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Midatech Pharma Plc
65 Innovation Drive
Milton Park
Abingdon
Oxfordshire OX14 4RQ
United Kingdom
T +44 (0)1235 841 575
E info@midatechpharma.com
W www.midatechpharma.com
Midatech Pharma Plc Annual Report & Accounts 2014
Annual Report & Accounts 2014 Midatech Pharma plc | Annual report & Accounts 2014
Page title continued
Overview
Midatech is a nanomedicine company 
focused on the development and 
commercialisation of multiple, high-value, 
targeted therapies for major diseases 
with unmet medical need.
Midatech is advancing a pipeline of novel clinical and pre-clinical product candidates based  
on its proprietary drug conjugate and sustained release delivery platforms with a clear  
focus on the key therapeutic areas of diabetes, cancer and neuroscience including ophthalmology. 
Midatech’s strategy is to develop its products in-house in rare cancers and with partners  
in other indications, and to accelerate the growth of its business through the strategic 
acquisition of complementary products and technologies. Midatech Pharma plc | Annual report & Accounts 2014 01
Highlights
Contents
Financial Highlights
• Oversubscribed flotation on the London Stock Exchange’s 
AIM raising £32.00m (before expenses)
• Strong balance sheet with £30.33m cash and deposits at  
31 December 2014 (2013: £2.39m)
• Net loss after tax of £7.38m (2013: £4.08m) with net cash 
inflow in the year of £27.94m (2013: £2.25m)
• Tax credit receivable of £0.84m (2013: £0.80m)
Operational Highlights
• Acquisition of Q Chip Limited bringing complementary 
technology and products, enabling sustained release over 
extended periods of time – December 2014
• Positive results in proof-of-concept OpsiSporin study with 
sustained release treatment for uveitis (ocular inflammation) 
– February 2015
• Research collaboration signed with unnamed global 
pharmaceutical company in field of diabetes – March 2015
• Appointment of Nick Robbins-Cherry, Finance Director  
on 4 February 2014 and Dr Craig Cook, Chief Operating 
Officer on 1 January 2014
•  Research collaboration with Dana-Farber Cancer Institute  
– April 2015
• Awarded a €7.9m Horizon 2020 European Union grant 
(€3.4m direct to the Group) to fund manufacturing scale-up 
– September 2014 
“ 2014 has been a very successful year. 
Aside from the significant strategic and 
operational achievements, financial results 
have ended ahead of expectations.”
Rolf Stahel  
Non-executive Chairman
Overview
Overview 
Highlights  01
About Midatech 02
Chairmans Review 06
Chief Executive’s Statement 07
Strategic Report 08
Governance
Board of Directors 12
Remuneration Report  14
Corporate Governance 18
Directors’ Report 20
Financial statements
Independent Auditor’s Report 22
Consolidated statement of  
comprehensive income 23
Consolidated statement of financial position  24
Consolidated statement of cash flows  25
Consolidated statement of changes in equity  26
Notes to the Group financial statements  27
Company balance sheet  54
Notes forming part of the Company  
financial statements 55
Other information
Company information 57 Midatech Pharma plc | Annual report & Accounts 2014 02
Page title continued
Overview
About Midatech
Midatech is a UK incorporated 
nanomedicine company focused on the 
development and commercialisation of 
multiple therapeutic products.
Midatech is a nanomedicine group of companies  
(“Midatech” or the “Group”) focused on the development 
and commercialisation of multiple therapeutic products to 
enhance the delivery of medicines in major diseases with high 
unmet medical needs. These diseases include diabetes, certain 
cancers such as liver, ovarian and brain (glioblastoma) and 
certain neurological/ophthalmologic conditions. Many of these 
therapeutic areas represent multi-$100 million or multi-$billion 
markets. The Group’s two platform technologies are designed 
to enable targeted delivery and sustained release of existing 
therapeutic drugs to the ‘right place’ at the ‘right time’. The 
Group is not engaged in the discovery of new drug compounds 
and hence does not carry the same risk usually associated with 
the development of new pharmaceuticals.
The Group’s core technology platform is based on a patented 
form of gold nanoparticles (“GNPs”) that are developed to 
improve key parameters of existing and new drugs, target 
individual cell types with specific targeting agents and deliver 
a therapeutic payload in the cell, while ensuring this can be 
achieved safely. The Directors believe that GNP technology 
represents the latest generation of nanomedicine and the 
fastest growing sector within the nanomedicine market. To 
date, studies have demonstrated safety in the clinic. 
The Group’s secondary platform of sustained release 
technology (acquired through the acquisition of Q Chip 
Limited) involves the consistent and precise encapsulation 
of active drug compounds within polymer microspheres. 
The microspheres are designed to release the active drug 
compound into the body in a highly controlled manner over a 
prolonged period of time, from a number of weeks to three 
months and potentially longer. The Directors believe that the 
Group’s sustained release technology provides the capability 
to sustain the optimal range of drug concentrations, which has 
wide medical applicability utilising diverse pharmaceutically 
active molecules.
The Group is collaborating with a number of universities, 
speciality and major pharmaceutical companies to develop 
its platform technologies into a number of products in order 
to achieve a range of potential revenue opportunities within 
priority therapeutic areas. Collaboration partners include the 
major biotechnology arm of a top 10 global pharmaceutical 
company and the Dana-Faber Cancer Institute (an affiliate 
of Harvard Medical School), in addition to two US major 
pharmaceutical companies and one European speciality 
pharmaceutical company. Furthermore, the Group has a joint 
venture with Monosol Rx LLC to develop and commercialise 
transbuccal delivery of insulin for diabetic patients, using insulin 
conjugated GNPs formulated into dissolvable, oral film strips.
The Group has developed a strong intellectual property 
base and has a wide IP portfolio of 53 granted patents, 96 
applications in process and 30 patent families covering a range 
of technologies.
Overview
What we do  Midatech Pharma plc | Annual report & Accounts 2014 03
Midatech is advancing a pipeline of product candidates in clinical and pre-clinical development for diseases for which there are 
currently few or no treatment options available. These diseases include diabetes, rare cancers including brain (glioblastoma), 
ovarian, liver and pancreatic cancer and neurological/ophthalmologic conditions.
Pipeline of product candidates in 
clinical and pre-clinical development 
in key therapeutic areas.
Therapeutic Areas
Licence Phase II CMC, Formulation
Licence Pre-clinical
Phase II Phase I Pre-clinical
Phase II Phase II Pre-clinical Med Chem
Phase Ib/II Pre-clinical
Pivotal 
Phase II
Phase Ib Pre-clinical
Med  
Chem
R&D
Phase II Phase I Pre-clinical Med Chem
Pivotal 
Phase II
Phase Ib Pre-clinical
Med  
Chem
R&D
Product launch Collaborative development
Insulin
GLP-1 / Q-Exenatide
GLP-1 / Insulin combination
Q-Ocreotide
Med  
Chem
Brain (glioblastoma)
Ovary
Liver
Pancreas
Q-Cancer Beads
2014
Cancer
2015 2016 2017
Endocrinology Midatech Pharma plc | Annual report & Accounts 2014 04
Page title continued
Overview
Midatech’s manufacturing facility based in Bilbao, Spain
About Midatech continued
Overview
Versatile technology platforms with 
broad application across multiple 
therapeutic areas.
Central to Midatech’s business are two platform technologies 
that are designed to enable the targeted delivery (‘right place’) 
and controlled release (‘right time’) of existing drugs.  
These technologies have broad applications in multiple 
therapeutic areas and offer the potential to create multiple 
revenue opportunities.
Drug conjugate technology: Midatech’s core platform is a 
pioneering drug conjugate delivery system based on gold 
nanoparticles (GNPs) combined with existing drugs for 
targeted release at specific organs, cells or sites of disease.
Sustained release technology: the Group’s secondary platform 
(developed at Q Chip) involves the consistent and precise 
encapsulation of active drug compounds within polymer 
microspheres that are designed to release the drug into the 
body in a highly controlled manner over a prolonged period 
of time.
These technologies can be used alone or potentially in 
combination, i.e. by encapsulating GNPs into polymer 
microspheres, the rate of release of the targeted therapeutic 
molecules could be controlled and substantially extended.
Midatech has developed a strong intellectual property base, 
comprising patents, know-how, and trade secrets. Currently 
the Group has an IP portfolio of 53 granted patents,  
96 applications in process, and 30 patent families covering  
all major regions. Midatech continues to strengthen its  
patent portfolio by strategically submitting new patents  
and divisional patent applications based on its active research 
and development activities.
Technology Midatech Pharma plc | Annual report & Accounts 2014 05
Major upgrade to manufacturing facility enabling production of sterile material which is critical to the oncology programme
Midatech’s strategy is expected to drive a  
commercial pipeline of products with improved
essential parameters including safety, tolerability, 
efficacy and compliance profiles.
The Directors believe that Midatech’s key strengths include:
• a rich science base having developed two platform 
technologies with broad application in healthcare that the 
Directors believe create value from multiple potential 
revenue opportunities within priority therapeutic areas; 
• first mover advantage in GNPs and highly novel sustained 
release technology which has enabled the Group to focus 
on a number of therapeutic areas primarily through the 
use of GNP carriers and sustained release formulations for 
existing medications;
• a strong intellectual property base comprising patents, ‘know-
how’ and trade secrets, to maximise innovation, protection 
and commercial success. The Group has an IP portfolio of 
53 granted patents, 96 applications in process and 30 patent 
families covering major geographic regions, owned solely by 
the Group, co-owned with others or in-licensed;
• in-house nanoparticle manufacturing facility which the 
Directors believe is the first licensed nanoconjugate cGMP 
facility of its kind in Europe. This state-of-the-art facility, 
based in Bilbao, Spain, aids in the rapid execution of 
projects, control of manufacturing quality and supply of all 
aspects of Midatech’s GNP platform, thus avoiding reliance 
on external manufacturing partners; 
• innovative therapies utilising its broadly applicable drug 
conjugate platforms for significant medical disorders with 
few or no existing clinical therapeutic options. As such 
the Directors believe that the Group’s therapies have 
the potential to be transformative for patients and their 
families as first or second therapies for disease treatment 
and can yield high returns for these poorly treated 
indications;
• the management team’s significant experience in the 
speciality pharmaceutical industry and of managing high 
growth companies. The Group’s management team 
comprises seasoned industry entrepreneurs, executives 
and scientists, and the Directors believe that the team 
is capable of executing a major value proposition in the 
specialty pharma field.
Midatech has a three part strategy to drive early revenue 
growth through fee for service partnerships, whilst 
simultaneously developing its own oncology focussed 
programmes. The third aspect of the strategy involves the 
ongoing search for attractive acquisition targets which enable 
the Group to more rapidly build its revenues and presence in 
key geographies.
Key Strengths
Strategy Midatech Pharma plc | Annual report & Accounts 2014 06
Overview
Chairman’s Review
“ 2014 was a transformational  
year for Midatech.”
Rolf Stahel 
Non-executive Chairman
2014 was a transformational year for Midatech. Since the 
inception of Midatech Limited in 2000, the Company has 
tested its gold nano-particle technology in a broad range of 
therapeutic areas. In 2013, the Board decided that the Company 
would benefit from building on the significant experience gained 
and brought in Dr Jim Phillips to set the strategy going forward.
The first step was to strengthen the management team by 
bringing in a new Chief Operating Officer, Dr Craig Cook, and 
a new Finance Director, Nick Robbins-Cherry, both joining 
early in 2014. Jim had worked with both Craig and Nick in 
the past and knew they would help him execute on the new, 
commercially focussed strategy.
This strategy was developed during the course of the first 
quarter of 2014 and combined a focus on just three therapeutic 
areas, diabetes, oncology, and ophthalmology/neuroscience with 
a push to expand the Company’s product pipeline through the 
acquisition of later stage assets.
At the beginning of 2014 the Company’s most advanced 
programme was its trans-buccal insulin product, Midaform
TM
, 
developed through a joint venture with the US pharmaceutical 
company Monosol Rx LLC. The highly promising Phase 1 clinical 
data made continuation of this programme a lead focus and this 
is now ready to commence its Phase 2 development in patients 
in 2015.
The second area of focus is in the field of oncology. Earlier 
experimental data had indicated that Midatech’s gold 
nanoparticles (“GNPs”) had the potential to transport 
chemotherapeutics to tumour sites with a high degree of 
specificity. Pre-clinical studies further indicated that GNPs 
would also reach the brain, passing the blood brain barrier. 
The enormous benefits this would bring to cancer patients 
made this an obvious area to develop further. Midatech’s 
oncology programme is working on using its GNP technology 
to transport active ingredients that already exist in the market, 
thereby benefitting the regulatory path and improving the risk 
profile of the projects.
The ever-increasing demand for highly specific drugs and the 
growth into personalised medicine are opening the market 
need for drug delivery that can be precisely targeted and 
released. The potential for Midatech in this market is clear, 
whether in diabetes, oncology or ophthalmology/neuroscience.
Right place and right time
Regardless of its huge potential, many of Midatech’s nano-
technology projects are at an early stage of development 
and are therefore still somewhat risky. The other arm of the 
strategy therefore is to lower the risk profile by acquiring later 
stage assets within the areas of therapeutic focus and that offer 
a good strategic fit.
Cardiff based Q Chip Limited (“Q Chip”) had a number of 
later stage products in its pipeline built around that Company’s 
controlled release technology platform. This product portfolio 
included a number that aligned with Midatech’s chosen 
therapeutic focus areas.
The combination of Q Chip with Midatech has created a well-
balanced and diverse product pipeline that gives the combined 
shareholder base multiple shots on goal and a reasonable 
expectation of having products in the market within the next 
five years.
IPO
Perhaps the most significant development in the year was 
the listing on AIM. The successful roadshow culminated in an 
oversubscribed IPO that allowed the Board to increase the size 
of the funds raised from the £30m targeted to £32m.
2014 has been a very successful year. Aside from the significant 
strategic and operational achievements, financial results have 
ended ahead of expectation in terms of revenue, loss before 
tax and cash expenditure. The Company’s twin technology 
platforms offer a unique combination of highly targeted delivery 
and controlled release of existing therapeutics, and looking 
forward, the highly significant product milestones on the near 
horizon have the potential to make 2015 a very exciting year  
for Midatech.
I would like to thank our shareholders for their support and the 
Board, management and staff for their continuing hard work and 
commitment to Midatech.
Rolf Stahel
Chairman
16 April 2015 Midatech Pharma plc | Annual report & Accounts 2014 07
Chief Executive’s Statement
“ 2014 was also a good year for revenue, with 
our current service partnerships helping to 
generate £0.73m pro forma revenue.”
Dr Jim Phillips
Chief Executive Officer
Dear Shareholder 
The exciting year under review has seen Midatech make great 
strides in advancing the Group towards becoming a specialty 
pharmaceutical business, progressing a development portfolio 
of multiple programmes towards commercialisation. There 
has been a significant expansion of the Senior Management 
team’s capabilities, the successful AIM IPO in December and 
the focussing of the Group’s pipeline strategy into the three 
core areas of diabetes, oncology and neuroscience including 
ophthalmology. The Group has two routes to commercialisation: 
licensing out and own product sales, which offers multiple shots 
on goal, a de-risked strategy and a significant amount of value 
potential for shareholders and patients.
The year also saw the acquisition of Q Chip Limited, bringing 
a complementary technology and two advanced product 
candidates within two of the three core areas described above. 
This demonstrated Midatech’s continuing hunger to enhance 
value and deliver results as a dynamic management team. 
The Company ended 2014 with £30.33m of cash, having raised 
£32.00m in the IPO process where we were able to attract key 
new investors resulting in an oversubscribed IPO and extension of 
funds raised.
2014 was also a good year for revenue, with our current service 
partnerships helping to generate £0.73m pro forma revenue in 
aggregate for the Midatech and Q Chip businesses for the year 
(£0.57m was pre acquisition), ahead of market expectations,  
as the Group booked more work through the second half of 
the year.
The Group’s two technologies which enable the targeted 
delivery of currently marketed and approved drugs to “the right 
place at the right time” have the potential to transform many 
areas of medical treatment; by reducing toxic doses required to 
kill cancer cells, the ability to move drugs more efficiently into 
the brain and, via our diabetes joint venture MidaSol, enabling 
needle free insulin (or other hormone) delivery via a strip in 
the mouth (which is similar to a breath freshener strip). Our 
projects are, so far, all on track to potentially deliver substantial 
value over the coming years and they all use existing, well 
understood pharmaceutical ingredients – so reducing the risk of 
products failing.
The Group also completed a major upgrade to its 
manufacturing plant in Bilbao, Spain, on time and on budget, 
meaning we can now start to produce sterile products. In 
addition to this we were selected by the European Union’s 
Horizon 20:20 programme to lead a consortium of our 
existing partners with €7.9m of European grant funding to 
develop the commercial scale manufacturing operations for 
our “nano” products. 
Outlook
During 2015, we will continue to execute on our three-
pronged strategy of driving early revenue growth through the 
service partnership model, whilst driving forward the clinical 
development of our own pipeline, further developing our 
technology and continuing to look for attractive acquisition 
targets to enable us to more rapidly build our revenues and 
presence in key geographies. 
I believe that the prospects for our business are good for the 
coming year and I am grateful for the exceptional contribution 
of all our employees and international collaborators that has 
helped transform Midatech over the last 12 months into a leading, 
international, emerging specialty pharmaceutical business.
Dr Jim Phillips
Chief Executive Officer 
16 April 2015 Midatech Pharma plc | Annual report & Accounts 2014 08
Overview
Strategic Report
Introduction 
Midatech Pharma plc (the “Company”) is a company domiciled 
in England. The Company was incorporated on 12 September 
2014 and this is the first set of financial statements prepared by 
the Company.
The Midatech Group was formed on 31 October 2014 when 
Midatech Pharma plc acquired the entire issued share capital of 
Midatech Limited and its wholly owned subsidiaries. 
The acquisitions of the Midatech subsidiaries was outside 
the scope of IFRS 3 “Business Combinations” and has been 
treated under the principles of merger accounting for group 
reconstructions as set out under UK GAAP. Further details can 
be found on pages 27 and 28.
On 8 December 2014, Midatech was admitted to the London 
Stock Exchange’s Alternative Investment Market (“AIM”), raising 
£32.00m, £29.8m net of costs, via the placing of 11,985,019 new 
ordinary shares at a price of £2.67.
Also on 8 December 2014 the Group acquired the entire issued 
share capital of Q Chip Limited (“Q Chip”) through the issue 
of 5,077,122 ordinary shares valued at £13.56m and a further 
299,624 shares to be issued, valued at £800,000, representing 
total consideration of £14.36m. Q Chip provides the Group 
with a secondary platform of sustained release technology. 
Subsequent to the acquisition the name of Q Chip was changed 
to Midatech Pharma (Wales) Limited.
The acquisition of Q Chip included intangibles comprising 
£14.10m ‘in-process research and development’ and £2.90m  
of goodwill.
Principal activities and business review
The Group is principally engaged in the discovery and 
development of pharmaceutical products in the fields of 
nanomedicine and sustained release technology.
Our strategy and outlook
The Directors’ business and commercialisation strategy is based 
on maturing the Group’s technology platforms with a clear 
focus on the key therapeutic areas of oncology, endocrinology 
and neuroscience (including ophthalmology), along with 
strategic late stage product focused acquisitions. Together, 
these strategies are expected to drive a commercial pipeline of 
products with improved essential parameters over and above 
the currently marketed source compound, including safety, 
tolerability, efficacy and compliance profiles. The Directors 
are of the opinion that the team has significant industry and 
technical experience and is highly capable of and committed to 
building the value of the Group.
Midatech’s business model has three components:
a.  Own products: development and commercialisation of 
products is done in-house without engaging partners  
to support the product. This applies particularly to  
oncology applications.
b.  Partner products: development and commercialisation of the 
Group’s partner-supported and licensed products, principally 
in diabetes, ophthalmology and neuroscience.
c.  Acquisitions: of later stage, strategic opportunities with 
complementary focused portfolios or complementary 
technologies that are synergistic to those of Midatech, that 
accelerate revenue and are value accretive.
The Group also aims to expand its vertical integration by 
leveraging its integrated manufacturing capabilities.
The Directors’ commercialisation strategy is intended to build a 
long term, profitable and commercially focused enterprise with 
revenues generated as follows:
a.  Research and development collaborations: in the near term, 
revenues are anticipated to be driven by collaborations 
such as those that currently exist and by adding new 
customers using the Group’s technologies to address their 
pharmaceutical challenges.
b.  Partner licensing and royalty deals: in the period from 2015 
to 2018, revenue growth is anticipated to be aligned to 
licensing transactions from those partnerships outlined in (a) 
above as well as new potential partnerships, with possible 
product royalties realised from 2016/17.
Midatech’s commercialisation strategy is 
intended to build a long term, profitable and 
commercially focused enterprise. Midatech Pharma plc | Annual report & Accounts 2014 09
c.  Own products commercialisation: in the third stage of 
the Group’s evolution, expected to be from 2018/19, the 
Group’s own products are anticipated to reach market 
in the specialised orphan sector and a commercial sales 
organisation to be deployed initially in the United States 
and then in Europe to drive sales and revenue growth from 
Midatech’s own product launches.
d.  Acquisition: in support of and in addition to the above, 
the Group will seek value accretive and synergistic target 
companies and portfolios that will accelerate ‘own product’ 
recurring revenues and profitability via products in market.
In diabetes, the Directors, alongside the Group’s Midasol 
Therapeutics (“MidaSol”) joint venture partner Monosol 
Rx LLC, intend to conduct a Phase 2a clinical trial with 
MidaForm™-Insulin-PharmFilm
®
 in humans with type 1 diabetes 
in 2015. Pending successful completion thereof and positive 
results, the Group will prepare for Phase 2b and potential 
outlicensing deals. Midatech would seek revenues from an initial 
upfront payment, licence payments, manufacturing fees and 
royalties. A similar approach is anticipated with other Midatech 
diabetes products such as GLP-1 when appropriate.
In oncology, Midatech believes that it has the opportunity to 
roll out its own commercial capabilities in the US and Europe 
around the market entry of its orphan oncology programme 
products. These products require small dedicated medical 
liaison teams rather than full pharmaceutical sales forces. 
Midatech will also look for further in-licensing acquisition 
opportunities to grow revenues in this sector.
In neuroscience (including ophthalmology), commercialisation 
will focus on products for the treatment of uveitis and other 
conditions of the eye, Parkinson’s, Alzheimer’s and Multiple 
Sclerosis, in partnerships with leading speciality pharmaceutical 
companies, where Midatech will seek to earn licence payments, 
manufacturing revenue and royalties.
Key strengths
The Directors believe that Midatech’s key strengths include:
• a rich science base having developed two platform 
technologies with broad application in healthcare that the 
Directors believe create value from multiple potential 
revenue opportunities within priority therapeutic areas; 
• first mover advantage in GNPs and highly novel sustained 
release technology which has enabled the Group to focus  
on a number of therapeutic areas primarily through the  
use of GNP carriers and sustained release formulations  
for existing medications;
• a strong intellectual property base comprising patents, 
‘know-how’ and trade secrets, to maximise innovation, 
protection and commercial success. The Group has an IP 
portfolio of 53 granted patents, 96 applications in process 
and 30 patent families covering major geographic regions, 
owned solely by the Group, co-owned with others or  
in-licensed;
• in-house nanoparticle manufacturing facility which the 
Directors believe is the first licensed nanoconjugate cGMP 
facility of its kind in Europe. This state-of-the-art facility, 
based in Bilbao, Spain, aids in the rapid execution of projects, 
control of manufacturing quality and supply of all aspects of 
Midatech’s GNP platform, thus avoiding reliance on external 
manufacturing partners;
• innovative therapies utilising its broadly applicable drug 
conjugate platforms for significant medical disorders with 
few or no existing clinical therapeutic options. As such, 
the Directors believe that the Group’s therapies have the 
potential to be transformative for patients and their families 
as first or second therapies for disease treatment and can 
yield high returns for these poorly treated indications;
• the management team’s significant experience in the 
speciality pharmaceutical industry and of managing high 
growth companies. The Group’s management team 
comprises seasoned industry entrepreneurs, executives and 
scientists, and the Directors believe that the team is capable 
of executing a major value proposition in the speciality 
pharma field.
Key performance indicators
2014 2013 Change
Turnover £0.16m £0.15m 7%
Operating loss (£7.89m) (£4.50m) 75%
Net cash inflow/(outflow) £27.94m £2.25m 1141%
Average headcount 38 29 31%
Given Midatech’s stage of development, KPIs are focussed 
on the key areas of cash management and operating results. 
Non-financial KPIs, including KPIs in respect of the research and 
development programmes, will be formalised as the business 
moves forward.
Financial review
For the year ended 31 December 2014, Midatech generated 
consolidated revenues of £0.16m (2013: £0.15m) however the 
newly acquired Q Chip Limited (now Midatech Pharma (Wales) 
Limited (“MPW”)) generated revenue for the full year of 
£0.57m giving a pro forma figure of £0.73m for the Group.  
This was ahead of expectation and represents a very 
encouraging outcome for the year and a good platform  
moving into 2015.
Excluding proceeds from share issues, net cash outflows for the 
year were £5.91m (2013: £3.54m) which was less than forecast. 
This was in part due to careful management of costs, including 
the R&D programmes, during the significant organisational 
changes that took place in the year. Midatech Pharma plc | Annual report & Accounts 2014 10
Overview
Administrative costs
Midatech’s administrative costs of £4.41m increased on the prior 
year as a result of:
• The Group incurred significant professional fees in respect 
of the IPO process and admission onto AIM. Costs directly 
attributable to the issue of new shares of £1.35m were 
debited to the share premium account. 
• MPW was acquired resulting in professional fees of £0.17m. 
• During the year the average number of staff employed 
grew by 9 to 38 (2013: 29) and the payroll cost increased by 
£0.47m to £2.81m (2013: £2.34m) which includes 23 days of 
MPW’s payroll cost since becoming part of the Group.
Research and development expenditure
Research and development activities undertaken during the 
year were largely focussed on the development of our oral 
insulin therapy enabling needle-free insulin delivery (developed 
via our diabetes joint venture MidaSol). Costs of £3.64m were 
incurred in the year by Midatech on its programmes.
Capital expenditure
The total cash expenditure on fixed assets in 2014 was £1.03m 
(2013: £0.05m) as Midatech continued to invest in its R&D and 
manufacturing capabilities. Of this amount, £0.79m was spent 
upgrading the Group’s manufacturing facility in Bilbao, Spain, 
to enable the production of sterile material. This is a critical 
stage in the Group’s development as it allows our oncology 
programmes to move into human trials.
Cash flow 
Net cash outflow from operating activities was £7.60m in 2014 
(2013: £4.25m). As previously noted the Group raised £29.8m 
(net of costs) following the placing of shares through an initial 
public offering and admission to AIM resulting in an overall net 
cash inflow for the year of £27.94m (2013: outflow of £2.25m). 
This is the primary reason for the year end cash balance of 
£30.33m (2013: £2.39m).
Capital structure
Midatech Pharma plc made a number of significant changes to 
its capital structure during 2014 all related to the IPO process 
and acquisition of Q Chip. The Company was incorporated as 
Midatech Pharma Limited on 12 September 2014 with share 
capital comprising a single Subscriber Share of £1. On  
31 October 2014 under a Share Exchange Agreement it 
acquired the issued share capital of Midatech Limited. This 
transaction mirrored the shareholding of Midatech Limited in 
Midatech Pharma Limited such that shareholders of Midatech 
Limited were given identical shares in Midatech Pharma Limited. 
As a result, on 13 November 2014 new shares were issued in 
Midatech Pharma Limited as follows: 3,287,527 Ordinary Shares 
of 0.01 pence each, 1,076,802 C Preference Shares of 0.01 
pence each and 1,000,000 A Preference Shares of £1 each. Also 
on 13 November 2014 the Subscriber Share was subdivided 
into 10,000 Ordinary Shares of 0.01 pence each.
Midatech Pharma Limited was re-registered as Midatech 
Pharma plc on 27 November 2014.
On 28 November 2014 a number of transactions took 
place. The Company allotted 628,356 Ordinary Shares of 
0.01 pence each to holders of warrants to subscribe for a 
total of 1,471,527 Ordinary Shares of 0.01 pence each in 
Midatech Limited in consideration for the cancellation of those 
warrants. Secondly, the 1,076,802 C Preference Shares were 
converted into 1,076,802 Ordinary Shares of 0.01p each and 
the 10,000 Ordinary “Subscriber” Shares referred to above 
were converted into one Deferred Share. Finally, a written 
ordinary resolution of the Company’s members was passed 
whereby each of the Ordinary Shares in the capital of the 
Company was sub-divided into two Ordinary Shares of 0.005 
pence each. At this point the Company had issued shares of 
9,985,370 Ordinary Shares of 0.005 pence each as well as 
the 1,000,000 A Preference Shares of £1 each and a single 
Deferred Share of £1.
On 8 December 2014 and on admission to AIM a further 
5,077,122 Ordinary Shares of 0.005 pence each were issued 
to the shareholders of Q Chip Limited (now Midatech Pharma 
(Wales) Limited) as the initial share consideration for the 
acquisition of the entire issued share capital of that company.  
A further 299,624 Deferred Consideration Shares will be issued 
in two tranches; 75% on 9 December 2015 and 25% on 30 June 
2016 subject to there not being any successful warranty claims 
against the sellers of Q Chip. Any warranty claims will result in 
the downward adjustment of the deferred consideration shares 
issued using the issue price of £2.67 per share.
Finally, also on 8 December 2014, 11,985,019 Ordinary Shares 
of 0.005 pence each were issued to subscribers in the IPO 
and the 1,000,000 A Preference Shares of £1 each, together 
with the accrued interest liability were settled by the issue of 
746,747 Ordinary Shares of 0.005 pence each. Following this, 
the A Preference shares were converted into Deferred Shares 
which the company has the authority to purchase for a price 
not exceeding 1p for all the Deferred Shares.
As a result of the above transactions, as at 31 December 2014 
Midatech Pharma plc had in issue 27,794,258 Ordinary Shares 
of 0.005 pence each.
Principal risks and uncertainties
The Directors consider the principal risks facing the business to 
be as follows:
Regulation
Midatech operates in a regulated sector where a number of 
regulations need to be adhered to.
The GNP manufacturing facility in Bilbao operates under the 
cGMP guidelines for Investigational Medicinal Products and has 
been licensed to manufacture non-sterile investigational medicinal 
products since March 2011, with indefinite validity (subject to 
passing regular inspections). The facility underwent a c€0.8m 
refurbishment in 2014 to enable the manufacture of sterile 
Strategic Report continued Midatech Pharma plc | Annual report & Accounts 2014 11
injectables and the amended certification of the facility is subject 
to an inspection in 2015. Midatech performs its investigational 
work in accordance with the European Commission 
recommendation on a Code of Conduct for responsible 
nanosciences and nanotechnologies research. 
The Group’s health and safety control is subcontracted to a 
specialist provider and complies with all Spanish employee and 
work regulations. 
Waste solutions and products are suitably disposed of under 
contract with a licensed provider for this purpose. Prior to 
disposal, hazardous waste materials are stored under appropriate 
conditions. Solvents and other inflammable reagents are stored in 
appropriate fire containment storage cabinets. 
The Group’s polymer microsphere manufacturing activities in 
the UK is outsourced to a contract manufacturing organisation 
based in Leicester, UK. This facility is MHRA approved and 
product is manufactured to cGMP standards at an appropriate 
level for the Group’s needs. Polymer manufacturing is compliant 
with all health and safety regulations. Waste handling is 
undertaken by a contract firm specialising in removal and 
disposal of hazardous waste.
Competition and T echnological Advances
The Group’s drug conjugate platform is among the latest 
generation of nanomedicine technology. Liposomes followed by 
various polymeric nanoparticles were the first nanotechnologies 
and now inorganic nanoparticles like Midatech GNPs are a 
rapidly emerging technology within the nanomedicine market. 
The speed and nature of technological change means that 
physical science is always evolving and new competition and 
alternatives are always a possibility, however the Directors 
believe that Midatech has established competitive advantage 
over its peers. As a result of the combination of its platform 
technology, intellectual property and proprietary know-how, the 
Group has a protected position in the nanoparticle and sustained 
release spaces which allows the potential for highly differentiated 
drugs serving high unmet needs, such as orphan oncology, to be 
rapidly and independently manufactured and scaled.
Clinical development and regulatory risk
There can be no guarantee that any of the Group’s products 
will be able to obtain or maintain the necessary regulatory 
approvals in any or all of the territories in respect of which 
applications for such approvals are made. Where regulatory 
approvals are obtained, there can be no guarantee that the 
conditions attached to such approvals will not be considered 
too onerous by the Group or its distribution partners in order 
to be able to market its products effectively.
The Group seeks to reduce this risk by developing products 
using safe, well-characterised active compounds, by seeking 
advice from regulatory advisers, consulting with regulatory 
approval bodies and by working with experienced  
distribution partners.
Financial risk management objectives and polices
The Group is exposed to a variety of financial risks which result 
from both its operating and investing activities. The Board is 
responsible for coordinating the Group’s risk management and 
focuses on actively securing the Group’s short to medium term 
cash flows.
Finance risk
The Group enters into very few transactions involving 
significant complexity, potential material financial exposure or 
atypical risk. The Group does not actively engage in the trading 
of financial assets and has no financial derivatives. 
Funding risk
The Group continues to incur substantial operating expenses. 
The recent IPO generated sufficient cash to take the Group 
toward break even and becoming cash flow positive however 
until the Group generates positive net cash inflows from the 
commercialisation of its products it may be required to seek 
additional funding through the injection of equity capital from share 
issues. The Group may not be able to generate positive net cash 
inflows in the future or be able to attract such additional funding 
as may be required, either at all, or on suitable terms. In such 
circumstances the development programmes may be delayed or 
cancelled and business operations cut back.
The Group seeks to reduce this risk by keeping a tight control on 
expenditure, avoiding long-term supplier contracts (other than 
for clinical trials), prioritising development spend on products 
closest to potential revenue generation, obtaining government 
grants (where applicable), maintaining a focused portfolio of 
products under development and by keeping shareholders 
informed of progress.
This report was approved by the Board on 16 April 2015 and 
signed on its behalf.
Dr Jim Phillips
Chief Executive Officer Midatech Pharma plc | Annual report & Accounts 2014 12
Governance
Board of Directors
EXECUTIVE
Dr Jim Phillips
Chief Executive Officer (52) 
Jim is a physician by training and has a strong background in 
company leadership and business development. Jim founded 
Talisker Pharma in 2004, which was the first and cornerstone 
acquisition of EUSA Pharma Inc. in 2006. As president of 
Europe and senior vice president, corporate development, of 
EUSA Pharma, Jim led the strategy resulting in the acquisition 
of OPi S.A. and which in turn lead to its ultimate acquisition 
by Jazz Pharmaceuticals Inc. in 2012. Jim is currently a non-
executive director of Herantis Pharma plc, listed in Helsinki, 
Insense Limited, a private spin-out from Unilever, and, until 
joining Midatech, was chairman of Prosonix Limited, guiding its 
successful transformation into a respiratory-focused business. 
Jim initially held senior positions at Johnson & Johnson and 
Novartis Pharmaceuticals. At Novartis, Jim was in Clinical 
and Business Development and was a board director of the 
$1.3 billion arthritis, bone, gastrointestinal, haematology 
and infectious diseases business unit and a member of the 
company’s Clinical Leadership Team. 
Nick Robbins-Cherry
Finance Director (45)
Nick is a Chartered Accountant and MBA with extensive 
commercial and finance experience gained in the life sciences, 
technology and consulting sectors, including roles at CACI 
Limited, Johnson & Johnson and ICI plc. Nick has a strong track 
record in mergers and acquisitions and of managing complex 
multi-national businesses. Nick qualified with Coopers & 
Lybrand (now PricewaterhouseCoopers) and also has a BSc  
in Pharmacology.
Midatech Pharma plc benefits from a strong, 
stable and proven Executive and Senior 
Management team. Midatech Pharma plc | Annual report & Accounts 2014 13
NON-EXECUTIVE
Rolf Stahel 
Non-Executive Chairman (70) 
Mr Stahel has approximately 40 years of experience in the 
pharmaceutical industry, of which around 20 years were spent 
at chief executive and board level in public companies listed in 
the United Kingdom, Switzerland and the United States and 
private life science companies registered in Europe, the United 
States and Asia. Mr Stahel joined Shire as chief executive 
in 1994 following a 27-year career at Wellcome plc (now 
GlaxoSmithKline plc). Mr Stahel is currently the non-executive 
chairman of Connexios Life Sciences Pvt Limited and Ergomed 
plc, and was previously the non-executive chairman of EUSA 
Pharma Inc., Cosmo Pharmaceuticals SpA, PowderMed Limited 
and Newron Pharmaceuticals SpA.
John Johnston
Non-Executive Director (55)
Mr Johnston is currently non-executive Chairman of 
Constellation Healthcare Technologies, non-executive director 
of Flowgroup plc, Action Hotels and prior to this, was managing 
director of Institutional Sales at Nomura Code. He was 
previously director of Sales and Trading at Seymour Pierce 
from 2008 to 2011. In 2003, Mr Johnston founded Revera Asset 
Management, where he oversaw an investment trust, a unit 
trust and a hedge fund, which he ran until 2007. From 1992 to 
1997, Mr Johnston was Head of Small Companies at Scottish 
Amicable, before spending a year at Ivory and Sime, again as 
Head of Small Companies from 1997 to 1998. He joined Legg 
Mason Investors for three years as Director of Small Companies 
Technology and Venture Capital Trusts, from 2000 to 2003 
having previously spent two years as Head of Small Companies 
with Murray Johnstone. Mr Johnston began his investment 
career at the Royal Bank of Scotland in 1981, working in the 
Trustee and Investment department, before moving to General 
Accident in 1985, holding the position of Head of Retail Funds 
before his move to Scottish Amicable.
Dr Simon Turton 
Senior Non-Executive Director (47)
Dr Turton previously headed Warburg Pincus’ healthcare 
investing activities in Europe and was a principal at Index 
Ventures in Geneva. He has over 10 years of experience 
investing in biopharma companies following a ten year career 
in the international pharmaceutical industry incorporating roles 
in research, business development and general management. 
Dr Turton has an MBA from INSEAD and a Ph.D. in pharmacy 
from the University of London. He has been a board director 
of Archimedes Pharma, Eurand, ProStrakan and Tornier. Dr 
Turton was most recently chairman of Q Chip prior to its 
acquisition by the Group.
Dr Sijmen de Vries
Non-Executive Director (55)
Dr de Vries has extensive senior level experience in both 
the pharmaceutical and biotechnology industries. He is 
currently chief executive officer and chief financial officer of 
Pharming Group N.V., the Euronext-listed pharmaceutical 
company. Dr de Vries was previously chief executive officer 
of Switzerland-based 4-Antibody and Morphochem AG, 
and prior to this he worked at Novartis Pharma, Novartis 
Ophthalmics and at SmithKline Beecham Pharmaceuticals 
plc, where he held senior business and commercial positions. 
Dr de Vries holds an MD degree from the University of 
Amsterdam and a MBA in General Management from 
Ashridge Management College (UK).
Pavlo Protopapa
Non-Executive Director (48)
Mr Protopapa is the founder and managing partner of Ippon 
Capital, a private equity company based in Geneva, Switzerland. 
He is the chairman and chief executive officer of Spacecode 
Holdings, a technology provider in healthcare and luxury goods, 
which he founded in 2005. He also serves as a non-executive 
director and lead investor of Socure Inc, a SaaS-based internet 
security company. Mr Protopapa has a Bachelor of Commerce 
(accounting, economics and commercial law) and Bachelor of 
Accounting Science (accounting) from the University of the 
Witwatersrand and the University of South Africa, respectively. 
He completed his articles at KPMG in Johannesburg, South 
Africa and has more than 15 years of experience in international 
commerce as chief financial officer of the Steinmetz Diamond 
Group from 1997 to 2012.
Michele Luzi
Non-Executive Director (57)
Mr Luzi is a partner in Bain & Company, based in the London 
office. He has recently led Bain’s EMEA Telecommunications 
Technology Media Practice for seven years and he was a 
board director of Bain & Company Global between 2006 and 
2009. He has been a member of the World Economic Forum 
Global Agenda Council and of the Web Foundation Advisory 
Board. Prior to joining Bain & Company, Mr Luzi worked in 
international management positions with Pirelli and also worked 
in Agusta and with the Italian Trade Commission. Mr Luzi 
earned his MBA from INSEAD and graduated in Economics, 
with Honours, from the University of Rome.
  Midatech Pharma plc | Annual report & Accounts 2014 14
Governance
Remuneration Report 
The Remuneration Committee ensures compliance 
with the UK Corporate Governance Code in 
relation to remuneration wherever possible.
The Remuneration Committee
The Remuneration Committee assists the Board in determining 
its responsibilities in relation to remuneration, including 
making recommendations to the Board on the Group’s 
policy on executive remuneration, setting the over-arching 
principles, parameters and governance framework of the 
Group’s remuneration policy and determining the individual 
remuneration and benefits package of each of the Executive 
Directors and the Group Secretary. 
The Remuneration Committee ensures compliance with the 
UK Corporate Governance Code in relation to remuneration 
wherever possible.
The Remuneration Committee is chaired by Sijmen de Vries, 
and its other members are Simon Turton, Rolf Stahel and 
Michele Luzi. The Remuneration Committee meet not less than 
twice a year. Since incorporation the Remuneration Committee 
has met twice.
Policy on Executive Directors’ remuneration
Executive remuneration packages are designed to attract and 
retain executives of the necessary skill and calibre to run the 
Group with reference to benchmarking comparable groups. 
The Remuneration Committee recommends remuneration 
packages to the Board by reference to individual performance 
and uses the knowledge and experience of the Committee 
members, published surveys relating to AIM companies, the 
nanomedicine industry and market changes generally. The 
Remuneration Committee has responsibility for recommending 
any long-term incentive schemes.
The Board determines whether or not Executive Directors 
are permitted to serve in roles with other companies. Such 
permission is only granted where a role is on a strictly limited 
basis, where there are no conflicts of interest or competing 
activities and providing there is no adverse impact on the 
commitments required to the Group. Earnings from such roles 
are not disclosed to the Group.
There are four main elements of the remuneration package for 
Executive Directors and staff:
(i) Basic salaries and benefits in kind
Basic salaries are recommended to the Board by the 
Remuneration Committee, taking into account the 
performance of the individual and the rates for similar 
positions in comparable companies. Benefits in kind 
comprising death in service cover and private medical 
insurance are available to staff and Executive Directors. 
Benefits in kind are non-pensionable.
(ii) Share options and other share-based incentives
The Group currently operates approved share option 
schemes for the Executive Directors and other employees 
to motivate those individuals through equity participation. 
Historically some unapproved share options have been 
granted to staff and key consultants however the Board and 
Remuneration Committee does not plan on issuing further 
unapproved share options. Exercise of share options under 
the schemes is subject to specified exercise periods and 
compliance with the AIM Rules.
The schemes are overseen by the Remuneration Committee 
which recommends all grants of share options to the Board 
based on the Remuneration Committee’s assessment of 
personal performance and specifying the terms under which 
eligible individuals may be invited to participate.
The UK Corporate Governance Code (“the Code”) requires 
a significant proportion of the total remuneration package 
of Executive Directors to comprise performance related 
elements of remuneration and should be designed to align 
Executive Directors’ interests with those of the shareholders. 
The Remuneration Committee currently considers that the 
best alignment of these interests is through the continued use 
of performance-based incentives through the award of share 
options or other share-based arrangements. Midatech Pharma plc | Annual report & Accounts 2014 15
(iii) Bonus scheme
The Group has a discretionary bonus scheme for staff and 
Executive Directors.
(iv) Pension contributions
The Group pays a defined contribution to the pension 
schemes of Executive Directors and other employees. The 
individual pension schemes are private and their assets are 
held separately from the Group.
Service contracts
Set out below are summary details of the service agreements 
and letters of appointment entered into between the Company 
and the Directors:
Executive Directors
Dr Jim Phillips (Chief Executive Officer)
Dr Phillips entered into a service agreement with the Company 
to act as Chief Executive Officer on 2 December 2014.  
Dr Phillips’s continuous employment with the Group 
commenced 1 May 2013. His appointment is terminable  
upon one year’s notice. 
Nick Robbins-Cherry (Finance Director)
Mr Robbins-Cherry entered into a service agreement with the 
Company to act as Finance Director on 2 December 2014. 
Mr Robbins-Cherry’s continuous employment with the Group 
commenced 4 February 2014. His appointment is terminable 
upon six months’ notice.
Non-Executive Directors
The service contracts of the Non-Executive Directors are 
made available for inspection at the AGM.
Rolf Stahel (Non-Executive Chairman)
Mr Stahel entered into an agreement with Midatech Limited on  
15 April 2014 and was subsequently appointed Chairman with 
effect from 1 March 2014. Mr Stahel subsequently entered  
into a revised appointment agreement with the Company on  
2 December 2014. With effect from 1 March 2015, the 
appointment became terminable upon the election of the Board. 
John Johnston (Non-Executive Director)
Mr Johnston entered into a non-executive director 
appointment letter with the Company on 2 December 2014. 
The appointment is terminable upon the election of the Board. 
Michele Luzi (Non-Executive Director)
Mr Luzi entered into a non-executive director appointment 
letter with the Company on 2 December 2014. Mr Luzi was 
originally appointed as a non-executive director of Midatech 
Limited on 20 August 2010 (subsequently terminated on  
2 December 2014). The appointment is terminable upon  
the election of the Board. 
Pavlo Protopapa (Non-Executive Director)
Mr Protopapa entered into a non-executive director 
appointment letter with the Company on 2 December 2014.  
Mr Protopapa was originally appointed as a non-executive 
director of Midatech Limited on 5 December 2013 
(subsequently terminated on 2 December 2014). The 
appointment is terminable upon the election of the Board.
Simon Turton (Senior Independent Non-Executive Director)
Dr Turton entered into a non-executive director appointment 
letter with Midatech Limited on 2 December 2014. Dr Turton 
was originally appointed as chairman of Q Chip Limited on 24 
March 2014 (subsequently terminated on 2 December 2014). 
The appointment is terminable upon the election of the Board. 
Sijmen de Vries (Non-Executive Director)
Dr de Vries entered into a non-executive director appointment 
letter with the Company on 2 December 2014. Dr de Vries  
was originally appointed as a non-executive director of 
Midatech Limited on 29 October 2004 (subsequently 
terminated on 2 December 2014). The appointment is 
terminable upon the election of the Board.
Policy on Non-Executive Directors’ remuneration
The Non-Executive Directors receive a fee for their services 
as a director, which is approved by the Board, giving due 
consideration to the time commitment and responsibilities 
of their roles and of current market rates for comparable 
organisations and appointments. Non-Executive Directors  
are reimbursed for travelling and other incidental expenses 
incurred on Group business in accordance with the Group 
expenses policy.
The Board encourages the ownership of Midatech Pharma 
shares by Executives and in normal circumstances does not 
expect Directors to undertake dealings of a short-term nature.
Non-Executive Directors are preferred to remain 
independent to the extent that they do not trade in the 
Company’s shares themselves.
The emoluments of the Directors of Midatech Pharma plc included 
within the consolidated financial statements are their emoluments 
from all Group companies for the year. This includes emoluments 
earned in their capacity as directors of Midatech Limited prior to 
their appointment as directors of Midatech Pharma plc. Where 
they were not directors of Midatech Limited their emoluments 
commence from the date of appointment as a Midatech Pharma 
plc director.  Midatech Pharma plc | Annual report & Accounts 2014 16
Governance
Remuneration Report continued
Salary
£
Bonus Fees
£
Benefits
£
2014
£
Non Executive Directors
Rolf Stahel 41,667 – 134,300 – 175,967
Jeff Brown – – 12,000 – 12,000
John Johnston – – 2,781 – 2,781
Michele Luzi – – – – –
Pavlo Protopapa – – – – –
Simon Turton – – – – –
Sijmen de Vries – – 12,000 – 12,000
Executive Directors
Jim Phillips 216,943 106,775 – 21,738 345,456
Nick Robbins-Cherry 9,821 40,755 – 4,417 54,993
Directors’ remuneration 268,431 147,530 161,081 26,155 603,197
NIC 69,390
Total 672,587
Details of the payments to other related parties are disclosed in Note 28.
Directors’ interests in shares
31 December 2014
Beneficial 
Interests
Non 
Beneficial 
Interests
Non Executive Directors
Rolf Stahel 
1
527,215 –
Jeff Brown – –
John Johnston 14,981 –
Michele Luzi 121,344 69,328
Pavlo Protopapa – 1,649,334
Simon Turton 
2
215,328 –
Sijmen de Vries 8,802 65,014
Executive Directors
Jim Phillips 31,339 –
Nick Robbins-Cherry – –
1
 At 31 December 2014 489,762 of Rolf Stahel’s shares were subject to restrictions preventing their disposal or transfer to another party. These restrictions fall away 
on the following events:
a. 61,220 shares become unrestricted on each of 1 March 2015 and 1 March 2016
b. 61,221 shares become unrestricted on each of and 1 March 2017 and 1 March 2018
c. 122,440 shares become unrestricted when the market capitalisation of the Company achieves £155m
d. 122,440 shares become unrestricted when the market capitalisation of the Company achieves £213m
2
 Simon Turton is entitled to receive 35,086 Deferred Consideration Shares to be converted into Ordinary Shares up to 30 June 2016 subject to there not being any 
successful warranty claims against the sellers of Q Chip Limited
Other than as shown in the table and note above no Director had any interest in the shares of the Company or in any 
subsidiary company.  Midatech Pharma plc | Annual report & Accounts 2014 17
Directors’ interests in share options
The Board uses share options to align Directors’ and employees’ interests with those of shareholders in order to provide incentives 
and reward them based on improvements in Group performance.
31 December 2014
Options Held Over  
Ordinary Shares
Non Executive Directors
Rolf Stahel –
Jeff Brown –
John Johnston –
Michele Luzi 36,696
Pavlo Protopapa –
Simon Turton –
Sijmen de Vries 17,000
Executive Directors
Jim Phillips 600,000
Nick Robbins-Cherry 60,000
All share options were granted with an exercise price at or above market value on the date of grant. The majority of share options 
only vest when the Company’s share price achieves certain targets. Otherwise the main vesting condition of all share options is that 
the Director or employee remain employed with the Group as at the date of exercise or continues to provide consultancy services 
as at the date of exercise. The share options of the Directors under the Midatech Pharma plc Enterprise Management Incentive 
Scheme (included in totals on page 52) are set out below:
Grant Date
£
Number 
Awarded
£
Exercise  
Price/ Share
£
Earliest 
Exercise Date
£
Expiry Date
£
Non Executive Directors
Michele Luzi 
1
20/08/2010 17,900 4.19 Fully vested 20/08/2015
Simon Turton 20/04/2012 18,796 4.19 Fully vested 20/04/2022
Sijmen de Vries 31/12/2008 3,000 1.425 Fully vested 31/12/2018
20/04/2012 4,000 4.19 Fully vested 20/04/2022
30/06/2014 10,000 0.075 Share price
1
30/06/2024
Executive Directors
Jim Phillips 09/05/2014 200,000 0.075 Fully vested 01/05/2023
30/06/2014 400,000 0.075 Share price 
2
30/06/2024
Nick Robbins-Cherry 30-06-2014 60,000 0.075 Share price 
2
30/06/2024
1
 Share options held by Michele Luzi were granted as part of a 2011 investment round in Midatech Limited.
2
 For those options noted as vesting based on share price 50% vest when the share price reaches £5.31 per share, a further 25% vests when the share price   
reaches £13.72 and the remaining 25% when the share price reaches £18.86.
Sijmen de Vries 
Chairman of the Remuneration Committee Midatech Pharma plc | Annual report & Accounts 2014 18
Governance
Corporate Governance
Board of Directors
As at 31 December 2014 the Board comprised nine 
Directors, two of whom are Executive Directors and seven 
Non-Executive Directors, reflecting a blend of different 
experience and backgrounds. Subsequent to the year-end one 
Non-Executive Director, Jeff Brown, resigned as a director 
following the successful IPO. Of the current Non-Executive 
Directors, the Group regards Rolf Stahel, Simon Turton, John 
Johnston, Michele Luzi and Sijmen de Vries as Independent 
Non-Executive Directors. With a view towards maintaining 
the independence of the Board no remuneration is paid to 
either the Chairman or Non-Executive Directors in the form 
of shares.
Although adherence to the UK Corporate Governance Code is 
not compulsory, the Directors apply certain aspects of the UK 
Corporate Governance Code to the extent appropriate to the 
Group’s size, resources and stage of development.
The Board is responsible for inter alia, approving interim and 
annual financial statements, formulating and monitoring Group 
strategy, approving financial plans and reviewing performance, 
as well as complying with legal, regulatory and corporate 
governance matters. There is a schedule of matters reserved 
for the Board.
The Board meet regularly to consider strategy, performance 
and the framework of internal controls. To enable the Board to 
discharge its duties, all Directors receive appropriate and timely 
information. Briefing papers are distributed to all Directors in 
advance of Board meetings.
The Company has established audit, nomination, remuneration 
and disclosure committees of the Board with formally delegated 
duties and responsibilities.
The Audit Committee
The Audit Committee assists the Board in discharging its 
responsibilities with regard to financial reporting, external 
and internal audits and controls, including reviewing and 
monitoring the integrity of the Group’s annual and interim 
financial statements, advising on the appointment of external 
auditors, reviewing and monitoring the extent of the non-
audit work undertaken by external auditors, overseeing the 
Group’s relationship with its external auditors, reviewing the 
effectiveness of the external audit process and reviewing the 
effectiveness of the Group’s internal control review function. 
The ultimate responsibility for reviewing and approving the 
annual report and accounts and the half-yearly reports remains 
with the Board.
The Audit Committee is chaired by Pavlo Protopapa and its 
other members are Simon Turton and John Johnston. The Audit 
Committee meet not less than twice a year. Since incorporation 
the Audit Committee has met twice.
The Nomination Committee
The Nomination Committee assist the Board in discharging 
its responsibilities relating to the composition and make-up of 
the Board and any committees of the Board. It is responsible 
for periodically reviewing the Board’s structure and identifying 
potential candidates to be appointed as Directors or 
committee members as the need may arise. The Nomination 
Committee is responsible for evaluating the balance of 
skills, knowledge and experience and the size, structure and 
composition of the Board and committees of the Board, 
retirements and appointments of additional and replacement 
Directors and committee members and will make appropriate 
recommendations to the Board on such matters.
The Nomination Committee is chaired by Rolf Stahel and 
its other members are all other members of the Board. The 
Nomination Committee meet not less than once a year. Since 
incorporation the Nomination Committee has not yet been 
formally convened.
Internal control
The Board is responsible for establishing and maintaining 
the Group’s system of internal control and for reviewing 
its effectiveness. The system of internal control is designed 
to manage, rather than eliminate, the risk of failure of the 
achievement of business objectives and can only provide 
reasonable but not absolute assurance against material 
misstatement or loss.
The Directors apply certain aspects of the UK 
Corporate Governance Code to the extent 
appropriate to the Group’s size, resources and 
stage of development. Midatech Pharma plc | Annual report & Accounts 2014 19
The Audit Committee continues to monitor and review the 
effectiveness of the system of internal control and report to the 
Board when appropriate with recommendations.
The annual review of internal control and financial reporting 
procedures did not highlight any issues warranting the 
introduction of an internal audit function. It was concluded, 
given the current size and transparency of the operations of the 
Group that an internal audit function was not required however 
this remains a matter for ongoing review.
The main features of the internal control system are  
outlined below:
• A control environment exists through the close management 
of the business by the Executive Directors. The Group has 
a defined organisational structure with delineated approval 
limits. Controls are implemented and monitored by the 
Executive Directors.
• The Board has a schedule of matters expressly reserved 
for its consideration and this schedule includes acquisitions 
and disposals, major capital projects, treasury and risk 
management policies and approval of budgets.
• The Group utilises a detailed budgeting and forecasting 
process. Detailed budgets are prepared annually by the 
Executive Directors before submission to the Board for 
approval. Forecasts are updated at least quarterly to reflect 
changes in the business and are monitored by the Board 
including future cash flow projections. Actual results are 
monitored against annual budgets in detail on a monthly 
basis, with variances highlighted to the Board.
Financial risks are identified and evaluated for each  
major transaction for consideration by the Board and  
senior management.
• Standard financial control procedures are operated 
throughout the Group to ensure that the assets of the 
Group are safeguarded and that proper accounting records 
are maintained.
• A risk review process is in development whereby the Chief 
Executive Officer and Finance Director will present a report 
to the Board each year on the key business risks.
Going concern
As disclosed in the Directors’ Report on page 20 the Group 
financial statements have been prepared on the going concern 
basis as the Directors have a reasonable expectation that the 
Group has adequate resources to continue in operational 
existence for the foreseeable future.
Relationship with shareholders
The Directors seek to build a mutual understanding of 
objectives between the Company and its shareholders. 
The Company reports formally to shareholders in its 
Annual Report and Interim Statements setting out details 
of the Group’s activities. In addition, the Company keeps 
shareholders informed of events and progress through the 
issue of regulatory news in accordance with the AIM Rules for 
Companies (“AIM Rules”) of the London Stock Exchange. The 
Chief Executive and Finance Director meet with institutional 
shareholders following interim and final results. The Company 
also maintains investor relations pages and other information 
regarding the business, the Group’s products and activities on 
its website at www.midatechpharma.com.
The Annual Report is made available to shareholders at least  
21 days before the Annual General Meeting (“AGM”) along 
with notice of the AGM. Directors are required to attend the 
AGM, unless unable to do so for personal reasons or due to 
pressing commercial commitments, and shareholders are given 
the opportunity to vote on each separate resolution proposed 
at the AGM. The Company counts all proxy votes and will 
indicate the level of proxies lodged for each resolution after  
it has first been dealt with by a show of hands.
Nick Robbins-Cherry
Company Secretary Midatech Pharma plc | Annual report & Accounts 2014 20
Governance
Directors’ Report
The Directors present their report and the consolidated financial statements of the Group for the year ended 31 December 2014.
Directors
The Directors during the period were:
Rolf Stahel (appointed 13 November 2014) 
Jeff Brown (appointed 13 November 2014) *
John Johnston (appointed 13 November 2014) 
Michele Luzi (appointed 13 November 2014) 
Pavlo Protopapa  (appointed 13 November 2014) 
Simon Turton (appointed 2 December 2014)
Sijmen de Vries (appointed 13 November 2014) 
Jim Phillips (appointed 12 September 2014) 
Nick Robbins-Cherry (appointed 12 September 2014) 
*Jeff Brown will be stepping down as a director of the company with effect from 30 April 2015.
Research and development
The Group is continuing to develop products within its chosen areas of therapeutic focus.
Matters covered in the Strategic Report
Details of the Group’s financial risk management objectives and policies are given in the Strategic Report.
Dividend
The Directors are not recommending the payment of a dividend at this time due to the level of maturity of the Group. The 
Directors intend implementing a dividend policy of progressive payments when the Group reaches the right stage of development.
Directors’ and officers’ liability insurance
The Company has, as permitted by s234 and 235 of the Companies Act 2006, maintained insurance cover on behalf of the Directors 
and Company Secretary indemnifying them against certain liabilities which may be incurred by them in relation to the Company. 
Employees
Midatech recognises the essential importance of employees to the success of the business and ensures that they are fully informed 
of events that directly affect them and their working conditions. Information on matters of concern to employees is given in 
briefings that seek to provide a common awareness on the part of all employees of the financial and economic factors affecting the 
Group’s performance.
Midatech recognises the essential 
importance of employees to the 
success of the business. Midatech Pharma plc | Annual report & Accounts 2014 21
Disabled employees
Applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their 
particular aptitudes and abilities. It is the policy of the Group that training and promotion opportunities should be available to  
all employees.
Directors’ responsibilities
The Directors are responsible for preparing the Director’s Report, Strategic Report and the financial statements in accordance 
with applicable law and regulations. 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
elected to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as 
adopted by the European Union and the Company financial statements in accordance with United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not 
approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and 
Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in 
accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market. 
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material 
departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue  
in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that 
the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the 
assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Directors’ statement as to the disclosure of information to auditors.
All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any information 
needed by the Group’s auditors for the purposes of their audit and to establish that the auditors are aware of that information. The 
Directors are not aware of any relevant audit information of which the auditors are unaware.
Website publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. 
Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing the 
preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and 
integrity of the Group’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing 
integrity of the financial statements contained therein.
By order of the Board
Nick Robbins-Cherry 
Finance Director 
16 April 2015  Midatech Pharma plc | Annual report & Accounts 2014 22
Financial Statements
Independent Auditor’s Report 
to the members of Midatech Pharma plc
We have audited the financial statements of Midatech Pharma plc for the year ended 31 December 2014 which comprise the 
consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement 
of cash flows, the consolidated statement of changes in equity, the company balance sheet and the related notes. The financial 
reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied 
in preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards (United 
Kingdom Generally Accepted Accounting Practice). 
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the 
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion 
on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors. 
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion: 
• the financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs as at 
31 December 2014 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company’s financial statements have been properly prepared in accordance with United Kingdom Generally 
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the strategic report and directors’ report for the financial year for which the financial 
statements are prepared is consistent with the financial statements. 
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,  
in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been 
received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Christopher Pooles (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Reading
16 April 2015
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Midatech Pharma plc | Annual report & Accounts 2014 23
Consolidated statement of comprehensive income
for the year ended 31 December 2014
Note
2014
£’000
2013
£’000
Revenue 3 157 147
Research and development costs (3,639) (1,925)
Administrative costs (4,405) (2,721)
Loss from operations (7,887) (4,499)
Finance income 7 8 1
Finance expense 7 (161) (385)
Loss before tax (8,040) (4,883)
Taxation 8 658 799
Loss after tax attributable to the owners of the parent (7,382) (4,084)
Other comprehensive income:
Items that will or may be reclassified subsequently  
to profit or loss when specific conditions are met:
Exchange (losses)/gains arising on translation of foreign operations (151) 5
Total other comprehensive income, net of tax (151) 5
Total comprehensive loss attributable to the owners of the parent (7,533) (4,079)
Loss per share 9
Basic and diluted loss per ordinary share – pence (82p) (71p)
The notes on pages 27 to 53 form part of these financial statements. Midatech Pharma plc | Annual report & Accounts 2014 24
Financial Statements
Consolidated statement of financial position
at 31 December 2014
Note
2014
£’000
2013
£’000
Assets
Non–current assets
Property, plant and equipment 10 1,516 684
Intangible assets 11 17,000 4
Investment in equity accounted joint venture – 12
Other receivables due in greater than one year 16 425 379
18,941 1,079
Current assets
Taxation 841 799
Trade and other receivables 16 462 909
Cash and cash equivalents 17 30,325 2,387
31,628 4,095
Total assets 50,569 5,174
Liabilities
Non–current liabilities
Borrowings 19 1,488 2,119
Deferred tax liability 21 2,820 –
4,308 2,119
Current liabilities
Trade and other payables 18 2,341 1,047
Borrowings 19 491 1,248
2,832 2,295
Total liabilities 7,140 4,414
Issued capital and reserves attributable to owners of the parent
Share capital 22 1,001 –
Share premium 23 31,643 21,018
Merger reserve 23 37,776 –
Shares to be issued 23 800 –
Foreign exchange reserve 23 (9) 142
Retained deficit 23 (27,782) (20,400)
Total equity 43,429 760
Total equity and liabilities 50,569 5,174
The financial statements on pages 23 to 53 were approved and authorised for issue by the Board of Directors on 16 April 2015 and 
were signed on its behalf by:
Nick Robbins–Cherry
Director
The notes on pages 27 to 53 form part of these financial statements. Midatech Pharma plc | Annual report & Accounts 2014 25
Consolidated statement of cash flows
for the year ended 31 December 2014
Note
2014
£’000
2013
£’000
Cash flows from operating activities
Loss for the year before tax (8,040) (4,883)
Adjustments for:
Depreciation of property, plant and equipment 10 321 246
Amortisation of intangible fixed assets 11 1 1
Loss on disposal of fixed assets 89 –
Foreign exchange loss (119) –
Net Interest expense/(income) 153 384
Cash flows from operating activities before changes in working capital (7,595) (4,252)
Decrease/(Increase) in trade and other receivables 547 (442)
Increase/(decrease) in trade and other payables 799 (330)
Cash generated from/(used in) operations 1,346 (772)
Taxes received 794 588
Net cash used in operating activities (5,455) (4,436)
Investing activities
Purchases of property, plant and equipment (1,030) (47)
Purchase of intangibles – (3)
Cash equivalents acquired with subsidiary 115 –
Interest received 8 –
Net cash used in investing activities (907) (50)
Financing activities
Interest paid (48) (15)
Payments to finance lease creditors (48) (93)
Repayment of borrowings (346) (200)
Issue of convertible debt – 1,251
Loan finance raised 890 –
Share issues net of costs 33,852 5,797
Net cash generated/(used in) financing activities 34,300 6,740
Net increase in cash and cash equivalents 27,938 2,254
Cash and cash equivalents at beginning of year 2,387 133
Cash and cash equivalents at end of year 17 30,325 2,387
The notes on pages 27 to 53 form part of these financial statements. Midatech Pharma plc | Annual report & Accounts 2014 26
Financial Statements
Consolidated statement of changes in equity
for the year ended 31 December 2014
Share 
capital
£’000
Share 
premium
£’000
Merger 
reserve
£’000
Shares to 
be issued
£’000
Foreign 
exchange 
reserve
£’000
Retained 
deficit
£’000
Total 
equity
£’000
At 1 January 2014 – 21,018 – – 142 (20,400) 760
Loss for the year – – – – – (7,382) (7,382)
Foreign exchange translation – – – – (151) – (151)
Total comprehensive loss – – – – (151) (7,382) (7,533)
Transactions with owners
Issue of Midatech Limited shares –  
pre-share for share exchange – 3,202 – – – – 3,202
Transfer to merger reserve on the merger of 
Midatech Pharma plc and Midatech Limited –  
31 October 2014 – (24,220) 24,220 – – – –
Transfer of A Preference shares from liability 
to equity (28 October 2014) and subsequent 
conversion to Deferred shares – 8 December 2014 1,000 – – – – – 1,000
Issue of shares to settle A Preference share 
accrued dividend – 8 December 2014 – 994 – – – – 994
Shares issued as consideration for a business 
combination – 8 December 2014 – – 13,556 – – – 13,556 
Shares to be issued as consideration for a 
business combination – 8 December 2014 – – – 800 – – 800
Issue of shares on placing – 8 December 2014 1 32,000 – – – – 32,001
Costs associated with share placing – (1,351) – – – – (1,351)
Total contribution by and distributions  
to owners 1,001 10,625 37,776 800 – – 50,202
At 31 December 2014 1,001 31,643 37,776 800 (9) (27,782) 43,429
1 January 2013 – 11,966 – – 137 (17,194) (5,091)
Loss for the year – – – – – (4,084) (4,084)
Foreign exchange translation – – – – 5 – 5
Total comprehensive income/(loss) – – – – 5 (4,084) (4,079)
Transactions with owners
Conversion of convertible loan notes – – – – – 584 584
Issue of shares – 9,093 – – – – 9,093
Cost of share issues – (41) – – – – (41)
Capital contribution – – – – – 294 294
Contributions by and distributions to owners – 9,052 – – – 878 9,930
31 December 2013 – 21,018 – – 142 (20,400) 760
The notes on pages 27 to 53 form part of these financial statements. Midatech Pharma plc | Annual report & Accounts 2014 27
1 Accounting policies
Basis of preparation
Midatech Pharma plc (the “Company”) is a company domiciled in England. The Company was incorporated on 12 September 2014 
and this is the first set of financial information prepared by the Company.
The Group was formed on 31 October 2014 when Midatech Pharma plc entered into an agreement to acquire the entire share 
capital of Midatech Limited and its wholly owned subsidiaries through the issue equivalent of shares in the Company which took 
place on 13 November 2014. 
The acquisition of the Midatech subsidiaries is outside the scope of IFRS 3 “Business combinations” and has been treated under 
the principles of merger accounting as set out under UK GAAP. The capital structure for the comparative year reflects the 
former holding company, Midatech Limited. Following the Group reconstruction the capital structure reflects that of Midatech 
Pharma plc. 
Accordingly, although the units which comprise the Group did not form a legal group for the entire period, the current period 
and comparative results comprise the results of the subsidiary companies as if the Group had been in existence throughout the 
entire period. 
These financial statements have been prepared in accordance with International Financial Reporting Standards, International 
Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as 
adopted by European Union (“adopted IFRSs”) and are presented in £’000’s Sterling.
The former group, Midatech Limited, adopted IFRS for the first time in its Historical Financial Information for the 3 years ended 
31 December 2013 as presented in the Placing and Admission to AIM document dated 3 December 2014. Midatech Pharma plc 
is a continuation of Midatech Limited as reflected in the merger accounting principle adopted and therefore the Group is not 
considered to be a first time adopter of IFRS in these financial statements. 
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been 
consistently applied to all the periods presented.
The following new standards have been adopted during the period:
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
• IFRS 12 Disclosure of Interests in Other Entities
• IAS 27 Separate Financial Statements
• IAS 28 Investments in Associates and Joint Ventures
• Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
• Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
• Recoverable amounts disclosures for non–financial assets (Amendments to IAS 36)
• Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
The adoption of the above new standards has not had a material impact on the financial statements during the year ended  
31 December 2014.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not effective for 2014 and therefore have not been 
applied in preparing these accounts. The effective dates shown are for periods commencing on the date quoted.
• Defined Benefit Plans: Employee Contributions: Amendments to IAS 19 (effective for periods beginning on or after 1 July 2014)
• Accounting for Acquisitions of Interests in Joint Operations: Amendments to IFRS 11 (effective 1 January 2016)
• Clarification of Acceptable Methods of Depreciation and Amortisation: Amendments to IAS 16 and IAS 38 (effective 1 January 2016)
• Equity Method in Separate Financial Statements (Amendments to IAS 27) (effective 1 January 2016)
• Sale or contribution of assets between an investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28) 
(effective 1 January 2016)
• IFRS 15 Revenue from Contracts with Customers (effective 1 January 2017)
• IFRS 9 Financial Instruments (effective 1 January 2018)
• Disclosure Initiative: Amendments to IAS 1 (effective 1 January 2016)
• Annual improvements to IFRSs
Notes forming part of the financial statements
for the year ended 31 December 2014 Midatech Pharma plc | Annual report & Accounts 2014 28
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
1 Accounting policies continued
The Group has considered the above new standards, interpretations and amendments to published standards that are not yet 
effective and concluded that they are either not relevant to the Group or that they would not have a significant impact on the 
Group’s financial statements, apart from additional disclosures.
Basis of consolidation
The Group financial statements consolidate those of the parent company and all of its subsidiaries. The parent controls a subsidiary 
if it has power over the investee to significantly direct the activities, exposure, or rights, to variable returns from its involvement 
with the investee, and the ability to use its power over the investee to affect the amount of the investor’s returns. All subsidiaries 
have a reporting date of 31 December.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses 
on transactions between Group companies. Where unrealised losses on intra–Group asset sales are reversed on consolidation, 
the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of 
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
The loss and other comprehensive income of the Midatech Pharma (Wales) Limited (formerly Q Chip) group acquired during the 
year are recognised from the effective date of acquisition, i.e. 8 December 2014. 
The consolidated financial statements consist of the results of the following entities:
Entity Summary description
Midatech Pharma plc Ultimate holding company
Midatech Limited Trading company
Midatech Biogune SL Trading company
Midatech Andalucia SL Dormant
Cura Vaccines Limited Dormant
PharMida AG Trading company
Midatech Pharma (Wales) Limited  
(formerly Q Chip Limited) Trading company
Q Chip BV Trading company
OpsiRx Pharmaceuticals Limited Non–trading company
OpsiRx Holdings Limited Non–trading company
Revenue
The Group’s income stream comprises milestone income from research and development contracts. Milestone income is 
recognised as revenue in the accounting period in which the milestones are achieved. Milestones are agreed on a project by  
project basis and will be evidenced by set deliverables.
Research and development contracts
Amounts received under collaborative joint agreements, representing contributions to the Group’s research and development 
programmes, are recognised as a credit against research and development expense in the period over which the related costs  
are incurred. All costs related to these collaborative agreements are recorded as research and development expenditure. 
Government grants and government loans
Government grants are credited to research and development expense in the same period as the expenditure towards which  
they are intended to contribute. 
The Group receives government loans that have a below–market rate of interest of 0%. These loans are recognised and measured 
in accordance with IAS 39. The benefit of the below–market rate of interest is measured as the difference between the initial 
carrying value of the loan discounted at a market rate of interest and the proceeds received.
The difference is held within deferred revenue as a government grant and is released as a credit to research and development 
expense in line with the expenditure to which it relates. In a situation where the proceeds were invested in plant and equipment, 
the deferred revenue is credited to research and development within the income statement in line with the depreciation of the 
acquired asset.
Externally acquired intangible assets and goodwill
Goodwill represents amounts arising on acquisition, being the difference between the cost of the acquisition and the net fair 
value of the identifiable assets and liabilities acquired on a business combination. Goodwill is stated at cost less any accumulated 
impairment losses. Goodwill is allocated to cash–generating units for the purposes of impairment testing and is not amortised.  
It is tested annually for impairment. Midatech Pharma plc | Annual report & Accounts 2014 29
An intangible asset, which is an identifiable non–monetary asset without physical substance, is recognised to the extent that it 
is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be 
measured reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights. 
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight line basis over their 
useful economic lives where they are in use.
The amounts ascribed to intangibles recognised on business combinations are arrived at by using appropriate valuation techniques 
(see section related to critical estimates and judgements below).
In–process research and development (IPRD) programmes acquired in business combinations are recognised as an asset even 
if subsequent expenditure is written off because the criteria specified in the policy for development costs below are not met. 
IPRD is subject to annual impairment testing until the completion or abandonment of the related project. No further costs will be 
capitalised in respect of this IPRD unless it meets the criteria for research and development capitalisation as set out below. As per 
IFRS 3, once the incremental research and development is completed, the carrying value of the acquired IPRD is reclassified as a 
finite–lived asset and amortised over its useful life.
The significant intangibles recognised by the Group and their useful economic lives are as follows:
Goodwill – Indefinite life
IPRD – to be determined when research complete
IT and Website costs – 4 years
Internally generated intangible assets (development costs)
Expenditure on the research phase of an internal project is recognised as an expense in the period in which it is incurred. 
Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:
• Completion of the asset is technically feasible so that it will be available for use or sale
• The Group intends to complete the asset and use or sell it
• The Group has the ability to use or sell the asset and the asset will generate probable future economic benefits (over and above cost)
• There are adequate technical, financial and other resources to complete the development and to use or sell the asset, and
• The expenditure attributable to the asset during its development can be measured reliably.
Judgement is applied when deciding whether the recognition criteria are met. Judgements are based on the information available at 
each statement of financial position date. In addition, all internal activities related to the research and development of new projects 
are continuously monitored by the Directors. The Directors consider that the criteria to capitalise development expenditure are 
not met for a product prior to that product receiving regulatory approval in at least one country.
Development expenditure not satisfying the above criteria, and expenditure on the research phase of internal projects, are 
included in R&D costs recognised in the Consolidated Statement of Comprehensive Income as incurred. No projects have yet 
reached the point of capitalisation.
Impairment of non–financial assets
Assets that have an indefinite useful life, for example goodwill, or intangible assets not ready for use, such as in–process research 
and development, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation 
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be 
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable 
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of 
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash–generating 
units). Non–financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of impairment at 
each reporting date.
Patents and trademarks
The costs incurred in establishing patents and trademarks are either expensed or capitalised in accordance with the corresponding 
treatment of the development expenditure for the product to which they relate.
Joint arrangements
The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control over the relevant 
activities of the arrangement to the Group and at least one other party. Joint control is assessed under the same principles as 
control over subsidiaries. Midatech Pharma plc | Annual report & Accounts 2014 30
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
1 Accounting policies continued
The Group classifies its interests in joint arrangements as either:
• Joint ventures: where the Group has rights to only the net assets of the joint arrangement
• Joint operations: where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers:
• The structure of the joint arrangement
• The legal form of joint arrangements structured through a separate vehicle
• The contractual terms of the joint arrangement agreement
• Any other facts and circumstances (including any other contractual arrangements).
The Group accounts for its interests in joint ventures using the equity method.
Any premium paid for an investment in a joint venture above the fair value of the Group’s share of the identifiable assets, liabilities 
and contingent liabilities acquired is capitalised and included in the carrying amount of the investment in joint venture. Where there 
is objective evidence that the investment in a joint venture has been impaired the carrying amount of the investment is tested for 
impairment in the same way as other non–financial assets. 
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities, revenues and expenses in 
accordance with its contractually conferred rights and obligations.
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which 
they operate are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are 
translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets 
and liabilities are recognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when 
the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those 
operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net 
assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and 
accumulated in the foreign exchange reserve. 
Exchange differences recognised in the profit or loss of Group entities on the translation of long–term monetary items forming 
part of the Group’s net investment in the overseas operation concerned are reclassified to other comprehensive income and 
accumulated in the foreign exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that 
operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit 
or loss on disposal.
Financial assets
The Group does not have any financial assets which it would classify as fair value through profit or loss, available for sale or held to 
maturity. Therefore all financial assets are classed as loans and receivables as defined below.
Loans and receivables
These assets are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. 
They arise principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate 
other types of contractual monetary asset. They are initially recognised at fair value plus transaction costs that are directly 
attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, 
less provision for impairment. 
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the 
counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the 
terms, the amount of such a provision being the difference between the net carrying amount and the present value of the future 
expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions 
are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated 
statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of 
the asset is written off against the associated provision.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the consolidated 
statement of financial position.  Midatech Pharma plc | Annual report & Accounts 2014 31
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short term highly liquid investments 
with original maturities of three months or less.
Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.
Fair value through profit and loss
The Group had convertible loans where the conversion price was not fixed on inception of the instrument. Therefore the 
derivative element of the instrument is fair valued on inception using an option pricing model and held at fair value through profit 
and loss as either a current or non–current liability depending on the expiration of the instrument at the date of financial position. 
The instrument was re–measured at each period end and immediately before conversion. The balance of the financial instrument is 
held at amortised cost.
Other financial liabilities include the following items:
• Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. 
Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which 
ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in 
the consolidated statement of financial position. Interest expense in this context includes initial transaction costs and premium 
payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
• Convertible loan notes, have been split between debt and fair value through profit and loss derivative. The debt element is 
recognised initially at fair value and subsequently carried at amortised cost.
• Government loans received on favourable terms below market rate are discounted at a market rate of interest. The difference 
between the present value of the loan and the proceeds is held as a government grant within deferred revenue and is released 
to research and development expenditure in line with when the asset or expenditure is recognised in the income statement.
• Redeemable preference shares are classified as liabilities as they accrued fixed interest payable in cash when distributable profits 
are available and confer no right to assets or equity distributions of the Company. 
• Trade payables and other short–term monetary liabilities are initially recognised at fair value and subsequently carried at 
amortised cost using the effective interest method.
Share capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a 
financial liability or financial asset. The Group has two classes of share in existence: 
• Ordinary shares of £0.00005 each are classified as equity instruments;
• Deferred shares of £1 each are classified as equity instruments.
Retirement benefits: defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in  
the year to which they relate.
Share–based payments
The share based payment charge is immaterial to the financial statements and has therefore not been recorded. 
Leased assets
Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group  
(a “finance lease”), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the 
lower of the fair value of the leased property and the present value of the minimum lease payments payable over the term of the 
lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed between capital and interest. The 
interest element is charged to the consolidated statement of comprehensive income over the period of the lease and is calculated 
so that it represents a constant proportion of the lease liability. The capital element reduces the balance owed to the lessor.
Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an “operating lease”), 
the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight–line 
basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the 
lease term on a straight–line basis.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when 
declared by the Directors. In the case of final dividends, this is when approved by the shareholders at the AGM. There have been 
no dividends paid since the formation of the Group. Midatech Pharma plc | Annual report & Accounts 2014 32
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
1 Accounting policies continued
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of 
financial position differs from its tax base, except for differences arising on:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the 
transaction affects neither accounting or taxable profit; and
• investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the 
difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against 
which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting 
date and are expected to apply when the deferred tax assets or liabilities are recovered or settled. 
Shares to be issued
Deferred consideration shares of 299,624 Ordinary Shares will be issued to the sellers of Midatech Pharma (Wales) Limited in two 
tranches; 224,718 on 8 December 2015 and 74,906 on 30 June 2016 as part consideration for the acquisition of 100% of the share 
capital. The number of shares will be revised downwards following any warranty claims not considered as part of the purchase price.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly 
attributable costs.
Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over their expected 
useful economic lives. It is provided at the following rates:
Fixtures and fittings – 25% per annum straight line
Leasehold improvements – 10% per annum straight line
Computer equipment – 25% per annum straight line
Laboratory equipment – 15% per annum straight line
2 Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated 
based on historical experience and other factors, including expectations of future events that are believed to be reasonable 
under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and 
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the 
next financial year are discussed below.
(i) Revenue recognition
   Fees invoiced in respect of milestones have been recognised as revenue in the Consolidated Statement of Comprehensive 
Income in the period as all criteria for revenue recognition have been met. Milestones are agreed on a project by project basis 
and will be evidenced by set deliverables.
(ii) Intangible asset recognition
   The Directors consider that the criteria to capitalise development expenditure are not met for a product prior to receipt of 
regulatory approval as this is the point at which technical feasibility can be demonstrated.
(iii) Calculation and impairment of goodwill
   The amount of goodwill initially recognised is dependent on the allocation of the purchase price to the fair value of the 
identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based 
to a considerable extent on the use of professional advisors in conjunction with management’s judgement. Allocation of the 
purchase price affects the result of the Group as finite lived intangible assets are amortised whereas indefinite lived intangible 
assets including goodwill are not amortised and could result in differing amortisation charges based on the allocation to 
indefinite lived and finite lived intangible assets.  Midatech Pharma plc | Annual report & Accounts 2014 33
(iv) Intangible assets
   Acquired in–process research and development (IPRD) is not amortised until research is complete and the product is 
revenue generating and is therefore subject to annual impairment reviews. The value of such acquired assets is based to a 
considerable extent on the use of professional advisors in conjunction with management judgement and is the subject of 
impairment reviews until the completion or abandonment of the related project. Management takes into consideration the 
requirements of IFRS 3, once the incremental research and development is completed, the carrying value of the acquired 
IPRD will be required to be reclassified as a finite–lived asset and amortised over its useful life.
(v) Determination of fair values of intangible assets acquired in business combinations
   The fair value of intangible assets acquired in business combinations is based on a method appropriate to the specific 
intangible asset. The fair value of the in–process research and development acquired in the Q Chip acquisition, was based on 
discounted cash flows over the expected life of the relevant patents.
(vi) Deferred tax asset recognition
   The Directors consider that, given the current stage of development of the business, deferred tax assets should not be 
recognised before the Group is generating recurring profits.
(vii) Classification of joint arrangements
   For all joint arrangements structured in separate vehicles the Group must assess the substance of the joint arrangement in 
determining whether it is classified as a joint venture or joint operation. This assessment requires the Group to consider 
whether it has rights to the joint arrangement’s net assets (in which case it is classified as a joint venture), or rights to and 
obligations for specific assets, liabilities, expenses, and revenues (in which case it is classified as a joint operation). Factors the 
Group must consider include:
  • Structure
  • Legal form
  • Contractual agreement
  • Other facts and circumstances.
   Upon consideration of these factors, the Group has determined that the Syntara LLC arrangement is a joint venture and 
the MidaSol Therapeutics arrangement is a joint operation. MidaSol Therapeutics is a collaborative agreement to share 50% 
of the development expenditure of a project where both parties have joint control but transactions are not recorded in a 
separate vehicle. As up to 90% of the costs can initially pass through the Group and periodically, including the year end, a true 
up invoice is credited to research and development and settled in cash by their collaborations partner.
(viii) Convertible loan notes
   The convertible loan notes have been split between the debt held under amortised cost and a derivative element held at fair 
value through profit and loss. This requires calculating the fair value of the derivative instrument using an option pricing model 
and recognising separately as a liability at fair value through profit and loss. The derivative is re–measured at each period end 
and immediately before conversion. The loan element is held at amortised cost. 
(ix) Useful lives of plant and equipment
   Plant and equipment is amortised or depreciated over its useful life. Useful lives are based on the Directors’ estimates of 
the periods over which the assets will be used in developing revenue generating products and the estimates are reviewed 
annually for continued appropriateness. The estimated useful lives are set out in Note 1. Changes to estimates can result in 
significant variations in the carrying value and amounts charged to the Consolidated Statement of Comprehensive Income 
in specific periods.
(x) Research and development tax credit
  Research and development tax credits are recognised on an accruals basis and are included as an income tax credit under 
current assets. The Group has a history of successfully estimating research and development tax credits as set out by 
applicable tax legislation. Midatech Pharma plc | Annual report & Accounts 2014 34
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
3 Revenue
Fees invoiced in respect of milestones have been recognised as revenue in the Consolidated Statement of Comprehensive Income 
in the period as all criteria for revenue recognition have been met. Milestones are agreed on a project by project basis and will be 
evidenced by set deliverables.
4 Segment information
The Group contains two operating segments following the acquisition of Midatech Pharma (Wales) Limited. These entities meet 
the aggregation criteria and have therefore been presented as a single reportable segment. The research and development activities 
involve the discovery and development of pharmaceutical products in the field of nanomedicine and sustained release technology. 
Information about major customers
To date, modest sales have meant that no meaningful analysis can be drawn from the customer profile of the revenues achieved 
during each period under review.
Non–current assets by location of assets
Non–current assets of £1.15m (2013: £0.95m) reside in Spain. The remainder of the Group’s non–current assets reside in the 
United Kingdom.
5 Loss from operations  
2014
£’000
2013
£’000
Loss from operations is stated after charging/(crediting):
Depreciation of property, plant and equipment 321 246
Amortisation of intangible assets 1 1
Fees payable to the Company’s auditor for the audit of the parent Company 21 6
Fees payable to the Company’s subsidiary auditors for the audits of the subsidiary accounts 31 25
Fees payable to the Company’s auditor for:
– Corporate finance services 281 –
– Tax compliance 14 1
– Tax advisory 14 1
– Other services 6 1
Operating lease expense:
– Property 97 194
– Plant and machinery 57 –
Foreign exchange (gain)/loss (37) 28
IPO costs (in addition to fees payable to the Company’s auditor) 763 –
Acquisition costs 172 –
Loss on disposal of property, plant and equipment 89 –
IPO costs primarily relate to the professional fees incurred on the admission of the Group to AIM.
Acquisition costs relate to professional fees and stamp duty incurred on the acquisition of Midatech Pharma (Wales) Limited. Midatech Pharma plc | Annual report & Accounts 2014 35
6 Staff costs  
2014
 £’000
2013 
£’000
Staff costs (including directors) comprise:
Wages and salaries 2,322 1,866
Defined contribution pension cost (note 25) 169 177
Social security contributions and similar taxes 322 295
2,813 2,338
Employee numbers
The average number of staff employed by the Group during the financial year amounted to: 
2014  
£’000
2013 
£’000
Research and development 28 22
General and administration 10 7
38 29
Key management personnel compensation 
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the 
activities of the Group, including the directors of the company listed on pages 12 and 13, and the Chief Operating Officer. Below 
includes the compensation for the Finance Director from the 4 February 2014 who was not a director of Midatech Limited or 
Midatech Pharma plc until 2 September 2014.
2014 
£’000
2013 
£’000
Wages and salaries 546 561
Defined contribution pension cost 36 55
Payments made to third parties 184 –
Social security contributions and similar taxes 78 72
Benefits in kind 36 7
880 695
Emoluments disclosed above include the following amounts in respect of the highest paid Director. Directors emoluments are 
disclosed on page 16.
2014 
£’000
2013 
£’000
Salary 323 192
Total pension and other post–employment benefit costs 22 19
Benefits in kind – 2
345 213
None of the Directors has exercised share options during the period.
During the year, 2 Directors (2013: 2) participated in a defined contribution pension scheme. Midatech Pharma plc | Annual report & Accounts 2014 36
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
7 Finance income and expense  
Recognised in profit or loss
2014
£’000
2013
£’000
Finance income
Interest received on bank deposits 8 1
Total finance income 8 1
2014
£’000
2013
£’000
Finance expense
Bank loans 126 3
Other loans – 50
Interest on convertible loans 35 195
Non–equity preference shares – 137
Total finance expense 161 385
8 Taxation  
2014 
£’000
2013 
£’000
Current tax credit
Current tax credited to the income statement 663 799
Taxation payable in respect of foreign subsidiary (5) –
Total current tax and tax credit 658 799 Midatech Pharma plc | Annual report & Accounts 2014 37
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United 
Kingdom applied to losses for the year are as follows:
2014
£’000
2013
£’000
Loss before income tax (8,040) (4,883)
Expected tax credit based on the standard rate of United Kingdom  
corporation tax at the domestic rate of 21.49% (2013: 20%) (1,723) (977)
Fixed asset differences 12 4
Expenses not deductible for tax purposes 385 67
Adjustments to brought forward values 33 –
Additional deduction for R&D expenditure (566) (811)
Surrender of tax losses for R&D tax refund 419 653
Adjust deferred tax opening/closing rate 59 –
Income not taxable (44) –
Difference in capital allowances and depreciation/amortisation – 5
Other short term timing differences – 23
Unrelieved tax losses and other deductions arising in the period (35) 237
Deferred tax not recognised 802 –
Total tax credited to the income statement (658) (799)
The taxation credit arises on the enhanced research and development tax credits accrued for the respective periods.
The Finance Act 2013 includes provision for the main rate of corporation tax to reduce from 23% to 21% from 1 April 2014 and to 
20% from 1 April 2015.
9 Loss per share
Total
2014
£’000
Total
2013
£’000
Numerator
Loss used in basic EPS and diluted EPS (7,382) (4,084)
Denominator
Weighted average number of ordinary shares used in basic EPS 9,026,347 5,715,576
Basic and diluted loss per share – pence (82p) (71p)
The 2013 loss per share is based on the Midatech Limited weighted average number of shares in issue which has been restated to 
take account of the share division that took place on 28 November 2014 whereby each 0.001p Ordinary Share was sub divided 
into two 0.0005p Ordinary Shares. Midatech Pharma plc | Annual report & Accounts 2014 38
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
10 Property, plant and equipment
Fixtures  
and fittings
£’000
Leasehold
improvements
£’000
Computer 
equipment
£’000
Laboratory 
equipment
£’000
Total
£’000
Cost
At 1 January 2013 716 746 147 161 1,770
Additions 16 15 15 1 47
Exchange differences 16 6 3 – 25
At 31 December 2013 748 767 165 162 1,842
At 1 January 2014 748 767 165 162 1,842
Additions  524 259 18 229 1,030
Acquired through acquisition of subsidiary 56 19 112 596 783
Exchange differences (42) (41) (3) – (86)
Disposals (31) (124) – (15) (170)
At 31 December 2014 1,255 880 292 972 3,399
Accumulated depreciation 
At 1 January 2013 321 400 94 79 894
Charge for the year 102 86 22 36 246
Exchange differences 7 9 2 – 18
At 31 December 2013 430 495 118 115 1,158
At 1 January 2014 430 495 118 115 1,158
Charge for the year 102 67 24 128 321
Acquired through acquisition of subsidiary 53 – 97 389 539
Exchange differences (22) (33) (2) 3 (54)
Disposals (31) (50) – – (81)
At 31 December 2014 532 479 237 635 1,883
Net book value
At 31 December 2014 723 401 55 337 1,516
At 31 December 2013 318 272 47 47 684
At 1 January 2013 395 346 53 82 876
Included within the total net book value of tangible fixed assets is £224k (2013: £346k) in respect of assets held under finance 
leases and similar hire purchase contracts. The depreciation charge for the year on these assets was £79k (2013: £90k). These 
assets were held as security in respect of their finance lease obligations.
No other assets were held as security other than those on finance lease. Midatech Pharma plc | Annual report & Accounts 2014 39
11 Intangible assets  
In–process
research and
development
£’000
Goodwill
£’000
IT/Website
costs
£’000
Total
£’000
Cost
At 1 January 2013 – – 9 9
Additions – – 3 3
At 31 December 2013 – – 12 12
At 1 January 2014 – – 12 12
Acquired in business combinations 14,100 2,897 – 16,997
At 31 December 2014 14,100 2,897 12 17,009
Accumulated amortisation
At 1 January 2013 – – 7 7
Amortisation charge for the year – – 1 1
At 31 December 2013 – – 8 8
At 1 January 2014 – – 8 8
Amortisation charge for the year – – 1 1
At 31 December 2014 – – 9 9
Net book value
At 31 December 2014 14,100 2,897 3 17,000
At 31 December 2013 – – 4 4
At 1 January 2013 – – 2 2
12 Acquisition of Q Chip Limited 
On 8 December 2014, the Group acquired 100% of the voting equity of Q Chip Limited and its subsidiaries, a UK company 
principally involved in design and development of the Q–Sphera TM drug encapsulation and delivery system and underpinning 
microsphere manufacturing technology. On 20 January 2015 Q Chip Limited changed its name to Midatech Pharma (Wales) 
Limited. The principal reason for this acquisition was to strengthen the Group’s technology and product portfolios, and thereby 
diversify risk through the following:
a) Add controlled–release technology to Midatech gold nano–particle and portfolio 
b) Expand the number of development projects
c)  Q Chip’s product portfolio offered Midatech a lower risk profile than Midatech’s own technology thereby mitigating against 
potential future failure
The revenue included in the Consolidated Statement of Comprehensive Income since 8 December 2014 contributed by Q Chip 
Limited was £nil. Q Chip Limited contributed a net loss of £0.3m over the same period.
If the acquisition had occurred on 1 January 2014, group revenue would have been £0.73m and group loss for the period would 
have been £9.41m.
Acquisition related costs of £0.17m were incurred in relation to this acquisition and are included within administrative expenses 
within the Consolidated Statement of Comprehensive Income for the period.  Midatech Pharma plc | Annual report & Accounts 2014 40
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
12 Acquisition of Q Chip Limited continued 
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are:
Provisional  
fair value 
£000
Identifiable intangible assets: 
In–process research and development 14,100
Property, plant and equipment 244
Receivables and other debtors 314
Payables and other liabilities (494)
Deferred tax (2,820)
Cash 115
Total net assets 11,459
Equity instruments (5,077,122 ordinary shares) 13,556
Deferred Equity instruments (299,624 deferred consideration shares held as shares to be issued) 800
Total consideration 14,356 
Goodwill on acquisition 2,897
The main factors leading to the recognition of goodwill are the presence of certain intangible assets, such as the assembled 
workforce of the acquired entity and the expected synergies of the enlarged group which do not qualify for separate recognition.
The goodwill and intangible assets recognised will not attract tax deductions.
The net cash inflow in the year in respect of acquisition comprised:
Fair Value 
£000
Net cash acquired 115
13 Impairment testing
Details of goodwill and IPRD allocated to the acquired cash generating unit and the recoverable amount and valuation basis is  
as follows:
Name
Goodwill 
carrying 
amount
IPRD Carrying 
amount 
Recoverable 
value of CGU
Valuation 
basis
2014
£000
2014 
£000
2014 
£000
CGU: Q Chip Limited and subsidiaries 2,897 14,100 14,177 Value in use
The value in use model uses a 20 year risk adjusted cash flow forecast that has been approved by the Board. The carrying value of 
the CGU includes a deferred tax liability of £2.88m, goodwill of £2.90m, IPRD of £14.10m and an immaterial amount of underlying 
net assets. The key assumptions used in the model include the following:
Assumptions
2014 CGU –  
Q Chip Limited and subsidiaries
Discount rate 14.5%
Cumulative probability of success of projects 49% to 60%
The value in use calculations used to value the acquired intangibles and appraise the carrying value of the intangibles were 
materially the same. This is because of the impairment test date and acquisition date being only 23 days apart. Any increase in the 
discount rate or decrease in the probability of success of projects stated above would result in an impairment.  Midatech Pharma plc | Annual report & Accounts 2014 41
14 Subsidiaries
The principal subsidiaries of Midatech Pharma plc, all of which are 100% owned and have been included in these financial 
statements in accordance with the details set out in the basis of preparation and basis of consolidation note 1, are as follows:
Name Country of incorporation Nature of Business Notes
Midatech Limited United Kingdom Trading company
Midatech Biogune SL Spain Trading company
Midatech Andalucia SL Spain Dormant
Cura Vaccines Limited United Kingdom Dormant
PharMida AG Switzerland Trading company (a)
Midatech Pharma (Wales) Limited United Kingdom Trading company (c)
Q Chip BV Netherlands Trading company (b)
OpsiRx Pharmaceuticals Limited United Kingdom Non–trading company
OpsiRx Holdings Limited United Kingdom Non–trading company
Notes:
(a) PharMida AG is due to become dormant from July 2015. 
(b) Q Chip BV is due to become dormant from July 2015.
(c) Q Chip Limited was renamed Midatech Pharma (Wales) Limited on 23 January 2015.
15 Joint arrangements 
Name Country of incorporation Nature of business Type of arrangement
Syntara LLC United States of America Research and development partner Joint venture
MidaSol Therapeutics GP Cayman Islands Research and development partner Joint operation
The Group has a 50% (2013: 50%) interest in two joint arrangements: Syntara LLC and MidaSol Therapeutics. The primary activity 
of these joint arrangements is to provide the partners with collaborative research and development on drug delivery systems in the 
market, which is in line with the Group’s strategy to develop a safe and effective drug delivery system. 
Syntara LLC is a non–trading joint venture where the Group has joint control over the separate legal entity. The Group equity 
accounts for its interests in this arrangement; the results are immaterial to the financial statements.
MidaSol Therapeutics has a separate legal entity however no costs or revenues pass through it. The Group and its collaborative 
partner incur costs in respect of research of development and periodically agree on a contribution from either side to ensure that 
both parties have incurred 50% of the total costs. Contributions from their research partner are netted against the costs to which 
they relate within research and development and the arrangement is accounted for as a joint operation.
2014
£’000
2013
£’000
Research and development spend on MidaSol Therapeutics 248 542
Year–end receivable due from joint operation partner – 146 Midatech Pharma plc | Annual report & Accounts 2014 42
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
16 Trade and other receivables  
2014 
£’000
2013 
£’000
Trade receivables 189 160
Prepayments 49 68
Other receivables 649 1,060
Total trade and other receivables 887 1,288
Less: non–current portion (rental deposit and bond) (425) (379)
Current portion 462 909
Trade and other receivables do not contain any impaired assets. The Group does not hold any collateral as security and the maximum 
exposure to credit risk at the Consolidated Statement of Financial Position date is the fair value of each class of receivable. 
Book values approximate to fair value at 31 December 2014 and 2013.
17 Cash and cash equivalents notes
2014 
£’000
2013
 £’000
Cash at bank available on demand 30,325 2,387
18 Trade and other payables
2014
£’000
2013
£’000
Current
Trade payables 981 522
Other payables 177 177
Accruals 732 58
Total financial liabilities, excluding loans and borrowings,  
classified as financial liabilities measured at amortised cost 1,890 757
Tax and social security 274 78
Deferred revenue 177 212
Total trade and other payables 2,341 1,047
Book values approximate to fair value at 31 December 2014 and 2013.
All current trade and other payables are payable within 3 months of the period end date shown above.
Government grants in UK
Midatech received development grant funding from the European Commission of £0.15m on 18 August 2014 and £0.07m on  
16 December 2014 under the Health Cooperation Work Programme of the 7th Framework Programme of which £0.15m  
(2013: £0.21m) is recorded as deferred revenue at 31 December 2014. The collaborative project supported by this grant is part  
of the EE–ASI European Research network. Midatech Pharma plc | Annual report & Accounts 2014 43
Government grants/loans in Spain
Five tranches of government loans have been received in Midatech Biogune SL for the finance of research, technical innovation and the 
construction of their laboratory. The loans are term loans which carry an interest rate of 0%, they are repayable over periods through 
to 2022. The loans carry default interest rates in the event of scheduled repayments not being met. The loans are discounted at a 
market rate of interest with the credit being classified as a grant within deferred revenue. The deferred grant revenue is released to 
the income statement within research and development in the period to which the expenditure is recognised.
The debt element of the government loans is designated within note 19 as borrowings, the gross contractual repayment of the 
loans is disclosed in note 20.
19 Loans and borrowings
2014 
£’000
2013 
£’000
Current
Bank loans 9 –
Finance lease 37 47
Government and research loans 445 138
Preference share dividends payable – 1,063
Total 491 1,248
Non–current
Bank loans 31 –
Government and research loans 1,457 1,006
Preference shares – 1,075
Finance lease – 38
Total 1,488 2,119
Book values approximate to fair value at 31 December 2014 and 2013.
Obligations under finance leases are secured by a fixed charge over the fixed assets to which they relate. 
The Group had no undrawn committed borrowing facilities at any year end. Midatech Pharma plc | Annual report & Accounts 2014 44
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
20 Financial instruments – risk management
The Group is exposed through its operations to the following financial risks:
• Credit risk
• Fair value or cash flow interest rate risk
• Foreign exchange risk
• Liquidity risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note 
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Trade receivables 
• Cash and cash equivalents
• Trade and other payables
• Loans and borrowings
• Derivative financial liabilities
A summary of the financial instruments held by category is provided below:
Financial assets – loans and receivables
2014 
£’000
2013 
£’000
Cash and cash equivalents 30,325 2,387
Trade receivables 189 160
Other receivables 649 1,060
Total financial assets 31,163 3,607
Financial liabilities – amortised cost
2014 
£’000
2013
 £’000
Trade payables 981 522
Other payables 177 177
Accruals 732 58
Loans and borrowings 1,979 3,367
Total financial liabilities – amortised cost 3,869 4,124 Midatech Pharma plc | Annual report & Accounts 2014 45
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst 
retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the 
effective implementation of the objectives and policies to the Group’s Management.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s 
competitiveness and flexibility. Further details regarding these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the Group if a development partner or a counterparty to a financial instrument fails to 
meet its contractual obligations. The Group is mainly exposed to credit risk from amounts due from collaborative partners which is 
deemed to be low. 
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial 
institutions, only independently rated parties with high credit status are accepted.
The Group does not enter into derivatives to manage credit risk.
Quantitative disclosures of the credit risk exposure in relation to financial assets are set out below. Further disclosures regarding 
trade and other receivables, which are neither past due nor impaired, are provided in note 16.
The total exposure to credit risk of the Group is equal to the total value of the financial assets held at each year end as  
noted above.
Cash in bank
The Group is continually reviewing the credit risk associated with holding money on deposit in banks and seeks to mitigate this risk 
by holding deposits with banks with high credit status.
Fair value and cash flow interest rate risk
The Group is not significantly exposed to cash flow interest rate risk from short term and long–term borrowings at variable rate as 
the majority of borrowings with the exception of finance leases are held on fixed rates. 
The Group has minimal exposure to interest rate risk as it has had minimal borrowings on variable rates and immaterial levels of 
interest paid and received on their variable rate loans. 
The Group’s exposure to fair value interest rate risk is also considered to be immaterial. 
Foreign exchange risk
Foreign exchange risk arises because the Group has a material operation located in Bilbao, Spain, whose functional currency is not 
the same as the functional currency of the Group. The Group’s net assets arising from such overseas operations are exposed to 
currency risk resulting in gains or losses on retranslation into sterling. Given the levels of materiality, the Group does not hedge its 
net investments in overseas operations as the cost of doing so is disproportionate to the exposure.
Foreign exchange risk also arises when individual Group entities enter into transactions denominated in a currency other than 
their functional currency; the Group‘s transactions outside the UK to the US and Europe drive foreign exchange movements 
where suppliers invoice in currency other than sterling. These transactions are not hedged because the cost of doing so is 
disproportionate to the risk.
As of 31 December 2014 and 2013, the Group’s exposure to foreign exchange risk was not material. 
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in 
meeting its financial obligations as they fall due.
It is the Group’s aim to settle balances as they become due.
The Group’s current financial position following the IPO is such that the Board does not consider there to be a short term liquidity 
risk however the Board will continue to monitor long term cash projections in light of the development plan and will consider 
raising funds as required to fund long term development projects. Development expenditure can be curtailed as necessary to 
preserve liquidity. Midatech Pharma plc | Annual report & Accounts 2014 46
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
20 Financial instruments – risk management continued
The following table sets out the contractual maturities (representing undiscounted contractual cash–flows) of financial liabilities:
2014
Up to 3 
months
£’000
Between
3 and 12 
months
£’000
Between
1 and 2  
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Trade and other payables 1,890 – – – –
Bank loans 2 7 9 24 –
Finance leases 11 27 – – –
Government research loans – 485 207 891 351
Total 1,903 519 216 915 351
2013
Up to 3 
months
£’000
Between
3 and 12 
months
£’000
Between
1 and 2 
years
£’000
Between
2 and 5 
years
£’000
Over 5 
years
£’000
Trade and other payables 757 – – – –
Finance leases 12 35 38 – –
Government research loans – 159 169 535 445
Preference shares – – – – 1,075
Preference share dividends payable 1,063 – – – –
Total 1,832 194 207 535 1,520
More details in regard to the line items are included in the respective notes:
• Trade and other payables – note 18 
• Loans and borrowings – note 19
Capital risk management
The Group monitors capital which comprises all components of equity (i.e. share capital, share premium, foreign exchange reserve 
and retained deficit).
The Group’s objectives when maintaining capital are:
• to safeguard the entity’s ability to continue as a going concern, and
• to have sufficient resource to take development projects forward towards commercialisation.
The Group continues to incur substantial operating expenses. Until the Group generates positive net cash inflows from the 
commercialisation of its products it remains dependent upon additional funding through the injection of equity capital and 
government funding. The Group may not be able to generate positive net cash inflows in the future or to attract such additional 
required funding at all, or on suitable terms. In such circumstances the development programmes may be delayed or cancelled and 
business operations cut back.
The Group seeks to reduce this risk by keeping a tight control on expenditure, avoiding long–term supplier contracts (other than 
clinical trials), prioritising development spend on products closest to potential revenue generation, obtaining government grants 
(where applicable), maintaining a focused portfolio of products under development and keeping shareholders informed of progress.
21 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 20%.
The movement on the deferred tax account is as shown below:
2014 
£’000
Liability at 1 January 2014 –
Arising on business combination (2,820)
Liability at 31 December 2014 (2,820) Midatech Pharma plc | Annual report & Accounts 2014 47
A deferred tax liability has arisen due to deferred tax on intangible assets acquired during the period. The intangible assets have 
not been amortised as they are not yet in use, consequently no credit has been recognised in the income statement. 
Unused tax losses carried forward, subject to agreement with local tax authorities, were as follows:
Gross losses
£’000
Unrecognised 
deferred tax
£’000
31 December 2013 13,004 2,601
31 December 2014 25,047 5,019
A deferred tax asset has not been provided in these accounts due to uncertainty as to the whether the asset would be recovered.
22 Share capital
2014
Number
2014
£’000
2013
Number
2013
£’000
Authorised – classified as equity
Ordinary shares of 0.01p each – – 11,940,981 1,194
C preference shares of 0.01p each – – 565,064 57
Ordinary shares of 0.005p each 37,059,013 1,853 – –
Deferred shares of £1 each 1,000,001 1,000,001 – –
Total 1,001,854 1,251
2014
Number
2014
£’000
2013
Number
2013
£’000
Authorised – classified as liabilities
A 7.5% preference shares of £1 each – – 1,000,000 1,000,000
B 15% preference shares of £1 each – – 75,000 75,000
Total – 1,075,000
2014
Number
2014
£’000
2013
Number
2013
£’000
Allotted and fully paid –  
classified as equity
At 1 January
Ordinary shares of 0.005p each 27,794,258 1,390 2,889,229 289
Deferred shares of £1 each 1,000,001 1,000,001 – –
C preference shares of 0.01p each – – 565,064 57
Total 1,001,391 346
2014
Number
2014
£’000
2013
Number
2013
£’000
Allotted and fully paid up –  
classified as liabilities
A 7.5% preference shares of £1 each – – 1,000,000 1,000,000
B 15% preference shares of £1 each – – 75,000 75,000
Total – – 1,075,000 Midatech Pharma plc | Annual report & Accounts 2014 48
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
22 Share capital continued
Rights attaching to the shares prior to the incorporation of Midatech Pharma plc
Shares classified as equity
The holders of ordinary shares and C preference shares in the capital of the Company had the following rights and ranked pari 
passu with one another:
(a) to receive notice of, to attend and to vote at all general meetings of the Company, in which case shareholders shall have one 
vote for each share of which they are the holder.
(b) to receive such dividend as is declared by the Board on each share held; and
In the event of a distribution of assets, the capital return would be distributed as follows:
i. C preference shareholders to receive original issue price;
ii. A and B preference shareholders to receive an agreed amount per share as set out in the Company’s Articles; and
iii. C preference and ordinary shareholders to receive remaining capital and rank pari passu.
Ordinary and C preference shares were recorded as equity.
Shares classified as liabilities
The A and B preference shares have a nominal value of £1 and have right to a fixed cumulative, preferential dividend at a rate of 
7.5% and 15% respectively, dividends ceased to accrue from 28 October 2013. Accrued dividends ranked equally amongst A and 
B preference shares and were compounded at the end of each period. Preference dividends are ranked before any other class 
of share. The preference dividends did not confer any further rights to participation in the profits or assets of the Company. The 
preference shares only became redeemable on a listing or change of control. Preference shareholders were entitled to attend and 
speak at general meetings of the Company but did not have the right of a vote.
A and B preference shares were categorised as liabilities and held at amortised cost until the right to a fixed dividend ceased  
to accrue. 
Rights attaching to the shares following the incorporation of Midatech Pharma plc
Shares classified as equity
The holders of ordinary shares in the capital of the Company have the following rights:
(a) to receive notice of, to attend and to vote at all general meetings of the Company, in which case shareholders shall have one 
vote for each share of which he is the holder.
(b) to receive such dividend as is declared by the Board on each share held.
The holders of Deferred Shares in the capital of the Company:
(a) shall not be entitled to receive notice of or to attend or speak at any general meeting of the Company or to vote on any 
resolution to be proposed at any general meeting of the Company;
(b) shall not be entitled to receive any dividend or other distribution of out of the profits of the Company.
In the event of a distribution of assets, the Deferred shareholders shall receive the nominal amount paid up on such share after the 
holder of each ordinary share shall have received (in cash or specie) the amount paid up or credited as paid up on such ordinary 
share together with an additional payment of £100 per share. The company has the authority to purchase the Deferred Shares and 
may require the holder of the Deferred Shares to sell them for a price not exceeding 1p for all the Deferred Shares. 
Ordinary and deferred shares are recorded as equity. Midatech Pharma plc | Annual report & Accounts 2014 49
Date of Issue 
Type of  
Share Issue
Ordinary 
Shares
Number
A 
Preference 
Shares
Number
B 
Preference 
Shares
Number
C 
Preference 
Shares
Number
Share  
Price
£
Total 
consideration
£’000
2013
As at 1 January 2013 Brought forward 2,457,493 1,000,000 75,000 – – –
11 February 2013 Convertible loan 234,196 – – – 8.38 1,963
21 February 2013 Subscription option 16,489 – – – 13.70 226
27 February 2013 Subscription option 133,808 – – – 8.38 1,120
30 April 2013 Subscription option 5,474 – – – 13.70 75
10 May 2013 Subscription option 4,806 – – – 13.70 66
03 June 2013 Subscription option 962 – – – 13.70 13
18 June 2013 Subscription option 5,715 – – – 17.50 100
04 July 2013 Subscription option 14,286 – – – 17.50 250
15 July 2013 Subscription option 5,715 – – – 17.50 100
05 August 2013 Subscription option 2,857 – – – 17.50 50
08 August 2013 Subscription option 1,428 – – – 17.50 25
26 September 2013 Subscription option 3,000 – – – 17.50 53
27 September 2013 Subscription option 3,000 – – – 17.50 53
05 December 2013 Convertible – – – 144,552 8.95 1,294
05 December 2013 Share issue – – – 420,512 8.81 3,705
Total 2013 2,889,229 1,000,000 75,000 565,064 – 9,093
Date of Issue 
Type of  
Share Issue
Ordinary 
Shares
Number
A 
Preference 
Shares
Number
B 
Preference 
Shares
Number
C 
Preference 
Shares
Number
Deferred 
Shares
Number
Share  
Price
£
Total 
consideration
£’000
2014
As at 1 January 2014 2,889,229 1,000,000 75,000 565,064 – – 9,093
30 January 2014 Equalisation round 39,853 – – – – – –
19 April 2014 Subscription option 244,881 – – – – 0.15 37
13 June 2014 Subscription option 8,250 – – – – 0.15 1
4 September 2014 Rights issue 105,314 – – 511,738 – 5.13 3,165
12 September 2014 Share redemption – – (75,000) – – –
Total pre–share 
for share exchange 
– Midatech 
Limited 3,287,527 1,000,000 – 1,076,802 – 12,296
12 September 2014 Subscriber share – 
Midatech Pharma plc
1 – – – – 1 –
13 November 2014 Share for share 
exchange 
3,287,527 1,000,000 – 1,076,802 – – –
13 November 2014 Sub–division of 
subscriber share
9,999 – – – – 0.0001 –
28 November 2014 Warrant exchange 
share issue
628,356 – – – – 0.0001 –
28 November 2014 Share conversion (10,000) – – – 1 – –
28 November 2014 Share conversion 1,076,802 – – (1,076,802) – – –
Total ordinary 
shares pre–
subdivision 4,992,685 – – – – – –
28 November 2014 Share sub division 9,985,370 – – – – – –
8 December 2014 Share issue on 
acquisition of Q 
Chip Limited
5,077,122 – – – – 2.67 –
8 December 2014 Public offering 11,985,019 – – – – 2.67 32,000
8 December 2014 Share conversion 746,747 (1,000,000) 1,000,000 – –
27,794,258 – – – 1,000,001 – 32,000 Midatech Pharma plc | Annual report & Accounts 2014 50
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
22 Share capital continued
The following changes in the share capital of the Company, and its constitution, have taken place between the date of the 
Company’s incorporation and the date of this document:
(a) The Company was incorporated on 12 September 2014 with a share capital of 1 ordinary share of £1 and was re–registered as 
a public limited company on 27 November 2014 with the name “Midatech Pharma plc”.
(b) On 13 November 2014, pursuant to a written ordinary and special resolutions of the Company’s sole member the 1 ordinary 
share of £1 was subdivided into 10,000 ordinary shares of 0.01 pence each (the “Subscriber Shares”);
(c) On 13 November 2014 pursuant to a Share Exchange Agreement executed with the members of Midatech Limited, the 
following relevant securities in the capital of the Company were allotted, mirroring the share capital of Midatech Limited: 
3,287,528 ordinary shares of 0.01 pence each, 1,000,000 A preference shares of £1 each and 1,076,802 C preference shares of 
0.01 pence each.
(d) On 28 November 2014 the Company allotted 628,356 ordinary shares of 0.01 pence each to holders of warrants to subscribe 
for shares in Midatech Limited. 
(e) On 28 November 2014 the 1,076,802 C preference shares of 0.01 pence each (being all such class of shares in issue) were 
converted into 1,076,802 ordinary shares of 0.01p each and the Subscriber Shares referred to in paragraph (b) above were 
converted into one Deferred Share.
(f) On 28 November 2014 a written ordinary resolution of the Company’s members was passed whereby each of the ordinary 
shares in the capital of the Company was sub–divided into two ordinary shares of 0.005 pence each. 
(g) On 8 December 2014 pursuant to a Sale and Purchase Agreement executed with the members of Q Chip Limited (now 
Midatech Pharma (Wales) Limited) 5,077,122 ordinary shares of 0.005 pence each were issued to the shareholders of Q Chip 
Limited in consideration for the acquisition of the entire issued share capital of that company. A further 299,624 Deferred 
Shares were also issued which may be converted into ordinary shares up to 30 June 2016 subject to there not being any 
successful warranty claims against the sellers of Q Chip Limited.
(h) On 8 December 2014 11,985,019 Ordinary Shares of 0.005 pence each were issued to subscribers in the initial public offering 
of the Company and its admission to AIM.
(i) On 8 December 2014 the 1,000,000 A Preference Shares of £1 each plus accrued interest liabilities were settled by the issue of 
746,747 Ordinary Shares of 0.005 pence each.
(j) Following the above settlement the 1,000,000 A Preference shares of £1 each were converted into 1,000,000 Deferred Shares 
of £1 each carrying the rights set out above. 
23 Reserves
The following describes the nature and purpose of each reserve within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Merger reserve Represents the difference between the fair value and nominal value of shares issued 
on the acquisition of subsidiary companies where the company has elected to take 
advantage of merger relief and the share premium of Midatech Limited prior to the 
merger as set out in note 1. 
Shares to be issued Shares for which consideration has been received but which are not yet issued and 
which form part of consideration in a business combination.
Foreign exchange reserve Gains/losses arising on retranslating the net assets of overseas operations into sterling.
Retained deficit All other net gains and losses and transactions with owners (e.g. dividends) not 
recognised elsewhere. Midatech Pharma plc | Annual report & Accounts 2014 51
24 Leases
The Group had commitments under non–cancellable operating leases as set out below:
2014
Land and 
buildings 
£’000
Other 
£’000
In one year or less 150 79
Between one and five years 159 –
309 79
2013
Land and 
Buildings
£’000
Other
£’000
In one year or less 48 67
Between one and five years 50 56
98 123
25 Retirement benefits
The Group operates a defined contribution pension scheme for the benefit of its employees. The assets of the scheme are 
administered by trustees in funds independent from those of the Group. The pension costs charged for each year are listed below:
2014
 £’000
2013
£’000
Defined contribution pension scheme 169 177
26 Share–based payment 
Share Options
The Group has issued options over ordinary shares under the Midatech Limited 2008 unapproved share option scheme and 
Midatech Limited 2013 approved Enterprise Incentive scheme. Exercise of an option is subject to continued employment.
The Directors have valued the options using an option–pricing model and concluded that the IFRS 2 share option charge arising 
from the grants is immaterial and has therefore not been recorded in the financial statements. The options are held over shares in 
Midatech Limited, the former parent, however the Company is in the process of reissuing these options into options over shares in 
Midatech Pharma plc, this will complete in 2015. Midatech Pharma plc | Annual report & Accounts 2014 52
Notes forming part of the financial statements
for the year ended 31 December 2014 continued
Financial Statements
26 Share–based payment continued
Details of all share options granted under the Midatech Limited schemes are set out below:
Date of grant
At  
1 January 
2014
Granted  
in 2014
Exercised  
in 2014
Forfeited  
in 2014
At  
31 December 
2014
Exercise 
Price
31 December 2008 44,622 – – (18,500) 26,122 £1.425
31 December 2008 15,500 – – – 15,500 £3.985
1 September 2009 12,500 – – (12,500) – £3.985
13 November 2009 25,000 – – (25,000) – £4.00
1 April 2010 25,110 – – – 25,110 £4.00
20 August 2010 59,666 – – – 59,666 £4.19
13 September 2011 3,000 – – – 3,000 £4.19
20 April 2012 47,796 – – (12,000) 35,796 £4.19
1 May 2013 100,000 – – (100,000) – £6.85
3 April 2014 – 43,000 (16,500) – 26,500 £0.075
9 May 2014 – 200,000 – – 200,000 £0.075
30 June 2014 – 880,000 – – 880,000 £0.075
11 July 2014 – 11,000 – – 11,000 £0.075
333,194 1,134,000 (16,500) (168,000) 1,282,694
Options exercisable at 31 December 2014 125,847
Weighted average exercise price of outstanding options at 31 December 2014 £0.54
Weighted average exercise price of options forfeited in 2014 £5.43
Weighted average exercise price of options granted in 2014 £0.08
Weighted average remaining contractual life of outstanding options at 31 December 2014 8.5 years
Date of grant
At  
1 January 
2013
Granted  
in 2013
Exercised  
in 2013
Forfeited  
in 2013
At  
31 December 
2013
Exercise 
Price
31 December 2008 46,222 – – (1,600) 44,622 £1.425
31 December 2008 15,500 – – – 15,500 £3.985
25 March 2009 25,000 – – (25,000) – £3.985
1 September 2009 12,500 – – – 12,500 £3.985
13 November 2009 25,000 – – – 25,000 £4.00
1 April 2010 25,110 – – – 25,110 £4.19
20 August 2010 59,666 – – – 59,666 £4.19
13 September 2011 3,000 – – – 3,000 £4.19
20 April 2012 47,796 – – – 47,796 £4.19
1 May 2013 – 100,000 – – 100,000 £6.85
259,794 100,000 – (26,600) 333,194
Options exercisable at 31 December 2013 148,528
Weighted average exercise price of outstanding options at 31 December 2013 £4.57
Weighted average exercise price of options forfeited in 2013 £3.83
Weighted average exercise price of options granted in 2013 £6.85
Weighted average remaining contractual life of outstanding options at 31 December 2013 6.0 years Midatech Pharma plc | Annual report & Accounts 2014 53
Options granted in 2014 relate to the Midatech Limited 2013 approved Enterprise Incentive scheme. All others relate to the 
Midatech Limited 2008 unapproved share option scheme. 2013 comparative figures have been restated to reflect the share split 
discussed in note 20 part (f) above.
On 13 November 2009 subscription options over 12,500 ordinary shares exercisable over a 5 year period were issued at an 
exercise price of £8.00 per share. On 5 December 2013 the expiry date of part of this option over 9,375 ordinary shares was 
extended to 13 November 2019.
On 15 June 2010 an option to subscribe for up to 133,808 ordinary shares was issued over a 3 year period. The option was 
exercised in full on 27 February 2013 for a cash consideration of £1,121,311.
Upon the issuance of convertible loan notes on 20 August 2010, subscription options over 1,282,813 ordinary shares were 
issued as follows:
• A subscription option of 29,833 ordinary shares exercisable over 5 years at an exercise price of £8.38 per share. On  
5 December 2013 the expiry date of part of this option over 20,883 ordinary shares was extended to 20 August 2020.
• A subscription option of up to a maximum of 417,660 ordinary shares exercisable over 6 months from 19 December 2010 at 
an exercise price of £8.38 per share. On 19 June 2011, pursuant to the exercise of this option, 251,635 ordinary shares of 0.01p 
each were issued for a cash consideration of £2.1 million.
• Two subscription options of up to a maximum of 417,660 ordinary shares each at an exercise price of £8.38 per share 
exercisable on a “follow on” basis to match any exercise of the above option. Following the exercise of the above option, the 
two options of 251,635 ordinary shares each were to be exercised by 19 December 2011. On 5 December 2011, 119,332 options 
were exercised and the remaining options over 383,938 shares were exercised on 19 December 2011.
• On 29 October 2012 the Company issued subscription options over 119,332 ordinary shares at an exercise price of £8.38 per 
share and over 182,482 ordinary shares at an exercise price of £13.70 per share. Both options were valid until 30 June 2013.  
On 31 January 2013 options over 16,489 ordinary shares were exercised for an aggregate cash consideration of £225,899.
27 Capital commitments
The Group had no capital commitments at 31 December 2014 and 31 December 2013.
28 Related party transactions 
Details of Directors’ remuneration are given on page 16 and in note 6. 
Transactions with Monosol RX, LLC
The Directors consider Monosol RX, LLC to be a related party by virtue of the fact that Monosol RX, LLC is a shareholder of the 
company and are a collaborative partner in the MidaSol Therapeutics joint operation.
During the period Midatech Limited received from Monosol RX, LLC £272,910 (2013: £541,612) for research services.
29 Contingent liabilities
The Group had no contingent liabilities at 31 December 2014 or 31 December 2013.
30 Ultimate controlling party
The Directors do not consider that there is an ultimate controlling party.
  Midatech Pharma plc | Annual report & Accounts 2014 54
Financial Statements
Note
2014 
£’000
2014 
£’000
Fixed assets
Investments 3 1,001
1,001
Current assets
Debtors 4 1,051
Cash at bank 29,599
30,650
Creditors: amounts due falling due within one year 5 (236)
Net current assets 30,414
Total assets less current liabilities 31,415
Capital and reserves 
Share capital 6 1,001
Share premium account 7 31,643
Profit and loss account 7 (1,229)
Total equity attributable to owners of the parent company 31,415
The financial statements on pages 54 to 56 were approved and authorised for issue by the Board of Directors on 16 April 2015 and 
were signed on its behalf by:
Nick Robbins–Cherry
Finance Director
The notes on pages 55 to 56 form part of these financial statements.
Company balance sheet
at 31 December 2014 Midatech Pharma plc | Annual report & Accounts 2014 55
Notes forming part of the company financial statements
for the year ended 31 December 2014
1 Accounting policies
Basis of preparation
The parent company financial statements have been prepared under the historical cost convention and in accordance with UK 
GAAP.
Investments in subsidiaries
Investments in subsidiaries are carried at cost less any provision for losses arising on impairment. In relation to acquisitions, where 
advantage can be taken of the merger relief rules, shares issued as consideration for acquisitions are accounted for at nominal value.
Taxation
Current tax, including UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws 
that have been enacted or substantively enacted by the balance sheet date.
A deferred tax asset in respect of unutilised tax losses has not been recognised on the basis that the future economic benefit was 
not certain.
Going concern
Accounting standards require the Directors to consider the appropriateness of the going concern basis when preparing the 
financial statements. The Directors are of the opinion that they consider the going concern basis will remain appropriate. The 
Directors have taken notice of the Financial Reporting Council guidance ‘Going Concern and Liquidity Risk: Guidance for Directors 
of UK Companies 2010’ which requires the reasons for this decision to be explained. The Directors regard the going concern basis 
as remaining appropriate as the Group has adequate resources to continue in operational existence for the foreseeable future. 
Thus the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements. 
2 Loss attributable to shareholders  
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss 
account. The loss for the financial period, of the holding Company, as approved by the Board, was £1.23m. 
3 Investments  
2014 
£’000
Additions 1,001
Total investments at 31 December 1,001
At 31 December 2014 the Company held share capital in the following subsidiaries and joint arrangements:
Name Country of incorporation Nature of business Proportion held Notes
Midatech Pharma Wales Limited United Kingdom Trading company 100%
Midatech Limited United Kingdom Trading company 100%
Q Chip BV Netherlands Trading company 100% (a)
OpsiRx Pharmaceuticals Limited United Kingdom Non–trading company 100% (a)
OpsiRx Holdings Limited United Kingdom Non–trading company 100% (a)
Midatech Biogune SL Spain Trading company 100% (b)
Midatech Andalucia SL Spain Dormant 100% (b)
Cura Vaccines Limited United Kingdom Dormant 100% (b)
PharMida AG Switzerland Trading 100% (b)
MidaSol Therapeutics GP Cayman Islands Trading 50% (c)
Syntara LLC United States Dormant 50% (c)
Note: Q Chip BV and PharMida AG are due to become dormant from July 2015
4 Debtors  
2014 
£’000
Amounts due from group companies 1,035
Other debtors 16
1,051
(a) All 100% owned via Midatech Pharma Wales Limited (b) All 100% owned via Midatech Limited (c) Joint venture, with 50% owned by Midatech Limited Midatech Pharma plc | Annual report & Accounts 2014 56
Notes forming part of the company financial statements
for the year ended 31 December 2014 continued
Financial Statements
5 Creditors: amounts due falling due within one year
2014 
£’000
Trade creditors 92
Amounts due to group companies 130
Accruals 14
236
6 Share capital
2014
Number
2014
£’000
Authorised
Ordinary shares of 0.005p each 37,059,013 2
Deferred shares of £1 each 1,000,001 1,000
Total 1,002
Allotted and fully paid
2014
Number
2014
£’000
Allotted and fully paid
Ordinary shares of 0.005p each 27,794,260 1
Deferred shares of £1 each 1,000,001 1,000
Total 1,001
Details of shares issued by the Company in the year are given in note 22 to the Group financial statements.
7 Reserves
Share Premium 
Account
£’000
Profit and Loss 
Account
£’000
Retained loss for the year – (1,229)
Shares issued during the year 32,994 –
Costs of share issues (1,351) –
At 31 December 2014 31,643 (1,229)
8 Capital commitments
The Company had no capital commitments at 31 December 2014.
9 Contingent liabilities
The Company had no contingent liabilities at 31 December 2014.
10 Related party transactions
The Company has taken advantage of the exemption conferred by Financial Reporting Standard 8 “Related party disclosures” not to 
disclose transactions with 100% owned members of the Group headed Midatech Pharma plc on the grounds that 100% of the voting 
rights of the Company are controlled within that Group and the Company is included in the consolidated financial statements.
All related party transactions are disclosed under note 28 to the consolidated financial statements.
11 Ultimate controlling party
There is not an ultimate controlling party. Midatech Pharma plc | Annual report & Accounts 2014 57
Directors
Rolf Stahel 
James Phillips 
Nicholas Robbins–Cherry 
Jeffrey Brown 
John Johnston 
Michele Luzi 
Pavlo Protopapa 
Simon Turton 
Sijmen de Vries
Secretary
Nicholas Robbins–Cherry
Registered office
65 Innovation Drive 
Milton Park 
Abingdon 
Oxfordshire  
OX14 4RQ 
United Kingdom
Registered number
09216368
Auditor
BDO LLP 
Kings Wharf 
20–30 Kings Road 
Reading  
RG1 3EX 
United Kingdom
Company information