual report and financial statements 2014 32
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Financial statements
Notes to the financial statements
year ended 31 December 2014
1. General information
1.1 Group
Silence	Therapeutics	and	its	subsidiaries	(together	“the	Group”)	are	primarily	involved	in	the	research	and	development	of	
novel	pharmaceutical	products.	Silence	Therapeutics	plc,	a	Public	Limited	Company	incorporated	and	domiciled	in	England,	
is	the	Group’s	ultimate	parent	Company.	The	address	of	Silence	Therapeutics’	registered	office	is	27‑28	Eastcastle	Street,	
London W1W 8DH	and	the	principal	place	of	business	is	1	Lyric	Square,	London	W6	0NB.
1.2 Company income statement
The	Company	has	taken	advantage	of	Section	408	of	the	Companies	Act	2006	and	has	not	included	its	own	income	statement	in	
these	financial	statements.	The	loss	for	the	financial	year	dealt	within	the	financial	statements	of	the	Company	was	as	follows:
£000s	 	 	 	 	 	 	 2014	 2013
	 					 12,237	 8,462
2. Principal accounting policies
2.1 Basis of preparation 
The	consolidated	financial	statements	of	the	Company	have	been	prepared	in	accordance	with	International	Financial	Reporting	
Standards	(IFRS)	and	IFRS	Interpretations	Committee	(IFRS	IC)	interpretations	as	adopted	by	the	European	Union	and	the	
Companies	Act	2006	applicable	to	companies	reporting	under	IFRS.	The	consolidated	financial	statements	have	been	prepared	
under	the	historical	cost	convention.	The	accounting	policies	set	out	below	have,	unless	otherwise	stated,	been	prepared	
consistently	for	all	periods	presented	in	these	consolidated	financial	statements.	The	financial	statements	are	prepared	in	pounds	
sterling	and	presented	to	the	nearest	thousand	pounds.	The	principal	accounting	policies	adopted	are	set	out	below.
Full	financial	statements	for	the	year	ended	31	December	2014	will	be	posted	to	shareholders	by	8	May	2015.	
2.2 Basis of consolidation
The	Group	financial	statements	consolidate	those	of	the	Company	and	its	controlled	subsidiary	undertakings	drawn	up	to	
31 December	2014.	Control	is	achieved	where	the	Company	has	the	power	to	govern	the	financial	and	operating	policies	of	the	
entity	so	as	to	obtain	benefits	from	its	activities.	The	parent	Company	financial	statements	present	information	about	the	Company	
as	a	separate	entity	and	not	about	its	Group.	Where	necessary,	adjustments	are	made	to	the	financial	statements	of	subsidiaries	to	
bring	accounting	policies	into	line	with	those	used	for	reporting	the	operations	of	the	Group.	All	intra‑group	transactions,	balances,	
income	and	expenses	are	eliminated	on	consolidation.
2.3 Going concern
The	financial	statements	have	been	prepared	on	a	going	concern	basis	that	assumes	that	the	Group	will	continue	in	operational	
existence	for	the	foreseeable	future.	The	Directors	consider	that	the	continued	adoption	of	the	going	concern	basis	is	appropriate	
and	the	financial	statements	do	not	reflect	any	adjustments	that	would	be	required	if	they	were	to	be	prepared	on	any	other	basis.
The	Group	had	a	net	cash	inflow	for	2014	of	£1.2m	(after	expenses),	principally	£9.6m	outflow	from	activities	offset	by	£10.8m	
from	share	issues	in	the	year,	and	at	31	December	2014	had	cash	balances	of	£16.9m	and	£5.0m	on	short‑term	deposit.	The	
Directors	have	reviewed	the	working	capital	requirements	of	the	Group	for	the	next	twelve	months	and	are	confident	that	these	can	
be	met.	
The	Directors,	having	prepared	cash	flow	forecasts,	believe	that	existing	cash	resources	will	provide	sufficient	funds	for	the	Group	
to	continue	its	research	and	development	programmes	and	to	remain	in	operation	for	at	least	twelve	months	from	the	date	of	
approval	of	these	financial	statements.	
The	Group’s	business	activities,	together	with	the	factors	likely	to	affect	its	future	development,	performance	and	position	are	set	
out	in	the	strategic	report	on	pages	01	to	11.	
2.4 Research and development
Expenditure	on	research	activities	is	recognised	in	the	income	statement	as	an	expense	as	incurred.	Further	details	on	research	
and	development	costs	can	be	found	in	note	2.11. Silence Therapeutics plc Annual report and financial statements 2014 33
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2.5 Revenue recognition
The	Group’s	income	consists	of	licence	fees,	milestone	and	option	payments,	grant	income	and	fees	from	research	and	
development	collaborations.	Income	is	measured	at	the	fair	value	of	the	consideration	received	or	receivable.
Licence	fees,	option	and	milestone	payments	are	recognised	in	full	on	the	date	that	they	are	contractually	receivable	in	those	
circumstances	where:
•	 the	amounts	are	not	time	related;
•	 the	amounts	are	not	refundable;
•	 the	licencee	has	unrestricted	rights	to	exploit	the	technology	within	the	terms	set	by	the	licence;	and
•	 the	Group	has	no	further	contractual	duty	to	perform	any	future	services.
Where	such	fees	or	receipts	require	future	performance	or	financial	commitments	on	behalf	of	the	Group,	the	revenue	is	
recognised	pro	rata	to	the	services	or	commitments	being	performed.	Funds	received	that	have	not	been	recognised	are	treated	
as	deferred	revenue	and	recognised	in	trade	and	other	payables.
Revenues	from	work	or	other	research	and	testing	carried	out	for	third	parties	are	recognised	when	the	work	to	which	they	relate	
has	been	performed.
All	time	related	receipts	in	respect	of	annual	licence	fees	or	similar	technology	access	fees	are	recognised	as	revenue	on	a	
straight‑line	basis	over	the	period	of	the	underlying	contract.
2.6 Foreign currency translation
Silence	Therapeutics’	consolidated	financial	statements	are	presented	in	sterling	(£),	which	is	also	the	functional	currency	of	the	
parent	Company.	The	individual	financial	statements	of	each	Group	entity	are	prepared	in	the	currency	of	the	primary	economic	
environment	in	which	the	entity	operates	(its	functional	currency).
In	preparing	the	financial	statements	of	the	individual	entities,	transactions	in	currencies	other	than	the	entity’s	functional	currency	
(foreign	currencies)	are	recorded	at	the	rates	of	exchange	prevailing	on	the	dates	of	the	transactions.	At	each	balance	sheet	date,	
monetary	items	denominated	in	foreign	currencies	are	retranslated	at	the	rates	prevailing	on	the	balance	sheet	date.	
Exchange	differences	arising	on	the	settlement	of	monetary	items,	and	on	the	retranslation	of	monetary	items,	are	included	in	
the	income	statement	for	the	year.	When	a	gain	or	loss	on	a	non‑monetary	item	is	recognised	directly	in	equity,	any	exchange	
component	of	that	gain	or	loss	is	also	recognised	directly	in	equity.	When	a	gain	or	loss	on	a	non‑monetary	item	is	recognised	in	
the	income	statement,	any	exchange	component	of	that	gain	or	loss	is	also	recognised	in	the	income	statement.
For	the	purpose	of	presenting	consolidated	financial	statements,	the	assets	and	liabilities	of	the	Group’s	foreign	operations	
(including	comparatives)	are	expressed	in	sterling	using	exchange	rates	prevailing	on	the	balance	sheet	date.	Income	and	expense	
items	(including	comparatives)	are	translated	at	the	average	exchange	rates	for	the	period.	Exchange	differences	arising,	if	any,	are	
recognised	in	equity.	Cumulative	translation	differences	are	recognised	in	profit	or	loss	in	the	period	in	which	the	foreign	operation	
is	disposed	of.
Goodwill	and	fair	value	adjustments	arising	on	the	acquisition	of	a	foreign	operation	are	treated	as	assets	and	liabilities	of	the	
foreign	operation	and	translated	at	the	closing	rate.
2.7 Defined contribution pension funds
In	2014	(and	2013)	the	Group	paid	no	contributions	related	to	salary	to	UK	employees’	individual	pension	schemes,	as	UK	pension	
contributions	have	ceased.	 Silence Therapeutics plc Annual report and financial statements 2014 34
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Financial statements
Notes to the financial statements continued
year ended 31 December 2014
2. Principal accounting policies continued
2.8 Business combinations
There	were	no	business	combinations	as	defined	by	IFRS	3	(revised)	during	2013	or	2014.	
Business	combinations	which	occurred	in	2010	were	accounted	for	by	applying	the	acquisition	method	described	in	IFRS	3	
(revised)	as	at	the	acquisition	date,	which	is	the	date	on	which	control	is	transferred	to	the	Group.	In	arriving	at	the	cost	of	
acquisition,	the	fair	value	of	the	shares	issued	by	the	Company	is	taken	to	be	the	bid	price	of	those	shares	at	the	date	of	the	issue.	
Where	this	figure	exceeds	the	nominal	value	of	the	shares,	the	excess	amount	is	treated	as	an	addition	to	the	merger	reserve.
Acquisitions before 1 January 2010
For	acquisitions	which	occurred	before	1	January	2010,	goodwill	represents	the	excess	of	the	cost	of	the	acquisition	over	the	
Group’s	interest	in	the	recognised	amount	(generally	fair	value)	of	the	identifiable	assets,	liabilities	and	contingent	liabilities	of	
the acquiree.	
Transaction	costs,	other	than	those	associated	with	the	issue	of	debt	or	equity	securities,	that	the	Group	incurred	in	connection	
with	business	combinations	were	capitalised	as	part	of	the	cost	of	the	acquisition.
2.9 Goodwill and other intangible assets
Goodwill
Goodwill	is	stated	at	cost	less	any	accumulated	impairment	losses.	Goodwill	is	allocated	to	cash‑generating	units	and	is	not	
amortised	but	is	tested	annually	for	impairment.
Goodwill	arising	on	the	acquisition	of	a	subsidiary	represents	the	excess	of	the	cost	of	acquisition	over	the	Group’s	interest	in	the	
net	fair	value	of	the	identifiable	assets,	liabilities	and	contingent	liabilities	of	the	subsidiary	at	the	date	of	acquisition.	Goodwill	is	
initially	recognised	as	an	asset	at	cost	and	is	subsequently	measured	at	cost	less	any	accumulated	impairment	losses.	On	disposal	
of	a	subsidiary,	the	attributable	amount	of	goodwill	is	included	in	the	determination	of	the	profit	or	loss	on	disposal.
Other intangible assets
Other	intangible	assets	that	are	acquired	by	the	Group	are	stated	at	cost	less	accumulated	amortisation	and	less	accumulated	
impairment	losses.
Amortisation
Amortisation	is	charged	to	the	income	statement	on	a	straight‑line	basis	over	the	estimated	useful	lives	of	intangible	assets	unless	
such	lives	are	indefinite.	Intangible	assets	with	an	indefinite	useful	life	and	goodwill	are	systematically	tested	for	impairment	at	
each	balance	sheet	date.	Other	intangible	assets	are	amortised	from	the	date	they	are	available	for	use.	The	estimated	useful	lives	
are	as	follows:
Acquired	patents	and	trademarks		 10‑15	years
2.10 Property, plant and equipment
The	Group	holds	no	property	assets.
All	plant	and	equipment	is	stated	in	the	financial	statements	at	its	cost	of	acquisition	less	a	provision	for	depreciation.
Depreciation	is	charged	to	write	off	the	cost	less	estimated	residual	values	of	plant	and	equipment	on	a	straight‑line	basis	over	
their	estimated	useful	lives.	All	plant	and	equipment	is	estimated	to	have	useful	economic	lives	of	between	three	and	five	years.	
Estimated	useful	economic	lives	and	residual	values	are	reviewed	each	year	and	amended	if	necessary.
2.11 Other intangible assets and research and development activities
Intellectual property rights
Other	intangible	assets	include	both	acquired	and	internally	developed	intellectual	property	used	in	research	and	operations.	
These	assets	are	stated	at	cost	less	amortisation.
Acquired	intellectual	property	rights	are	capitalised	on	the	basis	of	the	costs	incurred	to	acquire	the	specific	rights.
Amortisation	is	applied	to	write	off	the	cost	less	residual	value	of	the	intangible	assets	on	a	straight‑line	basis	over	their	
estimated	useful	life.	The	principal	rates	used	are	6.7%	and	10%	per	annum.	Amortisation	is	included	within	research	and	
development costs. Silence Therapeutics plc Annual report and financial statements 2014 35
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Capitalisation of research and development costs
Costs	associated	with	research	activities	are	treated	as	an	expense	in	the	period	in	which	they	are	incurred.
Costs	that	are	directly	attributable	to	the	development	phase	of	an	internal	project	will	only	be	recognised	as	intangible	assets	
provided	they	meet	the	following	requirements:
•	 an	asset	is	created	that	can	be	separately	identified;
•	 the	technical	feasibility	exists	to	complete	the	intangible	asset	so	that	it	will	be	available	for	sale	or	use	and	the	Group	has	the	
intention	and	ability	so	to	do;
•	 it	is	probable	that	the	asset	created	will	generate	future	economic	benefits	either	through	internal	use	or	sale;
•	 sufficient	technical,	financial	and	other	resources	are	available	for	completion	of	the	asset;	and
•	 the	expenditure	attributable	to	the	intangible	asset	during	its	development	can	be	reliably	measured.
Careful	judgement	by	the	Group’s	management	is	applied	when	deciding	whether	recognition	requirements	for	development	costs	
have	been	met.	This	is	necessary	as	the	economic	success	of	any	product	development	is	uncertain	and	may	be	subject	to	future	
technical	problems	at	the	time	of	recognition.	Judgements	are	based	on	the	information	available	at	each	balance	sheet	date.
To	date,	no	development	costs	have	been	capitalised	in	respect	of	the	internal	projects	on	the	grounds	that	the	costs	to	date	
are	either	for	the	research	phase	of	the	projects	or,	if	relating	to	the	development	phase,	then	the	work	so	far	does	not	meet	the	
recognition	criteria	set	out	above.
2.12 Impairment testing of goodwill, other intangible assets and property, plant and equipment
At	each	balance	sheet	date,	the	Group	assesses	any	impairment	event	and	whether	there	is	any	indication	that	the	carrying	value	
of	any	asset	may	be	impaired.	If	any	such	indication	exists,	the	recoverable	amount	of	the	asset	is	estimated	in	order	to	determine	
the	extent	of	the	impairment	loss	(if	any).	Where	it	is	not	possible	to	estimate	the	recoverable	amount	of	an	individual	asset,	the	
Group	estimates	the	recoverable	amount	of	the	cash‑generating	unit	to	which	the	asset	belongs.
For	the	purposes	of	assessing	impairment,	assets	are	grouped	at	the	lowest	levels	for	which	there	are	separately	identifiable	cash	
flows	(cash‑generating	units).	Goodwill	is	allocated	to	those	cash‑generating	units	that	are	expected	to	benefit	from	synergies	
of	the	related	business	combination	and	represent	the	lowest	level	within	the	Group	at	which	management	controls	the	related	
cash flows.
An	impairment	loss	is	recognised	for	the	amount	by	which	the	asset’s	or	cash‑generating	unit’s	carrying	amount	exceeds	its	
recoverable	amount.	The	recoverable	amount	is	the	higher	of	fair	value,	reflecting	market	conditions	less	costs	to	sell,	and	value	
in	use.	Impairment	losses	recognised	for	cash‑generating	units	to	which	goodwill	has	been	allocated	are	credited	initially	to	the	
carrying	amount	of	goodwill.	Any	remaining	impairment	loss	is	charged	pro	rata	to	the	other	assets	in	the	cash‑generating	unit.
2.13 Investments in subsidiaries
Investments	in	subsidiaries	comprise	shares	in	the	subsidiaries	and	loans	from	the	Company.	Investments	in	shares	of	the	
subsidiaries	are	stated	at	cost	less	provisions	for	impairment.
2.14 Financial instruments
Financial	assets	and	financial	liabilities	are	recognised	on	the	Group’s	balance	sheet	when	the	Group	becomes	a	party	to	the	
contractual	provisions	of	the	instrument.
Financial	assets	can	be	divided	into	the	following	categories:	loans	and	receivables,	financial	assets	at	fair	value	through	profit	or	
loss,	available‑for‑sale	financial	assets,	held‑to‑maturity	investments	and	other	financial	assets.	Financial	assets	are	assigned	to	
the	different	categories	by	management	on	initial	recognition,	depending	on	the	purpose	for	which	the	instruments	were	acquired.	
The	designation	of	financial	assets	is	re‑evaluated	at	every	reporting	date	at	which	a	choice	of	classification	or	accounting	
treatment	is	available.
De‑recognition	of	financial	instruments	occurs	when	the	rights	to	receive	cash	flows	from	investments	expire	or	are	transferred	
and	substantially	all	of	the	risks	and	rewards	of	ownership	have	been	transferred.	An	assessment	for	impairment	is	undertaken	
at	least	at	each	balance	sheet	date	whether	or	not	there	is	objective	evidence	that	a	financial	asset	or	a	group	of	financial	assets	
is impaired. Silence Therapeutics plc Annual report and financial statements 2014 36
www.silence-therapeutics.com
2. Principal accounting policies continued
2.14 Financial instruments continued
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction 
costs and are subsequently measured at amortised cost using the effective interest method. Appropriate allowances for estimated 
irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired. The 
allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated 
future cash flows discounted at an effective interest rate computed at initial recognition.
Loans and receivables
Loans and receivables are non‑derivative financial assets with fixed or determinable payments that are not quoted in an active 
market. They arise when the Group or Company provides money directly to a debtor with no intention of trading the receivables. 
Loans receivable are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are 
subsequently measured at amortised cost using the effective interest method, less provision for impairment. Any change in their 
value is recognised in the income statement.
Other financial assets
Other financial assets are initially measured at fair value (with direct transaction costs being amortised over the life of the loan) 
and are subsequently remeasured to amortised cost using the effective interest rate method at each reporting date. Changes in 
carrying value are recognised in profit.
The Group holds certain investments in restricted or unvested stock. These instruments may be restricted or unvested for a variety 
of reasons including restrictions based on the agreed delivery of contractual milestones. These instruments have no value until the 
restrictions are removed or the shares vest and they are only recognised when the associated conditions have been satisfied.
Derivatives
Derivatives are initially measured at fair value (with direct transaction costs being included in profit as an expense) and are 
subsequently remeasured to fair value at each reporting date. Changes in carrying value are recognised in profit.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits that are readily convertible to a known amount of cash 
and are subject to an insignificant risk of change in value.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual 
arrangements entered into and the definitions of a financial liability and an equity instrument. A financial liability is a contractual 
obligation to either deliver cash or another financial asset to another entity or to exchange a financial asset or financial liability with 
another entity, including obligations which may be settled by the Group using its equity instruments. An equity instrument is any 
contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies 
adopted for specific financial liabilities and equity instruments are set out below.
Financial liabilities
At initial recognition, financial liabilities are measured at their fair value plus, if appropriate, any transaction costs that are directly 
attributable to the issue of the financial liability. After initial recognition, all financial liabilities are measured at amortised cost using 
the effective interest method.
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.
2.15 Operating leases
Leases where substantially all the risks and rewards of ownership remain with the lessor are accounted for as operating leases and 
are accounted for on a straight‑line basis over the term of the lease and charged to the income statement.
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 37
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
2.16 Share‑based payments
Historically	the	Group	has	issued	equity‑settled	share‑based	payments	to	certain	employees	and	advisers	(see	note	25).	
Equity‑settled	share‑based	payments	are	measured	at	fair	value	(excluding	the	effect	of	non	market‑based	vesting	conditions)	at	
the	date	of	grant.	The	fair	value	so	determined	is	expensed	on	a	straight‑line	basis	over	the	vesting	period,	based	on	the	Group’s	
estimate	of	the	number	of	shares	that	will	eventually	vest	and	adjusted	for	the	effect	of	non	market‑based	vesting	conditions.	The	
value	of	the	change	is	adjusted	to	reflect	expected	and	actual	levels	of	award	vesting,	except	where	failure	to	vest	is	as	a	result	of	
not	meeting	a	market	condition.	Cancellations	of	equity	instruments	are	treated	as	an	acceleration	of	the	vesting	period	and	any	
outstanding	charge	is	recognised	in	full	immediately.	Fair	value	is	measured	using	a	binomial	pricing	model.	The	key	assumptions	
used	in	the	model	have	been	adjusted,	based	on	management’s	best	estimate,	for	the	effects	of	non‑transferability,	exercise	
restrictions	and	behavioural	considerations.
2.17 Equity
Share	capital	is	determined	using	the	nominal	value	of	shares	that	have	been	issued.
The	share	premium	account	includes	any	premiums	received	on	the	initial	issuing	of	the	share	capital.	Any	transaction	costs	
associated	with	the	issuing	of	shares	are	deducted	from	the	share	premium	account,	net	of	any	related	income	tax	benefits.
The	merger	reserve	represents	the	difference	between	the	nominal	value	and	the	market	value	at	the	date	of	issue	of	shares	issued	
in	connection	with	the	acquisition	by	the	Group	of	an	interest	in	over	90%	of	the	share	capital	of	another	company.
Equity‑settled	share‑based	payments	are	credited	to	a	share‑based	payment	reserve	as	a	component	of	equity	until	related	
options	or	warrants	are	exercised.
Foreign	currency	translation	differences	are	included	in	the	translation	reserve.
Profit	and	loss	account	(deficit)	includes	all	current	and	prior	period	results	as	disclosed	in	the	income	statement.
2.18 Taxation
Current	tax	payable	is	based	on	taxable	profit	for	the	year.	Taxable	profit	differs	from	profit	as	reported	in	the	income	statement	
because	it	excludes	items	of	income	or	expense	that	are	taxable	or	deductible	in	other	years	and	it	further	excludes	items	that	are	
never	taxable	or	deductible.	Current	tax	liabilities	are	calculated	using	tax	rates	that	have	been	enacted	or	substantively	enacted	
by	the	balance	sheet	date.
Tax	receivable	arises	from	the	UK	legislation	regarding	the	treatment	of	certain	qualifying	research	and	development	costs,	
allowing	for	the	surrender	of	tax	losses	attributable	to	such	costs	in	return	for	a	tax	rebate.
Deferred	tax	is	recognised	on	differences	between	the	carrying	amounts	of	assets	and	liabilities	in	the	financial	statements	and	the	
corresponding	tax	bases	used	in	the	computation	of	taxable	profit,	and	is	accounted	for	using	the	balance	sheet	liability	method.	
Deferred	tax	liabilities	are	generally	recognised	for	all	taxable	temporary	differences	and	deferred	tax	assets	are	recognised	to	
the	extent	that	it	is	probable	that	taxable	profits	will	be	available	against	which	deductible	temporary	differences	can	be	utilised.	
Such	assets	and	liabilities	are	not	recognised	if	the	temporary	difference	arises	from	initial	recognition	of	goodwill	or	from	the	initial	
recognition	(other	than	in	a	business	combination)	of	other	assets	and	liabilities	in	a	transaction	that	affects	neither	the	taxable	
profit	nor	the	accounting	profit.
Deferred	tax	liabilities	are	recognised	for	taxable	temporary	differences	arising	on	investments	in	subsidiaries	and	associates,	and	
interests	in	joint	ventures,	except	where	the	Group	is	able	to	control	the	reversal	of	the	temporary	difference	and	it	is	probable	that	
the	temporary	difference	will	not	reverse	in	the	foreseeable	future.
The	carrying	amount	of	deferred	tax	assets	is	reviewed	at	each	balance	sheet	date	and	reduced	to	the	extent	that	it	is	no	longer	
probable	that	sufficient	taxable	profits	will	be	available	to	allow	all	or	part	of	the	asset	to	be	recovered.
Deferred	tax	is	calculated	at	the	tax	rates	that	are	expected	to	apply	in	the	period	when	the	liability	is	settled	or	the	asset	realised.	
Deferred	tax	is	charged	or	credited	to	the	income	statement,	except	when	it	relates	to	items	charged	or	credited	directly	to	equity,	
in	which	case	the	deferred	tax	is	also	dealt	with	in	equity.
Deferred	tax	assets	and	liabilities	are	offset	when	there	is	a	legally	enforceable	right	to	set	off	current	tax	assets	against	current	tax	
liabilities	and	when	they	relate	to	income	taxes	levied	by	the	same	taxation	authority	and	the	Group	intends	to	settle	its	current	tax	
assets	and	liabilities	on	a	net	basis. Silence Therapeutics plc Annual report and financial statements 2014 38
www.silence-therapeutics.com
2. Principal accounting policies continued
2.19 Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the entity’s accounting policies, management makes estimates and assumptions that have an effect 
on the amounts recognised in the financial statements. Although these estimates are based on management’s best knowledge of 
current events and actions, actual results may ultimately differ from those estimates.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a 
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are 
those relating to:
•	 the ability of the Group to operate as a “going concern”;
•	 the carrying value of the Company’s investment in its subsidiaries; and
•	 the future recoverability of goodwill. 
The Group expends considerable sums on its development projects, with its total research and development costs for 2014 
amounting to £8.9m (2013: £5.6m). The Board has considered the criteria under IAS 38 to determine whether costs can be 
capitalised, concluding that it would not be able to prove reliably that such costs could be recovered due to the risk factors 
involved. Therefore, all such costs have been treated as expenses as they were incurred. Any decision to treat part of those costs 
as capital items could have a significant impact on the Group’s results and balance sheet.
As explained in note 2.3 above, the financial statements are drawn up on the going concern basis which assumes that the Group 
will be able to access sufficient funds to continue to operate for the foreseeable future. If the financial statements were to be drawn 
up on the basis that this assumption was not valid then there could be material changes to the carrying values of both assets 
and liabilities.
The Group’s main activities are carried out by subsidiary companies which are financed by ongoing investment by the parent 
Company. These investments are carried in the books of the parent Company at cost less provisions for impairment. The carrying 
value at 31 December 2014 is £34.0m (2013: £33.9m). The key assumptions concerning the carrying value of the investments 
in, and loans to, subsidiaries relate to the continuing progress of the research and development programmes. As noted below, 
there are a number of risks and uncertainties around those assumptions and the crystallisation of any of those risks could 
have a significant impact on the assessment of the carrying value of the investment shown in the financial statements of the 
parent Company.
Goodwill is carried in the financial statements at a value of £7.1m (2013: £7.5m).
The key assumptions concerning the carrying value, or otherwise, for both the goodwill and other intangible assets relate to 
the continuing progress of the Group’s research and development programmes, which are subject to risks common to all 
biotechnology businesses. These risks include the impact of competition in the specific areas of development, the potential failure 
of the projects in development or clinical trials and the possible inability to progress projects due to regulatory, manufacturing or 
intellectual property issues or the lack of available funds or other resources. Furthermore, the crystallisation of any of these risks 
could have a significant impact on the assessment of the value of both goodwill and other intangible assets.
2.20 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision‑maker. 
The chief operating decision‑maker, who is responsible for allocating resources and assessing performance of the operating 
segments, has been identified as Ali Mortazavi.
3. Revenue
Revenue in the year was from licence, grant and service fees generated by both European and US operations. The analysis of 
revenues by geographical destination is:
       2014 2013 
       £000s  £000s 
Europe        1 —
North America       14 14
Asia/Pacific       — 103
       15 117
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 39
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
4. Segment reporting
In	2014,	the	Group	operated	in	the	specific	technology	field	of	RNA	therapeutics.	
Non‑current assets
	 	 	 	 	 	 	 UK	 Germany	
	 	 	 	 	 	 	 £000s	 £000s
As at 31 December 2014       18 7,519
As	at	31	December	2013	 	 	 	 	 	 	 6	 8,012
Segment	loss	used	by	the	Board	in	its	assessment	of	the	entity	is	loss	before	tax.
Business segments
	 		 		 	 RNA Group Consolidated 
	 		 		 	 therapeutics unallocated data	
2014	 		 		 	 £000s £000s £000s
Revenue	from	external	customers		 	 	 	 	 15 — 15
Operating	loss		 	 	 	 	 	 (8,869) (3,258) (12,127)
Interest	and	other	income		 	 	 	 	 	 147 — 147
Segment	loss	for	the	year	before	taxation	 	 	 	 		 (8,722) (3,258) (11,980)
Segment	assets		 	 	 	 	 	 7,519 22,252 29,771
Segment	liabilities		 	 	 	 	 	 (980) (1,033) (2,013)
Costs	to	acquire	property,	plant	and	equipment		 	 	 	 322 15 337
Costs	to	acquire	intangible	assets	 	 	 	 	 1 — 1
Depreciation,	amortisation	and	abandonment	of	patents	 	 	 	 329 3 332
Charge	for	non‑cash	expenses:	share‑based	payments	charge		 	 	 — 1,127 1,127
Segment	non‑current	assets		 	 	 	 	 7,519 18 7,537
	 	 	 	 	 	 RNA	 Group	 Consolidated	
	 	 	 	 	 	 therapeutics	 unallocated	 data	
2013	 	 	 	 	 	 £000s	 £000s	 £000s
Revenue	from	external	customers		 	 	 	 	 117	 —	 117
Operating	loss		 	 	 	 	 	 (5,532)	 (3,540)	 (9,072)
Interest	and	other	income		 	 	 	 	 	 70	 —	 70
Segment	loss	for	the	year	before	taxation	 	 	 	 		 (5,462)	 (3,540)	 (9,002)
Segment	assets		 	 	 	 	 	 8,700	 20,600	 29,300
Segment	liabilities		 	 	 	 	 	 1,281	 443	 1,724
Costs	to	acquire	property,	plant	and	equipment		 	 	 	 114	 6	 120
Costs	to	acquire	intangible	assets		 	 	 	 	 18	 —	 18
Depreciation,	amortisation	and	abandonment	of	patents	 	 	 	 376	 1	 377
Charge	for	non‑cash	expenses:	share‑based	payments	charge		 	 	 —	 1,386	 1,386
Segment	non‑current	assets		 	 	 	 	 8,012	 6	 8,018 Silence Therapeutics plc Annual report and financial statements 2014 40
www.silence-therapeutics.com
5. Operating loss
This	is	stated	after	charging:
	 		 		 		 2014	 2013	
	 		 		 	 £000s	 £000s
Depreciation	of	property,	plant	and	equipment		 	 	 	 	 90	 64
Amortisation	of	intangibles	and	abandonment	of	patents	 	 	 	 	 242	 313
Share‑based	payments	charge		 	 	 	 	 	 1,127	 1,386
Fees	payable	to	the	Company’s	auditor	for	the	audit	of	the	parent	Company	and	the	consolidation:
–	audit	of	these	financial	statements		 	 	 	 	 	 55	 70
–	audit	of	the	Company’s	subsidiaries	pursuant	to	legislation		 	 	 	 —	 17
–	taxation		 	 	 	 	 	 	 14	 36
Operating	lease	payments	on	offices	 	 	 	 	 		 566	 367
The	auditor’s	remuneration	for	the	year	ended	31	December	2014	relates	to	PricewaterhouseCoopers	LLP	following	its	
appointment	as	auditor	during	the	year.	The	comparatives	relate	to	the	previous	auditor,	KPMG	LLP.
Taxation	services	consist	of	tax	compliance	services.	No	information	on	auditor	remuneration	in	respect	of	the	Company	has	been	
given	as	the	Group	financial	statements	are	required	to	give	on	a	Group	basis	the	disclosures	required	by	regulation.
6. Directors and staff costs
Staff	costs,	including	Directors’	remuneration,	during	the	year	were	as	follows:
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Wages	and	salaries		 	 	 	 	 	 	 4,661	 2,424
Termination	benefits		 	 	 	 	 	 	 117	—
Social	security	costs		 	 	 	 	 	 	 377	 477
Charge	in	respect	of	share‑based	payments		 	 	 	 1,127	 1,386
	 					 6,282	 4,287
Directors’ remuneration table 
	 		 Benefits  Total 	 	 Benefits	 Total	
	 Base salary in kind Bonus remuneration	 Base	salary	 Bonus	 in	kind	 remuneration	
	 2014 2014 2014 2014	 2013	 2013	 2013	 2013	
	 £000 £000 £000 £000	 £000	 £000	 £000	 £000
Executive  
Directors        
Ali	Mortazavi
1
	 140 7 60 207	 70	 —	 9	 79
Timothy	Freeborn	 130 2 37 169	 99	 20	 3	 122
Michael	Khan*	 120 — — 120	 53	 —	 —	 53
Non‑Executive  
Directors        
Simon	Sturge
2
	 75 — — 75	 17	 —	 —	 17
Alastair	Riddell
3
	 42 — — 42	 4	 —	 —	 4
Stephen	Parker
4
	 35 — — 35	 4	 —	 —	 4
Past Directors        
Annie	Cheng
5
	 140 — — 140	 58	 —	 —	 58
Jerry	Randall
6
	 — — — —	 9	 —	 —	 9
Total 682 9 97 788	 314	 20	 12	 346
Notes
1	 Appointed	as	CEO	29	May	2013
2		 Appointed	as	a	Director	21	August	2013	
3		 Appointed	as	a	Director	18	November	2013	and	as	Chairman	on	5	January	2015
4		 Appointed	as	a	Director	18	November	2013
5		 Resigned	as	a	Director	2	September	2014	but	continued	as	an	employee	until	February	2015
6		 Resigned	as	a	Director	18	November	2013
*	 See	related	party	transaction	note	25
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 41
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
The	monthly	average	number	of	employees,	including	both	Executive	and	Non‑Executive	Directors,	during	the	year	was	
51 (2013: 38).	Of	these,	the	monthly	average	number	of	employees	working	in	research	and	development	and	administration	
was 35	(2013:	27)	and	16 (2013:	11)	respectively.	
Apart	from	the	Directors,	the	monthly	average	number	of	employees	of	the	parent	Company	was	7	(2013:	1);	5	working	in	
administration	(2013:	1)	and	2	in	R&D	(2013:	nil).
In	the	2014	financial	year	the	Company	made	no	pension	scheme	contributions.
	 		 		 		 Share options	 Share	options		
	 		 		 		 charge 2014	 charge	2013	
	 		 		 		 £000s	 £000s
Ali	Mortazavi	 	 	 	 	 	 	 183	 545
Timothy	Freeborn	 	 	 	 	 	 	 103	 67
Michael	Khan	 	 	 	 	 	 	 114	 90
Jerry	Randall	 	 	 	 	 	 	 199	 340
Annie	Cheng	 	 	 	 	 	 	 —	 24
Total	 						 599	 1,066
The	Directors	of	the	Group	are	deemed	to	be	the	key	management	of	the	Group.
7. Finance and other income
Finance	and	other	income	comprises:
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Bank	interest	receivable	 	 	 	 	 	 139	 70
Other	income	 	 	 	 	 	 	 8	—
Finance	and	other	income	 	 	 	 	 	 	 147	 70
8. Taxation
Current	tax	and	deferred	tax	in	2014	were	nil	(2013:	nil).	Reconciliation	of	income	tax	credit	at	standard	rate	of	UK	corporation	tax	
to	the	current	tax	credit:
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Loss	before	tax		 	 	 	 	 	 	 (11,980)	 (9,002)
Tax	credit	at	the	standard	rate	of	UK	corporation	tax	of	21.5%	(2013:	23.25%)		 	 	 2,576	 2,093
Effect	of	overseas	tax	rate	 	 	 	 	 	 		 24	 11
Impact	of	unrelieved	tax	losses	not	recognised		 	 	 	 (2,600)	 (2,104)
R&D	tax	credit	adjustment	in	respect	of	prior	year	 	 	 	 	 (892)	—
	 					 (892)	—
Estimated	tax	losses	of	£63.5m	(2013:	£49.4m)	are	available	for	relief	against	future	profits.	
The	deferred	tax	asset	not	recognised	in	these	financial	statements	on	the	estimated	losses	and	the	treatment	of	the	equity‑settled	
share‑based	payments,	net	of	any	other	temporary	timing	differences	is	detailed	in	note	18.	During	the	year,	the	parent	Company	
received	a	research	and	development	tax	credit	of	£0.9m	(2013:	nil).	
During	the	year,	there	was	a	reduction	in	the	rate	from	23%	to	21%	(effective	from	1	April	2014)	which	was	substantively	enacted	
on	2	July	2013.	The	2013	Budget	announced	that	the	UK	corporation	tax	rate	will	reduce	further	to	20%	by	2015	(effective	from	
1 April	2015).	Minimal	impact	is	expected	from	these	changes	given	the	Group	is	loss	making.
9. Loss per share
The	calculation	of	the	loss	per	share	is	based	on	the	loss	for	the	financial	year	after	taxation	of	£11.1m	(2013:	loss	£9.0m)	and	on	
the	weighted	average	of	50,424,784	(2013:	43,932,664)	ordinary	shares	in	issue	during	the	year.	
The	options	outstanding	at	31	December	2014	and	31	December	2013	are	considered	to	be	non‑dilutive	as	the	Group	is	
loss making. Silence Therapeutics plc Annual report and financial statements 2014 42
www.silence-therapeutics.com
10. Property, plant and equipment
Equipment	and	furniture
	 	 	 	 	 	 	 Group	 Company	
	 	 	 	 	 	 	 £000s	 £000s
Cost		
At	1	January	2013		 	 	 	 	 	 	 2,912	 4
Additions		 	 	 	 	 	 	 120	 5
Disposals		 	 	 	 	 	 	 (3)	 —
Translation	adjustment		 	 	 	 	 	 	 85	 —
At	31	December	2013		 	 	 	 	 	 	 3,114	 9
Additions		 	 	 	 	 	 	 337	 15
Disposals		 	 	 	 	 	 	 (3)	 —
Translation	adjustment		 	 	 	 	 	 	 (193)	 —
At 31 December 2014       3,255 24
Accumulated depreciation  
At	1	January	2013		 	 	 	 	 	 	 2,755	 2
Charge	for	the	year		 	 	 	 	 	 	 64	 1
Eliminated	on	disposal		 	 	 	 	 	 	 (3)	 —
Translation	adjustment		 	 	 	 	 	 	 80		 —
At	31	December	2013	 	 	 	 	 	 		 2,896	 3
Charge	for	the	year		 	 	 	 	 	 	 90	 3
Eliminated	on	disposal		 	 	 	 	 	 	 (3)	 —
Translation	adjustment		 	 	 	 	 	 	 (186)	 —
At 31 December 2014       2,797 6
Net book value  
As	at	31	December	2013	 	 	 	 	 	 	 218	 6
As at 31 December 2014        458 18
11. Goodwill
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Balance	at	start	of	year		 	 	 	 	 	 	 7,549	 7,333
Translation	adjustment		 	 	 	 	 	 (472)	 216
Balance	at	end	of	year		 	 	 	 	 	 7,077	 7,549
The	carrying	amount	of	goodwill	is	attributable	to	the	acquisition	of	Silence	Therapeutics	GmbH	in	2005	and	forms	part	of	the	
Group’s	RNA	therapeutics	cash	generating	unit	(CGU).	In	accordance	with	IAS	36:	Impairment	of	Assets,	the	carrying	value	of	
goodwill	has	been	assessed	comparing	its	carrying	value	to	its	recoverable	amount.
The	recoverable	amount	is	based	on	fair	value	less	costs	to	sell.	No	goodwill	impairment	was	identified.
Fair	value	less	costs	to	sell	of	the	RNA	therapeutics	CGU	has	been	determined	based	on	the	market	capitalisation	of	the	Group	
as	a	whole,	which	at	the	year	end	was	£107m,	less	the	Directors’	assessment	of	the	fair	value	associated	with	the	Group’s	other	
CGU,	which	the	Directors	believe	is	equal	to	its	net	assets.
The	Directors	consider	that	the	use	of	a	fair	value	less	costs	to	sell	model	based	on	market	prices	to	be	appropriate,	given	the	
simple	nature	of	the	business	and	the	fact	that	all	the	enterprise	value	in	the	business	resides	within	the	RNA	therapeutics	CGU.
Due	to	the	headroom	which	exists	between	the	recoverable	amount	and	the	carrying	value	there	is	currently	no	reasonable	
possible	change	in	the	determined	recoverable	amount	which	would	cause	the	CGU’s	carrying	value	to	exceed	its	
recoverable amount.
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 43
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
12. Other intangible assets
	 	 	 	 	 	 	 Internally	
	 	 	 	 	 	 	 generated	 	
	 	 	 	 	 	 Licences		 patents	 Total	
	 	 	 	 	 	 £000s	 £000s	 £000s
Cost	 		
At	1	January	2013		 	 	 	 	 	 2,234	 1,274	 3,508
Additions		 	 	 	 	 	 1	 17	 18
Abandonment	of	patents	 	 	 	 	 	 —	 (328)	 (328)
Translation	adjustment		 	 	 	 	 	 66	 37	 103
At	31	December	2013		 	 	 	 	 	 2,301	 1,000	 3,301
Additions	 	 	 	 	 	 1	 —	 1
Translation	adjustment	 	 	 	 	 	 (143)	 (62)	 (205)
At 31 December 2014      2,159 938 3,097
Accumulated amortisation   
At	1	January	2013	 	 	 	 	 	 2,233	 749	 2,982
Charge	for	the	year		 	 	 	 	 	 —	 233	 233
Abandonment	of	patents	 	 	 	 	 	 —	 (248)	 (248)
Translation	adjustment		 	 	 	 	 	 66	 17	 83
At	31	December	2013		 	 	 	 	 	 2,299	 751	 3,050
Charge	for	the	year	 	 	 	 	 	 1	 241	 242
Translation	adjustment	 	 	 	 	 	 (143)	 (54)	 (197)
At 31 December 2014      2,157 938 3,095
Net book value   
As	at	31	December	2013		 	 	 	 	 	 2	 249	 251
As at 31 December 2014      2 — 2
The	intangible	assets	included	above	have	finite	useful	lives	estimated	to	be	of	10‑15	years	from	the	date	of	acquisition,	over	
which	period	they	are	amortised	or	written	down	if	they	are	considered	to	be	impaired.	Internally	generated	patent	costs	are	
only	recorded	where	they	are	expected	to	lead	directly	to	near	term	revenues.	These	costs	are	amortised	on	a	straight‑line	basis	
over	10‑15	years,	commencing	upon	the	completion	of	the	asset.	The	charge	for	amortisation	is	included	in	the	research	and	
development	costs	in	the	income	statement.
13. Investments in subsidiaries
	 	 	 	 	 	 	 2014	 2013	
Company		 	 	 	 	 	 	 £000s	 £000s
Investment	in	subsidiary	undertakings		 	 	 	 	 	 34,026	 33,908
The	investment	in	subsidiary	undertakings	is	made	up	as	follows:
	 	 	 	 	 	 Investment	 Impairment	 Net	
	 	 	 	 	 	 at	cost	 provision	 total	
	 	 	 	 	 	 £000s	 £000s	 £000s
Shares and loans in subsidiary undertakings   
At	31	December	2012		 	 	 	 	 	 80,951	 (46,747)	 34,204
Reduction	in	loan	 	 	 	 	 	 (296)	 —	 (296)
At	31	December	2013	 	 	 	 	 	 80,655	 (46,747)	 33,908
Additions	 	 	 	 	 	 118	 —	 118
At 31 December 2014      80,773 (46,747) 34,026
At	31	December	2014,	a	non‑interest	bearing	unsecured	loan	of	£22.4m	(2013:	£22.4m)	was	outstanding	from	Silence	
Therapeutics	plc	to	Stanford	Rook	Ltd.	This	has	been	fully	provided	for	in	both	2013	and	2014.	 Silence Therapeutics plc Annual report and financial statements 2014 44
www.silence-therapeutics.com
13. Investments in subsidiaries continued
Subsidiary companies
The	principal	activity	of	all	subsidiaries	is	the	research	and	development	of	pharmaceutical	products.	All	subsidiary	companies	are	
consolidated	in	the	Group’s	financial	statements:
	 	 	 	 	 Place	of	 	 Proportion	of	
	 	 	 	 	 	incorporation	 Principal	 ownership	
Name		 	 	 	 	 and	operation	 technology	area	 interest
Silence	Therapeutics	GmbH		 	 	 	 Germany	 RNA	therapeutics	 100%
Intradigm	Corporation		 	 	 	 	 US	 RNA	therapeutics	 100%
Stanford	Rook	Ltd		 	 	 	 	 England	 Immunotherapy	 100%
Innopeg	Ltd		 	 	 	 	 England	 Not	active	 100%
	 	 	 	 	 	 	 	 Exempt	from	
	 	 	 	 	 	 	 Exempt	 filing	financial		
Name	 	 	 	 	 	 	 from	audit	 statements
Silence	Therapeutics	GmbH		 	 	 	 	 	 No	 No
Intradigm	Corporation		 	 	 	 	 	 	 Yes	 Yes
Stanford	Rook	Ltd		 	 	 	 	 	 	 Yes	 No
Innopeg	Ltd		 	 	 	 	 	 	 Yes	 No
Silence	Therapeutics	plc	has	made	an	impairment	provision	against	the	investment	and	loans	to	Stanford	Rook	Ltd,	Innopeg	Ltd	
and	Intradigm	Corporation	to	the	extent	that	they	are	deemed	to	be	not	recoverable.	No	impairment	provision	has	been	made	
against	the	investment	in	Silence	Therapeutics	GmbH	as	the	Directors	believe	that	the	fair	value	exceeds	the	cost	of	investment	
to date.
14. Trade and other receivables
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 	 		 £000s £000s	 £000s	 £000s
Trade	receivables		 	 	 	 	 — —	—	—
Other	receivables		 	 	 	 	 212 124	 166	 56
Prepayments	and	accrued	income	 	 	 163 101	 224	 136
Total	trade	and	other	receivables		 	 	 	 375 225	 390	 192
The	Directors	consider	that	the	carrying	amount	of	trade	and	other	receivables	approximates	to	their	fair	value.	Trade	and	
other	receivables	were	all	receivable	within	90	days.	Fair	values	have	been	calculated	by	discounting	cash	flows	at	prevailing	
interest rates.
No	interest	is	charged	on	outstanding	receivables.
15. Other financial assets
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 	 		 £000s £000s	 £000s	 £000s
Other	financial	assets	 	 	 	 	 5,000 5,000	 5,000	 5,000
£5.0m	is	on	deposit	until	March	2015	with	Investec	Bank	plc.	The	rate	of	interest	on	this	deposit	is	linked	to	the	sterling	euro	
exchange	rate.	The	Directors	consider	that	the	carrying	amount	of	this	deposit	approximates	to	the	fair	value.
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 45
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
16. Cash and cash equivalents
Cash	at	bank	comprises	balances	held	by	the	Group	in	current	and	short‑term	bank	deposits	with	a	maturity	of	three	months	
or	less.	The	carrying	amount	of	these	assets	approximates	to	their	fair	value.	The	deposits	held	at	bank	are	treated	as	cash	
equivalents	under	the	definitions	of	IAS	7:	Cash	Flow	Statements.
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 	 		 £000s £000s	 £000s	 £000s
Cash	and	cash	equivalents	 	 	 	 	 16,857 15,761	 15,890	 15,600
17. Trade and other payables
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 	 		 £000s £000s	 £000s	 £000s
Trade	payables		 	 	 	 	 540 396	 476	 117
Social	security	and	other	taxes		 	 	 	 118 59	 119	 30
Deferred	revenues		 	 	 	 297 —	 293	 —
Accruals	and	other	payables		 	 	 	 1,058 578	 836	 296
	 			 2,013 1,033	 1,724	 443
Trade	payables	and	accruals	principally	comprise	amounts	outstanding	for	trade	purchases	and	continuing	costs.
The	Directors	consider	that	the	carrying	amount	of	trade	and	other	payables	approximates	to	their	fair	value.
18. Deferred tax
The	following	are	the	major	deferred	tax	liabilities	and	assets	recognised	by	the	Group:
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Deferred	tax	liability:	 	
–	in	respect	of	intangible	assets		 	 	 	 	 	 1	 74
Less:	offset	of	deferred	tax	asset	below		 	 	 	 	 	 (1)	 (74)
Liability		 	 	 	 	 	 	 —	—
Deferred	tax	asset:	 	
–	in	respect	of	available	tax	losses		 	 	 	 	 	 18,215	 11,184
–	in	respect	of	share‑based	payments		 	 	 	 	 	 865	 596
Less:	offset	against	deferred	tax	liability		 	 	 	 	 	 (1)	 (74)
	 						 19,079	 11,706
–	provision	against	asset		 	 	 	 	 	 (19,079)	 (11,706)
Asset		 	 	 	 	 	 —	—
Deferred	tax	is	calculated	at	20%.
Due	to	the	uncertainty	of	future	profits,	a	deferred	tax	asset	was	not	recognised	at	31	December	2014	(2013:	nil). Silence Therapeutics plc Annual report and financial statements 2014 46
www.silence-therapeutics.com
19. Share capital 
	 		 		 		 2014	 2013	
	 		 		 		 £000s	 £000s
Allotted,	called	up	and	fully	paid	 	
	 52,098,109	(2013:	47,061,554)	ordinary	shares	par	value	5p		 	 	 	 2,605	 2,353
The	Group	has	only	one	class	of	share.	All	ordinary	shares	have	equal	voting	rights	and	rank	pari	passu	for	the	distribution	
of dividends.
Details	of	the	shares	issued	by	the	Company	during	the	current	and	previous	years	are	as	follows:
	 		 		 		 	Number
Number	of	shares	in	issue	at	1	January	2013		 	 	 	 	 	 37,431,054
Shares	issued	during	2013:	
–	exercise	of	warrants	at	1p		 	 	 	 	 	 	 3,500,000
–	issue	of	shares	(equity	placing)	at	4p		 	 	 	 	 	 	 475,625,000
Consolidation	(50	to	1)	 	 	 	 	 	 	 	 9,582,500
Option	exercised	at	90p		 	 	 	 	 	 	 	 48,000
Total	issued	in	year		 	 	 	 	 	 	 	 9,630,500
Number of shares in issue at 31 December 2013      47,061,554
Shares	issued	during	2014:	
–	issue	of	shares	(equity	placing)	at	230p		 	 	 	 	 	 	 4,938,555
Options	exercised	at	90p		 	 	 	 	 	 	 	 98,000
Total	issued	in	year		 	 	 	 	 	 	 	 5,036,555
Number of shares in issue at 31 December 2014      52,098,109
The	Group	has	also	granted	options	to	certain	Directors	and	employees	under	the	auspices	of	an	Enterprise	Management	
Incentive	Scheme	and	by	individual	contract.	
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 47
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
At	31	December	2014	there	were	options	outstanding	over	4,711,703	(2013:	4,811,651)	unissued	ordinary	shares.
Details	of	the	options	outstanding	are	as	follows:
	 	 	 	 	 	 	 Exercise	
Exercisable	from	 	 	 	 	 Exercisable	until	 Number	 price	(p)
Any	time	until	 	 	 	 	 24	July	2015	 20,000	 11.50	
Any	time	until	 	 	 	 	 26	July	2016	 10,645	 6.38	
Any	time	until	 	 	 	 	 24	November	2016	 8,000	 21.50	
Any	time	until	 	 	 	 	 24	July	2015	 200	 54.50	
Any	time	until	 	 	 	 	 14	December	2017	 200	 54.50	
Any	time	until	 	 	 	 	 5	December	2018	 200	 54.50	
Any	time	until	 	 	 	 	 26	July	2017	 10,000	 63.50	
Any	time	until	 	 	 	 	 14	December	2017	 1,098	 33.88	
Any	time	until	 	 	 	 	 7	May	2018	 399	 20.75	
Any	time	until	 	 	 	 	 25	September	2018	 4,300	 14.75	
Any	time	until	 	 	 	 	 5	December	2018	 30,452	 10.00	
Any	time	until	 	 	 	 	 5	January	2020	 9,999	 10.61	
27	July	2015	 	 	 	 	 27	July	2024	 190,000		 0.25	
1	August	2015	 	 	 	 	 31	July	2024	 2,764,926		 0.25	
31	December	2015	 	 	 	 	 31	December	2024	 80,000		 1.25	
26	June	2016	 	 	 	 	 26	June	2026	 1,065,706		 1.25	
1	July	2016	 	 	 	 	 1	July	2026	 23,103		 1.85	
15	July	2016	 	 	 	 	 15	July	2026	 19,919		 2.17	
12	August	2016	 	 	 	 	 12	August	2026	 36,014		 2.03	
1	October	2016	 	 	 	 	 1	October	2026	 10,182		 2.75	
14	October	2016	 	 	 	 	 14	October	2026	 20,663		 2.42	
21	October	2016	 	 	 	 	 21	October	2026	 17,647		 2.55	
4	November	2016	 	 	 	 	 4	November	2026	 31,250		 2.40	
20	November	2016	 	 	 	 	 20	November	2026	 40,000		 2.82	
1	December	2016	 	 	 	 	 1	December	2026	 26,186		 2.06	
26	June	2016	 	 	 	 	 31	December	2016	 20,000		 1.25	
13	January	2017	 	 	 	 	 13	January	2029	 21,645		 2.17	
16	June	2017	 	 	 	 	 16	June	2029	 66,666		 2.10	
1	July	2017	 	 	 	 	 1	July	2029	 21,474		 2.20	
1	September	2017	 	 	 	 	 1	September	2029	 99,642		 2.10	
15	November	2017	 	 	 	 	 15	November	2029	 11,752		 2.01	
24	November	2017	 	 	 	 	 24	November	2029	 20,000		 2.00	
1	December	2017	 	 	 	 	 1	December	2029	 29,435		 2.14	
Total options outstanding      4,711,703
The	market	price	of	Company	shares	at	the	year	end	was	206p	(2013:	231p).	During	the	year	the	minimum	and	maximum	prices	
were	179.0p	and	375.0p	respectively	(2013:	158.5p	and	312.5p). Silence Therapeutics plc Annual report and financial statements 2014 48
www.silence-therapeutics.com
20. Equity-settled share-based payments
The	Company	has	a	share	option	scheme	open	to	all	employees	of	the	Group.	Options	are	exercisable	at	a	price	equal	to	the	
market	price	of	the	Company’s	shares	on	the	date	of	grant.	Under	the	scheme,	the	options	vest	at	dates	set	by	the	Company	at	
the	time	the	option	is	granted.	The	options	lapse	after	one	year	following	the	employee	leaving	the	Group.
	 2014	 2013
	
	 		 		 	 Weighted	 	 Weighted	
	 		 		 	 average	 	 average	
	 		 		 	 exercise price	 	 exercise	price	
	 		 	 Number p	 Number	 p
Options
Outstanding	at	the	beginning	of	the	year		 	 	 	 4,811,651 102.36	 164,129,490	 1.64
Adjust	for	consolidation	 	 	 	 	 — —	 (190)	 —
Outstanding	after	rounding	adjustment	 	 	 — —	 164,129,300	 —
50	to	1	consolidation	 	 	 	 	 — —	 3,282,586	 —
Granted	during	the	year		 	 	 	 366,089 205.81	 1,787,342	 145.25
Lapsed	during	the	year		 	 	 	 	 (368,037) 167.81	 (210,277)	 141.43
Exercised	during	the	year		 	 	 	 (98,000) 90.00	 (48,000)	 90.00
Outstanding	at	the	year	end		 	 	 	 4,711,703 104.99	 4,811,651	 102.36
Exercisable	at	the	year	end			 	 	 3,050,419 78.54	 811,494	 230.22
Warrants
Outstanding	at	the	beginning	of	the	year		 	 	 	 —	 —	 6,830,000	 1.24
50	to	1	consolidation	 	 	 	 	 —	 —	 136,600	 —
Granted	during	the	year		 	 	 	 	 —	 —	 —	 —
Lapsed	during	the	year		 	 	 	 	 —	 —	 —	 —
Exercised	during	the	year		 	 	 	 	 —	 —	 (70,000)	 50.00
Cancelled	during	the	year	 	 	 	 	 —	 —	 (66,600)	 75.00
Outstanding	at	the	year	end		 	 	 	 —	 —	 —	 —
Exercisable	at	the	year	end	 	 	 	 		 —	 —	 —	 —
The	options	outstanding	at	the	year‑end	have	a	weighted	average	remaining	contractual	life	of	10.3	years	(2013:	11.1	years).	
The	Group	granted	366,089	options	during	the	year	(2013:	1,787,342).	The	fair	value	of	options	granted	were	calculated	using	a	
binomial	model	and	inputs	into	the	model	were	as	follows:	
Inputs	and	assumptions	for	options	granted	in	the	year	 	 	 	 	 2014	 2013
Weighted	average	fair	value	at	grant	(p)	 	 	 	 	 	 160.4	 144.3
Weighted	average	share	price	(p)	 	 	 	 	 	 205.8	 153.6
Expected	volatility	 	 	 	 	 	 	 89%‑99%	 84%‑102%
Risk‑free	rate	 	 	 	 	 	 1.56%‑2.70%	1.45%‑1.55%
Hurdle	price	(p)	 	 	 	 	 	 400.0	 400.0
Expected	dividend	yield	 	 	 	 	 	 	 nil	 nil
The	Group	recognised	total	charges	of	£1.1m	(2013:	£1.4m)	related	to	equity‑settled	share‑based	payment	transactions	during	
the year.
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 49
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
21. Capital reserves
	 	 	 Share	 	 Share‑based	 	 Capital	 	
	 	 	 premium	 Merger	 payment	 Warrant	 redemption	 	
	 	 	 account	 reserve	 reserve	 reserve	 reserve	 Total	
Group 	 	 	 £000s	 £000s	 £000s	 £000s	 £000s	 £000s
At	1	January	2013		 	 	 65,714	 22,248	 1,660	 33	 5,194	 94,849
On	shares	issued	in	the	year:		 	 18,622	 —	 —	 —	 —	 18,622
–	less	cost	of	shares	issued		 	 (319)	 —	 —	 —	 —	 (319)
On	options	in	issue	during	the	year		 	 —	 —	 1,386	 —	 —	 1,386
On	vested	options	lapsed	during	the	year		 	 —	 —	 (27)	 —	 —	 (27)
On	options	exercised	during	the	year		 	 40	 —	 (40)	 —	 —	 —
On	issued	warrants	during	the	year		 	 —	 —	 —	 (33)	 —	 (33)
Movement	in	the	year		 	 	 18,343	 —	 1,319	 (33)	 —	 19,629
At	31	December	2013	 	 	 84,057	 22,248	 2,979	 —	 5,194	 114,478
On	shares	issued	in	the	year:		 	 11,112	 —	 —	 —	 —	 11,112
–	less	cost	of	shares	issued		 	 (604)	 —	 —	 —	 —	 (604)
On	options	in	issue	during	the	year		 	 —	 —	 1,127	 —	 —	 1,127
On	options	exercised	during	the	year		 	 84	 —	 —	 —	 —	 84
Movement	in	the	year	 	 	 10,592	 —	 1,127	 —	 —	 11,719
At 31 December 2014   94,649 22,248 4,106 — 5,194 126,197
	 	 	 Share	 	 Share‑based	 	 Capital	 	
	 	 	 premium	 Merger	 payment	 Warrant	 redemption	 	
	 	 	 account	 reserve	 reserve	 reserve	 reserve	 Total	
Company 	 	 	 £000s	 £000s	 £000s	 £000s	 £000s	 £000s
At	1	January	2013	 	 	 65,714	 22,064	 1,660	 33	 5,194	 94,665
On	shares	issued	in	the	year:		 	 18,622	 —	 —	 —	 —	 18,622
–	less	cost	of	shares	issued		 	 (319)	 —	 —	 —	 —	 (319)
On	options	in	issue	during	the	year		 	 —	 —	 1,386	 —	 —	 1,386
On	vested	options	lapsed	during	the	year		 	 —	 —	 (27)	 —	 —	 (27)
On	options	exercised	during	the	year	 	 40	 —	 (40)	 —	 —	 —
On	issued	warrants	during	the	year		 	 —	 —	 —	 (33)	 —	 (33)
Movement	in	the	year		 	 	 18,343	 —	 1,319	 (33)	 —	 19,629
At	31	December	2013	 	 	 84,057	 22,064	 2,979	 —	 5,194	 114,294
On	shares	issued	in	the	year:		 	 11,112	 —	 —	 —	 —	 11,112
–	less	cost	of	shares	issued		 	 (604)	 —	 —	 —	 —	 (604)
On	options	in	issue	during	the	year		 	 —	 —	 1,127	 —	 —	 1,127
On	options	exercised	during	the	year		 	 84	 —	 —	 —	 —	 84
Movement	in	the	year	 	 	 10,592	 —	 1,127	 —	 —	 11,719
At 31 December 2014   94,649 22,064 4,106 — 5,194 126,013
In	2013	the	cost	of	exercised	share	options	was	transferred	to	the	share	premium	account	from	the	share‑based	payment	reserve.	
In	2014,	on	advice	from	the	Company’s	auditor,	PricewaterhouseCoopers	LLP,	this	practice	has	been	discontinued.	This	reflects	
guidance	issued	by	the	Institute	of	Chartered	Accountants	in	England	and	Wales	as	set	out	in	Tech	02/10.
The	capital	redemption	reserve	was	created	in	2012	following	the	reduction	of	nominal	share	capital	to	0.1p	per	share.	It	is	
required	under	Section	733	of	the	Companies	Act	2006,	held	to	maintain	the	capital	of	the	Company	when	shares	are	bought	back	
and	subsequently	cancelled	without	court	approval.
Due	to	the	size	of	the	deficit	on	the	profit	and	loss	account,	the	Company	has	no	distributable	reserves.
The	share	premium	account	reflects	the	premium	to	nominal	value	paid	on	issuing	shares	less	costs	related	to	the	issue.	
The	merger	reserve	was	created	on	issuance	of	shares	relating	to	the	acquisition	of	Silence	Therapeutics	GmbH.
The	share‑based	payments	reserve	reflects	the	cost	to	issue	share‑based	compensation,	primarily	employee	share	options. Silence Therapeutics plc Annual report and financial statements 2014 50
www.silence-therapeutics.com
22. Capital commitments and contingent liabilities
There	were	no	capital	commitments	or	contingent	liabilities	at	31	December	2014	(2013:	nil).
23. Commitments under operating leases
At	31	December	2014	the	Group	and	Company	had	a	gross	commitment	on	its	serviced	office	at	1	Lyric	Square,	Hammersmith	
equal	to	£0.2m.
No	amounts	are	payable	between	one	to	five	or	greater	than	five	years.
24. Financial instruments and risk management
The	Group’s	financial	instruments	comprise	primarily	cash	and	other	financial	assets	and	various	items	such	as	trade	receivables	
and	trade	payables	which	arise	directly	from	its	operations.	The	main	purpose	of	these	financial	instruments	is	to	provide	working	
capital	for	the	Group’s	operations.	The	Group	assesses	counterparty	risk	on	a	regular	basis.	Board	approval	is	required	for	
adoption	of	any	new	financial	instrument	or	counterparty.	The	primary	focus	of	the	treasury	function	is	preservation	of	capital.	
The Directors	consider	that	the	carrying	amount	of	these	financial	instruments	approximates	to	their	fair	value.
Financial assets by category
The	categories	of	financial	assets	(as	defined	by	IAS	39:	Financial	Instruments:	Recognition	and	Measurement)	included	in	the	
balance	sheet	and	the	heading	in	which	they	are	included	are	as	follows:
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 		 £000s  £000s 	 £000s		 £000s	
Current assets	 			
Trade	and	other	receivables		 	 	 	 375 225	 390	 192
Other	financial	assets	 	 	 	 5,000 5,000	 5,000	 5,000
Cash	and	cash	equivalents	 	 	 	 		 16,857 15,761	 15,890	 15,600
All	amounts	are	short	term	and	none	are	past	due	dates	at	the	reporting	date.
Financial liabilities by category
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 		 £000s  £000s 	 £000s		 £000s	
Current liabilities
Trade	and	other	payables	 	 	 	 		 2,013 1,033	 1,724	 443
All	amounts	are	short	term	and	payable	in	zero	to	three	months.
The	maximum	exposure	to	credit	risk	at	the	reporting	date	by	class	of	financial	asset	was:
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 		 £000s  £000s 	 £000s		 £000s	
Loans	and	receivables		 	 	 	 375 225	 390	 192
Cash	and	cash	equivalents	are	not	considered	to	be	exposed	to	credit	risk	due	to	the	fact	it	sits	within	the	bank.	The	Group	
considers	the	possibility	of	significant	loss	in	the	event	of	non‑performance	by	a	financial	counterparty	to	be	unlikely.
Capital management
The	Group	considers	its	capital	to	be	equal	to	the	sum	of	its	total	equity.	The	Group	monitors	its	capital	using	a	number	of	
key	performance	indicators	including	cash	flow	projections,	working	capital	ratios,	the	cost	to	achieve	pre‑clinical	and	clinical	
milestones	and	potential	revenue	from	existing	partnerships	and	ongoing	licensing	activities.	The	Group’s	objective	when	
managing	its	capital	is	to	ensure	it	obtains	sufficient	funding	for	continuing	as	a	going	concern.	The	Group	funds	its	capital	
requirements	through	the	issue	of	new	shares	to	investors,	milestone	and	research	support	payments	received	from	existing	
licensing	partners	and	potential	new	licensees.
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Silence Therapeutics plc Annual report and financial statements 2014 51
www.silence-therapeutics.com
Corporate governance Financial statements Strategic report
Interest rate risk
The	nature	of	the	Group’s	activities	and	the	basis	of	funding	are	such	that	the	Group	has	significant	liquid	resources.	The	Group	
uses	these	resources	to	meet	the	cost	of	future	research	and	development	activities.	Consequently,	it	seeks	to	minimise	risk	in	the	
holding	of	its	bank	deposits	while	maintaining	a	reasonable	rate	of	interest.	The	Group	is	not	financially	dependent	on	the	income	
earned	on	these	resources	and	therefore	the	risk	of	interest	rate	fluctuations	is	not	significant	to	the	business.	Nonetheless,	the	
Directors	take	steps	to	secure	rates	of	interest	which	generate	a	return	for	the	Group	by	depositing	sums	which	are	not	required	
to	meet	the	immediate	needs	of	the	Group	in	interest‑bearing	deposits.	Other	balances	are	held	in	interest‑bearing,	instant	access	
accounts.	All	deposits	are	placed	with	main	clearing	banks	to	restrict	both	credit	risk	and	liquidity	risk.	The	deposits	are	placed	for	
the	short	term,	between	one	and	twelve	months,	to	provide	flexibility	and	access	to	the	funds	and	to	avoid	locking	into	potentially	
unattractive	interest	rates.
Credit and liquidity risk
Credit	risk	is	managed	on	a	Group	basis.	Funds	are	deposited	with	financial	institutions	with	a	credit	rating	equivalent	to,	or	above,	
the	main	UK	clearing	banks.	The	Group’s	liquid	resources	are	invested	having	regard	to	the	timing	of	payments	to	be	made	in	
the	ordinary	course	of	the	Group’s	activities.	All	financial	liabilities	are	payable	in	the	short	term	(between	zero	and	three	months)	
and	the	Group	maintains	adequate	bank	balances	in	either	instant	access	or	short‑term	deposits	to	meet	those	liabilities	as	they	
fall due.
Currency risk
The	Group	operates	in	a	global	market	with	income	possibly	arising	in	a	number	of	different	currencies,	principally	in	sterling	or	
euros.	The	majority	of	the	operating	costs	are	incurred	in	euros	with	the	rest	predominantly	in	sterling.	The	Group	does	not	hedge	
potential	future	income	since	the	existence,	quantum	and	timing	of	such	income	cannot	be	accurately	predicted.
Financial	assets	and	liabilities	denominated	in	euros	and	translated	into	sterling	at	the	closing	rate	were:
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 		 £000s  £000s 	 £000s		 £000s	
Financial	assets		 	 	 	 	 1,246 —	 487	 —
Financial	liabilities		 	 	 	 	 (556) —	 (894)	 —
Net	financial	assets		 	 	 	 	 690 —	 (407)	 —
Financial	assets	and	liabilities	denominated	in	US	dollars	and	translated	into	sterling	at	the	closing	rate	were:
	 2014	 2013
	
	 		 		 Group Company	 Group	 Company	
	 		 		 £000s  £000s 	 £000s		 £000s	
Financial	assets		 	 	 	 	 2 —	 2	 —
Financial	liabilities		 	 	 	 	 (424) —	 (413)	 —
Net	financial	liabilities		 	 	 	 	 (422) —	 (411)	 —
The	following	table	illustrates	the	sensitivity	of	the	net	result	for	the	year	and	the	reported	financial	assets	of	the	Group	in	regards	
to	the	exchange	rate	for	sterling:euro.
During	the	year	sterling	appreciated	by	7%	versus	the	euro.	The	table	shows	the	impact	of	an	additional	strengthening	or	falling	of	
sterling	against	the	euro	by	20%.
       If sterling If sterling 
      As reported rose 20% fell 20% 
2014      £000s £000s £000s
Group	result	for	the	year		 	 	 	 	 	 (11,088) (10,177) (12,456)
Euro	denominated	net	financial	liabilities		 	 	 	 	 690 575 863
Total	equity	at	31	December	2014	 	 	 	 	 27,758 26,460 29,703
	 	 	 	 	 	 	 If	sterling	 If	sterling	
	 	 	 	 	 	 As	reported	 rose	20%	 fell	20%	
2013	 	 	 	 	 	 £000s	 £000s	 £000s
Group	result	for	the	year		 	 	 	 	 	 (9,002)	 (8,966)	 (9,052)
Euro	denominated	net	financial	liabilities		 	 	 	 	 (407)	 (339)	 (509)
Total	equity	at	31	December	2013	 	 	 	 	 27,576	 28,077	 26,822
The	Group	no	longer	has	a	material	operating	exposure	to	the	US	dollar. Silence Therapeutics plc Annual report and financial statements 2014 52
www.silence-therapeutics.com
25. Related party transactions
Pharmalogos	Limited,	a	company	controlled	by	Dr	Stella	Khan,	wife	of	Dr	Michael	Khan,	supplies	research	services	to	Silence	
Therapeutics	plc	at	an	agreed	price	of	£100,000	per	annum.	Notice	was	given	to	cease	Pharmalogos	services	in	September	2014,	
with	effect	from	February	2015.
Key	management	personnel	are	considered	to	be	the	Directors	and	their	remuneration	is	disclosed	within	note	6.
As	part	of	the	equity	placing	during	the	year,	139,399	of	the	shares	issued	at	230p	were	subscribed	for	by	the	following	Directors:	
	 	 	 	 	 	 	 	 Shares	issued
Ali	Mortazavi		 	 	 	 	 	 	 	 129,399
Timothy	Freeborn		 	 	 	 	 	 	 	 10,000
26. Subsequent events
On	16	April	2015	the	Company	announced	that	1,036,848	new	ordinary	shares	had	been	issued	following	the	exercise	of	
share options.	
On	2	April	2015	the	Company	announced	it	had	raised	£40m	(before	expenses)	to	further	develop	its	RNA	platform.
On	23	March	2015,	the	Company	provided	early	interim	analysis	of	its	Phase	2a	trial	of	Atu027	in	pancreatic	cancer,	showing	
positive	signals.
On	12	February	2015	the	European	Patent	Office	upheld	a	key	RNAi	trigger	modification	patent	against	challenges	by	four	parties.	
Financial statements
Notes to the financial statements continued
year ended 31 December 2014 Secretary
Timothy Freeborn
Registered office
27‑28 Eastcastle Street
London W1W 8DH
Registered number
02992058
Nominated advisers and joint broker
Canaccord Genuity Limited
88 Wood Street
London EC2V 7QR
Joint broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Registrars
Capita IRG plc
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0LA
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and  
Statutory Auditors
Abacus House
Castle Park
Cambridge CB3 0AN 
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Silence Therapeutics plc Annual report and financial statements 2014