Provexis plc 
 
Annual report and accounts 2011 
 
 
 
Company number 05102907 
 
 
 
 
 
 
 
 
 
  Contents 
 
 
 
 
 
 
 
 
 
1 Corporate statement 
2 Key highlights 
3 Chairman‟s statement 
4 Chief Executive‟s statement 
6 Directors‟ report – financial review 
8 Directors‟ report – business overview 
14 Directors‟ report – remuneration report 
19 Independent auditor‟s report 
21 Consolidated statement of comprehensive income 
22 Consolidated statement of financial position 
23 Consolidated statement of cash flows 
24 Consolidated statement of changes in equity 
25 Notes to the consolidated financial statements 
47 Parent company balance sheet 
48 Notes to the parent company financial statements 
52 Company information 
 
 
 
 
  Corporate statement 
 
 
Provexis plc Annual report and accounts 2011        1 
 
 
 
 
The Provexis strategy is the discovery, development and licensing of scientifically-proven functional food, 
medical food and dietary supplement technologies, with five areas of focus: 
 
 Collaborating with leading research institutes to identify and develop proprietary technologies 
 
 Developing credible scientific proof to demonstrate efficacy and support product claims 
 
 Gaining regulatory and safety clearances in relevant global markets 
 
 Implementing global IP strategies, underpinned by strong patent portfolios 
 
 Commercialising technologies through collaboration and licensing with global brand owners and 
ingredients corporations. 
 
 
  Key highlights 
 
 
Provexis plc Annual report and accounts 2011        2 
 
 
 
 
Key highlights 
 
 The Company has entered into a conditional agreement to acquire SiS (Science in Sport) Limited for a 
consideration of £8m, partially funded by a £2.5m conditional placing at 1.5p per share, which is 
expected to complete on 24 June 2011.  
 
 Good progress to commercialise Fruitflow® heart-health technology in all major global markets under the 
Alliance Agreement with DSM Nutritional Products. 
 
 Clinical trial for NSP#3G for Crohn‟s disease patients progressed through interim review with focus now 
on opening new trial centres to complete patient recruitment.  
 
 Collaboration with Institute of Food Research for the reduction of cardiovascular inflammation and the 
reduction of risk of certain cancers making good progress with the first human trials underway. 
 
 Agreement entered into with DSM Nutritional Products to develop technology for management of blood 
glucose.  
 
 £2.5m total funding raised through Equity Financing Facility in June 2010 and October 2010. 
 
 
Key financial results 
 
 Loss attributable to owners of the parent for the year ended 31 March 2011 £2.0m (2010: £1.6m). 
 
 Cash balance as at 31 March 2011 £7.6m (2010: £7.0m). 
 
 Loss per share for the year ended 31 March 2011 0.17p (2010: 0.18p). 
 
  Chairman’s statement 
 
 
 
Provexis plc Annual report and accounts 2011        3 
The business has made substantial progress this year through the development of its long-term, global 
commercial agreement with DSM for our lead Fruitflow® technology, in addition to the broader pipeline being 
extended and developed.  
 
I can announce that we are about to meet our objective of making an acquisition, as we today announce that 
the Company has entered into a conditional agreement to purchase SiS (Science in Sport) Limited, which is 
expected to complete on 24 June 2011. The business develops, manufactures and sells nutrition products 
for sports people and its heritage is in providing nutrition products for professional and elite athletes. In 
addition to bringing revenues and cash flow to the Group, there is a great synergy between the two 
businesses and we believe our existing scientific and regulatory skills will help the acquired business to 
cement further its reputation in its target sectors. 
 
Following the signing of our Alliance Agreement with DSM on 1 June 2010, good progress has been made in 
the commercialisation of our lead heart-health Fruitflow® technology. DSM launched Fruitflow® to the 
industry in Europe in November 2010 and in the US in March 2011. DSM has made significant progress in 
marketing the technology in a broad range of global markets, attracting positive interest from a wide range of 
global, multinational and national brand owners in the functional food and dietary supplement sectors.  We 
are pleased with the progress made by DSM. 
 
Having a broader pipeline remains central to our strategy and progress has been made on a number of 
fronts. While we have been frustrated with the slow progress in patient recruitment for our NSP#3G Crohn‟s 
disease trial, an independent interim review of trial data has given us confidence to open further patient 
centres. Our collaboration with the Institute of Food Research, with an initial objective of developing a 
product for cardiovascular inflammation, is proceeding well and a first human trial is underway. We recently 
entered into a development agreement with DSM where the Group will bring its scientific and regulatory 
expertise to bear to commercialise DSM owned intellectual property. 
 
With our first commercial deal for Fruitflow®, a major acquisition and the expansion of our pipeline, it has 
been a busy year and I would like to thank the executive team, all of our staff and our advisors for their 
efforts and professionalism.  
 
Dawson Buck 
Chairman 
  Chief Executive’s statement 
 
 
 
 
Provexis plc Annual report and accounts 2011        4 
 
Strategy 
 
We have continued to execute our strategy of discovery, development and licensing functional food, medical 
food and dietary supplements. Our intention to make acquisitions in order to develop shareholder value has 
been realised through our entering into a conditional agreement to acquire SiS (Science in Sport) Limited 
(“SiS”), which is expected to complete on 24 June 2011.  We believe that there is good synergy between the 
two businesses and that our existing scientific and regulatory expertise can assist in making the SiS 
business a leader in claims-supported sports nutrition.  
 
The Provexis business model now extends from discovery, through development and now to market by a 
combination of licensing and direct sales revenues. The Directors believe that this gives the business the 
correct balance of short-term revenues and long-term pipeline potential.  
 
The executive team will continue to seek further acquisitions as part of the long-term aim to strengthen the 
pipeline. We have continued to invest in top quality management expertise in order to assist the Group in 
meeting its strategic goals and this policy will continue. 
 
To support our strategy, we raised £2.5m via our Equity Financing Facility in June and October 2010, with a 
further £2.5m from the conditional placing announced on 17 June 2011.  Together, these fundraising events 
will enable us to undertake the acquisition of SiS, which is expected to complete on 24 June 2011, and 
deliver on our strategic plan. 
 
Fruitflow® 
 
The Company announced on 1 June 2010 that it had entered into a long-term alliance with DSM Nutritional 
Products (“DSM”) to develop Fruitflow® in all major global markets, through an effective commercialisation of 
current formats and pioneering new and significant applications (the “Alliance”).  
 
DSM launched Fruitflow® to the industry in Europe in November 2010 and in the US in March 2011. 
Manufacturing and supply chain for a cost effective syrup version of Fruitflow® has been secured. Also good 
progress has been made on optimising the powder version of Fruitflow®, suitable for formats such as tablets 
and capsules, and this format will be commercially available late in the summer. 
 
Fruitflow® has been recognised in the industry for its strong science and innovation, being awarded the 
„Most Innovative Health Ingredient‟ and winning the best innovation in the „Heart Health‟ category at the 
major Health Ingredients Europe Conference in November 2010. In March 2011 the technology was awarded 
„Best New Ingredient‟ at the 2011 NutrAwards held at the Nutracon 2011 exhibition in Anaheim, California. 
 
The Alliance partners continue to collaborate on regulatory matters related to certain markets. In addition, the 
Provexis scientific team continues to support its counterparts in areas such as analytical methods and 
analysis, together with deepening the understanding of the core science. 
 
DSM has made significant progress in marketing the technology in a broad range of global markets, 
attracting positive interest from a wide range of global, multinational and national brand owners in the 
functional food and dietary supplement sectors. The Directors are pleased with the progress being made in 
the marketplace by the Company's Alliance partner. 
 
 
NSP#3G plantain extract 
 
A fully independent Data Monitoring Committee (“DMC”) has reviewed the data gathered from the first 
patients to complete the full 12 months of treatment in the Crohn‟s disease trial. Following their review, the 
DMC has confirmed that there are no negative findings associated with this initial dataset and no safety 
concerns related to the administration of the test product. The DMC recommended a further interim review of 
the study be conducted in Q4 2011. The interim review findings are in line with the Company‟s expectations. 
 
Following this advice, Provexis intends to identify up to four additional trial centres to facilitate full recruitment 
of the remaining patients required, to enable it to complete the trial in the shortest feasible timeline. The 
Directors have previously noted that the recruitment of patients for clinical trials in the area of inflammatory 
bowel disease is recognised as being challenging across the industry. The Company remains committed to  Chief Executive’s statement 
 
 
 
Provexis plc Annual report and accounts 2011        5 
this key technology and believes that opening extra trial centres will expedite the trial and support initial 
commercial discussions with corporate partners.  
 
The Group‟s Liverpool-based R&D team will also continue to research and characterise NSP#3G extracts for 
addressing C.difficile, the so-called hospital „super bug‟, and antibiotic-associated diarrhoea.  
 
Isothiocyanates 
 
The isothiocyanate-based cardiovascular inflammation work in collaboration with Institute of Food Research 
(“IFR”) is proceeding well. A novel extract has been developed and the first human trial has now 
commenced. A second trial will commence later this year, with a third and final trial to provide regulatory 
support for product launches being scheduled for 2012. 
 
Blood glucose 
 
We recently announced an agreement for development of DSM-owned intellectual property for the promotion 
of healthy blood glucose levels, following a period of assessment by Provexis. Under the agreement, it is the 
intention that Provexis will develop a cost effective product, carry out clinical trials and gain the necessary 
regulatory clearances. DSM will contribute intellectual property and know-how to the development 
programme. The partners will together identify the most appropriate commercialisation arrangements before 
the product is launched. 
 
Outlook 
 
The commercial progress of Fruitflow® is an important objective for the Group in the coming financial period 
and we expect to see progress as our Alliance partner DSM continues its marketing and selling efforts, in 
addition to launching the powder version for dietary supplements. 
 
Integrating the SiS business is the second major objective and we look to complete this as quickly as 
possible in order to focus existing and new management members on growing revenues in this business.  
 
It is important that we reach full recruitment in the Crohn‟s disease trial during this year, in order that 
commercial partnering discussions can commence. The isothiocyanate technology platform and the new 
blood glucose technology will both be accelerated in order we can bring these to market in the earliest 
possible time. 
 
The management team will be focused on progress in the revenue generating areas of Fruitflow® and SiS, 
while not losing sight of the medium and long term importance of the broader pipeline. Cash management 
will continue to be an area of high importance. We will maintain our strategy of developing the capability of 
the overall Provexis team in line with our goals.  
 
Stephen Moon 
Chief Executive 
 
  Directors’ report – financial review 
 
 
 
Provexis plc Annual report and accounts 2011        6 
Revenue and grant income 
Revenue for the year ended 31 March 2011 was £50,086 (2010: £14,767). 
 
Grant income for the year ended 31 March 2011 was £ Nil (2010: £80,000), the amount in 2010 being the 
final part of a £100,000 grant which was awarded to the Group in January 2009 by The Northwest Regional 
Development Agency (NWDA). 
 
Research and development costs 
Research and development (“R&D”) costs for the year ended 31 March 2011 were £1,268,874 (2010: 
£718,468), including £17,959 capitalised under IAS 38 (2010: £20,646), reflecting the recruitment of 
additional R&D staff, continuation of the clinical trial for the Group's NSP#3G technology for Crohn‟s disease 
and the commencement of isothiocyanate-based cardiovascular inflammation work in collaboration with the 
Institute of Food Research (“IFR”). 
 
R&D expenditure comprises in-house costs (staff, R&D consumables, intellectual property, facilities and 
depreciation of R&D assets) and external costs (preclinical studies, manufacturing, regulatory affairs and 
clinical trials). 
 
The Group‟s R&D team continues to research further claim areas for the Group‟s technologies. 
 
The Group aims to achieve cost effective research and development and to bring products to market through 
licensing partners as soon as is practicable. 
 
Administrative costs 
Administrative costs for the year relating to continuing operations were £1,274,493 (2010: £1,184,859). 
 
The Group‟s cost base and its resources have been and will continue to be tightly managed. 
 
Taxation 
A research and development tax credit of £221,218 (2010: £54,408) of which £71,228 related to the prior 
year in respect of research and development expenditure incurred has been recognised in the financial 
statements and is shown as a debtor at 31 March 2011. 
 
Losses and dividends 
The loss attributable to owners of the parent for the year ended 31 March 2011 was £1,986,206 (2010: 
£1,648,180) and the loss per share was 0.17p (2010: 0.18p). 
 
The directors do not recommend the payment of a dividend (2010: £ Nil). 
 
Effect of change in accounting standard 
 
The application of the following standard has resulted in the losses attributable to the non-controlling interest 
being accounted for in the financial statements even where this resulted in the non-controlling interest having 
a deficit balance:  
 
• IAS 27 (Amendment) „Consolidated and Separate Financial Statements‟ effective for periods 
beginning on or after 1 July 2009. 
 
For further Information about this change in accounting standard see the Principal risks and uncertainties 
section of the business overview on page 10. 
 
Financial instruments 
Information about the use of financial instruments by the Group is disclosed in notes 1 and 2. 
 
  Directors’ report – financial review continued 
 
 
 
Provexis plc Annual report and accounts 2011        7 
Capital structure and funding 
The group is funded entirely by equity funding. 
 
On 31 March 2010 the Company announced that it had secured a 3 year Equity Financing Facility of up to 
£25m (the “EFF”) with Evolution Securities Limited (“Evolution”). The EFF has been arranged by Darwin 
Strategic Limited (“Darwin”), an appointed representative of Evolution. 
 
On 22 June 2010 the Company announced that it had raised a net £88,426 by drawing down on the EFF, 
allotting 2,135,000 new ordinary shares of 0.1p each to Darwin. 
 
On 4 October 2010 the Company announced that it had raised a further net £2.4m by drawing down on the 
EFF, allotting 86,300,000 new ordinary shares of 0.1p each to Darwin. 
 
The Directors are of the opinion that at 17 June 2011, the Group's liquidity and capital resources are 
adequate to deliver the current strategic objectives and 2011/12 business plan and that the Group meets 
going concern criteria. See also note 1 to the consolidated financial statements on page 26. 
 
Cash at bank at 31 March 2011 was £7,551,505 (31 March 2010: £7,049,134). 
 
  Directors’ report – business overview  
 
 
 
Provexis plc Annual report and accounts 2011        8 
Principal activities 
Provexis plc is a life sciences-driven enterprise that discovers, develops and licenses scientifically-proven 
technologies for the global functional food, medical food and dietary supplement sectors. 
 
Provexis plc has two wholly owned subsidiaries, Provexis Nutrition Limited (“PNL”) and Provexis Natural 
Products Limited (“PNP”) which are registered in England and Wales.  Provexis plc also owns 75% of 
Provexis (IBD) Limited (“IBD”) which is also registered in England and Wales. 
 
Group strategy 
The Provexis strategy is the discovery, development and licensing of functional food, medical food and 
dietary supplement technologies, with five areas of focus: 
 
 Collaborating with leading research institutes to identify and develop proprietary technologies 
 
 Developing credible scientific proof to demonstrate efficacy and support product claims 
 
 Gaining regulatory and safety clearances in relevant global markets 
 
 Implementing global IP strategies, underpinned by strong patent portfolios 
 
 Commercialising technologies through collaboration and licensing with global brand owners and 
ingredients corporations. 
 
Review of the performance of the business and future developments 
The Chairman‟s Statement on page 3, the Chief Executive‟s Statement on pages 4 and 5 and the Financial 
Review on pages 6 and 7 report on the Group‟s performance during the year ended 31 March 2011, 
its position at that date and its likely future development. 
 
Key performance indicators 
The executive management and Directors utilise a balanced scorecard of key activities including R&D project 
progress, commercial milestones and regulatory activities to monitor and measure the performance of the 
business. These are measures of the progress of the business towards its strategic target of revenue 
generation and profitability, and are considered by the Board to be the key non-financial performance 
indicators used to determine achievement of Group strategy and are discussed in the Chief Executive‟s 
statement. The balanced scorecard is reviewed regularly by the executive team and the Directors. 
 
The Directors consider Group cash and the absolute values of, and the ratio between, research and 
development costs and other administrative overhead costs as being the Group‟s key financial performance 
indicators. The cost related indicators assist in monitoring financial control to reduce the hurdle to achieving 
the key future financial milestone of monthly break-even. The monitoring of cash gives due consideration to 
anticipated future spend required to prioritise development opportunities and to plan the resources required 
to achieve the goals of the business. 
 
The table below shows the Group‟s cash position at 31 March 2011 and 31 March 2010: 
 
 
 
31 March  
2011 
31 March 
2010 
 £ £ 
   
Cash at bank and in hand 7,551,505 7,049,134 
 7,551,505 7,049,134 
 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2011        9 
Key performance indicators (continued) 
The table below shows the Group‟s R&D ratio for the two years ended 31 March 2011. The R&D ratio is the 
percentage of research and development costs relative to total operating expenses.  The Directors strive to 
maximise the ratio of research and development costs to administrative costs. 
 
 
 
31 March 
2011 
31 March 
2010 
 £ £ 
   
Research and development costs 1,250,915 697,822 
Administrative costs  1,274,493 1,184,859 
Total operating costs  2,525,408 1,882,681 
R&D ratio 50% 37% 
 
The increase in the R&D ratio for the year is primarily due to increased R&D expenditure including the 
continuation of the clinical trial for Crohn‟s Disease and two new projects: the development of a new product 
for the promotion of healthy blood glucose levels and a project targeting cardiovascular inflammation being 
carried out in conjunction with the Institute of Food Research. 
 
Post balance sheet events 
As disclosed in note 23 to the financial statements, on 1 June 2011 the Group announced an agreement to 
commercialise DSM owned intellectual property, through the development of a new product for the promotion 
of healthy blood glucose levels. 
 
On 17 June 2011 the Group entered into a conditional agreement to acquire 100% of the issued share 
capital of SiS (Science in Sport) Limited, a company which manufactures and sells sports nutrition products 
for a maximum consideration of £8m, subject to completion.  £7m is payable in cash of which £250,000 is to 
be held in escrow against claims for one year or longer if claims have been notified but not settled.  The 
balance of the consideration is £1m in Provexis shares, with a lock-in of two years.   
 
The £7m cash consideration will be met by £4.5m from current cash reserves and £2.5m from a placing for 
new shares.  The Company intends to undertake an Open Offer to shareholders of the Company as soon as 
is reasonably practicable after the completion of the Acquisition. 
 
Principal risks and uncertainties 
The Directors consider that the key risks of the Group are as set out below: 
 
The Group‟s success will depend in part on its ability to obtain and maintain rigorous patent protection for its 
technologies both in the UK and internationally. The Group cannot give definitive assurance that pending or 
future patent applications will be granted or that patents granted will not be challenged, invalidated or 
held unenforceable. 
 
The Group cannot assure that its intellectual property rights are sufficiently broad to prevent third parties 
from producing competing functional food, medical food and dietary supplement technologies similar in 
nature to its own. The Group also relies on protection of trade secrets, know-how and confidential and 
proprietary information. To mitigate this, the Group enters into non-disclosure agreements with employees, 
consultants and prospective commercial partners but cannot assure that such agreements will provide 
complete safeguards against unauthorised disclosure of confidential information. 
 
The Group‟s commercial success will also depend in part on avoiding infringement of other third parties‟ 
patents or proprietary rights and the breach of any licences in connection with the pursuit of its technologies. 
Management is of the opinion that it does not infringe third parties‟ patents or other rights and is not aware of 
any such infringements but cannot assure that it will not be found in the future to infringe such rights. 
 
The Group has a limited pipeline of new technologies and new indications for technologies already in 
development. As a result of regulatory and competitive uncertainties and the unpredictability of successful 
outcomes to new research and development, the Group cannot provide assurance that it will be able to 
develop and license these new technologies. 
 
The Group continues to pursue acquisitions as part of its growth strategy. Such acquisitions may not realise 
expected benefits.  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2011        10 
Principal risks and uncertainties (continued) 
The Group may require additional funding.  To the extent that the current cash resources of the Group and 
the funds received from the Open Offer are insufficient to cover the Group's liabilities in the longer term it 
may be necessary to seek additional funds through future equity or debt financings and there is no certainty 
that such funds would be available. Any such further financings, if available at all, may be on terms that are 
not favourable to the Group. Further, if adequate capital cannot be obtained, the Group's operating results 
and financial condition could be adversely affected. 
 
The Group currently employs fourteen people, excluding Non-executive Directors, and has a very small 
management team. Should it lose any key management resources and be unable to attract replacements of 
equivalent calibre to continue implementation of its business plan, future development and commercial 
activities could be materially adversely affected. 
 
The Group relies on potential license partners to meet certain commercial and development milestones and 
their failure to achieve this, or other delays or cancellation of projects due to internal or market factors 
affecting potential license partners could affect the execution of the Group‟s business plan, with a material 
adverse effect on the business. In these circumstances the Group would look to raise additional funding 
through the issue of additional equity through rights issues, share placing and the exercise of share options 
but no assurance can be given regarding the successful outcome of such financing initiatives. 
 
As noted previously the Group is not able to predict successful outcomes to research and development.  The 
non-controlling interest share of Provexis (IBD) Limited‟s loss would need to be reversed if the project didn‟t 
come to fruition.  At 31 March 2011 this would increase the loss attributable to the equity holders of the 
parent by £136,459 to £2,120,665. 
 
Policy on the payment of creditors 
It is the policy of the Group to pay creditors and suppliers in accordance with their normal terms of business. 
Creditor days outstanding for the Group at 31 March 2011 amounted to 22 days compared to 33 days at 
31 March 2010. 
 
Board of Directors 
The Board of Directors has overall responsibility for the Group. 
 
The Board comprises a Non-executive Chairman, two additional Non-executive Directors, all of whom are 
independent, and three further Executive Directors. The Board continues to be satisfied that it has an 
appropriate mix of independence and experience in its Non-executive Directors. 
 
  
 
The Directors of the Company during the year are shown below. 
 
Executive Directors 
S N Moon 
S N Morrison 
I Ford 
 
Non-executive Directors 
C D Buck 
N C Bain 
K Rietveld 
 
A qualifying third-party indemnity provision as defined in Section 234 of the Companies Act 2006 is in force 
for the benefit of each of the Directors in respect of liabilities incurred as a result of their office, to the extent 
permitted by law. In respect of those liabilities for which Directors may not be indemnified, the Company 
maintained a Directors‟ and officers‟ liability insurance policy throughout the financial year.  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2011        11 
Audit Committee 
The Audit Committee comprises two Non-executive Directors, and is chaired by Neville Bain as Senior 
Independent Non-executive Director. It meets as required and specifically to review the Interim Report and 
Annual Report and to consider the suitability and monitor the effectiveness of the internal control processes. 
There were three Audit Committee meetings during the year. The Audit Committee reviews the findings of 
the external auditors and reviews accounting policies and material accounting judgements. 
 
The independence of the auditors is considered by the Audit Committee. The Audit Committee (with no 
Executive Director present) meets at least once per calendar year with the auditors to discuss their 
objectivity and independence, the Annual Report, any audit issues arising, internal control processes and 
any other appropriate matters. As well as providing audit related services, the auditors provide taxation 
advice, corporate finance services and share scheme advice and undertake work in relation to the interim 
report. The fees in respect of the non-audit services provided are £22,300 for the year ended 31 March 2011 
(2010: £25,000). Further, the overall fees paid to the auditors are not deemed to be of such significance to 
them as to impair their independence. The Audit Committee considers that the objectivity and independence 
of the auditors is safeguarded. 
 
The current terms of reference of the Audit Committee are set out in the governance pages on the Group‟s 
website www.provexis.com. 
 
Internal control 
The Directors are 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 to the achievement of business objectives and can only provide reasonable but not absolute 
assurance against material misstatement or loss. 
 
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. There have been no significant changes to the 
system of internal control throughout the year. 
 
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 again concluded, given the current size and 
transparency of the operations of the Group, that an internal audit function was still not required. 
 
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 system. Detailed budgets are prepared 
annually by the Executive Directors before submission to the Board for approval. Forecasts are 
regularly 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 
regularly and at least quarterly, with variances highlighted for the Board. 
 
● Financial risks are identified and evaluated for each major transaction for consideration by 
the Board. 
 
● Standard financial control procedures operate 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 operation whereby the Chief Executive and Finance Director present 
a report to the Board each year on the key business risks. 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2011        12 
Going concern 
The Directors have a reasonable expectation that the Group and the Company will continue in operational 
existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in 
preparing the Group‟s financial statements. 
 
See also note 1 to the consolidated financial statements on page 26. 
 
Employees 
The Executive Directors keep staff informed of the progress and development of the Group regularly through 
formal and informal meetings and employee feedback is encouraged. The Company has a policy of offering 
share options to all eligible employees, subject to availability under the option plan rules and with due 
consideration to the level of dilution to shareholders. 
 
The Group does not discriminate between employees and prospective employees on grounds of age, race, 
religion or gender. Every effort is made to provide the same opportunities to disabled persons as to others. 
 
The Board recognises its obligation towards its employees to provide a safe and healthy working 
environment. The Group complies with health and safety legislation including conducting regular inspections 
and risk assessments. 
 
Environmental, social and community matters 
As a result of the size and nature of the Group‟s operations, the impact of the Group‟s operations on the local 
community and the environment is not considered to be significant. Recycling of office supplies is undertaken 
where possible. 
 
Charitable and political contributions 
No political or charitable donations were made during the year (2010: £Nil). 
 
Relationship with shareholders 
The Directors seek to build a mutual understanding of objectives between the Company and its 
shareholders. The Group reports formally to shareholders in its interim and annual reports setting out details 
of its activities. In addition, the Group keeps shareholders informed of events and progress through the issue 
of regulatory news in accordance with the AIM rules of the London Stock Exchange. The Chief Executive 
and Finance Director seek to meet with significant shareholders following interim and final results. The Group 
also maintains investor relations pages and other information regarding the business, its products and 
activities on its website www.provexis.com. 
 
Where possible the Annual Report is sent to shareholders at least 20 working days before the Annual 
General Meeting. Directors are required to attend Annual General Meetings of the Company unless unable 
to do so for personal reasons or due to pressing commercial commitments. Shareholders are given the 
opportunity to vote on each separate issue. The Company counts all proxy votes and will indicate the level of 
proxies lodged on each resolution, after it has been dealt with by a show of hands. 
 
Adequacy of information supplied to auditors 
Each Director has taken all reasonable steps to make himself aware of any information needed by the 
Company‟s auditors for the purpose 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. 
 
BDO LLP have expressed their willingness to continue in office.  Under the Companies Act 2006 section 
487(2) they will be automatically re-appointed as auditors 28 days after these accounts are sent to the 
members, unless the members exercise their rights under the Companies Act 2006 to prevent their re-
appointment.  
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2011        13 
Directors’ responsibilities 
The directors are responsible for preparing the directors‟ 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 the group financial statements 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; 
 
 state whether the company financial statements have been prepared in accordance with applicable UK 
Accounting Standards, 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 company will continue in business. 
 
The directors are responsible for keeping adequate accounting records that are sufficient to show and 
explain the company‟s transactions and disclose with reasonable accuracy at any time the financial position 
of the company and enable them to ensure that the financial statements comply with the requirements of the 
Companies Act 2006.  They are also responsible for safeguarding the assets of the company and hence for 
taking reasonable steps for the prevention and detection of fraud and other irregularities. 
 
Website publication 
The directors are responsible for ensuring the annual report and the financial statements are made available 
on a website.  Financial statements are published on the company'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 company'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 
 
 
Ian Ford 
Secretary 
17 June 2011 
  Directors’ report – remuneration report  
 
 
 
Provexis plc Annual report and accounts 2011        14 
Remuneration Committee: composition and terms of reference 
The Group‟s Remuneration Committee during the year ended 31 March 2011 comprised two independent 
Non-executive Directors and was chaired by Dawson Buck. 
 
The purpose of the Remuneration Committee is to ensure that the Executive Directors are fairly rewarded for 
their individual contribution to the overall performance of the Company. The Committee considers and 
recommends to the Board the remuneration of the Executive Directors and is kept informed of the 
remuneration packages of senior staff and invited to comment on these. 
 
Policy on Executive Directors’ remuneration 
Executive remuneration packages are designed to attract and retain executives of the necessary skill and 
calibre to run the Company successfully but avoiding paying more than is necessary. Direct benchmarking of 
remuneration is not possible given the specialised nature and size of the Company. The Remuneration 
Committee recommends to the Board remuneration packages by reference to individual performance and 
uses the knowledge and experience of the Non-executive Directors and published surveys relating to AIM 
Directors, and market changes generally. The Remuneration Committee has responsibility for recommending 
any long term incentive schemes. 
 
The full 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 not an adverse impact on the commitments 
required to the Group. Earnings from such roles are not disclosed nor paid to the Group. 
 
There are four main elements of the remuneration package for Executive Directors and senior 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 private medical insurance are available to all senior staff and Executive Directors. 
 
(ii) Share option scheme 
The Company operates a share option scheme which was established in June 2005 (”the Provexis 2005 
share option scheme”) to motivate the Executive Directors and employees through equity participation in the 
Company. Options granted pursuant to the Provexis 2005 share option scheme may take the form of either 
unapproved share options or tax favoured EMI options. Exercise of options under the scheme is subject to 
specified exercise periods and compliance with the AIM rules of the London Stock Exchange. 
 
The scheme is overseen by the Remuneration Committee which recommends to the Board all grants of 
share options based on the Committee‟s assessment of personal performance and specifying the terms 
under which eligible individuals may be invited to participate. 
 
In June 2005 the Company undertook a reverse takeover of Provexis Natural Products Limited (“PNP”, 
formerly Provexis Limited) through a share for share exchange. Prior to the takeover the Company and PNP 
had granted EMI options and unapproved options. Options granted by the Company prior to the takeover 
remain subject to the same terms as contained in the individual share option contracts under which they 
were originally granted. The PNP EMI options and unapproved options were rolled over into options over the 
Company‟s ordinary shares, and these replacement options remain subject to the same terms as contained 
in the individual PNP share option contracts under which they were originally granted. 
 
The Combined Code refers to the requirement for the performance-related elements of remuneration to form 
a significant proportion of the total remuneration package of Executive Directors and should be designed to 
align their interests with those of shareholders. In the development phase of the Group and during the early 
stages of revenue generation, the Remuneration Committee currently considers that the best alignment of 
these interests is through continued use of incentives for performance through the award of share options or 
other share-based arrangements. 
 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2011        15 
Policy on Executive Directors’ remuneration (continued) 
(iii) Bonus scheme 
The Company has an established discretionary non-pensionable bonus scheme for Executive Directors, 
which is subject to the achievement of agreed goals and targets that are designed to incentivise Directors to 
perform at the highest levels, and align Directors‟ interests with those of the shareholders. 
 
For the Executive Directors the performance-related annual bonus potential is up to 40% of basic salary. The 
Remuneration Committee approved bonuses of between 20% and 40% of salary for 2011 based on the 
achievements in 2011. In 2010 annual bonuses of 15% were paid. 
 
(iv) Pension contributions 
The Group pays a defined contribution to the pension scheme of Executive Directors and employees. The 
individual pension schemes are private and their assets are held separately from those of the Group. 
 
Salaries and benefits were reviewed in April 2010 to cover the year from 1 April 2010 to 31 March 2011. 
Future reviews will continue to be undertaken on an annual basis each April to enable the Group‟s 
performance over the preceding financial year and the strategy for the forthcoming year to be considered. 
 
Service contracts 
The Chief Executive is employed under a service contract requiring twelve months‟ notice by either party, 
and the Chief Operating Officer and Finance Director are employed under service contracts requiring three 
months‟ notice. All Non-executive Directors receive payments under appointment letters which are 
terminable by three months‟ notice from either party. 
 
Policy on Non-executive Directors’ remuneration 
Dawson Buck and Neville Bain each receive a fee for their services as a director, which is approved by the 
Board, mindful of 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 
minor expenses incurred. 
 
Neville Bain, Non-executive Director, received 330,300 share options prior to the Group joining AIM, and he 
exercised these options on 12 February 2010. However, to maintain independence, the Non-executive 
Directors do not participate in any incentive or share option arrangements. 
 
Gains made on exercise of directors’ share options 
 
 Gain 
 Year ended 
31 March 2011 
Year ended 
31 March 2010 
 £ £ 
N C Bain - exercise on 12 February 2010 
of 330,300 share options granted on 17 June 2004 
 
- 
 
20,082 
 - 20,082 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2011        16 
Details of directors’ remuneration 
The emoluments of the individual Directors for the year were as follows: 
 
 Year ended 31 March 2011 Year ended 31 
March 2010 
 Salary and 
directors’ 
fees 
£ 
Benefits 
in kind 
 
£ 
Bonus 
payments 
 
£ 
Pension 
 
 
£ 
Total 
 
 
£ 
Total 
 
 
£ 
Executive Directors       
S N Moon 175,443 886 70,656 8,832 255,817 191,149 
S N Morrison 124,881 1,792 25,126 6,281 158,080 143,451 
I Ford 110,139 1,618 31,258 5,582 148,597 118,866 
       
Non-executive Directors       
C D Buck 35,000 - - - 35,000 42,500 
N C Bain 17,500 - - - 17,500 17,500 
J B Diggines (resigned 17 September 2009) - - - - - 7,500 
K Rietveld - - - - - -  
 462,963 4,296 127,040 20,695 614,994 520,966 
 
The above fees and emoluments exclude reimbursed expenditure incurred in the conduct of Group business. 
 
Share-based payment expense 
The share-based payment expenses of the individual Directors recognised for the year were as follows: 
 
 Year ended 
31 March 
2011 
Year ended  
31 March 
2010 
 £ £ 
Executive Directors   
S N Moon 15,857 107,303 
S N Morrison 11,666 36,870 
I Ford 12,324 41,651 
   
Non-executive Directors   
C D Buck - - 
N C Bain - - 
J B Diggines (resigned 17 September 2009) - - 
K Rietveld - - 
 39,847 185,824 
 
 
Directors’ interests in shares Ordinary shares of 
0.1 pence each 
 
Ordinary shares of 
0.1 pence each 
 
 Beneficial interests 
 31 March 2011 1 April 2010 
   
S N Moon 1,540,000 1,540,000 
S N Morrison 1,668,333 1,668,333 
I Ford 1,668,333 1,668,333 
C D Buck 11,271,359 11,271,359 
N C Bain 5,608,416 5,608,416 
 21,756,441 21,756,441 
 
Other than as shown in the table and as further disclosed above in respect of Deferred Shares, no Director 
had any interest in the shares of the Company or its subsidiary companies at 31 March 2011. 
 
 
 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2011        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 Company performance. 
 
On 1 September 2008 the Company announced that further to an announcement on 1 August 2008 the 
Company's Remuneration Committee had approved the grant of options over 62,471,648 ordinary shares of 
0.1p each to certain Directors and employees of the Company. As a condition of the grant of options, certain 
Directors surrendered 19,089,110 existing options and an additional 3,709,384 existing options were 
surrendered by other existing employees. 
 
On 15 October 2009 the Company‟s Remuneration Committee modified the Performance Period and 
Performance Target of share options over 62,471,648 ordinary shares of 0.1p each held by the Executive 
Directors and employees of the Company. 
 
Following the changes agreed to the Performance Period and Performance Target, share options over 
27,305,073 ordinary shares of 0.1p each held by the Executive Directors and employees of the Company 
vested on 15 October 2009. Share options over 35,166,575 ordinary shares of 0.1p each held by certain 
Directors and employees of the Company will vest on 1 April 2011. 
 
The share options held by the Directors and not exercised at 31 March 2011 are summarised below. 
 
 Number of options over shares 
 At 1 April 2010 Options exercised  
in year 
At 31 March 2011 
    
S N Moon 21,117,620 - 21,117,620 
S N Morrison 12,000,000 - 12,000,000 
I Ford 10,000,000 - 10,000,000 
 43,117,620 - 43,117,620 
 
The unapproved share options at 31 March 2011 of the Directors who served during the year are set 
out below: 
 
 Grant date Number 
awarded 
Exercise 
price/share 
Earliest 
exercise date 
Expiry date 
      
S N Moon August 2008 7,324,520  0.900p April 2011 August 2018 
  7,324,520    
 
The EMI share options at 31 March 2011 of the Directors who served during the year are set out below: 
 
 Grant date 
 
Number 
awarded 
Exercise 
price/share 
Earliest 
exercise date 
Expiry date 
      
S N Moon August 2008 1,117,620 1.000p August 2008 August 2018 
S N Moon August 2008 2,675,480 0.900p April 2011 August 2018 
S N Moon August 2008 10,000,000 0.900p October 2009 August 2018 
S N Morrison October 2008 6,000,000 0.900p April 2011 October 2018 
S N Morrison October 2008 6,000,000 0.900p October 2009 October 2018 
I Ford August 2008 5,000,000 0.900p April 2011 August 2018 
I Ford August 2008 5,000,000 0.900p October 2009 August 2018 
  35,793,100    
 
All options were granted with an exercise price at or above market value on the date of grant. 
 
The Company carried out a share re-organisation on 28 August 2008, which is further detailed in note 17 to 
the consolidated financial statements on page 41. 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2011        18 
 
Directors’ interests in share options (continued) 
Share options which had been granted prior to 28 August 2008 over existing ordinary shares with a nominal 
value of 1p each in the capital of the Company became options over new ordinary shares with a nominal 
value of 0.1p each in the capital of the Company. The options remain subject to the same terms as contained 
in the individual option contracts under which they were originally granted. 
 
Share options issued after 28 August 2008 are options over new ordinary shares with a nominal value of 
0.1p each in the capital of the Company. 
 
 
Dawson Buck 
Chairman of the Remuneration Committee 
 
  Independent auditor’s report to the members of Provexis 
plc continued 
 
 
 
Provexis plc Annual report and accounts 2011        19 
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PROVEXIS PLC 
 
We have audited the financial statements of Provexis plc for the year ended 31 March 2011 which comprise 
the group statement of financial position and company balance sheet, the group statement of comprehensive 
income, the group statement of cash flows, the group statement of changes in equity 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 sections 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 Auditing Practices Board‟s (APB‟s) Ethical Standards for Auditors.  
 
Scope of the audit of the financial statements 
 
A description of the scope of an audit of financial statements is provided on the APB‟s website at 
www.frc.org.uk/apb/scope/private.cfm.  
 
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 March 2011 and of the group‟s loss for the year then ended; 
 
 the group financial statements have been properly prepared in accordance with IFRSs as adopted by the 
European Union; 
 
 the parent company‟s financial statements have been properly prepared in accordance with United 
Kingdom Generally Accepted Accounting Practice; and 
 
 the financial statements have been prepared in accordance with the requirements of the Companies Act 
2006. 
 
Opinion on other matters prescribed by the Companies Act 2006 
 
In our opinion the information given in the directors‟ report for the financial year for which the financial 
statements are prepared is consistent with the financial statements.  
  Independent auditor’s report to the members of Provexis 
plc continued 
 
 
 
Provexis plc Annual report and accounts 2011        20 
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 
United Kingdom 
 
 
BDO LLP is a limited liability partnership registered in England and Wales (with registered number 
OC305127). 
  Consolidated statement of comprehensive income 
Provexis plc Annual report and accounts 2011        21 
 
 
  Year 
ended 
31 March 
2011 
Year 
ended 
31 March 
2010 
 Notes £ £ 
    
Revenue 1,3 50,086 14,767 
Grant income 4 - 80,000 
Research and development costs  (1,250,915) (697,822) 
Administrative costs  (1,274,493) (1,184,859) 
Loss from operations 5 (2,475,322) (1,787,914) 
Finance income 8 133,439 85,326 
Loss before tax  (2,341,883) (1,702,588) 
Taxation 9 221,218 54,408 
Loss and total comprehensive expense 
for the year 
 (2,120,665) (1,648,180) 
    
    
Attributable to:    
Owners of the parent 19 (1,984,206) (1,648,180) 
Non-controlling interest  (136,459) - 
  (2,120,665) (1,648,180) 
    
Loss per share to owners of the parent    
Basic and diluted – pence 10 0.17 0.18 
 
 
 
  Consolidated statement of financial position 
Provexis plc Annual report and accounts 2011        22 
 
 
Company number 05102907 
 
  
As at  
31 March 
2011 
As at  
31 March 
2010 
 Notes £ £ 
Non-current assets    
Goodwill 11,12 3,802,685 3,802,685 
Other intangible assets 11 75,892 57,933 
Plant and equipment 13 89,769 61,182 
Total non-current assets  3,968,346 3,921,800 
    
Current assets    
Trade and other receivables 14 253,249 274,638  
Corporation tax asset 9 271,220 111,844 
Cash and cash equivalents 15 7,551,505 7,049,134 
Total current assets  8,075,974 7,435,616  
    
Liabilities    
Current liabilities    
Trade and other payables 16 (563,190) (295,498) 
Total liabilities  (563,190) (295,498) 
    
Total net assets  11,481,130 11,061,918 
    
    
Capital and reserves attributable 
to owners of the parent company 
   
Share capital 17 4,812,036 4,723,601 
Share premium reserve 19 16,909,650 14,527,277 
Warrant reserve 19 115,980 115,980 
Merger reserve 19 6,273,909 6,273,909 
Retained earnings 19 (16,493,986) (14,578,849) 
  11,617,589 11,061,918 
Non-controlling interest  (136,459) - 
    
Total equity  11,481,130 11,061,918 
 
 
These consolidated financial statements were approved and authorised for issue by the Board on 17 June 
2011. The notes on pages 25 to 46 form part of these consolidated financial statements. 
 
 
 
Stephen Moon    Ian Ford 
Director     Director 
 
On behalf of the Board of Provexis plc 
  Consolidated statement of cash flows 
Provexis plc Annual report and accounts 2011        23 
 
 
  Year ended 
31 March  
2011 
Year ended 
31 March  
2010 
 Notes £ £ 
Cash flows from operating activities    
Loss after tax   (2,120,665) (1,648,180) 
Adjustments for:    
Depreciation  28,697 20,908 
Finance income  (133,439) (85,326) 
Taxation  (221,218) (54,408) 
Share-based payment charge  69,069 225,909 
Operating cash outflow before changes in working capital  (2,377,556) (1,541,097) 
    
(Increase) / decrease in trade and other receivables  (5,898) (66,737) 
Increase / (decrease) in trade and other payables  267,692 61,525 
Cash used in operations  (2,115,762) (1,546,309) 
    
Tax credits received  61,844 46,215 
Net cash outflow from operating activities  (2,053,918) (1,500,094) 
    
Cash flows from investing activities    
Purchase of plant and equipment  (57,285) (15,149) 
Purchase of intangible assets  (17,959) (20,646) 
Interest received  148,339 70,347 
Cash generated by investing activities  73,095 34,552 
    
Cash flows from financing activities    
Proceeds from issue of 
share capital – share placings and open offer 
  
2,684,534 
 
7,130,293 
Expenses paid on share issues  (201,340) (401,779) 
Proceeds from exercise of share options  - 107,899 
Cash generated by financing activities  2,483,194 6,836,413 
    
Net increase in cash and cash equivalents  502,371 5,370,871 
Cash and cash equivalents at beginning of year 15 7,049,134 1,678,263 
Cash and cash equivalents at end of year 15 7,551,505 7,049,134 
 
 
  Consolidated statement of changes in equity 
Provexis plc Annual report and accounts 2011        24 
 
         
      Total equity    
      attributable    
 Share  Share  Warrant Merger  Retained  to owners of  
Non-
controlling  Total  
 capital  premium  reserve reserve  earnings  the parent  interests  equity 
 £  £  £ £  £  £  £  £  
                
At 31 March 2009 4,434,907 7,979,558 - 6,273,909  (13,156,578) 5,531,796 - 5,531,796 
         
Share-based charges - 
- - - 
225,909 225,909 - 225,909 
         
Issue of shares  - exercise of 
share options 3,482 104,417 
- - - 
107,899 - 107,899 
         
Issue of shares - subscription 
30 September 2010 40,969 915,185 
- - - 
956,154 - 956,154 
         
Issue of shares - subscription 
16 October 2010 159,031 3,633,544 
- - - 
3,792,575 - 3,792,575 
         
Issue of shares - open offer 22 
December 2010 85,212 1,894,573 
- - - 
1,979,785 - 1,979,785 
         
Issue of warrants - equity 
financing facility 30 March 2011 
- - 
115,980 
- - 
115,980 - 115,980 
         
Total comprehensive expense 
for the year 
- - - - 
(1,648,180) (1,648,180) - (1,648,180) 
         
At 31 March 2010 4,723,601 14,527,277 115,980 6,273,909 (14,578,849) 11,061,918  - 11,061,918  
         
Share-based charges - - - - 69,069 69,069 - 69,069 
         
Issue of shares  - EFF 
drawdown – 28-Jun-10 2,135 86,291 - - - 88,426 - 88,426 
         
Issue of shares  - EFF 
drawdown – 08-Oct-10 86,300 2,296,082 - - - 2,382,382 - 2,382,382 
         
Total comprehensive expense 
for the year - - - - (1,984,206) (1,984,206) (136,459) (2,120,665) 
         
At 31 March 2011 4,812,036 16,909,650 115,980 6,273,909 (16,493,986) 11,617,589 (136,459) 11,481,130 
         
 
The total comprehensive expense for the year represents the total recognised income and expense for the 
year. 
 
 
  Notes to the consolidated financial statements 
 
Provexis plc Annual report and accounts 2011        25 
1. Accounting policies 
General information 
Provexis plc is a public limited company incorporated and domiciled in the United Kingdom (registration 
number 05102907). The address of the registered office is Thames Court, 1 Victoria Street, Windsor, 
Berkshire SL4 1YB, UK. 
 
As described in the Directors‟ Report, the main activities of the Group are those of discovering, developing 
and licensing scientifically-proven technologies for the global functional food, medical food and dietary 
supplement sectors. 
 
Basis of preparation 
The Group 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 the European Union (“adopted IFRS”). 
 
The Company has elected to prepare its parent company financial statements in accordance with United 
Kingdom Generally Accepted Accounting Practice (“UK GAAP”), and these are set out on pages 47 to 51. 
 
The accounting policies set out below have been applied to all periods presented in these Group financial 
statements and are in accordance with IFRS, as adopted by the European Union, and International Financial 
Reporting Interpretations Committee (“IFRIC”) interpretations that were applicable for the year ended 
31 March 2011. 
 
The following new standards, amendments to standards and interpretations, applied for the first time from 1 
April 2010: 
 
• IFRS 3 (Revised) „Business Combinations‟ effective for periods beginning on or after 1 July 2009; 
• Improvements to IFRSs (2009) effective for periods beginning on or after 1 January 2010; and 
• IFRS 2 (Amendment) „Share-based Payment: Group Cash-settled Share-based Payment 
Transactions‟ effective for periods beginning on or after 1 January 2010. 
 
The adoption of these standards and interpretations has not had any significant impact on the amounts 
reported in these financial statements but may impact the accounting for future transactions and 
arrangements. 
 
The application of the following standard has resulted in the losses attributable to the non-controlling interest 
being accounted for in the financial statements even where this resulted in the non-controlling interest having 
a deficit balance:  
 
• IAS 27 (Amendment) „Consolidated and Separate Financial Statements‟ effective for periods 
beginning on or after 1 July 2009. 
 
The Directors have determined that only one operating segment exists under the terms of International 
Financial Reporting Standard 8 „Operating Segments‟, as the Group is organised and operates as a single 
business unit and all activities are based in the UK.. 
 
The following new standards, amendments to standards and interpretations have been issued but are not 
effective for the year ended 31 March 2011. The new standards, amendments to standards and 
interpretations will be relevant to the Group but have not been adopted early as the Directors do not expect 
these standards and interpretations to have a material effect on the consolidated financial statements: 
 
 IFRS 9 „Financial Instruments‟ is effective from periods commencing on or after 1 January 2013. 
 IAS 24 (Amended) „Related party disclosures‟ is effective from periods commencing on or after 1 
January 2011.  
 
There are a number of standards, interpretations and amendments to published accounts not listed above 
which the Directors consider not to be relevant to the Group. 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        26 
1. Accounting policies (continued) 
Going concern 
The Group‟s business activities together with the factors likely to affect its future development are set out in 
the Business Overview on pages 8 to 13. The financial position of the Group, its cash flows and liquidity 
position are set out in the Financial Review on pages 6 and 7. In addition note 2 to the financial statements 
includes the Group‟s objectives, policies and processes for managing its capital; its financial risk 
management objectives; details of its financial instruments and its exposure to credit and liquidity risk. 
 
The Group made a loss for the year attributable to owners of the parent of £1,984,206 (2010: £1,648,180) 
and expects to make a further loss during the year ending 31 March 2012.  At 31 March 2011 the Group had 
cash balances of £7,551,505 (2010: £7,049,134). 
 
The directors have prepared projected cash flow information for a period including twelve months from the 
date of approval of these financial statements and have reviewed this information as at the date of these 
financial statements. Based on the level of existing cash, projected income and expenditure and other 
sources of funding, the Directors are satisfied that the Company and the Group have adequate resources to 
continue in business for the foreseeable future. Accordingly the going concern basis has been used in 
preparing the financial statements. 
 
Basis of consolidation 
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to 
govern the financial and operating policies generally accompanying a shareholding of more than one half of 
the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the 
Group. They are de-consolidated from the date that control ceases. 
 
The consolidated financial information presents the results of the Company and its subsidiaries, 
Provexis Nutrition Limited, Provexis Natural Products Limited and Provexis (IBD) Limited as if they formed a 
single entity ("the Group"). All subsidiaries share the same reporting date, 31 March, as Provexis plc. All intra 
group balances are eliminated in preparing the financial statements. 
 
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The 
cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and 
liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and 
contingent liabilities assumed in a business combination are measured initially at their fair values at the 
acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of 
acquisition over the fair value of the Group‟s share of the identifiable net assets acquired is recorded as 
goodwill. 
 
Non-controlling interest 
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent 
and to the non-controlling interests.  Total comprehensive income is attributed to the owners of the parent 
and the non-controlling interests even if this results in the non-controlling interests having a deficit balance. 
 
Revenue 
Revenue comprises the fair value received or receivable for exclusivity arrangements, collaboration 
agreements, royalties and sales of the Group‟s Fruitflow
® 
product net of value added tax. 
 
The accounting policies for the principal revenue streams of the Group are as follows: 
 
(i) Exclusivity arrangements and similar agreements are recognised as revenue in the accounting period in 
which the related services, or required activities, are performed or specified conditions are fulfilled in 
accordance with the terms of completion of the specific transaction. 
 
(ii) Royalty income relating to the sale by a licensee of licensed product is recognised on an accruals basis in 
accordance with the substance of the relevant agreement and based on the receipt from the licensee of the 
relevant information to enable calculation of the royalty due. 
 
(iii) Sales of the Group‟s Fruitflow® product are recorded net of value added tax when the significant risks 
and rewards of ownership have been transferred to the buyer. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        27 
1. Accounting policies (continued) 
Leased assets 
Leases, which contain terms whereby the Group does not assume substantially all the risks and rewards 
incidental to ownership of the leased item are classified as operating leases. Operating lease rentals are 
charged to the statement of comprehensive income on a straight line basis over the lease term. The Group 
does not hold any assets under finance leases. 
 
Intangible assets 
Goodwill 
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group‟s share of the 
identifiable net assets acquired. Goodwill on acquisition of subsidiaries is included in „intangible assets‟. 
Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated 
impairment losses. 
 
An impairment loss is recognised within administrative expenses in the consolidated statement of 
comprehensive income 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. 
 
Impairment losses on goodwill are not reversed. 
 
Research and development 
Certain Group products are in the research phase and others are in the development phase. Expenditure 
incurred on the development of internally generated products is capitalised if it can be demonstrated that: 
 
● It is technically feasible to develop the product for it to be sold; 
● Adequate resources are available to complete the development; 
● There is an intention to complete and sell the product; 
● The Group is able to sell the product; 
● Sale of the product will generate future economic benefits; and 
● Expenditure on the project can be measured reliably. 
 
The value of the capitalised development cost is assessed for impairment annually. The value is written 
down immediately if impairment has occurred. Development costs are not being amortised as income has 
not yet been realised from the underlying technology.  
 
Development expenditure, not satisfying the above criteria, and expenditure on the research phase of 
internal projects is recognised in the statement of comprehensive income as incurred. 
 
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. 
 
Plant and equipment 
Plant and machinery, fixtures, fittings and computer equipment and laboratory equipment are stated at 
historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost 
includes expenditure that is directly attributable to the acquisition of the items. Depreciation is charged to the 
statement of comprehensive income on all plant and equipment at rates calculated to write off the cost or 
valuation, less estimated residual value, of each asset on a straight line basis over their estimated useful 
lives, which is 3 years for plant and machinery, fixtures, fittings and computer equipment and 5 years for 
laboratory equipment. 
 
The assets‟ residual values and useful lives are determined by the Directors and reviewed and adjusted if 
appropriate at each balance sheet date in accordance with the Group policy for impairment of assets. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        28 
1. Accounting policies (continued) 
Impairment of assets 
Assets that have a finite useful life but that are not yet in use and are therefore not subject to amortisation or 
depreciation are tested annually for impairment. Assets that are subject to amortisation are reviewed for 
impairment annually and when events or circumstances suggest 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. 
 
Goodwill is allocated to cash-generating units („CGU‟) for the purpose of impairment testing to the extent that 
it is possible to allocate goodwill to a CGU on a non-arbitrary basis. A CGU is identified at the lowest 
aggregation of assets that generate largely independent cash inflows, and that which is looked at by 
management for monitoring and managing the business. 
 
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of 
the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the 
statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which 
case the impairment loss is treated as a revaluation decrease. 
 
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the 
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the 
carrying amount that would have been determined had no impairment loss been recognised for the asset in 
prior periods. A reversal of an impairment loss is recognised immediately in the statement of comprehensive 
income, unless the relevant asset is carried at a revalued amount, in which case the reversal of the 
impairment loss is treated as a revaluation increase. 
 
Financial instruments 
Financial assets 
The Group‟s financial assets are comprised of „trade and other receivables‟ and „cash and cash equivalents‟. 
They are recognised initially at their fair value and subsequently at amortised cost. The Group will assess at 
each balance sheet date whether there is objective evidence that the financial asset is impaired. If an asset 
is judged to be impaired the carrying amount of the asset will be adjusted to its impaired valuation. 
 
Financial liabilities 
The Group‟s financial liabilities comprise „trade and other payables‟. These are recognised initially at fair 
value and subsequently at amortised cost. 
 
Cash and cash equivalents 
Cash and cash equivalents comprise cash at bank and in hand. 
 
Government grants 
Government grants are recognised when there is reasonable assurance that the grant will be received and 
the Group will comply with all attached conditions. Government grants are recognised in the statement of 
comprehensive income in the same period to which the costs that they are intended to compensate are 
expensed. 
 
Taxation 
Current tax is provided at amounts expected to be recovered or to be paid using the tax rates and tax laws 
that have been enacted or substantively enacted at the balance sheet date. When research and 
development tax credits are claimed they are recognised on an accruals basis and are included as a 
taxation credit. 
 
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability on the 
balance sheet 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 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.  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        29 
1. Accounting policies (continued) 
Taxation (continued) 
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profits 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 balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are 
settled/(recovered). Deferred tax balances are not discounted. 
 
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current 
tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax 
authority on either: 
 
 The same taxable Group Company; or 
 
 Different Group entities which intend to settle current tax assets and liabilities on a net basis, or to realise 
the assets and settle the liabilities simultaneously, on each future period in which significant amounts of 
deferred tax assets or liabilities are expected to be settled or recovered. 
 
Foreign currency translation 
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing 
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such 
transactions and from the translation at period end exchange rates of monetary assets and liabilities 
denominated in foreign currencies are recognised in the statement of comprehensive income. 
 
Employee benefits 
(i) Defined contribution plans 
The Group provides retirement benefits to all employees and Executive Directors. The assets of these 
schemes are held separately from those of the Group in independently administered funds. Contributions 
made by the Group are charged to the statement of comprehensive income in the period in which they 
become payable. 
 
(ii) Accrued holiday pay 
Provision has been made at the balance sheet date for holidays accrued but not taken at the salary of the 
relevant employee at that date. 
 
(iii) Share-based payment transactions 
The Group operates an equity-settled, share-based compensation plan. Vesting conditions are service 
conditions and performance conditions only. Where share options are awarded to employees and others 
providing similar services, the fair value of the options at the date of grant is charged to the statement of 
comprehensive income over the vesting period. Non-market vesting conditions are taken into account by 
adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, 
the cumulative amount recognised over the vesting period is based on the number of options that eventually 
vest. Market vesting conditions are factored into the fair value of the options when granted. As long as all 
other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions 
are satisfied. The cumulative charge is not adjusted for failure to achieve a market vesting condition. If 
market related terms and conditions of options are modified before they vest, the change in the fair value of 
the options, measured immediately before and after the modification, is also charged to the statement of 
comprehensive income over the remaining vesting period. If non-market related terms and conditions of 
options are modified before they vest, the number of instruments expected to vest at each balance sheet 
date, and therefore the cumulative charge, is therefore amended accordingly. Where equity instruments are 
granted to persons other than employees and others providing similar services, the statement of 
comprehensive income is charged with the fair value of goods and services received. 
 
The proceeds received when options are exercised, net of any directly attributable transaction costs, are 
credited to share capital (nominal value) and the remaining balance to share premium. 
 
National insurance on share options 
All employee option holders sign statements that they will be liable for any employers national insurance 
arising on the exercise of share options. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        30 
1. Accounting policies (continued) 
Interest income 
Interest income is recognised on a time-proportion basis using the effective interest rate method. 
 
Warrants 
The Group has issued warrants to Evolution Securities Limited as part of the Equity Financing Facility. These 
are considered to be outside the scope of share-based employee remuneration, and hence out of the scope 
of IFRS 2. These warrants have been measured at fair value at the date of grant using an appropriate 
options pricing model. This fair value has been held on the balance sheet within prepayments and in the 
warrants reserve within equity. The prepayment will be released against share premium as the equity 
financing facility is utilised. The warrants reserve will be released to share premium when the warrants are 
exercised.  If the warrants lapse then the reserve is transferred to retained earnings.  
 
Critical accounting estimates and judgements 
The preparation of financial statements in conformity with IFRSs requires the use of certain critical 
accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of 
the financial statements and the reported amounts of revenues and expenses during the reporting period. 
Estimates and judgements are continually made and are based on historic experience and other factors, 
including expectations of future events that are believed to be reasonable in the circumstances. 
 
As the use of estimates is inherent in financial reporting, actual results could differ from these estimates. 
The Directors believe the following to be the key areas of estimation and judgement: 
 
(i) Research and development 
Under IAS 38 Intangible Assets, development expenditure which meets the recognition criteria of the 
standard must be capitalised and amortised over the useful economic lives of intangible assets from product 
launch. The Directors consider that the criteria to capitalise development expenditure were met in 2007 for 
one of the Group‟s products and have continued to be met since. 
 
(ii) Share-based payments 
The Group operates an equity-settled, share-based compensation plan. Employee and similar services 
received, and the corresponding increase in equity, are measured by reference to the fair value of the equity 
instruments at the date of grant, which is based upon certain assumptions over the future performance of the 
share price. 
 
(iii) Goodwill and impairment 
The recoverable amount of goodwill is determined based on value in use calculations of the cash-generating 
units to which it relates.  The value in use calculations use pre-tax cash flow projections for nine years using 
data from the Group‟s latest internal forecasts. The revenue forecasts are extrapolated beyond nine years 
and costs are extrapolated beyond two years at growth rates of 2% (2010: between 2% and 7%). The results 
of the value in use calculations are reviewed by the Board. 
 
The key assumptions for the value in use calculations are those regarding discount rates, revenue 
commencement dates, growth rates, absolute values of expected sales and expected margins and costs. 
Management estimate discount rates using pre-tax rates that reflect the current market assessment of the 
time value of money and the risks specific to the cash-generating unit. Revenue commencement dates are 
based on current planned launch dates.  Growth rates, absolute values of expected sales and expected 
margins and costs are based on information received from commercial partners and market intelligence 
reports on expectations of future changes in the market. 
 
Pre-tax cash flow projections are discounted to calculate value in use using a pre-tax discount rate. The pre-
tax discount rate is based on a number of factors including the risk-free rate in the UK, the Group's estimated 
market risk premium, and a premium to reflect the inherent risk of the forecast income streams included in 
the Group‟s cash flow projections, which remain subject to contracts being agreed with prospective 
customers. 
 
Further information is given in note 12 to these consolidated financial statements.  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        31 
2. Financial risk management 
2.1 Financial risk factors 
The Group‟s activities inevitably expose it to a variety of financial risks: market risk (including currency risk, 
cash flow interest rate risk and fair value interest rate risk), credit risk and liquidity risk. 
 
It is Group policy not to enter into speculative positions using complex financial instruments. The Group‟s 
primary treasury objective is to minimise exposure to potential capital losses whilst at the same time securing 
favourable market rates of interest on Group cash deposits using money market deposits with banks. Cash 
balances used to settle the liabilities from operating activities are also maintained in current accounts which 
earn interest at variable rates. 
 
(a) Market risk  
Foreign exchange risk 
The Group primarily enters into contracts which are to be settled in UK pounds. However, some contracts 
involve other major world currencies including the US Dollar and the Euro. Where large contracts of more 
than £50,000 total value are to be settled in foreign currencies consideration is given to converting the 
appropriate amounts to or from UK pounds at the outset of the contract to minimise the risk of adverse 
currency fluctuations. 
 
The Group incurred minimal expenditure in foreign currencies during the year, and the prior year, and 
consequently there is no material exposure to foreign currency rate risk. 
 
Cash flow and fair value interest rate risk 
The Group‟s interest rate risk arises from medium term and short term money market deposits. Deposits 
which earn variable rates of interest expose the Group to cash flow interest rate risk. Deposits at fixed rates 
expose the Group to fair value interest rate risk. 
 
The Group analyses its interest rate exposure on a dynamic basis throughout the year.  
 
(b) Credit risk 
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well 
as credit exposure in relation to outstanding receivables. Group policy is to place deposits with institutions 
with investment grade A2 or better (Moody‟s credit rating) and deposits are made in sterling only. The Group 
does not expect any losses from non-performance by these institutions. Management believes that the 
carrying value of outstanding receivables and deposits with banks represents the Group‟s maximum 
exposure to credit risk. 
 
(c) 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. Prudent liquidity risk management 
implies maintaining sufficient cash and cash equivalents and management monitors rolling forecasts of the 
Group‟s liquidity on the basis of expected cash flow. 
 
The Group had trade and other payables at the statement of financial position date of £563,190 (2010: 
£295,498) as disclosed in note 16 on page 39. 
 
2.2 Capital risk management 
The Group considers its capital to comprise its ordinary share capital, share premium, warrant reserve, 
merger reserve and accumulated retained earnings as disclosed in the consolidated statement of financial 
position on page 22. 
 
The Group remains funded primarily by equity capital which reflects the development status of its products. 
The Group‟s objectives when managing capital are to safeguard the Group‟s ability to continue as a going 
concern in order to provide returns for equity holders of the Company and benefits for other stakeholders and 
to maintain an optimal capital structure to reduce the cost of capital. 
 
2.3 Fair value estimation 
The Group uses amortised cost, using the effective interest rate method, to determine subsequent fair value 
after initial recognition, for its financial instruments. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        32 
3. Segmental reporting 
The Directors have determined that only one operating segment exists under the terms of International 
Financial Reporting Standard 8 „Operating Segments‟, as the Group is organised and operates as a single 
business unit and all activities are based in the UK.. 
 
4. Grant income 
 Year ended 
31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
   
NWDA R&D grant income recognised in consolidated statement of 
comprehensive income 
 
- 
 
80,000 
 - 80,000 
 
5. Loss from operations 
 Year ended 
31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
Loss from operations is stated after charging:   
   
Depreciation of plant and equipment 28,697 20,908 
Operating lease costs – land and buildings 120,543 102,875 
Equity-settled share based payment expense 69,069 225,909 
Defined contribution pension expense 37,370 31,581 
 
The total fees of the Group‟s auditor, BDO LLP, for services provided are analysed below: 
 
 Year ended 
31 March  
2011 
Year ended 
31 March 
2010 
 £ £ 
Audit services   
Parent company 14,000 12,600 
Subsidiaries 27,500 26,900 
Tax services – compliance   
Parent company 4,000 3,600 
Subsidiaries 10,600 8,400 
Other services   
Tax advisory services 700 2,000 
Parent company – share option scheme advice - 8,000 
Subsidiary – NWDA grant - 3,000 
Review of interim statement 5,000 5,000 
Corporate finance 7,000 - 
   
Total fees 68,800 69,500 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        33 
6. Wages and salaries 
The average monthly number of persons (including all Directors) employed by the Group during the year was 
as follows: 
 
  Year ended 
 31 March  
2011 
Year ended 
31 March 
2010 
   
Administrative staff 1 - 
Research and development staff 8 7 
Directors 6 6 
 15 13 
 
Their aggregate emoluments were: 
 
  Year ended 
 31 March  
2011 
Year ended 
31 March 
2010 
 £ £ 
   
Wages and salaries 953,287 733,879  
Social security costs 102,944 71,980 
Other pension and insurance benefits costs 48,089 38,266 
Total cash settled emoluments 1,104,320 844,125 
Accrued holiday pay 13,429 1,600 
Share-based payment remuneration charge: equity settled 69,069 225,909 
Total emoluments 1,186,818 1,071,634 
 
7. Directors’ emoluments 
  Year ended 
 31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
Directors   
Aggregate emoluments 594,299 502,144 
Company pension contributions 20,695 18,822 
Share based payment remuneration charge: equity settled 39,847 185,824 
Gains made on exercise of directors‟ share options - 20,082 
Total Directors’ emoluments 654,841 726,872 
 
Emoluments disclosed above include the following amounts in respect of the highest paid Director: 
 
  Year ended 
 31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
   
Aggregate emoluments 246,985 183,169 
Company pension contributions 8,832 7,980 
Share based payment remuneration charge: equity settled 15,857 107,303 
Total of the highest paid Director’s emoluments 271,674 298,452 
 
During the year, three Directors (2010: three Directors) participated in defined contribution pension schemes. 
 
Directors‟ emoluments include amounts attributable to benefits in kind comprising private medical insurance 
on which the directors are assessed for tax purposes. The amounts attributable to benefits in kind are stated 
at cost to the Group, which is also the tax value of the attributable benefits. 
 
Further details of Directors‟ emoluments are included in the Remuneration report on pages 14 to 18. 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        34 
8. Finance income 
  Year ended 
 31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
   
Bank interest receivable 133,439 85,326 
 133,439 85,326 
 
9. Taxation 
 
 
 
Year ended 
31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
Current tax income   
United Kingdom corporation tax research and development credit 150,000 50,000 
Adjustment in respect of prior period   
United Kingdom corporation tax research and development credit 71,218 4,408 
Taxation credit 221,218 54,408 
 
The tax assessed for the year is different from the standard rate of corporation tax in the UK. The differences 
are explained below: 
 
 Year ended 
31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
   
Loss before tax 2,341,883 1,702,588 
   
Loss before tax multiplied by the 
standard rate of corporation tax in the UK of 28% (2010: 28%) 
 
655,727 
 
476,725 
Effects of:   
Expenses not deductible for tax purposes (12,435) 3,540 
Difference between depreciation and capital allowances 8,005 (5,854) 
Other short-term timing differences (21,718) (63,255) 
Unutilised tax losses and other deductions arising in the year (508,496) (442,056) 
Tax deduction for share options exercised - 80,900 
Additional deduction for R&D expenditure 178,917 50,000 
Surrender of tax losses for R&D tax credit refund (150,000) (50,000) 
Adjustments in respect of prior years 71,218 4,408 
Total tax credit for the year 221,218 54,408 
 
At 31 March 2011 the Group UK tax losses to be carried forward are estimated to be £14,488,679 
(2010: £13,398,578). 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        35 
9. Taxation (continued) 
 
Deferred tax 
Deferred tax assets amounting to £4,093,379 (2010: £4,391,974) have not been recognised on the basis that 
their future economic benefit is not certain. Assuming a prevailing tax rate of 26% (2010: 28%) when the 
timing differences reverse, the unrecognised deferred tax asset comprises: 
 
  Year ended 
 31 March 
2011 
Year ended 
31 March 
2010 
 £ £ 
   
Depreciation in excess of capital allowances 4,324 16,903 
Other short term timing differences 6,773 - 
Unutilised tax losses 3,767,057 3,639,702 
Share-based payments 315,225 735,369 
 4,093,379  4,391,974 
 
 
Income tax asset receivable within one year 31 March 
2011 
31 March 
2010 
 £ £ 
   
Corporation tax recoverable 271,220 111,844 
 271,220 111,844 
 
10. Loss per share 
Basic and diluted loss per share amounts are calculated by dividing the loss attributable to owners of the 
parent by the weighted average number of ordinary shares in issue during the period. 
 
There are 62,471,648 share options in issue (2010: 62,471,648) that are all currently anti-dilutive and have 
therefore been excluded from the calculations of the diluted loss per share. 
 
Basic and diluted loss per share amounts are in respect of all activities. 
 
 Year ended  Year ended  
 31 March 31 March 
 2011  2010  
     
Loss for the year attributable 
to owners of the parent - £ 
1,984,206 1,648,180 
   
Weighted average number of shares 1,150,836,614 937,060,783 
   
Basic and diluted loss per share – pence 0.17 0.18  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        36 
11. Intangible assets 
 Goodwill Development 
costs 
Total 
 
 £ £ £ 
Cost    
At 1 April 2010 7,265,277 57,933 7,323,210 
Additions  - 17,959 17,959 
At 31 March 2011 7,265,277 75,892 7,341,169 
    
Amortisation and impairment    
At 1 April 2010 3,462,592 - 3,462,592 
At 31 March 2011 3,462,592 - 3,462,592 
    
Net book value    
At 31 March 2011 3,802,685 75,892 3,878,577 
At 31 March 2010 3,802,685 57,933 3,860,618 
    
    
Cost    
At 1 April 2009 7,265,277 37,287 7,302,564 
Additions  - 20,646 20,646 
At 31 March 2010 7,265,277 57,933 7,323,210 
    
Amortisation and impairment    
At 1 April 2009 3,462,592 - 3,462,592 
At 31 March 2010 3,462,592 - 3,462,592 
    
Net book value    
At 31 March 2010 3,802,685 57,933 3,860,618 
At 31 March 2009 3,802,685 37,287 3,839,972 
 
Development costs represent costs incurred in registering patents that meet the capitalisation criteria set out 
in IAS 38, see also note 1. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        37 
12. Goodwill and impairment 
Goodwill arising on consolidation represents the excess of the cost of an acquisition over the fair value of the 
Group‟s share of the net assets of the acquired subsidiary at the date of acquisition. 
 
Goodwill arose on 23 June 2005 when the Company acquired the entire issued share capital of 
Provexis Natural Products Limited (formerly Provexis Limited), a private company engaged in research and 
development. Provexis Natural Products Limited has been consolidated using the purchase method and its 
results have been incorporated in the Group results from the date of acquisition. 
 
Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual 
basis or more frequently if there are indications that goodwill may be impaired. 
 
The recoverable amount of goodwill is determined based on value in use calculations of the cash-generating 
units to which it has been allocated. 
 
The key assumptions for the value in use calculations are those regarding discount rates, revenue 
commencement dates, growth rates, absolute values of expected sales and expected margins and costs. 
Management estimate discount rates using pre-tax rates that reflect the current market assessment of the 
time value of money and the risks specific to the cash-generating unit. Revenue commencement dates are 
based on current planned launch dates.  Growth rates, absolute values of expected sales and expected 
margins and costs are based on information received from commercial partners and market intelligence 
reports on expectations of future changes in the market.  The growth rates used are below the long-term 
growth rates for the Nutraceuticals industry. 
 
The value in use calculations use pre-tax cash inflow projections for nine years using data from the Group‟s 
approved internal forecasts. The cash inflow forecasts are extrapolated beyond nine years at growth rates of 
2% (2010: between 2% and 7%) for a further 6 years and thereafter at a nil growth rate in perpetuity.  The 
results of the value in use calculations are reviewed by the Board.   
 
The Directors believe that it is appropriate to use internally approved forecasts for a period of 9 years as this 
will give a more accurate estimate of the likely growth patterns in the early stages of the product‟s life than 
the application of a single growth rate. 
 
The value in use calculations use pre-tax cash outflows for two to four years based on approved budgets.  
The cash outflow forecasts are extrapolated beyond two to four years at growth rates of 2% for a further 13 
or 11 years (2010: 2%) and thereafter at a nil growth rate in perpetuity.  The results of value in use 
calculations are reviewed by the Board. 
 
The values used in the Group‟s internal forecasts reflect anticipated market developments, following 
discussions with prospective customers and suppliers. An element of the risk inherent in the forecast income 
streams, which remain subject to contracts being agreed with prospective customers, has been incorporated 
in the Group‟s pre-tax cash flow projections and discount rates. 
 
Pre-tax cash flow projections have been discounted to calculate value in use using pre-tax discount rates of 
15.8% and 29.8% (2010: 23%) reflecting the stage of development of their respective cash generating units.  
No impairment charge was required in the current or previous year. 
 
The pre-tax discount rate is based on a number of factors including the risk-free rate in the UK, the Group's 
estimated market risk premium, and a premium to reflect the inherent risk of the forecast income streams 
included in the Group‟s cash flow projections, which remain subject to contracts being agreed with 
prospective customers. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        38 
13. Plant and equipment 
  Fixtures, fittings 
and computer 
equipment 
Laboratory 
equipment 
Total 
 
  £ £ £ 
Cost     
At 1 April 2010  49,784 85,967 135,751 
Additions  15,010 42,275 57,285 
Disposals  (196) - (196) 
At 31 March 2011  64,598 128,242 192,840 
     
Depreciation     
At 1 April 2010  39,251 35,318 74,569 
Charge for the year  8,014 20,684 28,698 
Disposals  (196) - (196) 
At 31 March 2011  47,069 56,002 103,071 
     
Net book value     
At 31 March 2011  17,529 72,240 89,769 
At 31 March 2010  10,533 50,649 61,182 
 
 
  Fixtures, fittings 
and computer 
equipment 
Laboratory 
equipment 
Total 
 
  £ £ £ 
Cost     
At 1 April 2009  41,433 79,169 120,602 
Additions  8,351 6,798 15,149 
At 31 March 2010  49,784 85,967 135,751 
     
Depreciation     
At 1 April 2009  34,549 19,112 53,661 
Charge for the year  4,702 16,206 20,908 
At 31 March 2010  39,251 35,318 74,569 
     
Net book value     
At 31 March 2010  10,533 50,649 61,182 
At 31 March 2009  6,884 60,057 66,941 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        39 
14. Trade and other receivables 
 
31 March 
2011 
31 March 
2010 
 £ £ 
   
Amounts receivable within one year:   
Trade receivables 48,708 - 
Other receivables 39,862 48,529 
Total loans and receivables 88,570 48,529 
Prepayments and accrued income 164,679 226,109 
 253,249 274,638  
 
The Directors consider that the carrying amount of these receivables approximates to their fair value. 
 
All amounts shown under receivables fall due for payment within one year. 
 
15. Cash and cash equivalents 
 
31 March  
2011 
31 March 
2010 
 £ £ 
   
Cash at bank and in hand 7,551,505 7,049,134 
 7,551,505 7,049,134 
 
16. Trade and other payables 
 
31 March 
2011 
31 March 
2010 
 £ £ 
   
Trade payables 91,529 87,409 
Other taxes and social security 62,376 72,972 
Accruals 409,285 135,117 
Total financial liabilities measured at amortised cost 563,190 295,498 
 
The Directors consider that the carrying amount of these liabilities approximates to their fair value. 
 
All amounts shown fall due within one year. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        40 
17. Share capital 
On 31 March 2010 the Company announced that it had secured a 3 year Equity Financing Facility of up to 
£25m (the “EFF”) with Evolution Securities Limited (“Evolution”). The EFF was arranged by Darwin Strategic 
Limited (“Darwin”), an appointed representative of Evolution. 
 
On 22 June 2010 the Company announced that it had raised a net £88,426 by drawing down on the EFF, 
allotting 2,135,000 new ordinary shares of 0.1p each to Darwin. 
 
On 4 October 2010 the Company announced that it had raised a further net £2.4m by drawing down on the 
EFF, allotting 86,300,000 new ordinary shares of 0.1p each to Darwin. 
 
The EFF agreement, provides the Company with a facility which (subject to certain limited restrictions) can 
be drawn down at any time over the 3 years ending on 29 March 2013. The timing and amount of any draw 
down is at the discretion of Provexis. Provexis is under no obligation to make a draw down and may make as 
many draw downs as its wishes, up to the total value of the EFF, by way of issuing subscription notices to 
Evolution. Following delivery of a subscription notice, Evolution will subscribe and Provexis will allot to 
Evolution new ordinary shares of 0.1p each (“Ordinary Shares”). 
 
The subscription price for any Ordinary Shares to be subscribed by Evolution under a subscription notice will 
be at a 7.5% discount to an agreed reference price determined during 5, 10 or 15 trading days following 
delivery of a subscription notice (the “Pricing Period”). The length of the Pricing Period is at the discretion of 
Provexis and is set at each relevant subscription notice. Provexis is also obliged to specify in each 
subscription notice a minimum price below which Ordinary Shares will not be issued. 
 
Warrant reserve 
In consideration of Evolution agreeing to provide the EFF the Company entered into a warrant agreement 
dated 30 March 2010 for the grant to Evolution of warrants to subscribe for up to ten million Ordinary Shares, 
such warrants to be exercisable at a price of 20 pence per share and to be exercisable at any time prior to 
the expiry of 36 months following the date of the warrant agreement. 
 
The warrants were measured at fair value at the date of grant using a Black-Scholes model, with the 
following assumptions: 
 
Date of 
grant 
Exercise 
price 
 
 
pence 
Number of 
warrants 
Share 
price at 
grant date 
 
pence 
Expected 
volatility 
Risk free 
rate 
Expected 
life 
 
 
years 
Fair value 
per share 
under 
warrant 
pence 
        
30-Mar-10 20.0 10,000,000 6.3 70% 1.77% 3 1.1598 
 
Warrant reserve (continued) 
An expected dividend yield of 0% was used in the above valuation. 
 
The assumption made for the expected life of the warrants is not necessarily indicative of the exercise 
patterns that may occur. The expected volatility reflects the assumption that the historical volatility 
is indicative of future trends, which may not necessarily be the actual outcome. 
 
The total fair value of the warrants, £115,980, has been held on the balance sheet within prepayments and in 
the warrants reserve within equity. The prepayment will be released against share premium as the equity 
financing facility is utilised. The warrants reserve will be released to share premium when the warrants are 
exercised. If the warrants lapse then the reserve is transferred to retained earnings. 
 
Evolution or the Company may terminate the EFF in specified circumstances. The issue of subscription 
notices is subject to specified pre-conditions. The Company has provided warranties and indemnities to 
Evolution and affiliated persons. If the aggregate price paid for the Ordinary Shares allotted under the EFF 
by the second anniversary of the EFF is not equal to or more than five million pounds (subject to certain 
exceptions), or if the EFF is terminated by Evolution in certain circumstances, then the Company will be 
required to pay a fee to Evolution amounting to 1% of the value of the facility in cash or by an issue of fully 
paid ordinary shares at the Company‟s discretion. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        41 
17. Share capital (continued) 
 
Share re-organisation 
In August 2008, to facilitate a share placing, the company undertook a share re-organisation when It was 
agreed to sub-divide: 
 
 each of the 401,724,366 then issued existing ordinary shares of 1p each in the capital of the Company 
into one new ordinary share of 0.1p and one Deferred Share of 0.9p; and 
 each of the 148,275,634 unissued ordinary shares of 1p each into 10 new ordinary shares of 0.1p each, 
 
The share re-organisation was approved at an EGM on 26 August 2008. 
 
The rights attached to the new ordinary shares are substantially the same as the rights attached to the 
original, pre placing ordinary shares. The Deferred Shares have very limited rights which are deferred to the 
new ordinary shares and effectively carry no value as a result. Accordingly, the holders of the Deferred 
Shares are not entitled to receive notice of, attend or vote at general meetings of the Company; nor be 
entitled to receive any dividends or any payment on a return of capital until at least £10,000,000 has been 
paid on each new ordinary share. No application will be made for the Deferred Shares to be admitted to 
trading on AIM. No certificates for the Deferred Shares will be issued. 
 
Full details of the share re-organisation were provided in a circular to shareholders on 1 August 2008. The 
circular is available to download from the Company‟s website www.provexis.com. 
 
Allotted, called up and fully paid Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number number 
    
At 31 March 2010 1,108,081,929 401,724,366 1,509,806,295 
Issued on subscription 88,435,000 - 88,435,000 
At 31 March 2011 1,196,516,929 401,724,366 1,598,241,295 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2010 1,108,082 3,615,519 4,723,601 
Issued on subscription 88,435 - 88,435 
At 31 March 2011 1,196,517 3,615,529 4,812,036 
 
Allotted, called up and fully paid Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number number 
    
At 31 March 2009 819,387,796 401,724,366 1,221,112,162 
Issued on exercise of share options 3,482,469 - 3,482,469 
Issued on subscription 200,000,000 - 200,000,000 
Issued on open offer 85,211,664 - 85,211,664 
At 31 March 2010 1,108,081,929 401,724,366 1,509,806,295 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2009 819,388 3,615,519 4,434,907 
Issued on exercise of share options 3,482 - 3,482 
Issued on subscription 200,000 - 200,000 
Issued on open offer 85,212 - 85,212 
At 31 March 2010 1,108,082 3,615,519 4,723,601 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        42 
17. Share capital (continued) 
During the year ended 31 March 2011 the Company issued ordinary shares of 0.1p each as follows: 
 
Date Reason for issue Shares issued 
  £ Number 
22.06.10 Share subscription 2,135 2,135,000 
04.10.10 Share subscription 86,300 86,300,000 
  88,435 88,435,000 
 
During the year ended 31 March 2010 the Company issued ordinary shares of 0.1p as follows: 
 
Date Reason for issue Shares issued 
  £ Number 
04.09.09 Exercise of share options 1,768 1,768,180 
11.09.09 Exercise of share options 1,384 1,383,989 
30.09.09 Share subscription 40,969 40,969,390 
16.10.09 Share subscription 159,031 159,030,610 
22.12.09 Open offer 85,212 85,211,664 
19.02.10 Exercise of share options  330 330,300 
  288,694 288,694,133 
 
18. Share options 
In June 2005 the Company adopted a new share option scheme for employees (”the Provexis 2005 share 
option scheme”). Under the scheme, options to purchase ordinary shares are granted by the Board of 
Directors, subject to the exercise price of the option being not less than the market value at the grant date. 
The options typically vest after a period of 3 years and the vesting schedule is subject to predetermined 
overall company selection criteria. In the event that the option holder‟s employment is terminated, the option 
may not be exercised unless the Board of Directors so permits. The options expire 10 years from the date 
of grant. 
 
The Company undertook a reverse takeover of Provexis Natural Products Limited (“PNP”, formerly Provexis 
Limited) in June 2005 through a share for share exchange. Prior to the takeover the Company and PNP had 
granted EMI options and unapproved options. Options granted by the Company prior to the takeover remain 
subject to the same terms as contained in the individual share option contracts under which they were 
originally granted. The PNP EMI options and unapproved options were rolled over into options over the 
Company‟s ordinary shares, and these replacement options remain subject to the same terms as contained 
in the individual PNP share option contracts under which they were originally granted. 
 
On 1 September 2008 the Company announced that further to an announcement on 1 August 2008 the 
Company's Remuneration Committee had approved the grant of options over 62,471,648 ordinary shares of 
0.1p each to certain Directors and employees of the Company. As a condition of the grant of options, certain 
Directors surrendered 19,089,110 existing options and an additional 3,709,384 existing options were 
surrendered by other existing employees. 
 
On 15 October 2009 the Company‟s Remuneration Committee modified the Performance Period and 
Performance Target of share options over 62,471,648 ordinary shares of 0.1p each held by the Executive 
Directors and employees of the Company. 
 
Following the changes agreed to the Performance Period and Performance Target, share options over 
27,305,073 ordinary shares of 0.1p each held by certain Directors and employees of the Company vested on 
15 October 2009. Share options over 35,166,575 ordinary shares of 0.1p each held by certain Directors and 
employees of the Company will vest on 1 April 2011. 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        43 
18. Share options (continued) 
At 31 March 2011 the number of ordinary shares subject to options granted over the 2005 and prior option 
schemes were: 
 
EMI options 
 31 March 2011 31 March 2010 
 
Weighted 
average 
exercise price 
(pence) 
Number Weighted 
average 
exercise price 
(pence) 
Number 
     
Outstanding at the beginning of the year 1.07 51,552,031 1.15 54,198,000 
Granted during the year - - - - 
Exercised during the year - - 2.75 (2,645,969) 
Cancelled during the year - - - - 
Outstanding at the end of the year 1.07 51,552,031 1.07 51,552,031 
 
The exercise price of EMI options outstanding at the end of the year ranged between 0.9p and 6.28p 
(2010: 0.9p and 6.28p) and their weighted average contractual life was 7.3 years (2010: 8.3 years). 
 
Of the total number of EMI options outstanding at the end of the year, 23,709,976 (2010: 23,709,976) had 
vested and were exercisable at the end of the year. Their weighted average exercise price was 1.3 pence 
(2010: 1.8 pence). 
 
Unapproved options 
 31 March 2011 31 March 2010 
 
Weighted 
average 
exercise price 
(pence) 
Number Weighted 
average 
exercise 
price 
(pence) 
Number 
     
Outstanding at the beginning of the year 1.18 10,919,617 1.39 11,756,117 
Granted during the year - - - - 
Exercised during the year - - 4.20 (836,500) 
Cancelled during the year - - - - 
Outstanding at the end of the year 1.18 10,919,617 1.18 10,919,617 
 
The exercise price of unapproved options outstanding at the end of the year ranged between 0.9p and 6.28p 
(2010: 0.9p and 6.28p) and their weighted average contractual life was 6.3 years (2010: 7.3 years). 
 
Of the total number of unapproved options outstanding at the end of the year, 3,595,097 (2010: 3,595,097) 
had vested and were exercisable at the end of the year. Their weighted average exercise price was 1.7 
pence (2010: 1.7 pence). 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        44 
18. Share options (continued) 
Grant of options 
The fair values of the options have been estimated at the date of grant using a Black-Scholes model, using 
the following assumptions: 
 
Tranche 
 
Date of 
grant 
Exercise 
price 
 
 
 
pence 
Number of 
options 
Share 
price at 
grant 
date 
 
pence 
Expected 
volatility 
Risk free 
rate 
Expected 
life 
 
 
 
years 
Fair value 
per share 
under 
option 
 
pence 
         
1 06-Jun-07 2.875 17,304,347 2.75 78% 4.44% 10 1.42 
2 29-Nov-07 3.38 2,751,479 3.00 65% 3.77% 10 1.06 
3 26-Aug-08 0.9 44,166,575 0.87 65% 4.45% 10 0.585 
4 01-Oct-08 0.9 12,000,000 0.725 65% 4.39% 10 0.485 
 
An expected dividend yield of 0% has been used in all of the above valuations. 
 
The expected life of the options is based on historical data and is not necessarily indicative of the exercise 
patterns that may occur. The expected volatility reflects the assumption that the historical volatility 
is indicative of future trends, which may not necessarily be the actual outcome. 
 
The total charge for the year relating to employee share-based payment plans was £69,069 
(2010: £225,909) all of which related to equity settled share-based payment transactions. 
 
The Company carried out a share re-organisation on 28 August 2008, which is further detailed in note 17 to 
the consolidated financial statements on page 41. 
 
Share options which had been granted prior to 28 August 2008 over existing ordinary shares with a nominal 
value of 1p each in the capital of the Company became options over new ordinary shares with a nominal 
value of 0.1p each in the capital of the Company. The options remain subject to the same terms as contained 
in the individual option contracts under which they were originally granted. 
 
Share options issued after 28 August 2008 are options over new ordinary shares with a nominal value of 
0.1p each in the capital of the Company. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        45 
19. Reserves 
 Share 
premium 
reserve 
Warrant 
reserve 
Merger 
reserve 
Retained 
earnings  
Total 
attributable 
to equity 
holders of the 
parent 
Non-
controlling 
interest 
Total 
equity 
 £ £ £ £ £ £ £ 
        
At 1 April 2009 7,979,558 - 6,273,909 (13,156,578) 1,096,889 - 1,096,889 
Loss for the year - - - (1,648,180) (1,648,180) - (1,648,180) 
Share-based 
charges 
- - - 225,909 225,909 - 225,909 
Issue of shares - 
exercise of share 
options 
 
104,417 
- - -  
104,417 
-  
104,417 
Issue of shares - 
subscription  
4,548,729 - - - 4,548,729 - 4,548,729 
Issue of shares - 
open offer 
1,894,573 - - - 1,894,573 - 1,894,573 
Warrants issued 
during the year - 
equity financing 
facility 
 
- 
 
115,980 
- -  
115,980 
-  
115,980 
At 31 March 2010 14,527,277 115,980 6,273,909 (14,578,849) 6,338,317 - 6,338,317 
Loss for the year - - - (1,984,206) (1,984,206) (136,459) (2,120,665) 
Share-based 
charges 
- - - 69,069 69,069 - 69,069 
Issue of shares - 
subscription  
2,382,373 - - - 2,382,373 - 2,382,373 
At 31 March 2011 16,909,650 115,980 6,273,909 (16,493,986) 6,805,553 (136,459) 6,669,094 
 
The following describes the nature and purpose of each reserve within total equity: 
 
Share capital Amount subscribed for share capital at nominal value. 
Share premium Amount subscribed for share capital in excess of nominal value. 
Warrant reserve The warrant reserve arose in March 2010 when the Group issued warrants to 
Evolution Securities Limited as part of the Equity Financing Facility (see Note 17). 
Merger reserve The merger reserve arose on the reverse takeover in 2005 of Provexis Natural 
Products Limited (formerly Provexis Limited) by Provexis plc through a share for 
share exchange. 
Retained earnings Cumulative net gains and losses recognised in the consolidated statement of 
comprehensive income. 
 
20. Pension costs 
The pension charge represents contributions payable by the Group to independently administered funds 
which during the year ended 31 March 2011 amounted to £37,370 (2010: £31,581). Pension contributions 
payable but not yet paid at 31 March 2011 totalled £26,051, in respect of pension contribution entitlements 
where employees had not yet provided details of the funds to which the contributions should be made 
(2010: £16,368). In addition, pension contributions payable in arrears at 31 March 2011 totalled £ Nil 
(2010: £1,189). All unpaid contributions are included in accrued social security costs at the balance 
sheet date. 
 
21. Operating lease commitments 
Future minimum rentals payable under non-cancellable operating leases are as follows: 
 
 
31 March 
2011 
31 March 
2010 
 £ £ 
Due within 1 year 90,500 86,500 
 90,500 86,500 
 
Operating lease payments represent rentals payable by the Group for various offices. The leases have 
various terms, escalation clauses and renewal rights typical of lease agreements for the class of asset. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2011        46 
22. Related party transactions 
On 12 February 2010 the Company announced that it had entered into a Letter of Intent (“LOI”) for its 
Fruitflow® technology with DSM Nutritional Products (“DSM”). 
 
The LOI provided a framework for the parties to develop a long-term Alliance Agreement (the “Agreement”), 
giving DSM exclusive global rights to Fruitflow®. 
 
On 1 June 2010 the Company announced a long-term Alliance Agreement with DSM Nutritional Products, 
which will see the Company collaborate with DSM to develop Fruitflow® in all major global markets. DSM will 
invest substantially in the manufacture, technology development, marketing and sale of Fruitflow® in the 
coming years. Provexis will continue to contribute scientific expertise and will collaborate in areas such as 
cost of goods optimisation and regulatory matters. The financial model is based upon the division of profits 
between the two partners on an agreed basis, linked to certain revenue targets, following the deduction of 
the cost of goods and a fixed level of overhead from sales. The Company is working closely with DSM in 
various areas related to launch planning. It is not possible to determine the financial impact of the Alliance 
Agreement at this time. 
 
DSM is classified as a related party of the Group in accordance with IAS 24 as it holds shares in the Group. 
Further, K Rietveld is a director of the Company, and a senior employee of DSM. The directors of Provexis 
(the "Directors"), having consulted with Evolution Securities Limited ("Evolution Securities"), the Company's 
nominated adviser, consider that the terms of the letter of intent and the Alliance Agreement are fair and 
reasonable insofar as Provexis's shareholders are concerned. In providing advice to the Directors, Evolution 
Securities has taken into account the Directors' commercial assessments. 
 
On 1 June 2011 the Group announced an agreement to commercialise DSM owned intellectual property, 
through the development of a new product for the promotion of healthy blood glucose levels. 
 
Key management compensation 
The Directors represent the key management personnel. Details of their compensation and share options are 
given in note 7 and within the Remuneration report on pages 14 to 18. 
 
23. Post balance sheet events 
On 1 June 2011 the Group announced an agreement to commercialise DSM owned intellectual property, 
through the development of a new product for the promotion of healthy blood glucose levels. 
 
On 17 June 2011 the Group entered into an  agreement to acquire 100% of the issued share capital of SiS 
(Science in Sport) Limited, a company which manufactures and sells sports nutrition products for a maximum 
consideration of £8m, subject to completion.  £7m is payable in cash of which £250,000 is to held in escrow 
against claims under the Share Purchase Agreement and related contracts for one year or longer if claims 
have been notified but not settled.  The balance of the consideration is £1m in Provexis shares, with a lock-in 
of two years.  The £7m cash consideration will be met by £4.5m from current cash reserves and £2.5m from 
a subscription for new shares.  The Company intends to undertake an Open Offer to shareholders of the 
Company as soon as is reasonably practicable after the completion of the Acquisition. 
 
Completion of the acquisition is dependent on the fulfilment of certain conditions, which had not been met at 
the date of approval: 
 
 the admission by the London Stock Exchange of the consideration shares to AIM becoming effective 
in accordance with the AIM Rules; and 
 a placing agreement between the Company and Evolution Securities Limited concerning the placing 
becoming unconditional in all respects (save for the condition in the placing agreement that the 
agreement concerning the Acquisition becomes unconditional).  
 
Since the acquisition agreement entered into on 17 June 2011 is conditional, and completion has therefore 
not yet occurred, control is not deemed to have passed to the Company as at the date of approval of the 
financial statements and there is therefore no requirement to provide IFRS 3 disclosures in respect of a post 
balance sheet acquisition.  However, in the interests of full disclosure, we have included those disclosures 
for which information is available at the date of approval. 
 
For the financial year ended 31 December 2010, SiS had unaudited turnover of £4.6 million (2009: £4.3 
million (unaudited)) and unaudited profit before tax of £0.2 million (2009: £0.4 million (unaudited)). As at 31 
December 2010, SiS had unaudited net assets of £0.96 million (2009: £0.8 million (unaudited)).  Parent company balance sheet 
 
Provexis plc Annual report and accounts 2011        47 
 
Company number 05102907  As at  
31 March 
2011 
As at  
31 March 
2010 
 Notes £ £ 
    
Fixed assets    
Investments 3 1,117,336 1,117,336 
    
Current assets    
Debtors - due within one year 4 103,593 115,980 
Debtors - due after one year 4 10,143,754 5,285,050 
Cash and cash equivalents 5 7,508,925 6,979,011 
Total current assets  17,756,272 12,380,041 
    
Net assets  18,873,608 13,497,377 
    
Creditors: amounts falling due after more than one year 6 (2,900,418) - 
    
Total net assets  15,973,190 13,497,377 
    
    
Capital and reserves    
Share capital 8 4,812,036 4,723,601 
Share premium reserve 9 16,909,650 14,527,277 
Warrant reserve 9 115,980 115,980 
Retained earnings 9 (5,864,476) (5,869,481) 
Equity shareholders’ funds 10 15,973,190 13,497,377 
 
 
These financial statements were approved and authorised for issue by the Board on 17 June 2011. 
The notes on pages 48 to 51 form part of these parent company financial statements. 
 
 
Stephen Moon    Ian Ford 
Director     Director 
 
On behalf of the Board of Provexis plc 
 
  Notes to the parent company financial statements 
 
Provexis plc Annual report and accounts 2011        48 
1. Accounting policies 
The parent company financial statements have been prepared under the historical cost convention and in 
accordance with UK GAAP.  
 
Share-based employee remuneration 
The Company has no employees however the Company will issue shares to satisfy share awards made by 
its subsidiary companies. The Company records a management charge equivalent to the fair value of the 
share-based payment incurred by its subsidiaries as disclosed in note 9 on page 51. 
 
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. 
 
Deferred tax balances are recognised in respect of all timing differences that have originated but not 
reversed by the balance sheet date, except that the recognition of deferred tax assets is limited to the extent 
that the Company anticipates making sufficient taxable profits in the future to absorb the reversal of the 
underlying timing differences. Deferred tax balances are not discounted. 
 
Valuation of investments 
Investments are stated at cost less any provision for impairment. Profits or losses arising from disposals of 
fixed asset investments are treated as part of the result from ordinary activities. 
 
Warrants 
The Group has issued warrants to Evolution Securities Limited as part of the Equity Financing Facility. These 
are considered to be outside the scope of share-based employee remuneration, and hence out of the scope 
of FRS20. These warrants have been measured at fair value at the date of grant using an appropriate 
options pricing model. This fair value has been held on the balance sheet within prepayments and in the 
warrants reserve within equity. The prepayment will be released against share premium as the equity 
financing facility is utilised. The warrants reserve will be released to share premium when the warrants are 
exercised.  If the warrants lapse then the reserve is transferred to retained earnings. 
 
2. Profit attributable to shareholders 
As permitted by Section 408 of the Companies Act 2006 no separate Company profit and loss account has 
been included in these financial statements. The Group loss for the year includes a loss after tax of £64,065 
(2010: £ Nil) which is dealt with in the financial statements of the Company. The total fees of the Group‟s 
auditor, BDO LLP, for services provided are analysed in note 5 to the consolidated financial statements on 
page 32. Total fees for the year were £68,896 (2010: £69,500). 
 
The parent company did not have any employees in the year and therefore there were no payroll costs or 
pension costs (2010: Nil). 
 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2011        49 
3. Investments 
 
31 March 
2011 
31 March  
2010 
 £ £ 
   
Cost 1,382,919 1,382,919 
Provision for impairment (265,583) (265,583) 
Net book value 1,117,336 1,117,336 
 
 
At 31 March 2011 the Company owned the following material subsidiary undertakings: 
 
 Share of issued 
ordinary share 
capital, and voting 
rights 
 
Country of 
incorporation and 
operation 
Business activity 
Provexis Nutrition Limited 100% England and Wales Functional food, 
medical food and 
dietary supplement 
technologies 
Provexis Natural Products Limited 100% England and Wales Functional food, 
medical food and 
dietary supplement 
technologies 
Provexis (IBD) Limited 75% England and Wales Functional food, 
medical food and 
dietary supplement 
technologies 
 
There are no significant restrictions on the ability of subsidiary undertakings to transfer funds to the parent, 
other than those imposed by the Companies Act 2006. 
 
4. Debtors 
 
31 March 
2011 
 31 March 
2010 
 £ £ 
   
Debtors falling due within one year   
Prepayments 103,593 115,980 
Total debtors falling due within one year 103,593 115,980 
   
Debtors falling due after one year   
Amounts owed by subsidiaries 10,143,754 5,285,050 
Total debtors falling due after one year 10,143,754 5,285,050 
   
Total debtors 10,247,347 5,401,030 
 
5. Cash and cash equivalents 
 
31 March 
2011 
 31 March 
2010 
 £ £ 
   
Cash at bank and in hand 7,508,925 6,979,011 
 7,508,925 6,979,011 
 
 
 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2011        50 
6. Creditors: amounts falling due after one year 
 
31 March 
2011 
 31 March 
2010 
 £ £ 
   
Creditors falling due after one year   
Amounts owed to subsidiaries 2,900,418 - 
Total creditors falling due after one year 2,900,418 - 
 
7. Deferred tax 
 
Deferred tax assets amounting to £227,205 (2010: £153,128) have not been recognised on the basis that 
their future economic benefit is not certain.  
 
8. Share capital 
 
Allotted, called up and fully paid Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number number 
    
At 31 March 2010 1,108,081,929 401,724,366 1,509,806,295 
Issued on subscription 88,435,000 - 88,435,000 
At 31 March 2011 1,196,516,929 401,724,366 1,598,241,295 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2010 1,108,082 3,615,519 4,723,601 
Issued on subscription 88,435 - 88,435 
At 31 March 2011 1,196,517 3,615,529 4,812,036 
 
Allotted, called up and fully paid Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number Number number 
    
At 31 March 2009 819,387,796 401,724,366 1,221,112,162 
Issued on exercise of share options 3,482,469 - 3,482,469 
Issued on subscription 200,000,000 - 200,000,000 
Issued on open offer 85,211,664 - 85,211,664 
At 31 March 2010 1,108,081,929 401,724,366 1,509,806,295 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2009 819,388 3,615,519 4,434,907 
Issued on exercise of share options 3,482 - 3,482 
Issued on subscription 200,000 - 200,000 
Issued on open offer 85,212 - 85,212 
At 31 March 2010 1,108,082 3,615,519 4,723,601 
 
Details of the share subscriptions, share placings, and the shares issued by the Company during the two 
years ended 31 March 2011 are given in note 17 to the consolidated financial statements on pages 40 to 42. 
 
Details on the share option scheme and share based payment charge for the year are given in note 18 to the 
consolidated financial statements on page 44. 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2011        51 
9. Reserves 
 Share 
premium 
reserve 
Warrant 
reserve 
Retained 
earnings 
 £ £ £ 
    
At 1 April 2010 14,527,277 115,980 (5,869,481) 
Retained loss for the year - - (64,065) 
Share-based charges - - 69,070 
Reduction of premium – subscription under EFF (12,386) - - 
Shares issued during the year - subscription under EFF 2,394,759 - - 
At 31 March 2011 16,909,650 115,980 (5,864,476) 
 
10. Shareholders’ funds 
Reconciliation of movement in shareholders‟ funds. 
 31 March  
2011 
31 March  
2010 
 £ £ 
   
Loss for year (64,065) - 
Share-based payment charge (note 18 – page 44) 69,070 225,909 
Shares issued during the year 88,435 288,694 
Premium on shares issued 2,394,759 6,547,719 
Reduction of premium on share issue (12,386) - 
Warrants issued during the year - equity financing facility - 115,980 
Net additions to shareholders‟ funds 2,475,813 7,178,302 
Opening shareholders‟ funds 13,497,377 6,319,075 
Closing shareholders‟ funds 15,973,190 13,497,377 
 
11. 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 Provexis 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. 
 
Provexis (IBD) Limited is 75% owned by Provexis plc and 25% owned by Ulive Enterprises Limited. Ulive 
Enterprises Limited is 75% owned by The University of Liverpool. 
 
Provexis plc wholly owns Provexis Nutrition Limited and Provexis Natural Products Limited. Provexis 
Nutrition Limited, Provexis Natural Products Limited and Provexis (IBD) Limited are under the common 
control of Provexis plc. 
 
The Company did not trade with Provexis (IBD) Limited during the year ended 31 March 2011 (2010: Nil). At 
31 March 2011 the Company was owed £5,509 by Provexis (IBD) Limited (31 March 2010: owed £5,509). 
 
Provexis (IBD) Limited does not have a bank account, and all its cash accounting transactions during the 
year were processed by Provexis plc, and Provexis Natural Products Limited (“Provexis group companies”). 
Amounts transacted by Provexis (IBD) Limited with Provexis group companies are charged through inter 
company accounts and the net amount transacted during the year was £545,838 (2010: £380,094). Provexis 
(IBD) Limited owed Provexis group companies a total of £1,426,593 at 31 March 2011 (31 March 2010: 
owed £880,755). 
 
Details of a related party transaction with DSM are given in note 22 to the consolidated financial statements 
on page 46. 
 
12. Post balance sheet events 
Details of post balance sheet events are given in note 23 to the consolidated financial statements on 
page 46. 
 
  Company information 
 
 
Provexis plc Annual report and accounts 2011        52 
 
Company number   05102907 
 
 
Directors    C D Buck 
     N C Bain 
     K Rietveld 
     S N Moon 
     S N Morrison 
     I Ford 
 
 
Audit committee   N C Bain 
C D Buck 
 
 
Remuneration committee  C D Buck 
N C Bain 
K Rietveld 
 
 
Registrars    Equiniti Limited 
Aspect House 
Spencer Road 
Lancing 
West Sussex BN99 6DA 
 
 
Secretary and registered office I Ford 
Thames Court 
1 Victoria Street 
Windsor 
Berkshire SL4 1YB 
 
 
Nominated adviser and broker  Evolution Securities Limited 
100 Wood Street 
London EC2V 7AN 
 
 
Principal solicitors   Shoosmiths 
Apex Plaza 
Forbury Road 
Reading 
Berkshire RG1 1SH 
 
 
Auditors    BDO LLP 
Kings Wharf 
20–30 Kings Road 
Reading 
Berkshire RG1 3EX