Provexis plc 
 
Annual report and accounts 2012 
 
 
 
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 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 
55 Parent company balance sheet 
56 Notes to the parent company financial statements 
60 Company information 
 
 
 
 
  Corporate statement 
 
 
Provexis plc Annual report and accounts 2012 1 
 
 
 
 
The Provexis strategy is the development, licensing and marketing of scientifically-proven functional food, 
and sports nutrition technologies, with four areas of focus: 
 
 To develop SiS® into the leader in elite endurance sports nutrition in major global markets; 
 
 Collaborate closely with partners to maximise the commercial success of Fruitflow® globally;  
 
 Underpin the competitiveness of these revenue streams with scientific excellence and regulatory 
capability; and 
 
 Seek further opportunities in the global functional food and sports nutrition sectors through being 
recognised as a partner of choice.  
 
 
  Key highlights 
 
 
Provexis plc Annual report and accounts 2012 2 
 
 
 
 
Key highlights 
 
 
 Science in Sport generated revenues of £3.48m in the nine months from acquisition, representing like for 
like revenue growth of 12% compared to the same period last year; 
 
 Substantial investment made in SiS® in order to execute the Board’s growth plan for FY2012/13, 
including new supply facility and plant, investment in marketing and sales, and enhanced innovation 
pipeline; 
 
 First two SiS® innovations in market, with Fruitflow® product to follow in Q3 FY2012/13; 
 
 Good progress with proprietary Fruitflow® heart health technology with seven regional consumer 
products containing Fruitflow® syrup now on sale in various global markets, and at least five further 
launches expected in 2012; 
 
 Tablet grade powder format of Fruitflow® now complete, with good levels of interest from potential 
customers; 
 
 DSM Nutritional Products (“DSM” or “Alliance partner”) continuing commercial discussions with a wide 
range of consumer healthcare businesses including global brand owners; 
 
 Significant restructuring across the Company to reduce cash burn and improve the operating margin of 
SiS®; and 
 
 Appointment of John Clarke, formerly Global President of GlaxoSmithKline’s Consumer Healthcare 
business, as Non-executive Director. 
 
 
Key financial results 
 
 Revenues £3.48m (2011: £50k). 
 
 Underlying operating loss* reduced to £2.18m (2011: £2.41m); the 2012 underlying operating loss 
includes £0.66m of costs which are non-recurring, following the restructuring undertaken during the 
financial year. 
 
 Statutory loss from operations of £4.33m (2011: £2.48m); this loss is after charging £1.39m of non-cash 
amortisation and impairment charges (2011: £Nil), £0.15m of acquisition costs (2011: £Nil), £0.46m of 
restructuring costs (2011: £Nil) and a £0.14m non cash share based payment charge (2011: £0.07m). 
 
 Cash balance at 31 March 2012 £1.45m (2011: £7.55m). 
 
 Loss per share 0.28p (2011: 0.17p). 
 
*before impairment and amortisation of intangible assets, share based payments and exceptional costs of £2.15m (2011: £69k), as 
set out on the face of the Consolidated Statement of Comprehensive Income 
 
  Chairman’s statement 
 
 
 
Provexis plc Annual report and accounts 2012 3 
The past year has seen substantial change with the acquisition of SiS® and good progress with our 
proprietary Fruitflow® heart health technology. The Board announced at the interim results that it was to 
focus on these two assets, and as a result major reductions in cash burn have been made in the second half.  
 
Following the acquisition of SiS® last June, we have made great progress in developing a platform to drive 
long-term shareholder value. Key steps include opening a new supply chain facility including state of the art 
gel filling, investment in an enhanced marketing and sales strategy, and a range of science-led innovation 
initiatives to solidify our position as leading nutrition suppliers to elite athletes. 
 
DSM has now completed the development of a tablet grade version of Fruitflow® and we see this as a major 
milestone in the commercialisation of the technology, this being borne out by high interest from brand owners 
across the globe. The syrup version of Fruitflow® continues to gain traction in the marketplace, with seven 
regional healthcare products now on sale, with at least a further five expected in the second half of the year. 
 
Other pipeline projects were ceased or wound down at the half-year, and the focus is now firmly on the 
revenue generation potential of Fruitflow® and SiS®. As a Board, we continue to examine the business for 
further efficiencies and savings, as we seek to drive towards profitability.  
 
While the Board believes that the economic environment is challenging and will remain so for the 
foreseeable future, we believe that all due steps have been taken to develop a viable growth platform based 
on two promising revenue streams, while reducing cash usage and entrenching a culture of cost reduction. 
 
Dr Neville Bain resigned as non-executive Director, for health reasons, during the year. Sadly, Neville 
passed away in May 2012, and I would like to register on behalf of the Board my appreciation for the 
immeasurable value he contributed to the Company during his years of service. Dr Bain was replaced by 
John Clarke, formerly Global President of GlaxoSmithKline’s Consumer Healthcare business. The wealth of 
sector experience John brings to the Board will be a great asset to the business in the coming years. 
 
Following a year of wide ranging change in the business, including the acquisition and integration of SiS®, 
and further major development steps for Fruitflow®, I would like to thank the executive team and all of our 
staff and advisors for their continued high levels of commitment and professionalism. 
 
Dawson Buck 
Chairman  
  Chief Executive’s statement 
 
 
 
Provexis plc Annual report and accounts 2012 4 
SiS® 
 
Revenues were £3.48m from the acquisition at the end of June, through to the end of the period, 
representing like for like revenue growth of 12% compared to the same period last year. The underlying 
operating loss was £226k, this being related to low season sales levels in the winter months and high levels 
of investment in the new supply chain facility, together with increased investment in marketing and sales. We 
believe that following this period of investment, the SiS® business has a very solid growth platform. 
 
Much focus has been given to developing heartland sales in independent cycle, triathlon and running shops 
and we will continue to invest in this important sector. In addition we have made good progress in multiple 
retailers and this progress has continued into the new financial year, with new listings being secured for the 
second half of the current financial year. New advertising and public relations strategies have re-established 
the brand, together with continuation of many of the existing sponsorship arrangements with elite athletes 
and teams in cycling, triathlon and rowing. Investment in marketing and sales has increased significantly 
when compared with the last financial year under previous ownership. The Company hopes to benefit 
following the Olympic Games, as interest in elite athletes increases and given the expected uplift in sports 
participants. 
 
Substantial investment has been made in the development of a new e-commerce platform and this will 
launch in the second half of the year. While export sales have remained stable, we continue to examine 
options for expansion into new markets and again, we expect to see progress later in the year. 
 
We believe that continuous science-led innovation is important in maintaining and enhancing our reputation 
with elite athletes. We developed the novel Go Gel® plus Nitrates during the year, launching it in April 2012. 
May saw us launch Go Hydro hydration tablets. During the year we also significantly advanced the 
development of a Go Gel® with Fruitflow® and this novel and proprietary product will launch later in the 
calendar year. All three of these innovations are supported by research and development programmes, 
including collaboration with research institutes. A promising innovation pipeline is in development for 2013 
and 2014. Key to this strong innovation drive is the combined scientific and regulatory expertise of the 
enlarged business, together with strong relationships with leading figures, teams and research institutes in 
the sports science arena. 
 
The move to the new supply chain facility and the installation of a new gel-filling machine has resulted in cost 
efficiencies and we are seeing improved gross margin in the current financial year as a result. In addition we 
have made savings in overheads and instituted an ongoing cost improvement programme to improve 
margins further and facilitate investment in revenue growth and innovation. 
 
Fruitflow® 
 
DSM has developed a tablet grade version of Fruitflow® and this represents a major milestone in the 
commercialisation of the technology, as evidenced by the large number of requests for samples from brand 
owners. Manufacturing facilities for both the syrup and powder formats are now in place and in addition, 
DSM has used its expertise in ingredient development to significantly reduce the cost in use of Fruitflow®. 
 
Seven regional consumer healthcare brands incorporating Fruitflow® syrup are now for sale in a range of 
global markets, and it is expected at least a further five brands will launch in the second half of the year. The 
introduction of the tablet grade format is expected to drive further interest in the technology and the current 
sales enquiry pipeline is promising and includes some global brands.  
 
Whilst revenues for Fruitflow® are nominal in the last period, the overall trend is that the technology is 
gaining market acceptance via the increasing number of brands in market. This together with the new tablet 
grade format and progress made on reducing cost in use provides a promising outlook for the technology.  
 
Pipeline restructuring 
 
At the interim results we announced the decision to halt, postpone or review other activities in the pipeline in 
order to deliver a focused, revenue-oriented strategy based on Fruitflow® and SiS®. This resulted in the 
halting of the Crohn’s disease trial and the closure of the Liverpool facility. We have since halted the 
cardiovascular inflammation project. Together, these actions will result in an annualised reduction in cash 
burn of £1.15m. 
  Chief Executive’s statement 
 
 
 
Provexis plc Annual report and accounts 2012 5 
The second interim review of the Crohn’s disease trial showed an inconclusive result in terms of efficacy. We 
are currently assessing the residual value of the intellectual property (‘IP’) related to the technology, both in 
the area of Crohn’s disease and other potential applications, before arriving at a decision as to whether to 
seek a development partner or purchaser for the IP. 
 
Following the cessation of the cardiovascular inflammation project, we have chosen not to retain any of the 
jointly owned IP, although background IP was developed by the Group which may be used in the future. On 
the DSM-owned blood glucose technology, while we have successfully developed a pilot scale product, we 
are not pursuing any further activity at this stage. 
 
These actions in closing or suspending pipeline activities are consistent with our previously announced 
strategy of focusing our efforts and resources on the revenue generating potential of Fruitflow® and SiS®. 
 
Strategy 
 
Our strategy has been aligned to focus on developing the Fruitflow® heart health technology and the SiS® 
sports nutrition business, with these two areas underpinned by the scientific and regulatory expertise of the 
Group. The closure of other pipeline activities has resulted in annualised underlying expenditure being 
reduced by £1.15m. In addition, we have reduced overheads in the SiS® business and we are improving 
operating margins through investment in supply chain and other efficiency initiatives. The combination of 
focus on revenue generation, reduced costs and improved margins are targeted at achieving breakeven and 
then operating profit for the business. 
 
Scientific capability will remain at the heart of the enlarged Company, both to support our Alliance partner 
DSM in the development of Fruitflow® and to achieve our goal of being a global leader in endurance sports 
nutrition. 
 
Outlook 
 
The economic climate remains challenging and we expect this to continue through the coming year, affecting 
both brand owner attitudes to innovation, and consumer spending. The poor weather in the first quarter of 
the year has also constrained the growth of SiS®, although we believe we will achieve our growth target for 
the full year. Overall, the medium to long-term growth prospects for the sports nutrition category are very 
promising. 
 
We will continue to work closely with our Alliance partner DSM on the commercialisation of Fruitflow® as a 
priority, particularly in the areas of scientific and technical support, as well as refining the commercial 
positioning. 
 
On SiS® we will drive our growth model of improving gross margin and reducing costs, in order to invest 
further in marketing, sales and science-led innovation. In the second half of the year we also expect to 
progress our major e-commerce initiative, together with firming up international expansion plans. The Board 
believes the Company is well placed for sustained long-term growth and we are looking forward to the year 
ahead. 
 
Stephen Moon 
Chief Executive 
 
  Directors’ report – financial review 
 
 
 
Provexis plc Annual report and accounts 2012 6 
Acquisition of SiS (Science in Sport) Limited (“SiS®”) 
On 24 June 2011 the Group acquired SiS®, a company which manufactures and sells sports nutrition 
products. The Acquisition of SiS® was for a total consideration of £7.36 million, of which £7.0 million was 
satisfied in cash and a further £0.36 million was satisfied in new Ordinary Shares. Further details of the 
acquisition accounting are set out in note 10. 
 
The Group has identified the fair values of the consideration paid and of the assets acquired and liabilities 
assumed, including the separate identification of intangible assets in accordance with IFRS 3 ‘Business 
Combinations’. This formal process involves an assessment of the assets acquired and liabilities assumed 
with assistance provided by external valuation specialists where appropriate. The assessment period 
remains open up to a maximum of 12 months from the relevant acquisition date. As at 31 March 2012, the 
assessment was not complete and accordingly the fair values presented are provisional. 
 
Research and development costs 
Research and development costs for the year ended 31 March 2012 were £818,186 (2011: £1,268,874) 
including £56,729 capitalised under IAS 38 (2011: £17,959). 
 
The suspension of work on the Crohn’s disease trial does not constitute discontinued operations as defined 
by ‘IFRS 5 Non-current assets Held for Sale and Discontinued Operations’ as the operations have neither 
been permanently abandoned nor are being actively marketed for sale at this stage, and therefore no 
discontinued operations disclosures are necessary. 
 
Impairment of goodwill and restructuring costs 
During the year the Group took the decision to halt the Crohn’s disease trial and suspend other activity 
related to the NSP#3G technology. The Group has fully impaired the goodwill relating to the Crohn’s disease 
CGU, given the uncertainty regarding the future cash flows of the CGU, resulting in a non-cash goodwill 
impairment charge for the year of £1,140,806 within the Provexis CGU. 
 
The Directors have concluded that no other indication of impairment to goodwill exists because the results of 
SiS® have been in line with budget since acquisition, and the Alliance partners have made good progress 
with Fruitflow®. 
 
The suspension of work on the Crohn’s disease trial and the cardiovascular inflammation project and the 
closure of the Liverpool facility have resulted in an annualised reduction in cash burn of £1.15m. 
Restructuring costs of £205,746 were incurred as part of this process. 
 
Restructuring and rebranding costs of a further £258,767 have been incurred as part of the reorganisation 
and rebranding of the SiS® business since acquisition. 
 
Total restructuring costs arising during the financial year from these activities were £464,513. 
 
Underlying operating loss 
Underlying operating loss has reduced to £2,180,362 (2011: £2,406,253). 
 
The Group has chosen to report underlying operating loss as the Directors believe that the operating loss 
before amortisation and impairment of acquired intangible assets, share based payments and exceptional 
items measure provides additional useful information for shareholders on underlying trends and 
performance. A reconciliation of underlying operating loss to statutory loss is presented on the face of the 
Statement of Comprehensive Income. The underlying operating loss is used for internal performance 
analysis. 
  
The Group’s cost base and its resources have been and will continue to be tightly managed within budgets 
approved and monitored by the Board. 
 
Taxation 
A research and development tax credit of £150,000 (2011: £221,218) in respect of research and 
development expenditure incurred and deferred tax credit of £49,590 (2011: £Nil) in respect of the 
amortisation of acquired intangible assets have been recognised in the financial statements. A £121,220 
research and development tax credit claim primarily relating to the year ended 31 March 2010 was paid to 
the Group during the year. 
  Directors’ report – financial review  
 
 
 
Provexis plc Annual report and accounts 2012 7 
Losses and dividends 
The loss attributable to equity holders of the parent for the year ended 31 March 2012 was £3,873,215 
(2011: £1,984,206) and the basic and diluted loss per share was 0.28p (2011: 0.17p). 
 
The directors are unable to recommend the payment of a dividend (2011: £Nil). 
 
Capital structure and funding 
On 17 June 2011 the Company announced that it had raised £2.5 million before expenses via a placing of 
new ordinary shares of 0.1 pence each in the Company, in connection with the acquisition of SiS®. 
 
On 5 July 2011 the Company announced an Open Offer to shareholders at 1.5 pence per share, on the basis 
of 1 offer share for every 10 existing ordinary shares, with an excess application facility. On 26 July 2011 the 
Company announced that it had raised approximately £1.025 million before expenses from the Open Offer. 
 
On 8 November 2011 the Company announced that it had renewed a 3 year equity financing facility of up to 
£25m (the “EFF”). 
 
The EFF agreement, which was arranged by Darwin Strategic Limited (“Darwin”), provides the Company with 
a facility which (subject to certain limited restrictions) can be drawn down at any time over the 3 years ending 
6 November 2014, the timing and amount of any draw down being at the discretion of Provexis. 
 
Provexis is under no obligation to make a draw down and may make as many drawdowns as its wishes, up 
to the total value of the EFF, by way of issuing subscription notices to Darwin. 
 
The subscription price for any ordinary shares to be subscribed by Darwin 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. The Company will have the right (with the 
agreement of Darwin) to modify that minimum price at any time during the relevant Pricing Period. 
 
On 17 May 2012 the Company announced that it had raised a net £244,336 by drawing down on the EFF, 
allotting 13,197,880 new ordinary shares of 0.1p each to Darwin. 
 
Further details of the EFF agreement and the drawdowns made using the EFF are available to download 
from the announcements section of the Company’s website www.provexis.com. 
 
The Directors are of the opinion that at 31 July 2012, the Group's liquidity and capital resources are 
adequate to deliver the current strategic objectives and 2012/13 business plan and that the Group and 
Company remain a going concern. See also note 1 to the consolidated financial statements on page 25. 
 
Cash and cash equivalents at 31 March 2012 were £1.4m (31 March 2011: £7.6m). 
 
 
  Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 8 
Principal activities 
Provexis plc is a business that develops, licenses and markets scientifically-proven functional food and 
sports nutrition technologies. 
 
Provexis plc has three wholly owned subsidiaries, SiS (Science in Sport) Limited (“SiS”), 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, licensing and marketing of scientifically-proven 
functional food and sports nutrition technologies, with four areas of focus: 
 
 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 2012, 
its position at that date and its likely future development. 
 
Internal control and risk management 
The Board is responsible for maintaining a sound system of internal control to safeguard shareholders’ 
investment and the Group’s assets, as well as reviewing its effectiveness. The system of internal control is 
designed to manage rather than eliminate the risk of failure to achieve business objectives and can only 
provide reasonable and not absolute assurance against material loss and misstatement. 
 
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 key control procedures operating within the Group include, but are not limited to: 
 
1. a comprehensive system of financial budgeting, forecasting and then reporting and reviewing actual 
monthly results for the current year against these expectations; 
2. a system of operational and financial Key Performance Indicators (“KPIs”), which are reviewed on a 
weekly and monthly basis; 
3. procedures for appraisal, review and authorisation of capital expenditure; 
4. properly authorised treasury procedures and banking arrangements; 
5. regular review of materials and services supply agreements; and 
6. regular review of tax, insurance and health and safety matters. 
 
The principal financial KPIs monitored by the Board relate to underlying operating loss and cash and cash 
equivalents. 
 
The table below shows the Group’s underlying operating loss for the two years ended 31 March 2012: 
 
 
 
Year ended 
31 March  
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Underlying operating loss 2,180,362 2,406,253 
 
   Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 9 
Internal control and risk management (continued) 
The £225,891 reduction in underlying operating loss in 2012 is primarily attributable to the R&D cost savings 
made during the financial year, which are further detailed in the financial review on page 6. The underlying 
operating loss for 2012 includes £656,348 of costs which are non-recurring, following the restructuring 
undertaken during the financial year, as further described in the financial review on page 6. 
 
The table below shows the Group’s cash position at 31 March 2012 and 31 March 2011: 
 
 
 
31 March  
2012 
31 March 
2011 
 £ £ 
   
Cash and cash equivalents 1,447,405 7,551,505 
 
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 £6,104,100 
reduction in cash and cash equivalents during the financial year is primarily due to the acquisition of SiS, as 
further detailed in the consolidated statement of cash flows on page 23, and in note 10 on page 39. 
 
The R&D cost savings realised during the financial year will result in an annualised reduction in operating 
costs and cash burn of £1.15m, to the direct advantage of the underlying operating loss and cash and cash 
equivalents KPIs. 
 
In 2011 KPIs included the ratio of R&D expenditure to administrative expenditure. Following the restructuring 
of the business and the acquisition of SiS this KPI is no longer considered relevant. 
 
At this stage in the Group’s development, the Board does not consider it appropriate to establish an internal 
audit function. 
 
Principal risks and uncertainties 
In the course of its normal business the Group is exposed to a range of risks and uncertainties which could 
impact on the results of the Group. The Board considers that risk-management is an integral part of good 
business process and, on a bi-annual basis, reviews the industry, operational and financial risks facing the 
Group and considers the adequacy of the controls & mitigants to manage the risks. 
 
The Directors have identified the following principal risks and uncertainties that could have the most 
significant impact on the Group’s long-term value generation. 
 
Intellectual property 
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 and sports nutrition 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. 
 
   Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 10 
Principal risks and uncertainties (continued) 
Food quality and safety 
A major incident resulting from a food quality or health and safety failure could pose a risk to consumers and 
therefore have reputational and financial implications for the Group. 
 
The Group’s stringent approach to food quality and safety is controlled via quality assurance procedures 
which are based on a risk management approach. Internal systems are reviewed continuously and potential 
for improvement is monitored.  
 
The Group’s SiS® manufacturing facility is subject to regular food safety and quality control audits, including 
those carried out by, and/or for, major customers. The Group’s products are analysed and tested regularly 
for banned substances by an experienced, independent surveillance company. Where appropriate, additional 
investment is made to optimise ingredient screening efficiency and effectiveness. 
 
The Group maintains product liability insurance cover to mitigate the potential impact of such an event. 
 
The Group believes that the quality of its raw materials is critical to the quality of its product. The availability 
and resultant price levels of ingredients meeting the Group’s high standards of quality may adversely affect 
the margins available to the Group, subject to the ability to pass through corresponding price increases to 
customers. 
 
Movement in the commodity prices of raw materials and, in the case of imported raw materials and other 
goods, the value of Sterling against other currencies may have a corresponding impact on finished product 
cost. Failure to manage the Group’s exposure to price increase may adversely affect the Group’s financial 
performance. 
 
Customers and consumers 
The Group operates in a competitive market sector and its ability to compete effectively requires an on-going 
commitment to marketing, product development, innovation, product quality and ability to offer value for 
money. 
 
A significant proportion of the Group’s sales is generated from a small number of customers and hence there 
is a risk from loss of a key customer of a significant piece of business. Significant resources are devoted to 
forging strong relationships with customers. 
 
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. 
 
People 
The Group recognises that its employees are critical to the successful delivery of service to customers. The 
failure to retain people of high quality would have an adverse effect on Group performance. The Group has 
high expectations of all staff and in return strives to provide an environment that is both challenging and 
rewarding. 
 
Funding and other risks 
The Group may require additional funding. To the extent that the current cash resources of the Group 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 continues to pursue acquisitions as part of its growth strategy. Such acquisitions may not realise 
expected benefits. 
 
   Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 11 
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 2012 amounted to 51 days compared to 22 days at 
31 March 2011. 
 
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 two 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 and up to the date that the financial statements were 
approved are shown below. 
 
Executive Directors 
S N Moon 
S N Morrison (resigned 30 November 2011) 
I Ford 
Phil Walker (appointed 24 September 2011 - resigned 29 November 2011) 
 
Non-executive Directors 
C D Buck 
N C Bain (resigned 30 November 2011) 
J M Clarke (appointed 1 April 2012) 
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. 
 
Audit Committee 
The Audit Committee comprises two Non-executive Directors and is chaired by Dawson Buck as Chairman. 
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 two 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 £63,500 for the year ended 31 March 2012 
(2011: £27,300). 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. 
 
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 25. 
 
   Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 12 
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. 
 
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 and a resolution to re-appoint BDO LLP will 
be proposed at the forthcoming AGM. 
 
   Directors’ report – business overview 
 
 
 
Provexis plc Annual report and accounts 2012 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 
31 July 2012 
  Remuneration report  
 
 
 
Provexis plc Annual report and accounts 2012 14 
Remuneration Committee: composition and terms of reference 
The Group’s Remuneration Committee during the year ended 31 March 2012 comprised three 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 UK Corporate Governance 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 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. 
 
  Remuneration report  
 
 
 
Provexis plc Annual report and accounts 2012 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 no bonuses in 2012. In 2011 annual bonuses of between 20% and 40% 
of salary 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 2011 to cover the year from 1 April 2011 to 31 March 2012. 
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 Finance Director is employed under a service contract 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 John Clarke 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. 
 
Gains made on exercise of directors’ share options 
No directors’ share options were exercised during the year (2011: Nil). 
 
Details of directors’ remuneration 
The emoluments of the individual Directors for the year were as follows: 
 
 Year ended 
31 March 
2012 
Year ended 
31 March 
2011 
 Salary and 
directors’ 
fees 
£ 
Benefits 
in kind 
 
£ 
Pension 
 
 
£ 
Loss of 
office 
 
£ 
Total 
 
 
£ 
Total 
 
 
£ 
Executive Directors       
S N Moon 187,248 943 9,362 - 197,553 255,817 
S N Morrison (resigned 30 November 2011) 92,423 1,269 4,314 30,000 128,006 158,080 
I Ford 119,676 1,914 6,029 - 127,619 148,597 
P Walker (appointed 24 September 2011 - 
resigned 29 November 2011) 
52,083 500 2,604 61,250 116,437 - 
       
Non-executive Directors       
C D Buck 27,500 - - - 27,500 35,000 
N C Bain (resigned 30 November 2011) 11,667 - - - 11,667 17,500 
K Rietveld - - - - - - 
 490,597 4,626 22,309 91,250 608,782 614,994 
 
The above fees and emoluments exclude reimbursed expenditure incurred in the conduct of Group business. 
 
   Remuneration report  
 
 
 
Provexis plc Annual report and accounts 2012 16 
Share-based payment expense 
The share-based payment expenses of the individual Directors recognised for the year were as follows: 
 
 Year ended 
31 March 
2012 
Year ended  
31 March 
2011 
 £ £ 
Executive Directors   
S N Moon 69,504 15,857 
S N Morrison (resigned 30 November 2011) - 11,666 
I Ford 32,708 12,324 
P Walker (appointed 24 September 2011 - resigned 29 November 2011) - - 
   
Non-executive Directors   
C D Buck - - 
N C Bain (resigned 30 November 2011) - - 
K Rietveld - - 
 102,212 39,847 
 
 
Directors’ interests in shares Ordinary shares of 
0.1 pence each 
 
Ordinary shares of 
0.1 pence each 
 
 Beneficial interests 
 31 March 2012 1 April 2011 
   
S N Moon 2,060,666 1,540,000 
S N Morrison (resigned 30 November 2011) - 1,668,333 
I Ford 2,201,832 1,668,333 
N C Bain (resigned 30 November 2011) - 5,608,416 
C D Buck 12,906,433 11,271,359 
 17,168,931 21,756,441 
 
Other than as shown in the table and as further disclosed above in respect of Deferred Shares in note 19 
and disclosed in respect of share options on page 17, no Director had any interest in the shares of the 
Company or its subsidiary companies at 31 March 2012. 
 
 
 
 
   Remuneration report  
 
 
 
Provexis plc Annual report and accounts 2012 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 17 June 2011 the Company announced that the Company's Remuneration Committee had approved the 
grant of options over 51,300,000 ordinary shares of 0.1p each to certain Directors and employees of the 
Company. During the year 22,000,000 of these options were surrendered by Directors leaving the company. 
 
The share options held by the Directors and not exercised at 31 March 2012 are summarised below. 
 
     
 At 1 April 2011 Options granted  
in year  
Resignation as a 
director 
At 31 March 2012 
     
S N Moon 21,117,620 17,000,000 - 38,117,620 
S N Morrison (resigned 30 November 2011) 12,000,000 - (12,000,000) - 
I Ford 10,000,000 8,000,000 - 18,000,000 
Phil Walker (appointed 24 September 2011 - 
resigned 29 November 2011) 
- 10,000,000 (10,000,000) - 
 43,117,620 35,000,000 (22,000,000) 56,117,620 
 
The unapproved share options at 31 March 2012 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 
S N Moon June 2011 17,000,000 2.800p April 2014 June 2021 
I Ford June 2011 6,350,010 2.800p April 2014 June 2021 
  30,674,530    
 
The EMI share options at 31 March 2012 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 3,000,000 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 
I Ford June 2011 1,649,990 2.800p April 2014 June 2021 
  34,443,090    
 
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 19 to 
the consolidated financial statements on page 49. 
 
   Remuneration report  
 
 
 
Provexis plc Annual report and accounts 2012 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 
 
 
 
Provexis plc Annual report and accounts 2012 19 
TO THE MEMBERS OF PROVEXIS PLC 
 
We have audited the financial statements of Provexis plc for the year ended 31 March 2012 which comprise 
the consolidated statement of comprehensive income, the consolidated statement of financial position, the 
consolidated statement of cash flows, the consolidated statement of changes in equity, the parent company 
balance sheet and the related notes. The financial reporting framework that has been applied in the 
preparation of the group financial statements is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been 
applied in preparation of the parent company financial statements is applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).  
 
This report is made solely to the company’s members, as a body, in accordance with 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 2012 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 2012 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 
 
Date 
 
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 2012 21 
 
  Year  Year  
  ended  ended  
  31 March 31 March  
  2012 2011 
 Notes £  £  
    
    
Revenue 1,3 3,477,862 50,086 
Cost of goods  (1,720,241) - 
Gross profit  1,757,621 50,086 
Research and development costs 4 (761,457) (1,250,915) 
Administrative costs  (5,326,301) (1,274,493) 
    
Underlying operating loss  (2,180,362) (2,406,253) 
Amortisation and impairment charges 11 (1,390,638) - 
Costs of acquisition 10 (153,163) - 
Restructuring costs 4 (464,513) - 
Share based payment charges 20 (141,461) (69,069) 
    
Loss from operations 4 (4,330,137) (2,475,322) 
    
Net finance income 7 46,111 133,439 
Loss before taxation  (4,284,026) (2,341,883) 
    
Taxation 8 328,538 221,218 
Loss and total comprehensive expense for the period  (3,955,488) (2,120,665) 
    
Attributable to:    
Owners of the parent 21 (3,873,215) (1,984,206) 
Non-controlling interest 21 (82,273) (136,459) 
Loss and total comprehensive expense for the period 21 (3,955,488) (2,120,665) 
    
    
Loss per share to owners of the parent    
Basic and diluted – pence 9 0.28 0.17 
    
 
All amounts relate to continuing operations. 
 
 
 
  Consolidated statement of financial position 
Provexis plc Annual report and accounts 2012 22 
 
Company number 05102907  As at  As at  
  31 March 31 March 
  2012 2011 
 Notes £  £  
    
Assets    
Non-current assets    
Intangible assets 11 9,369,603 3,878,577 
Plant and equipment 13 598,430 89,769 
Deferred tax 18 128,948 - 
Total non-current assets  10,096,981 3,968,346 
    
Current assets    
Inventories 14 635,771 - 
Trade and other receivables 15 934,773 253,249 
Corporation tax asset 8 300,000 271,220 
Cash and cash equivalents 16 1,447,405 7,551,505 
Total current assets  3,317,949 8,075,974 
    
Total assets  13,414,930 12,044,320 
    
Liabilities    
Current liabilities    
Trade and other payables 17 (1,541,839) (563,190) 
Current tax liabilities  (39,133) - 
Total current liabilities  (1,580,972) (563,190) 
Net current assets  1,736,977 7,512,784 
    
Non-current liabilities    
Deferred tax 18 (535,072) - 
Total non-current liabilities  (535,072) - 
    
Total liabilities  (2,116,044) (563,190) 
    
Total net assets  11,298,886 11,481,130 
    
    
Capital and reserves attributable to 
owners of the parent company 
   
Share capital 19 5,085,352 4,812,036 
Share premium reserve 21 19,998,832 16,909,650 
Warrant reserve 21 60,000 115,980 
Merger reserve 21 6,599,174 6,273,909 
Retained earnings 21 (20,225,740) (16,493,986) 
  11,517,618 11,617,589 
Non-controlling interest  (218,732) (136,459) 
Total equity  11,298,886 11,481,130 
 
These consolidated financial statements were approved and authorised for issue by the Board on 31 July 
2012. The notes on pages 25 to 54 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 2012 23 
 
 
  Year Year  
  ended  ended  
  31 March 31 March  
  2012 2011 
 Notes £  £  
    
    
Cash flows from operating activities    
Loss after tax  (3,955,488) (2,120,665) 
Adjustments for:    
Amortisation and impairment 11 1,390,638 - 
Depreciation 13 89,360 28,697 
Loss on disposal of intangible assets  9,872 - 
Profit on sale of fixed assets  (3,631) - 
Net finance income  (46,111) (133,439) 
Taxation  (328,538) (221,218) 
Share-based payment charge  141,461 69,069 
Operating cash outflow before changes in working capital  (2,702,437) (2,377,556) 
    
Changes in inventories  42,239 - 
Changes in trade and other receivables  81,419 (5,898) 
Changes in trade and other payables  320,426 267,692 
Total cash outflow from operations  (2,258,353) (2,115,762) 
    
Tax paid  (28,134) - 
Tax credits received  121,220 61,844 
Total cash flow from operating activities  (2,165,267) (2,053,918) 
    
Cash flow from investing activities    
Purchase of property, plant and equipment  (458,984) (57,285) 
Proceeds from sale of property, plant and equipment  4,750 - 
Purchase of intangible assets  (62,356) (17,959) 
Interest received  49,762 148,339 
Acquisition of subsidiary net of cash acquired 10 (6,786,036) - 
Net cash (outflow)/inflow from investing activities  (7,252,864) 73,095 
    
Cash flow from financing activities    
Proceeds from issue of share capital  3,524,694 2,684,534 
Expenses paid on share issues  (236,919) (201,340) 
Proceeds from exercise of share options  27,000 - 
Interest paid  (744) - 
Net cash flow from financing activities  3,314,031 2,483,194 
    
Net (decrease) / increase in cash and cash equivalents  (6,104,100) 502,371 
Opening cash and cash equivalents 16 7,551,505 7,049,134 
Closing cash and cash equivalents 16 1,447,405 7,551,505 
 
 
  Consolidated statement of changes in equity 
Provexis plc Annual report and accounts 2012 24 
 
         
 
Share 
capital  
Share  
premium 
Warrant 
reserve 
Merger  
reserve 
Retained  
earnings 
Total equity 
attributable 
to owners of  
the parent 
Non-
controlling  
interests 
Total  
equity 
 £  £  £ £  £  £  £  £  
                
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 
         
Share-based charges - - - - 141,461 141,461 - 141,461 
         
Issue of shares - acquisition of SiS 
(Science in Sport) 24 June 2011 35,336 - - 325,265 - 360,601 - 360,601 
         
Issue of shares - placing 24 June 
2011 166,667 2,333,333 - - - 2,500,000 - 2,500,000 
         
Issue costs - placing 24 June 2011 - (199,380) - - - (199,380) - (199,380) 
         
Issue of shares - open offer 27 July 
2011 68,313 956,381 - - - 1,024,694 - 1,024,694 
         
Issue costs - open offer 27 July 
2011 - (37,539) - - - (37,539) - (37,539) 
         
Issue of shares - share options 
exercised 13 December 2011 3,000 24,000 - - - 27,000 - 27,000 
         
Cancellation of warrants - equity 
financing facility 8 November 2011 - 12,387 (115,980) - - (103,593) - (103,593) 
         
Issue of warrants - equity financing 
facility 8 November 2011 - - 60,000 - - 60,000 - 60,000 
         
Total comprehensive expense for 
the year - - - - (3,873,215) (3,873,215) (82,273) (3,955,488) 
         
At 31 March 2012 5,085,352 19,998,832 60,000 6,599,174 (20,225,740) 11,517,618 (218,732) 11,298,886 
         
 
 
  Notes to the consolidated financial statements 
 
Provexis plc Annual report and accounts 2012 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 Kings Road House, 2 Kings Road, Windsor, 
Berkshire SL4 2AG, UK. 
 
The main activities of the Group are those of developing, licensing and marketing scientifically-proven 
functional food and sports nutrition technologies for the global functional food and sports nutrition 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”) and 
those parts of the Companies Act 2006 that are applicable to financial statements prepared in accordance 
with 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 55 to 59. 
 
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 2012. 
 
The following new amendment to IAS24 was applied for the first time from 1 April 2011: 
 
 IAS 24 (amended) ‘Related party disclosures’ 
 
The Group has adopted all amendments published in ‘Improvements to IFRSs’ issued in May 2010. The 
adoption of the above amendment has not had any significant impact on the amounts reported in the Group 
financial statements but may impact the disclosure of future transactions and arrangements. 
 
The following new standards, amendments to standards and interpretations have been issued but are not 
effective for the year ended 31 March 2012. 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: 
 
 IAS 1 (Amended) ‘Financial statement presentation’ is effective from periods commencing on or after 1 
July 2012. 
 IFRS 7 (Amended) ‘Financial instruments: Disclosures’ and IAS 32 (Amended) Financial instruments: 
Presentation’ are effective from 1 January 2013 and 2014 respectively. 
 IFRS 9 ‘Financial Instruments’ is effective from periods commencing on or after 1 January 2015. 
 IFRS 10 ‘Consolidated financial statements’ is effective from periods commencing on or after 1 January 
2013. 
 IFRS 12 ‘Disclosures of interests in other entities’ is effective from periods commencing on or after 1 
January 2013. 
 IFRS 13 ‘Fair value measurement’ is effective from periods commencing on or after 1 January 2013. 
 IAS 27 (Amended) ‘Separate financial statements’ is effective from periods commencing on or after 1 
January 2013. 
 
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. 
 
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. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 26 
1. Accounting policies (continued) 
Going concern (continued) 
The Group made a loss for the year attributable to owners of the parent of £3,873,215 (2011: £1,984,206) 
and expects to make a further loss during the year ending 31 March 2013. At 31 March 2012 the Group had 
cash balances of £1,447,405 (2011: £7,551,505). 
 
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.  
 
The restructuring undertaken during the year ended 31 March 2012, as further set out in the Financial 
Review on pages 6 and 7, has resulted in an annualised reduction in cash burn of £1.15m. The Group is able 
to seek additional funds through future equity or debt financings, and is currently in negotiations with the 
Group’s bankers seeking to obtain an overdraft and asset finance facility. 
 
The Group has access to future equity or debt financings, overdraft and asset financing facilities as potential 
additional sources of funding. Based on the level of existing cash, projected income and expenditure, and 
excluding the potential additional 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, Provexis (IBD) Limited and SiS (Science in 
Sport) 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. The direct costs of acquisition are recognised immediately as an expense. 
 
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 net of sales rebates and excluding VAT and trade discounts. 
 
The accounting policies for the principal revenue streams of the Group are as follows: 
 
(i) Exclusivity arrangements and collaboration 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. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 27 
1. Accounting policies (continued) 
Revenue (continued) 
(iii) Sales are recorded net of value added tax when the significant risks and rewards of ownership have 
been transferred to the buyer in accordance with customer terms. This is normally when goods are 
dispatched to export customers and when the goods are delivered for UK customers. Sales rebates and 
discount reserves are established based on management’s best estimate of the amounts necessary to meet 
claims by the Group’s customers in respect of these rebates and discounts. The provision is made at the 
time of sale and released, if unutilised, after assessment that the likelihood of such a claim being made has 
become remote. 
 
Segment reporting 
The Group determines and presents operating segments based on the information that internally is provided 
to the Executive Committee of the Board of Directors, which is the Group’s ‘chief operating decision maker’ 
(“CODM”). 
An operating segment is a component of the Group that engages in business activities from which it may 
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of 
the Group’s other components. An operating segment’s operating results are reviewed regularly by the 
CODM to make decisions about resources to be allocated to the segment and assess its performance, and 
for which discrete financial information is available. 
 
Segment results that are reported to the Group Board include items directly attributable to a segment as well 
as those that can be allocated on a reasonable basis.  
 
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and 
equipment, and intangible assets. 
 
Exceptional items 
Exceptional items are those material items which, by virtue of their size or incidence, are presented 
separately in the Statement of Comprehensive Income to give a full understanding of the Group’s financial 
performance. Transactions which may give rise to exceptional items include the restructuring of business 
activities and acquisitions. Further details of exceptional items are set out on the face of the Statement of 
Comprehensive Income and in the related notes.  
 
Use of non-GAAP profit measure – underlying operating profit 
The Directors believe that the operating loss before amortisation and impairment of acquired intangibles, 
share based payments and exceptional items measure provides additional useful information for 
shareholders on underlying trends and performance. This measure is used for internal performance analysis. 
Underlying operating loss is not defined by IFRS and therefore may not be directly comparable with other 
companies’ adjusted profit measures. It is not intended to be a substitute for, or superior to IFRS 
measurements of profit. 
 
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. For the purposes of assessing impairment, assets are grouped into cash generating units (‘CGU’) 
being the lowest levels for which there are separately identifiable cash flows. The recoverable amount of a 
CGU is the higher of a CGU’s fair value less costs to sell and value in use. 
 
Impairment losses on goodwill are not reversed.   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 28 
1. Accounting policies (continued) 
Intangible assets (continued) 
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. 
 
Externally acquired intangible assets 
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a 
straight-line basis over their useful economic lives. 
 
Intangible assets are recognised on business combinations if they are separable from the acquired entity or 
give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using 
appropriate valuation techniques. 
 
In-process research and development programmes acquired in such combinations are recognised as an 
asset even if subsequent expenditure is written off because the criteria specified in the policy for research 
and development costs above are not met. 
 
The significant intangibles recognised by the Group, their useful economic lives and the methods used to 
determine the cost of intangibles acquired in a business combination are as follows: 
 
Intangible asset Useful economic life Valuation method 
Trademarks 9.5 Relief From Royalty Rate Method 
Patents / recipes / formulations 4.5 to 9.5 Relief From Royalty Rate Method 
Covenants not to compete 3.0 Comparative Business Valuation 
Customer relationships 9.5 Multi-Period Excess Earnings Method 
 
Non-current assets held for sale and disposal groups 
Non-current assets and disposal groups are classified as held for sale when: 
- they are available for immediate sale; 
- management is committed to a plan to sell; 
- it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; 
- an active programme to locate a buyer has been initiated; 
- the asset or disposal group is being marketed at a reasonable price in relation to its fair value; and 
- a sale is expected to complete within 12 months from the date of classification. 
 
Non-current assets and disposal groups classified as held for sale are measured at the lower of: 
- their carrying amount immediately prior to being classified as held for sale in accordance with the group's 
accounting policy; and 
- fair value less costs to sell. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 29 
1. Accounting policies (continued) 
Non-current assets held for sale and disposal groups (continued) 
Following their classification as held for sale, non-current assets (including those in a disposal group) are not 
depreciated. 
 
The results of operations disposed during the year are included in the consolidated statement of 
comprehensive income up to the date of disposal. 
 
A discontinued operation is a component of the Group's business that represents a separate major line of 
business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that 
has been disposed of, has been abandoned or that meets the criteria to be classified as held for sale. 
 
Discontinued operations are presented in the consolidated statement of comprehensive income as a single 
line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or 
loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal 
groups constituting discontinued operations. 
 
Plant and equipment 
Plant and machinery, fixtures, fittings and computer equipment and laboratory equipment are stated at cost 
less accumulated depreciation and any accumulated impairment losses. 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: 
 
 between 3 and 8 years for motor vehicles, plant and machinery, fixtures, fittings and computer 
equipment; and 
 5 years for laboratory equipment. 
 
Leasehold improvements are depreciated on a straight line basis over the unexpired portion of the lease. 
 
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. 
 
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. Impairment losses on goodwill are not reversed. 
 
The gain or loss arising on the disposal of an asset is determined as the difference between the disposal 
proceeds and the carrying amount of the asset and is recognised in the income statement. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 30 
1. Accounting policies (continued) 
Inventories 
Inventories are stated at the lower of cost and net realisable value. Cost is calculated as follows: 
Raw materials - cost of purchase on first in, first out basis. 
Work in progress and finished goods - cost of raw materials and labour, together with attributable overheads 
based on the normal level of activity. 
 
Net realisable value is based on estimated selling price less further costs to completion and disposal. A 
charge is made to the income statement for slow moving inventories. The charge is reviewed at each 
balance sheet date. 
 
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. 
 
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. 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 31 
1. Accounting policies (continued) 
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. 
 
Interest income 
Interest income is recognised on a time-proportion basis using the effective interest rate method. 
 
Warrants 
The Group has issued warrants to Darwin Strategic Limited as part of the Equity Financing Facility. 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 or 
are cancelled then the reserve is transferred to retained earnings.  
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 32 
1. Accounting policies (continued) 
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. The charge for share-based 
payments is determined based on the fair value of awards at the date of grant partly by use of the Black-
Scholes pricing model which require judgements to be made regarding expected volatility, dividend yield, risk 
free rates of return and expected option lives. The inputs used in these pricing models to calculate the fair 
values are set out in note 20. An element of the share-based payment charge also relies on certain 
assumptions over the future performance of the share price which may not be met or may be exceeded by 
the time the relevant awards vest. 
 
(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. Further detail on key assumptions, including growth rates, discount rates and the 
time period of these value in use calculations is given in note 12 on page 42. 
 
(iv) Fair value of identifiable net assets acquired 
Upon acquisition of a business, its identifiable assets and liabilities are assessed to determine their fair 
value. The values attributed to assets and liabilities as part of this process are, where appropriate, based on 
market values identified for equivalent assets, together with management’s experience and assessments 
including comparison to the carrying value of assets of a similar condition and age in the existing business. 
 
(v) Valuation of inventories 
Inventories are valued at the lower of cost and net realisable value. Cost comprises direct materials, labour 
and, where appropriate, overheads that have been incurred in bringing the inventory to its present location 
and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the 
estimated costs of completion and selling expenses. 
 
(vi) Useful economic lives of intangible and tangible assets 
In relation to the Group’s finite life intangible assets and property, plant and equipment, useful economic lives 
and residual values of assets have been established using historical experience and an assessment of the 
nature of the assets involved. Assets are assessed on an ongoing basis to determine whether circumstances 
exist that could lead to potential impairment of the carrying value of such assets. 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 33 
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 £1,541,839 (2011: 
£563,190) as disclosed in note 17 on page 46. 
 
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. 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 2012 34 
3. Segmental reporting 
The Group’s reporting segments are determined based on the Group’s internal reporting to the Chief 
Operating Decision Maker (CODM). The CODM has been determined to be the Executive Committee of the 
Board of Directors as it is primarily responsible for the allocation of resources to segments and the 
assessment of performance of the segments.  
 
The CODM uses underlying operating profit/(loss), as reviewed at monthly Executive Committee meetings, 
as the key measure of the segments’ results as it reflects the segments’ underlying trading performance for 
the financial period under evaluation.  
 
Underlying operating profit/(loss) is a consistent measure within the Group which measures the performance 
of each segment before goodwill and acquired intangible asset amortisation and impairment, share based 
payment charges, restructuring charges and acquisition costs arising from acquisitions. 
 
Segment assets include items directly attributable to a segment as well as those that can be allocated on a 
reasonable basis. 
 
The segment results, the reconciliation of the segment measures to the respective statutory items included in 
the Group Statement of Comprehensive Income and the segment assets and liabilities are as follows: 
 
 
 
All operations and assets are based in the UK. There were no intersegment sales or transfers for the period. 
 
Revenues from one customer total £406,884 (2011: £Nil). This major customer purchases goods from the 
SiS segment. 
 
The segments identified include the following: 
 Provexis, being the development and marketing of health based nutritional products; and 
 SiS, being the development and marketing of sports based nutritional products 
 
Comparatives have not been displayed since the Group had only one operating segment prior to the 
acquisition of SiS®. 
 
Year ended 31 March 2012 Provexis SiS Group 
 £ £ £ 
Revenue 5,779 3,472,083 3,477,862 
Underlying operating loss (1,954,680) (225,682) (2,180,362) 
Intangible asset amortisation and impairment charges (1,179,352) (211,286) (1,390,638) 
Costs of SiS acquisition expensed (153,163) - (153,163) 
Restructuring costs (205,746) (258,767) (464,513) 
SG&A costs - share-based payment charges (141,461) -  (141,461) 
Loss from operations (3,634,402) (695,735) (4,330,137) 
Net finance income 46,853  (742) 46,111 
Loss before taxation (3,587,549) (696,477) (4,284,026) 
    
Additions to non-current assets 85,175 7,249,144  7,334,319 
    
Reportable segment assets 4,503,878  8,911,052  13,414,930 
    
Reportable segment liabilities (355,755) (1,760,289) (2,116,044) 
External revenue by location of customers 2012 2011 
 £ £ 
UK 3,085,147 50,086 
Europe 338,634 - 
Rest of the World 54,081 - 
Revenue 3,477,862 50,086  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 35 
4. Loss from operations 
 Year ended 
31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
Loss from operations is stated after charging:   
   
Depreciation of plant and equipment 89,360 28,697 
Amortisation and impairment of intangible assets 1,390,638 - 
Research and development costs 761,457 1,250,915 
Foreign exchange losses 2,414 19 
Costs of acquisition 153,163 - 
Restructuring costs 464,513 - 
Loss on disposal of intangible assets 9,872 - 
Profit on disposal of property, plant and equipment (3,631) - 
Changes in inventories of finished goods and work in progress 42,239 - 
UKTI TR&DE R&D Grant income (3,000) - 
Operating lease costs - land and buildings 222,441 120,543 
Equity-settled share based payment expense 141,461 69,069 
Defined contribution pension expense 42,434 37,370 
 
Restructuring costs of £205,746 were incurred as part of the suspension of work on the Crohn’s disease trial 
and the cardiovascular inflammation project, and the closure of the Liverpool facility. 
 
Restructuring and rebranding costs of a further £258,767 have been incurred as part of the reorganisation 
and rebranding of the SiS® business since acquisition. 
 
 
The total fees of the Group’s auditor, BDO LLP, for services provided are analysed below: 
 
 Year ended 
31 March  
2012 
Year ended 
31 March 
2011 
 £ £ 
Audit services   
Parent company 28,000 14,000 
Subsidiaries 46,500 27,500 
Tax services – compliance   
Parent company 4,000 4,000 
Subsidiaries 12,500 10,600 
Other services   
Tax advisory services - 700 
Parent company - share option scheme advice 15,000 - 
Review of interim statement 7,000 5,000 
Corporate finance - due diligence 25,000 7,000 
   
Total fees 138,000 68,800 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 36 
5. 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  
2012 
Year ended 
31 March 
2011 
   
Sales staff 5 - 
Manufacturing staff 8 - 
Administrative staff 12 1 
Research and development staff 7 8 
Directors 4 6 
 36 15 
 
Their aggregate emoluments were: 
  Year ended 
 31 March  
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Wages and salaries 1,736,465 953,287 
Social security costs 191,772 102,944 
Other pension and insurance benefits costs 69,205 48,089 
Total cash settled emoluments 1,997,442 1,104,320 
Accrued holiday pay 42,498 13,429 
Share-based payment remuneration charge: equity settled 141,461 69,069 
Total emoluments 2,181,401 1,186,818 
 
6. Directors’ remuneration 
  Year ended 
 31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
Directors   
Aggregate emoluments 495,223 594,299 
Compensation for loss of office 91,250 -  
Company pension contributions 22,309 20,695 
 608,782 614,994 
Share based payment remuneration charge: equity settled 102,212 39,847 
Total Directors’ emoluments 710,994 654,841 
 
Emoluments disclosed above include the following amounts in respect of the highest paid Director: 
 
  Year ended 
 31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Aggregate emoluments 188,191 246,985 
Company pension contributions 9,362 8,832 
Share based payment remuneration charge: equity settled 69,504 15,857 
Total of the highest paid Director’s emoluments 267,057 271,674 
 
During the year, four Directors (2011: 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 2012 37 
7. Finance income 
  Year ended 
 31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Bank interest receivable 46,111 133,439 
 46,111 133,439 
 
8. Taxation 
 
 
 
Year ended 
31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
Current tax income   
United Kingdom corporation tax research and development credit 150,000 150,000 
Adjustment in respect of prior period   
United Kingdom corporation tax research and development credit - 71,218 
Total current tax income 150,000 221,218 
Deferred tax   
Origination and reversal of temporary differences 178,538 - 
Tax on loss for the year 328,538 221,218 
 
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 
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Loss before tax 4,284,026 2,341,883 
   
Loss before tax multiplied by the 
standard rate of corporation tax in the UK of 26% (2011: 28%) 
 
1,113,846 
 
655,727 
Effects of:   
Expenses not deductible for tax purposes (343,565) (12,435) 
Difference between depreciation and capital allowances 19,432 8,005 
Other short-term timing differences (37,930) (21,718) 
Unutilised tax losses and other deductions arising in the year (479,391) (508,496) 
Additional deduction for R&D expenditure 221,808 178,917 
Surrender of tax losses for R&D tax credit refund (150,000) (150,000) 
Adjustments in respect of prior years - 71,218 
Effect of rate change (15,662) - 
Total tax credit for the year 328,538 221,218 
 
At 31 March 2012 the Group UK tax losses to be carried forward are estimated to be £16,504,434 
(2011: £14,488,679). 
 
The 2010 Budget announced that the main rate of UK corporation tax was to be reduced from 28% to 24% 
between 2011 and 2014. Further reductions were announced in the 2011 and 2012 Budgets, so that the 
main rate of corporation tax was reduced to 26% from 1 April 2011, to 24% from 1 April 2012 and with more 
reductions planned to reduce the main rate to 22% by 1 April 2014. 
 
The rate change from 26% to 24% had been substantively enacted by the balance sheet date, so deferred 
tax is provided for at a rate of 24%. 
 
The other proposed changes had not been substantively enacted by the balance sheet date and it is not yet 
possible to quantify the full effect of the announced further 2% rate reduction, although this will further reduce 
the company’s future current tax charges and reduce the deferred tax assets accordingly.  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 38 
8. Taxation (continued) 
 
Income tax asset receivable within one year 31 March 
2012 
31 March 
2011 
 £ £ 
   
Corporation tax recoverable 300,000 271,220 
 300,000 271,220 
 
9. 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 94,071,648 share options in issue (2011: 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 
 2012  2011  
     
Loss for the year attributable to owners of the parent - £ 3,873,215 1,984,206 
   
Weighted average number of shares 1,398,837,335 1,150,836,614 
   
Basic and diluted loss per share – pence 0.28 0.17 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 39 
10. Acquisition 
As part of the Group’s strategy to grow through acquisition, on 24 June 2011 the Group acquired 100% of 
the share capital of SiS (Science in Sport) Limited, a company which manufactures and sells sports nutrition 
products. The principal reason for this acquisition is that it provides immediate revenue and cash flow to the 
Group and diversifies the Group’s business model from its existing longer-term technology development and 
licensing model. The Group believes it can use its management and technical capabilities to support growth 
in the SiS business in the areas of product development, scientific and regulatory expertise and expertise in 
the sports nutrition sector. 
 
The purchase has been accounted for under the acquisition method of accounting. 
 
The Group has identified the fair values of the assets acquired and liabilities assumed, including the separate 
identification of intangible assets in accordance with IFRS 3 ‘Business Combinations’. This formal process 
involves an assessment of the assets acquired and liabilities assumed with assistance provided by external 
valuation specialists where appropriate. The assessment period remains open up to a maximum of 12 
months from the relevant acquisition date. As at 31 March 2012, the assessment was not complete and 
accordingly the fair values presented are provisional. 
 
Adjustments are made to the assets acquired and liabilities assumed during the assessment period to the 
extent that further information and knowledge come to light that more accurately reflect conditions at the 
acquisition date. 
 
The consideration paid or payable in respect of the acquisition comprises the amount paid on completion and 
an amount held in escrow which is contingent on certain warranties and indemnities being satisfied and has 
been allocated against the identified net assets, with the balance recorded as goodwill. Transaction costs 
and expenses such as professional fees are charged to the Statement of Comprehensive Income. 
 
Goodwill arose on the acquisition of SiS® because the cost of the combination included amounts in relation 
to the benefit of expected synergies, revenue growth, future market development and the assembled 
workforce of SiS®. These benefits are not recognised separately from goodwill because they do not meet 
the recognition criteria for identifiable intangible assets. A summary of the effect of the acquisition is detailed 
below: 
 
 
Book value 
at 
acquisition  
Provisional 
fair value 
adjustments  
Fair value 
 
 £ £ £ 
Website costs capitalised 16,201 - 16,201 
Trademarks - 1,004,029 1,004,029 
Patents / recipes / formulations - 180,886 180,886 
Covenants not to compete - 22,480 22,480 
Customer relationships - 1,228,696 1,228,696 
Property, plant and equipment 140,155 - 140,155 
Inventories 711,010 (33,000) 678,010 
Trade and other receivables 809,444 - 809,444 
Net cash 213,964 - 213,964 
Trade and other payables (658,223) - (658,223) 
Tax and deferred tax (67,267) (584,662) (651,929) 
 1,165,284 1,818,429 2,983,713 
Goodwill   4,376,888 
Consideration   7,360,601 
Satisfied by:    
cash consideration 6,750,000 - 6,750,000 
non-cash consideration (issue of shares) 1,000,000 (639,399)* 360,601 
cash consideration held in escrow 250,000 - 250,000 
 8,000,000 (639,399) 7,360,601 
Net cash acquired   (213,964) 
Transaction costs and expenses   153,163 
Total expected net cost of acquisition   7,299,800  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 40 
10. Acquisition (continued) 
 
   
Fair value 
£ 
The net cash outflow in the period in respect of 
acquisitions comprised: 
   
Cash consideration   6,750,000 
Net cash acquired   (213,964) 
Consideration held in escrow   250,000 
Net cash outflow in respect of acquisitions   6,786,036 
Acquisition related costs recognised as an expense   153,163 
Total cash outflow in respect of acquisitions   6,939,199 
 
*In accordance with IFRS 3 Business Combinations (revised 2008) the fair value adjustment to consideration 
paid in shares is based on the difference between the share price at the date on which the Company 
obtained control of SiS and the price determined in the Sale and Purchase Agreement for calculating the 
number of shares to be issued to the vendors. 
 
The acquisition made during the year to 31 March 2012 contributed £3.5m to the Group’s revenue and a 
£0.7m operating loss to the Group’s loss from operations. 
 
The estimated contribution of Science in Sport to the results of the Group, as if the acquisition had been 
made at the beginning of the year, is as follows: 
 
   £ 
Revenue   4,977,156 
Underlying operating loss before amortisation, 
exceptional restructuring and acquisition related costs 
  43,014 
Loss from operations   576,442  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 41 
11. Intangible assets 
 
 Goodwill Development 
costs 
Trademarks Patents / 
recipes / 
formulations 
Covenants 
not to 
compete 
Customer 
relationships 
Website 
development 
costs 
Total 
 
 £ £ £     £ 
Cost         
At 1 April 2011 7,265,277 75,892 - - - - - 7,341,169 
Acquisitions 4,376,888 - 1,004,029  180,886  22,480  1,228,696  16,201 6,829,180 
Additions - 56,729 - - - - 5,627 62,356 
Disposals - - - - - - (12,314) (12,314) 
At 31 March 2012 11,642,165 132,621 1,004,029  180,886  22,480  1,228,696  9,514 14,220,391 
         
Amortisation and 
impairment 
        
At 1 April 2011 3,462,592 - - - - - - 3,462,592 
Charge for year 1,140,806 38,546 81,027  20,696  5,745  99,158  4,660 1,390,638 
Disposals - - - - - - (2,442) (2,442) 
At 31 March 2012 4,603,398 38,546 81,027  20,696  5,745  99,158  2,218 4,850,788 
         
Net book value         
At 31 March 2012 7,038,767 94,075 923,002  160,190  16,735  1,129,538  7,296 9,369,603 
At 31 March 2011 3,802,685 75,892 - - - - - 3,878,577 
         
         
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 
 
 
Development costs represent costs incurred in registering patents that meet the capitalisation criteria set out 
in IAS 38, see also note 1. 
 
Further detail on the components of acquisition intangibles is provided in Note 10 on page 39. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 42 
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. The carrying amount of 
goodwill is allocated to the cash generating units (CGUs) as follows: 
 
 Goodwill carrying amount 
 2012 2011 
 £ £ 
Provexis 2,661,879 3,802,685 
SiS 4,376,888 - 
 7,038,767 3,802,685 
 
During the year the Group took the decision to halt the Crohn’s disease trial and suspend other activity 
related to the NSP#3G technology. The Group has fully impaired the goodwill relating to the Crohn’s disease 
CGU, given the uncertainty regarding the future cash flows of the CGU, resulting in a non-cash goodwill 
impairment charge for the year of £1,140,806 within the Provexis CGU. 
 
The Directors have concluded that no other indication of impairment to goodwill exists because the results of 
SiS® have been in line with budget since acquisition, and the Alliance partners have made good progress 
with Fruitflow®. 
 
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 major assumptions used in value in use calculations are as follows: 
 
2012 Provexis SiS 
 % % 
Pre-tax discount rate 15.8 13 
Growth rate* 2 10 
Growth rate in perpetuity 0 3 
 
* The growth rate for cash flows from operating activities applies only to the period beyond the formal 
budgeted period with the value in use calculation based on an extrapolation of the budgeted cash flows for 
year seven for Provexis and year three for SiS. 
 
The key assumptions for the value in use calculations are those regarding discount rates and growth rates. 
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. Growth rates are based on 
information received from commercial partners and market intelligence reports on expectations of future 
changes in the market. The growth rate used in Provexis is below the long-term growth rate for the 
Nutraceuticals industry. The growth rate used in SiS is higher than the long-term growth rate for the sports 
nutrition market because the Directors believe they can gain market share. 
 
The Directors believe that it is appropriate to use internally approved forecasts for a period of more than the 
5 years recommended by IFRS as they consider this will give a more accurate estimate of the likely growth 
patterns in the early stages of the product’s life and better reflect the growth of the sports nutrition market 
than the application of a single growth rate. 
 
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. 
 
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 2012 43 
12. Goodwill and impairment (continued) 
The results of the value in use calculations for the CGUs are as follows: 
 
 Provexis exceeds its carrying amount by £971,516 (2011: £5,796,075) 
 SiS exceeds its carrying amount by £442,581 (2011: £Nil) 
 
If any one of the following changes were made to the above key assumptions, the carrying amount and 
recoverable amount would be equal: 
 
2012 Provexis SiS* 
 % % 
Pre-tax discount rate increase from 15.8% to 18.4% increase from 13.0% to 13.5% 
Growth rate Not sensitive reduction from 10.0% to 8.3% 
Growth rate in perpetuity Not sensitive reduction from 3% to 2.0% 
 
*The SiS business was acquired during the year and therefore the sensitivity of the key assumptions and 
headroom by which the value in use calculations exceeds the carrying amount of the CGU reflects the fact 
that there has been limited time to increase the value of the business beyond the acquisition price. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 44 
13. Plant and equipment 
 Leasehold 
improvements 
Fixtures, 
fittings, 
plant and 
equipment 
Laboratory 
equipment 
Motor 
vehicles 
Total 
 
 £ £ £ £ £ 
Cost      
At 1 April 2011 - 64,598 128,242 - 192,840 
Acquisitions - 127,120 - 13,035 140,155 
Additions 219,247 220,834 18,903 - 458,984 
Disposals - (2,157) - (1,508) (3,665) 
At 31 March 2012 219,247 410,395 147,145 11,527 788,314 
      
Depreciation      
At 1 April 2011 - 47,069 56,002 - 103,071 
Charge for the year 10,706 44,669 28,268 5,717 89,360 
Disposals - (1,039) - (1,508) (2,547) 
At 31 March 2012 10,706 90,699 84,270 4,209 189,884 
      
Net book value      
At 31 March 2012 208,541 319,696 62,875 7,318 598,430 
At 31 March 2011 - 17,529 72,240 - 89,769 
 
 
 Leasehold 
improvements 
Fixtures, 
fittings, 
plant and 
equipment 
Laboratory 
equipment 
Motor 
vehicles 
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 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 45 
14. Inventories 
 
31 March 
2012 
31 March 
2011 
 £ £ 
   
Raw materials 351,744 - 
Finished goods 284,027 - 
 635,771 - 
 
There is £61,103 included within inventories in relation to assets held at fair value less costs to sell acquired 
with SiS. During the year inventories of £1,252,233 were recognised as an expense within cost of sales. 
 
15. Trade and other receivables 
 
31 March 
2012 
31 March 
2011 
 £ £ 
   
Amounts receivable within one year:   
Trade receivables 600,649 48,708 
Less: provision for impairment of trade receivables (32,101) - 
Trade receivables - net 568,548 48,708 
Other receivables 178,571 39,862 
Total financial assets other than cash and cash equivalents classified 
as loans and receivables 
747,119 88,570 
Prepayments and accrued income 187,654 164,679 
Total trade and other receivables 934,773 253,249 
 
Trade receivables represent debts due for the sale of goods to customers. The provision for impairment of 
receivables is estimated by the Group’s management based on prior experience. 
 
The balance at 31 March 2012 of £934,773 is £682,524 greater than the prior year due predominantly to the 
incorporation of SiS net trade receivables of £568,548. 
 
Trade receivables are denominated in Sterling. The Directors consider that the carrying amount of these 
receivables approximates to their fair value. Trade and other receivables are categorised as loans and 
receivables under IAS 39. 
 
All amounts shown under receivables fall due for payment within one year. 
 
At 31 March 2012, £476,551 (March 2011: £Nil) of trade receivables had been sold to a provider of invoice 
discounting and debt factoring services. The Group is committed to underwrite any of the debts transferred 
and therefore continues to recognise the debts sold within trade receivables until the debtors repay or 
default.  
 
The Group does not hold any collateral as security. 
 
As at 31 March 2012 trade receivables of £154,902 (2011: £48,708) were past due but not impaired. They 
relate to customers with no default history. The ageing analysis of these receivables is as follows: 
 
 
31 March 
2012 
31 March 
2011 
 £ £ 
   
Up to 3 months 154,902 48,708 
 154,902 48,708 
 
As at 31 March 2012 trade receivables of £32,101 (2011: £Nil) were past due and impaired. The amount of 
the provision as at 31 March was £32,101 (2011: £Nil). 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 46 
15. Trade and other receivables (continued) 
Movements on the group provision for impairment of trade receivables are as follows 
 
 
31 March 
2012 
31 March 
2011 
 £ £ 
   
At beginning of the year - - 
Provided during the year 32,101 - 
Receivable written off during the year as uncollectible - - 
Unused amounts reversed - - 
 32,101 - 
 
The movement on the provision for impaired receivables has been included in administrative expenses in the 
consolidated statement of comprehensive income. 
 
Other classes of financial assets included within trade and other receivables do not contain impaired assets. 
 
16. Cash and cash equivalents 
 
31 March  
2012 
31 March 
2011 
 £ £ 
   
Cash at bank and in hand 1,447,405 7,551,505 
 1,447,405 7,551,505 
 
17. Trade and other payables 
 
31 March 
2012 
31 March 
2011 
 £ £ 
   
Trade payables 894,535 91,529 
Other payables 43,341 - 
Accruals 513,377 409,285 
Total financial liabilities measured at amortised cost 1,451,253  500,814  
Other taxes and social security 90,586 62,376 
Total trade and other payables 1,541,839 563,190 
 
The Directors consider that the carrying amount of these liabilities approximates to their fair value. 
 
All amounts shown fall due within one year. 
 
18. Deferred tax 
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 24% 
(2011: 26%). 
 
Details of the deferred tax asset and liability, amounts recognised in profit or loss and amounts recognised in 
other comprehensive income are as follows: 
 
  
 
 
Asset 
2012 
 
 
 
Liability 
2012 
 
 
 
Net 
2012 
(Charged) / 
credited to 
profit or 
loss 
2012 
 
(Charged) / 
credited to 
equity 
2012 
 £ £ £ £ £ 
      
Business combinations - (535,072) (535,072) 49,590 - 
Available losses 128,948 - 128,948 128,948 - 
Net tax assets / (liabilities) 128,948 (535,072) (406,124) 178,538 - 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 47 
18. Deferred tax (continued) 
A deferred tax asset of £128,948 (2011:£Nil) has been recognised in respect of tax losses in SiS and other 
temporary differences giving rise to deferred tax assets where the directors believe it is probable that these 
assets will be recovered. The Directors have made this assessment based on the evidence available from 
projected budgets, forecasts of profitability and post year end profitability of the entity. 
 
Deferred tax assets amounting to £4,199,712 (2011: £4,093,379) have not been recognised on the basis that 
their future economic benefit is not certain. Assuming a prevailing tax rate of 24% (2011: 26%) when the 
timing differences reverse, the unrecognised deferred tax asset comprises: 
 
  Year ended 
 31 March 
2012 
Year ended 
31 March 
2011 
 £ £ 
   
Depreciation in excess of capital allowances 38,846 4,324 
Other short term timing differences 7,314 6,773 
Unutilised tax losses 3,832,116 3,767,057 
Share-based payments 321,436 315,225 
 4,199,712 4,093,379 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 48 
19. Share capital 
On 8 November 2011 the Company announced that it had signed a new 3 year Equity Financing Facility 
(“EFF”) of up to £25m with Darwin Strategic Limited (“Darwin”). The new facility replaced the Company's 
existing EFF and warrant agreements with Darwin, dated 30 March 2010, which have accordingly been 
cancelled. 
 
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 6 November 2014. 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 
Darwin. Following delivery of a subscription notice, Darwin will subscribe and Provexis will allot to Darwin 
new ordinary shares of 0.1p each (“Ordinary Shares”). 
 
The subscription price for any Ordinary Shares to be subscribed by Darwin 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 Darwin agreeing to provide the EFF the Company has entered into a new warrant 
agreement dated 7 November 2011 for the grant to Darwin of warrants to subscribe for up to ten million 
Ordinary Shares, such warrants to be exercisable at a price of 5 pence per share and to be exercisable at 
any time prior to the expiry of 36 months following the date of the new warrant agreement. The ten million 
warrants issued to Darwin in conjunction with the March 2010 EFF have been cancelled. 
 
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 
        
7-Nov-11 5.0 10,000,000 2.0 75% 3.00% 3 0.6 
 
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, £60,000, 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. 
 
Darwin 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 Darwin 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 two and a half million pounds (subject to certain 
exceptions), or if the EFF is terminated by Darwin in certain circumstances, then the Company will be 
required to pay a fee to Darwin amounting to a maximum of £125,000 in cash or by an issue of fully paid 
Ordinary Shares at the company’s discretion (such fee reducing pro rata with reference to the aggregate 
price paid for the Ordinary Shares allotted under the EFF at the date the fee becomes payable). 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 49 
19. 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 2011 1,196,516,929 401,724,366 1,598,241,295 
Issued on exercise of share options 3,000,000 - 3,000,000 
Issued on acquisition 35,335,689 - 35,335,689 
Issued on placing 166,666,662 - 166,666,662 
Issued on open offer 68,312,935 - 68,312,935 
At 31 March 2012 1,469,832,215 401,724,366 1,871,556,581 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2011 1,196,517 3,615,519 4,812,036 
Issued on exercise of share options 3,000 - 3,000 
Issued on acquisition 35,336 - 35,336 
Issued on placing 166,667 - 166,667 
Issued on open offer 68,313 - 68,313 
At 31 March 2012 1,469,833 3,615,519 5,085,352 
 
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 3,615,519 4,812,036 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 50 
19. Share capital (continued) 
During the year ended 31 March 2012 the Company issued ordinary shares of 0.1p each as follows: 
 
Date Reason for issue Shares issued 
  £ Number 
24.06.11 Acquisition 35,336 35,335,689 
24.06.11 Placing 166,667 166,666,662 
27.07.11 Open offer 68,313 68,312,935 
13.12.11 Exercise of share options 3,000 3,000,000 
  273,316 273,315,286 
 
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 
 
20. 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 vested on 1 April 2011. 
 
On 17 June 2011 the Company announced that the Company's Remuneration Committee had approved the 
grant of options over 51,300,000 ordinary shares of 0.1p each to certain Directors and employees of the 
Company. Subsequently 16,700,000 of these options were cancelled. 
 
On 4 July 2011 the Company announced that the Company's Remuneration Committee had approved the 
grant of options over 10,000,000 ordinary shares of 0.1p each to certain Directors and employees of the 
Company. Subsequently these options were cancelled. 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 51 
20. Share options (continued) 
At 31 March 2012 the number of ordinary shares subject to options granted over the 2005 and prior option 
schemes were: 
 
EMI options 
 31 March 2012 31 March 2011 
 
Weighted 
average 
exercise 
price 
(pence) 
Weighted 
average 
share price 
at date of 
exercise 
(pence) 
Number Weighted 
average 
exercise 
price 
(pence) 
Number 
      
Outstanding at the beginning of the year 1.07 - 51,552,031 1.07 51,552,031 
Granted during the year 2.80 - 27,949,990 - - 
Exercised during the year 0.90 1.78 (3,000,000) - - 
Cancelled during the year 2.80 - (16,700,000) - - 
Outstanding at the end of the year 1.42 - 59,802,021 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 
(2011: 0.9p and 6.28p) and their weighted average contractual life was 6.9 years (2011: 7.3 years). 
 
Of the total number of EMI options outstanding at the end of the year, 37,385,456 (2011: 23,709,976) had 
vested and were exercisable at the end of the year. Their weighted average exercise price was 1.16 pence 
(2011: 1.27 pence). 
 
Unapproved options 
 31 March 2012 31 March 2011 
 
Weighted 
average 
exercise price 
(pence) 
Number Weighted 
average 
exercise 
price 
(pence) 
Number 
     
Outstanding at the beginning of the year 1.18 10,919,617 1.18 10,919,617 
Granted during the year 2.80 23,350,010 - - 
Exercised during the year - - - - 
Cancelled during the year - - - - 
Outstanding at the end of the year 2.28 34,269,627 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 
(2011: 0.9p and 6.28p) and their weighted average contractual life was 8 years (2011: 7.3 years). 
 
Of the total number of unapproved options outstanding at the end of the year, 10,919,617 (2011: 3,595,097) 
had vested and were exercisable at the end of the year. Their weighted average exercise price was 1.18 
pence (2011: 1.7 pence). 
 
   Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2012 52 
20. 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 
5 17-Jun-11 2.8 51,300,000 2.00 88% 4.48% 10 1.17 
 
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 £141,461 
(2011: £69,069) 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 19 to 
the consolidated financial statements on page 49. 
 
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 2012 53 
21. Reserves 
 Share 
premium 
reserve 
Warrant 
reserve 
Merger 
reserve 
Retained 
earnings  
Total 
attributable 
to equity 
holders of 
the parent 
Non-
controlling 
interest 
Total reserves 
 £ £ £ £ £ £ £ 
        
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 
Loss for the year - - - (3,873,215) (3,873,215) (82,273) (3,955,488) 
Share-based charges - - - 141,461 141,461 - 141,461 
Issue of shares - acquisition - - 325,265 - 325,265 - 325,265 
Issue of shares - placing 2,333,333 - - - 2,333,333 - 2,333,333 
Issue costs - placing (199,380) - - - (199,380) - (199,380) 
Issue of shares - open offer 956,381 - - - 956,381 - 956,381 
Issue costs - open offer (37,539) - - - (37,539)  (37,539) 
Issue of shares - exercise of 
share options 
24,000 - - - 24,000 - 24,000 
Warrants cancelled during 
the year - equity financing 
facility 
12,387 (115,980) - - (103,593) - (103,593) 
Warrants issued during the 
year - equity financing 
facility 
- 60,000 - - 60,000 - 60,000 
At 31 March 2012 19,998,832 60,000 6,599,174 (20,225,740) 6,432,266 (218,732) 6,213,534 
 
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 19). 
These warrants were cancelled and new warrants were issued to Darwin Strategic 
Limited on the renewal of the Equity Financing Facility in November 2011. 
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 and on the issue of shares for the acquisition of SiS (Science in 
Sport) Limited in 2011. 
Retained earnings Cumulative net gains and losses recognised in the consolidated statement of 
comprehensive income. 
 
22. Pension costs 
The pension charge represents contributions payable by the Group to independently administered funds 
which during the year ended 31 March 2012 amounted to £42,434 (2011: £37,370). Pension contributions 
payable but not yet paid at 31 March 2012 totalled £30,474, in respect of pension contribution entitlements 
where employees had not yet provided details of the funds to which the contributions should be made (2011: 
£26,051). 
 
23. Operating lease commitments 
Future minimum rentals payable under non-cancellable operating leases are as follows: 
 
 
31 March 
2012 
31 March 
2011 
 £ £ 
Due within 1 year 146,456 90,500 
Due between 1 year and 2 years 152,500 - 
Due between 2 years and 5 years 372,500 - 
 671,456 - 
 
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 2012 54 
24. Related party transactions 
On 1 June 2010 the Company announced a long-term Alliance Agreement with DSM Nutritional Products, 
which has seen 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 of the project. 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 Cenkos Securities Limited ("Cenkos Securities"), the Company's 
nominated adviser, consider that the terms of the Alliance Agreement are fair and reasonable insofar as 
Provexis's shareholders are concerned. In providing advice to the Directors, Cenkos Securities has taken 
into account the Directors' commercial assessments. 
 
Key management compensation 
The Directors represent the key management personnel. Details of their compensation and share options are 
given in note 6 and within the Remuneration report on pages 14 to 18.  Parent company balance sheet 
 
Provexis plc Annual report and accounts 2012 55 
 
Company number 05102907 
 
As at  As at 
31 March  31 March  
2012  2011  
  Notes £ £ 
    
Fixed assets 
   
Investments 3 8,151,922  1,117,336  
    
Current assets 
   
Debtors - due within one year 4 60,000  103,593  
Debtors - due after one year 4 5,206,256  10,143,754  
Total debtors 
 
5,266,256  10,247,347  
Cash and cash equivalents 5 1,151,476  7,508,925  
Total current assets and net current assets 
 
6,417,732  17,756,272  
  
  
  
Total assets 
 
14,569,654  18,873,608  
  
 
    
Creditors: amounts falling due after more than 
one year 
6 (239,896) (2,900,418) 
  
 
    
Net assets 
 
14,329,758 15,973,190  
    
    
Capital and reserves 
   
Share capital 8 5,085,352  4,812,036  
Share premium reserve 9 19,998,832  16,909,650  
Warrant reserve 9 60,000  115,980  
Retained earnings 9 (10,814,426) (5,864,476) 
Equity shareholders’ funds 10 14,329,758  15,973,190  
 
These financial statements were approved and authorised for issue by the Board on 31 July 2012. 
The notes on pages 56 to 59 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 2012 56 
1. Accounting policies 
The parent company financial statements have been prepared under the historical cost convention and in 
accordance with applicable United Kingdom Accounting Standards. 
 
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 59. 
 
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 Darwin Strategic Limited as part of the Equity Financing Facility. 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 
£5,091,411 (2011: £64,065) 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 4 to the consolidated financial 
statements on page 35. Total fees for the year were £138,000 (2011: £68,800). 
 
The parent company did not have any employees in the year and therefore there were no payroll costs or 
pension costs (2011: Nil). 
 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2012 57 
3. Investments 
 
31 March 
2012 
31 March  
2011 
 £ £ 
   
Cost 8,418,255 1,382,919 
Provision for impairment (266,333) (265,583) 
Net book value 8,151,922  1,117,336 
 
 
At 31 March 2012 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 
SiS (Science in Sport) Limited 100% England and Wales Sports nutrition 
 
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 
2012 
31 March 
2011 
 
£ £ 
   
Debtors falling due within one year 
  
Prepayments 60,000  103,593  
Total debtors falling due within one year 60,000  103,593  
   
Debtors falling due after one year 
  
Amounts owed by subsidiaries 5,206,256  10,143,754  
Total debtors falling due after one year 5,206,256  10,143,754  
   
Total debtors 5,266,256  10,247,347  
 
 
5. Cash and cash equivalents 
 
31 March 
2012 
 31 March 
2011 
 £ £ 
   
Cash at bank and in hand 1,151,476 7,508,925 
 1,151,476 7,508,925 
 
 
   Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2012 58 
6. Creditors: amounts falling due after one year 
 
31 March 
2012 
 31 March 
2011 
 £ £ 
   
Creditors falling due after one year   
Amounts owed to subsidiaries (239,896) 2,900,418 
Total creditors falling due after one year (239,896) 2,900,418 
 
7. Deferred tax 
Deferred tax assets amounting to £257,959 (2011: £227,205) 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 2011 1,196,516,929 401,724,366 1,598,241,295 
Issued on exercise of share options 3,000,000 - 3,000,000 
Issued on acquisition 35,335,689 - 35,335,689 
Issued on placing 166,666,662 - 166,666,662 
Issued on open offer 68,312,935 - 68,312,935 
At 31 March 2012 1,469,832,215 401,724,366 1,871,556,581 
 
 Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ 
    
At 31 March 2011 1,196,517 3,615,519 4,812,036 
Issued on exercise of share options 3,000 - 3,000 
Issued on acquisition 35,336 - 35,336 
Issued on placing 166,667 - 166,667 
Issued on open offer 68,313 - 68,313 
At 31 March 2012 1,469,833 3,615,519 5,085,352 
 
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 3,615,519 4,812,036 
 
Details of the share subscriptions, share placings, and the shares issued by the Company during the two 
years ended 31 March 2012 are given in note 19 to the consolidated financial statements on pages 48 to 50. 
 
Details on the share option scheme and share based payment charge for the year are given in note 20 to the 
consolidated financial statements on page 50. 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2012 59 
9. Reserves 
 Share 
premium 
reserve 
Warrant 
reserve 
Retained 
earnings 
 £ £ £ 
    
At 1 April 2011 16,909,650 115,980 (5,864,476) 
Retained loss for the year - - (5,091,411)  
Share-based charges - - 141,461 
Issue of shares - placing 2,133,953 - - 
Issue of shares - open offer 918,842 - - 
Issue of shares - exercise of share options 24,000 - - 
Warrants cancelled on renewal of EFF 8 November 2011 12,387 (115,980) - 
Warrants issued on renewal of EFF 8 November 2011 - 60,000 - 
At 31 March 2012 19,998,832 60,000 (10,814,426)   
 
10. Shareholders’ funds 
Reconciliation of movement in shareholders’ funds. 
 31 March  
2012 
31 March  
2011 
 £ £ 
   
Loss for year (5,091,411) (64,065) 
Share-based payment charge (note 20 - page 52) 141,461 69,070 
Shares issued during the year 273,316 88,435 
Premium on shares issued 3,076,795 2,394,759 
Reduction of premium on share issue - (12,386) 
Warrants cancelled on renewal of EFF 8 November 2011 (103,593) - 
Warrants issued on renewal of EFF 8 November 2011 60,000 - 
Net (decrease) / increase in shareholders’ funds (1,643,432) 2,475,813 
Opening shareholders’ funds 15,973,190 13,497,377 
Closing shareholders’ funds 14,329,758 15,973,190 
 
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. 
 
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, SiS (Science in Sport) Limited and Provexis Natural 
Products Limited. Provexis Nutrition Limited, Provexis Natural Products Limited, SiS (Science in Sport) 
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 2012 (2011: Nil). At 
31 March 2012 the Company was owed £5,509 by Provexis (IBD) Limited (31 March 2011: 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 £329,091 (2011: £545,838). Provexis 
(IBD) Limited owed Provexis group companies and Provexis Nutrition limited a total of £1,755,684 at 31 
March 2012 (31 March 2011: owed £1,426,593). Provisions of £1,755,684 (2011: £Nil) have been 
recognised in the accounts of Provexis group companies and Provexis Nutrition Limited. 
 
Details of a related party transaction with DSM are given in note 24 to the consolidated financial statements 
on page 54. 
 
  Company information 
 
 
Provexis plc Annual report and accounts 2012 60 
 
Company number   05102907 
 
 
Directors    C D Buck 
     J M Clarke 
     K Rietveld 
     S N Moon 
     I Ford 
 
 
Audit committee   C D Buck 
J M Clarke 
 
 
Remuneration committee  C D Buck 
J M Clarke 
K Rietveld 
 
 
Registrars    Equiniti Limited 
Aspect House 
Spencer Road 
Lancing 
West Sussex BN99 6DA 
 
 
Secretary and registered office I Ford 
Kings Road House 
2 Kings Road 
Windsor 
Berkshire SL4 2AG 
 
 
Nominated adviser and broker  Cenkos Securities plc 
6.7.8 Tokenhouse Yard 
London EC2R 7AS 
 
 
Principal solicitors   Shoosmiths 
Apex Plaza 
Forbury Road 
Reading 
Berkshire RG1 1SH 
 
 
Auditors    BDO LLP 
Kings Wharf 
20–30 Kings Road 
Reading 
Berkshire RG1 3EX