Provexis plc 
 
Annual report and accounts 2009 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Contents 
 
 
 
 
 
 
 
 
 
3 Corporate statement 
4 Key highlights 
5 Chairman’s statement 
6 Chief Executive’s statement 
8 Directors’ report – financial review 
10 Directors’ report – business overview 
16 Directors’ report – remuneration report 
20 Independent auditors’ report 
22 Consolidated income statement 
23 Consolidated balance sheet 
24 Consolidated cash flow statement 
25 Consolidated statement of changes in equity 
26 Notes to the consolidated financial statements 
50 Parent company balance sheet 
51 Notes to the parent company financial statements 
56 Company information 
 
 
 
 
  Corporate statement 
 
 
Provexis plc Annual report and accounts 2009        3 
 
 
 
 
The Provexis strategy is the discovery, development and licensing of functional food, medical food and 
dietary supplement technologies, with five areas of focus: 
 
• Collaborating with leading research institutes to identify and develop proprietary technologies 
 
• Developing credible scientific proof to demonstrate efficacy and support product claims 
 
• Gaining regulatory and safety clearances in relevant global markets 
 
• Implementing global IP strategies, underpinned by strong patent portfolios 
 
• Commercialising technologies through collaboration and licensing with global brand owners and 
ingredients corporations. 
 
 
  Key highlights 
 
 
Provexis plc Annual report and accounts 2009        4 
 
 
 
 
August placing of £2.5m of new ordinary shares of 0.1p each at 0.65p per share and October placing of 
£0.2m of new ordinary shares of 0.1p each at 0.65p per share providing working capital and funding for 
new product pipeline development. 
 
DSM Venturing take strategic investment of 28.2% in the Company. 
 
Company in advanced license negotiations with a global ingredients manufacturer for the rights to use 
Fruitflow®. 
 
Commercial discussions for Fruitflow® continue with potential global license partners for the dairy 
sector, in addition to further assessment and development work with Coca-Cola. 
 
Fruitflow® gains first ever Article 13(5) adoption of scientific substantiation of health claim under 
European Food Safety Authority regulatory framework. 
 
Crohn’s Disease clinical trial approved by regulator, with two-centre trial to commence shortly. 
 
Assessment of new technology for treatment and prevention of peptic ulcers on track. 
 
Steve Morrison appointed Chief Operating Officer effective 1 October 2008 and Krijn Rietveld, DSM 
Senior Vice President, appointed as Non-executive Director on 29 August 2008. 
 
 
Key financial results 
Loss attributable to equity shareholders £4,570,506 (2008: £1,189,117). 
 
Loss includes a non-cash goodwill impairment charge of £3,099,328 (2008: £NIL) 
 
Cash balance £1,678,263 (2008: £532,581). 
 
Loss per share from continuing operations 0.71p (2008: 0.26p). 
 
Adjusted loss per share from continuing operations, net of goodwill impairment 0.23p (2008: 0.26p). 
 
  Chairman’s statement 
 
 
 
Provexis plc Annual report and accounts 2009        5 
The very difficult economic climate has presented all companies in the sector with some significant 
challenges and we are not immune to these. I am pleased to report that the Company raised £2.7m in 
aggregate of working capital in August and October 2008 and in addition attracted DSM Venturing as a 
major strategic investor. These are both positive endorsements of the quality of the business and also 
give us resilience to carry us through the downturn. 
 
These challenging conditions have resulted in some potential license partners for our Fruitflow® heart-
health technology reprioritising innovation projects. However, the management team has continued to 
explore all avenues for Fruitflow® revenue generation and I can report that the Company is at an 
advanced stage of negotiations for a license agreement with a leading global ingredients manufacturer. 
 
Furthermore, the Company continues to work with global brand owners in the beverage and dairy 
sectors on potential Fruitflow® commercial arrangements. The Board will continue to assess all 
strategic options to protect and maximise shareholder value in parallel with potential licensing activity. 
 
The R&D team is driving the Fruitflow® development programme forward and, importantly, the scientific 
substantiation for the health claim has recently been adopted by the European Food Safety Authority. 
 
We are now ready to start the clinical trial for our patented technology for the treatment of Crohn’s 
Disease patients in remission. The assessment and development of our peptic ulcer technology, under 
option from the University of Manchester, is on track. 
 
The R&D pipeline is promising and underpins our strategy to build medium to long-term shareholder 
value for our shareholders through addressing substantial market sectors with novel, scientifically-
proven technologies. 
 
The Board has been significantly strengthened through the addition of new COO Steve Morrison, a 
very experienced R&D project Director and Non-executive Director Krijn Rietveld, a Senior Vice 
President with DSM Nutrition. On behalf of the whole Board I would like to thank our staff and scientific 
advisers for their expertise, dedication and commitment throughout the year. 
 
 
Dawson Buck 
Chairman 
8 June 2009 
 
  Chief Executive’s statement 
 
 
 
Provexis plc Annual report and accounts 2009        6 
Strategy and structure 
We continue to execute our strategy of discovery, development and licensing functional food, medical food 
and dietary supplements, in the face of very difficult market conditions. We are at an advanced stage of 
negotiations for a license agreement for Fruitflow®, together with discussions with major brand owners with 
interests in substantial sectors. In parallel, we are working to examine all strategic value-realisation options 
for our technologies. With a further novel product now entering clinical trial, attention will be given to 
exploring its commercial potential with possible license partners. 
 
We have strengthened the team, with Steve Morrison joining us from Ipsen (and prior to that Shire 
Pharmaceuticals) and bringing a strong record as a global R&D project Director. The R&D team has been 
strengthened with the addition of two further scientists. Both of these steps underpin the strategy to deliver 
shareholder value via a healthy pipeline of proprietary technologies addressing substantial markets. 
 
We raised an aggregate of £2.7m of working capital in August and October 2008 giving us sufficient reserves 
to deliver the next phase of the Company’s development. Clearly, in the face of very difficult conditions 
across our sector, we are managing cash very carefully. As planned we have reduced overheads 2% year on 
year to £967,000 and while R&D spend has increased 21% to £651,000 in line with plan, we are currently 
managing the phasing of future investment very conservatively. The increased R&D investment was for 
developing new IP for Fruitflow®, advancing the Crohn’s Disease human trial programme and commencing 
the assessment of the peptic ulcer technology, these initiatives being key to developing shareholder value. 
 
There is a goodwill impairment charge of £3,099,328 in relation to the carrying value of the goodwill from the 
acquisition of Provexis Natural Products Limited in June 2005. This is a prudent step given the deterioration 
in the economic climate and resultant increased uncertainties. The charge has no effect on our cash position 
or our operations.  
 
Fruitflow® 
We are in advanced license negotiations with a leading global ingredients manufacturer with global reach 
and strategic relationships with a wide range of global brand owners, in addition to an extensive customer 
base of regional brand owners. These negotiations are focused on rights for all food, beverage and dietary 
supplement applications. 
 
In addition, we are in discussions with a major dairy brand owner and we continue to explore with Coca-Cola 
the development of a product for one of their major markets, with this work planned to continue over the 
coming months. A re-prioritisation of Unilever’s innovation pipeline, together with our own initiatives in mini-
drinks, has resulted in collaborative work being halted at present. 
 
The European Food Safety Authority has adopted the scientific substantiation of a health claim for Fruitflow® 
under Article 13(5) of the new EC regulation framework for nutrition and health claims. This is the first Article 
13(5) dossier to be approved by EFSA and as such represents a major breakthrough for the Company. 
 
We filed new patents relating to the bioactive composition of Fruitflow®, as well as novel manufacturing 
process elements, following extensive characterisation work by the R&D team. This important new patent 
family is aimed at further protecting and developing the value of our intellectual property. 
 
A human trial comparing the Fruitflow® technology with aspirin, a recognised anti-thrombotic product, is 
underway in Aberdeen. Aspirin has known deficiencies, such as resistance to its effect in a significant 
proportion of users and side effects including gastric bleeding. We believe that favourable results in the trial 
will provide potential commercial opportunities, given an estimated 50 million people in the USA use low-
dose aspirin daily. Results of the trial will be announced later in the year. 
 
In March 2009 our license partner Multiple Marketing Limited launched Sirco® in a range of Waitrose stores 
in the UK and we understand our partner is working to extend distribution into other major multiple and high 
street chains. The Company will receive a royalty from the sales of Sirco®. 
 
NSP#3G plantain extract 
Following a Clinical Trials Authorisation received from the Medicines & Healthcare products Regulatory 
Agency and completion of the necessary pre-trial processes, we will commence a two-centre trial on Crohn’s 
Disease patients in remission in the next few weeks. 
  Chief Executive’s statement continued 
 
 
 
Provexis plc Annual report and accounts 2009        7 
With the trial commencing and combined with recently obtained healthy human data, we will now increase 
activity in the commercial area, seeking to identify potential global license or co-development partners to 
address this substantial market opportunity.  
 
Helicobacter pylori 
Our option agreement with the University of Manchester and associated research work into a novel extract 
for the treatment of helicobacter pylori, a major cause of peptic ulcers, is proceeding well and will reach a 
critical decision point in the last quarter of this calendar year. 
 
The Company received a £100,000 grant from the North West Development Agency for this project and this 
directly funds a significant portion of the costs in the phase of development. 
 
Outlook 
Progress will continue to be difficult in this economic environment and we are managing cash and resources 
very carefully in recognition of this. We are focused on revenue development for our key Fruitflow® 
technology with positive negotiations and discussions in place with global players in the ingredients, food and 
beverage sectors. We will continue to explore actively all options for value creation and realisation for 
Fruitflow® and our pipeline technologies. 
 
We remain committed to creating medium and long-term shareholder value through the exploitation of our 
technology pipeline and will expedite development this year, while being mindful of the need to preserve 
resources. 
 
 
Stephen Moon 
Chief Executive 
8 June 2009 
 
  Directors’ report – financial review  
 
 
 
Provexis plc Annual report and accounts 2009        8 
International Financial Reporting Standards 
The Financial Review should be read in conjunction with the consolidated financial statements and the notes 
to the financial statements set out on pages 22 to 49. 
 
The Group financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRS) as adopted by the European Union and International Financial Reporting Interpretation 
Committee (IFRIC) interpretations as endorsed by the European Union, and those parts of the Companies 
Acts 1985 and 2006 as applicable to companies reporting under IFRS. 
 
The financial statements of the Company continue to be prepared in accordance with United Kingdom 
Generally Accepted Accounting Practice (“UK GAAP”) and are set out on pages 50 to 55. 
 
Revenue and grant income 
Revenue for the year ended 31 March 2009 was £5,400 (2008: £161,702), reflecting a decrease in amounts 
payable to the Group by its prospective licensing partners. 
 
Grant income for the year ended 31 March 2009 was £20,000, being the first part of a £100,000 grant which 
was awarded to the Group in January 2009 by The Northwest Regional Development Agency (NWDA). The 
grant is in respect of the Group’s new helicobacter pylori project with the University of Manchester, for a new 
technology for the treatment and prevention of peptic ulcers. 
 
Grant income for the year ended 31 March 2008 was £133,649, being the final part of a research grant for 
the Group’s Crohn’s Disease technology. The Crohn’s Disease grant was awarded to the Group in 
November 2005 by the NWDA. 
 
Research and development costs 
Research and development (“R&D”) costs for the year ended 31 March 2009 were £651,301 (2008: 
£537,840), including £16,690 capitalised under IAS 38 (2008: £20,597) reflecting an increase in R&D activity 
for the Fruitflow
®
 and Crohn’s Disease projects, and the commencement of R&D activity for the Group’s new 
peptic ulcer project. 
 
R&D expenditure comprises in-house costs (staff, R&D consumables, intellectual property, facilities and 
depreciation of R&D assets) and external costs (preclinical studies, manufacturing, regulatory affairs and 
clinical trials). 
 
The Group’s R&D team continues to research further claim areas for the Group’s core Fruitflow
® 
technology. 
A second phase patient trial for the Group’s Crohn’s Disease technology is due to commence shortly, 
following a Clinical Trials Authorisation received from the Medicines and Healthcare products Regulatory 
Agency. 
 
The Group aims to achieve cost effective research and development and to bring products to market through 
licensing partners as soon as is practicable. 
 
Administrative costs 
Administrative costs for the year relating to continuing operations were £967,111 (2008: £986,073), which 
includes a share-based payment charge of £112,630 (2008: £31,583). Net of the share-based payment 
charge administrative costs for the year were £854,481, a £100,009 reduction from the net £954,490 
incurred in 2008. 
 
The Group’s cost base and its resources have been and will continue to be tightly managed. 
 
Impairment of goodwill 
The Group has recorded a non-cash goodwill impairment charge of £3,099,328 (2008: £NIL) in relation to the 
carrying value of the goodwill which arose in June 2005 when the Company acquired the entire issued share 
capital of Provexis Natural Products Limited. 
 
Goodwill arising on business combinations is reviewed for impairment on an annual basis or more frequently 
if there are indications that goodwill may be impaired, and the recoverable amount of goodwill is determined 
based on value in use calculations. The Group’s activities are treated as a single cash-generating unit. 
  Directors’ report – financial review continued 
 
 
 
Provexis plc Annual report and accounts 2009        9 
Impairment of goodwill (continued) 
The key assumptions for the value in use calculations are those regarding discount rates, revenue 
commencement dates, growth rates and expected changes in margins. 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. Changes in selling prices and direct costs are based on past experience 
and expectations of future changes in the market. 
 
The impairment recorded in the year was driven by the deterioration in the economic climate, corresponding 
reductions in expected revenues and greater uncertainty about the future, resulting in changes in applicable 
discount rates. The discount rate used to calculate value in use was 23%, which compares to a discount rate 
of 15% used in 2008. The impairment has no impact on the Group’s cash position or its operations. 
 
Taxation 
A research and development tax credit of £50,000 (2008: £134,371) in respect of research and development 
expenditure incurred has been recognised in the financial statements and is shown as a debtor at 31 March 
2009. 
 
The £134,371 R&D tax credit disclosed for the year ended 31 March 2008 was in respect of the three years 
ended 31 March 2008. £80,720 of this amount was attributable to the two years ended 31 March 2007, and 
the R&D tax credit claims for these two years were paid to the Group during the year ended 31 March 2009. 
A £46,215 R&D tax credit claim for the year ended 31 March 2008 was paid to the Group in May 2009. 
 
Losses 
The loss from continuing operations for the year ended 31 March 2009 was £4,570,506 (2008: £1,017,287) 
and the loss per share from continuing operations was 0.71p (2008: 0.26p). The overall loss from continuing 
and discontinued operations for the year ended 31 March 2009 was £4,570,506 (2008: £1,162,684) and the 
loss per share from continuing and discontinued operations was 0.71p (2008: 0.30p). 
 
The adjusted overall loss from continuing and discontinued operations for the year ended 31 March 2009, 
net of the £3,099,328 non-cash goodwill impairment charge, was £1,471,178 and the adjusted loss per share 
from continuing and discontinued operations, net of goodwill impairment, was 0.23p (2008: 0.30p). 
 
Financial instruments 
Information about the use of financial instruments by the Group is disclosed in note 2. 
 
Capital structure and funding 
On 28 August 2008 the Company raised £2.514m gross from a new share placing to provide working capital 
and funding for pipeline development. The net proceeds of the placing were £2.270m after share issue costs. 
The placing involved the issue of 386,894,230 new shares at 0.65p per share and a share re-organisation to 
facilitate the issue of the new shares at the subscription price. 
 
The share re-organisation was carried out because the issue price of 0.65p was lower than the nominal 
value of 1p per share, and it was therefore agreed to sub-divide (i) each of the 401,724,366 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 (ii) each of the 148,275,634 unissued ordinary shares of 1p each into 10 new 
ordinary shares of 0.1p each, thus enabling the Company lawfully to implement the placing at the placing 
price. The aggregate nominal value of the Company’s authorised share capital was not affected by these 
changes. 
 
Full details of the placing 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. 
 
On 2 October 2008 the Company raised a further £200,000 gross from a further new share placing. The net 
proceeds of the placing were £194,000 after share issue costs. 
 
The Directors are of the opinion that at 8 June 2009, the Company's liquidity and capital resources are 
adequate to deliver the current strategic objectives and 2009/10 business plan and that the Company meets 
going concern criteria. See also note 1 to the consolidated financial statements on page 26. 
 
Cash at bank at 31 March 2009 was £1,678,263 (31 March 2008: £532,581). 
  Directors’ report – business overview  
 
 
 
Provexis plc Annual report and accounts 2009        10 
Principal activities 
Provexis plc is a life sciences-driven enterprise that discovers, develops and licenses scientifically-proven 
technologies for the global functional food, medical food and dietary supplement sectors. 
 
Provexis plc has two wholly owned subsidiaries, Provexis Nutrition Limited (“PNL”) and Provexis Natural 
Products Limited (“PNP”) each of which is registered in England. Provexis plc also owns 75% of 
Provexis (IBD) Limited (“IBD”) which is also registered in England. 
 
Group strategy 
The Provexis strategy is the discovery, development and licensing of functional food, medical food and 
dietary supplement technologies, with five areas of focus: 
 
• Collaborating with leading research institutes to identify and develop proprietary technologies 
 
• Developing credible scientific proof to demonstrate efficacy and support product claims 
 
• Gaining regulatory and safety clearances in relevant global markets 
 
• Implementing global IP strategies, underpinned by strong patent portfolios 
 
• Commercialising technologies through collaboration and licensing with global brand owners and 
ingredients corporations. 
 
Review of the performance of the business and future developments 
The Chairman’s Statement on page 5, the Chief Executive’s Statement on pages 6 and 7 and the Financial 
Review on pages 8 and 9 report on the Group’s performance during the year ended 31 March 2009, 
its position at that date and its likely future development. 
 
Key performance indicators 
The executive management and Directors utilise a balanced scorecard of key activities including R&D project 
progress, commercial milestones and regulatory activities to monitor and measure the performance of the 
business. These are measures of the progress of the business towards its strategic target of revenue 
generation and profitability, and are considered by the Board to be the key non-financial performance 
indicators used to determine achievement of Group strategy and are discussed in the Chief Executive’s 
statement. The balanced scorecard is reviewed regularly by the executive team and the Directors. 
 
The Directors consider Group cash and the absolute values of, and the ratio between, research and 
development costs and other administrative overhead costs as being the Group’s key financial performance 
indicators. The cost related indicators assist in monitoring financial control to reduce the hurdle to achieving 
the key future financial milestone of monthly break-even. The monitoring of cash gives due consideration to 
anticipated future spend required to prioritise development opportunities and to plan the resources required 
to achieve the goals of the business. 
 
The table below shows the Group’s cash position at 31 March 2009 and 31 March 2008: 
 
 
 
31 March  
2009 
31 March 
2008 
 £ £ 
   
Cash at bank and in hand 1,678,263 532,581 
 1,678,263 532,581 
 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2009        11 
Key performance indicators (continued) 
The table below shows the Group’s R&D ratio for the two years ended 31 March 2009. The R&D ratio is the 
percentage of research and development costs relative to total operating expenses. 
 
 
 
31 March 
2009 
31 March 
2008 
 £ £ 
   
Research and development costs 634,611 517,243 
Administrative costs before goodwill impairment 967,111 986,073 
Total operating costs before goodwill impairment 1,601,722 1,503,316 
R&D ratio 40% 34% 
 
Post balance sheet events 
On 28 May 2009 the Company announced the adoption of scientific substantiation of a health claim for the 
Company’s Fruitflow® anti-thrombotic technology by the European Food Safety Authority (“EFSA”). 
 
The European Commission has introduced regulation aimed at harmonizing and approving nutrition and 
health claims on foods. EFSA intends to establish an EU-wide list of permitted claims by 2010 and health 
claims which do not comply will be prohibited. The Company submitted a health claim dossier to EFSA in 
late 2008 under Article 13(5), which regulates newly developed science or claims with proprietary data. 
 
Following a review by the EFSA panel, it was judged that a cause and effect relationship has been 
established between consumption of Fruitflow® and the reduction of platelet aggregation in humans. EFSA 
has now adopted the scientific opinion substantiating the health claim, which is expected to go through the 
final authorization procedure in the coming weeks. 
 
See also note 24 to the consolidated financial statements on page 49. 
 
Principal risks and uncertainties 
The Directors consider that the key risks of the Group are as set out below: 
 
The Group’s success will depend in part on its ability to obtain and maintain rigorous patent protection for its 
technologies both in the UK and internationally. The Group cannot give definitive assurance that pending or 
future patent applications will be granted or that patents granted will not be challenged, invalidated or 
held unenforceable. 
 
The Group cannot assure that its intellectual property rights are sufficiently broad to prevent third parties 
from producing competing functional food, medical food and dietary supplement technologies similar in 
nature to its own. The Group also relies on protection of trade secrets, know-how and confidential and 
proprietary information. To mitigate this, the Group enters into non-disclosure agreements with employees, 
consultants and prospective commercial partners but cannot assure that such agreements will provide 
complete safeguards against unauthorised disclosure of confidential information. 
 
The Group’s commercial success will also depend in part on avoiding infringement of other third parties’ 
patents or proprietary rights and the breach of any licences in connection with the pursuit of its technologies. 
Management is of the opinion that it does not infringe third parties’ patents or other rights and is not aware of 
any such infringements but cannot assure that it will not be found in the future to infringe such rights. 
 
The Group has a limited pipeline of new technologies and new indications for technologies already in 
development. As a result of regulatory and competitive uncertainties and the unpredictability of successful 
outcomes to new research and development, the Group cannot provide assurance that it will be able to 
develop and license these new technologies. 
 
The Group currently employs ten people and has a very small management team. Should it lose any key 
management resources and be unable to attract replacements of equivalent calibre to continue 
implementation of its business plan, future development and commercial activities could be materially 
adversely affected. 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2009        12 
Principal risks and uncertainties (continued) 
The Group has limited liquidity and capital resources and significant delays to development projects could 
affect execution of its business plan in connection with the receipt of future royalties with a material adverse 
effect on the business. The Group also relies on potential license partners to meet certain commercial and 
development milestones and their failure to achieve this, or other delays or cancellation of projects due to 
internal or market factors affecting potential license partners could affect the execution of the Group’s 
business plan, with a material adverse effect on the business. In these circumstances the Group would look 
to raise additional potential funding through the issue of additional equity through rights issues, share placing 
and the exercise of share options but no assurance can be given regarding the successful outcome of such 
financing initiatives. 
 
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 2009 amounted to 28 days compared to 51 days at 
31 March 2008. 
 
Board of Directors 
The Board of Directors has overall responsibility for the Group. 
 
The Board comprises a Non-executive Chairman, three additional independent Non-executive Directors and 
three further Executive Directors. The Board continues to be satisfied that it has an appropriate mix of 
independence and experience in its Non-executive Directors. 
 
The roles of Chairman and Chief Executive are and will remain separate and it is not permissible for the 
same individual to be appointed to both roles simultaneously. 
 
The Chairman provides strategic and operational guidance and also oversees the duties performed by the 
Chief Executive and ensures that they are in line with Board expectations. The Chief Executive manages the 
day-to-day running and strategic direction of the Group in line with policy decisions agreed with the Board 
and shareholder expectations. 
 
The Board retains full control of the Group with day-to-day operational control delegated by the Board to the 
Executive Directors. The full Board meets every two months, and on any other occasions it considers 
necessary.  
 
The Board is responsible for approving interim and annual financial statements, formulating and monitoring 
Group strategy and approving financial plans and reviewing performance, as well as complying with legal, 
regulatory and corporate governance matters. There is a schedule of matters reserved for the Board. Board 
papers are circulated in advance of each Board meeting. 
 
The Directors of the Company during the year are shown below. 
 
Executive Directors 
S N Moon 
S N Morrison (appointed 1 October 2008) 
I Ford 
 
Non-executive Directors 
C D Buck 
N C Bain 
J B Diggines 
K Rietveld (appointed 29 August 2008) 
 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2009        13 
Audit Committee 
The Audit Committee comprises two Non-executive Directors, and is chaired by Neville Bain as Senior 
Independent Non-executive Director. It meets as required and specifically to review the Interim Report and 
Annual Report and to consider the suitability and monitor the effectiveness of the internal control processes. 
There were three Audit Committee meetings during the year. The Audit Committee reviews the findings of 
the external auditors and reviews accounting policies and material accounting judgements. 
 
The independence of the auditors is considered by the Audit Committee. The Audit Committee (with no 
Executive Director present) meets at least once per calendar year with the auditors to discuss their 
objectivity and independence, the Annual Report, any audit issues arising, internal control processes and 
any other appropriate matters. As well as providing audit related services, the auditors provide taxation 
advice and undertake work in relation to the interim report. The fees in respect of the non-audit services 
provided are £18,000 for the year ended 31 March 2009 (2008: £42,000). Further, the overall fees paid to the 
auditors are not deemed to be of such significance to them as to impair their independence. The Audit 
Committee considers that the objectivity and independence of the auditors is safeguarded. 
 
The current terms of reference of the Audit Committee are set out in the governance pages on the Group’s 
website www.provexis.com. 
 
Internal control 
The Directors are responsible for establishing and maintaining the Group’s system of internal control and for 
reviewing its effectiveness. The system of internal control is designed to manage, rather than eliminate, the 
risk of failure to the achievement of business objectives and can only provide reasonable but not absolute 
assurance against material misstatement or loss. 
 
The Audit Committee continues to monitor and review the effectiveness of the system of internal control and 
report to the Board when appropriate with recommendations. There have been no significant changes to the 
system of internal control throughout the year. 
 
The annual review of internal control and financial reporting procedures did not highlight any issues 
warranting the introduction of an internal audit function. It was again concluded, given the current size and 
transparency of the operations of the Group, that an internal audit function was still not required. 
 
The main features of the internal control system are outlined below: 
 
● A control environment exists through the close management of the business by the Executive 
Directors. The Group has a defined organisational structure with delineated approval limits. 
Controls are implemented and monitored by the Executive Directors. 
 
● The Board has a schedule of matters expressly reserved for its consideration and this schedule 
includes acquisitions and disposals, major capital projects, treasury and risk management policies 
and approval of budgets. 
 
● The Group utilises a detailed budgeting and forecasting system. Detailed budgets are prepared 
annually by the Executive Directors before submission to the Board for approval. Forecasts are 
regularly updated at least quarterly to reflect changes in the business and are monitored by the 
Board including future cash flow projections. Actual results are monitored against annual budgets 
regularly and at least quarterly, with variances highlighted for the Board. 
 
● Financial risks are identified and evaluated for each major transaction for consideration by 
the Board. 
 
● Standard financial control procedures operate throughout the Group to ensure that the assets 
of the Group are safeguarded and that proper accounting records are maintained. 
 
● A risk review process is in operation whereby the Chief Executive and Finance Director present 
a report to the Board each year on the key business risks. 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2009        14 
Going concern 
The Directors have a reasonable expectation that the Group and the Company will continue in operational 
existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in 
preparing the Group’s financial statements. 
 
See also note 1 to the consolidated financial statements on page 26. 
 
Employees 
The Executive Directors keep staff informed of the progress and development of the Group regularly through 
formal and informal meetings and employee feedback is encouraged. The Company has a policy of offering 
share options to all eligible employees, subject to availability under the option plan rules and with due 
consideration to the level of dilution to shareholders. 
 
The Group does not discriminate between employees and prospective employees on grounds of age, race, 
religion or gender. Every effort is made to provide the same opportunities to disabled persons as to others. 
 
The Board recognises its obligation towards its employees to provide a safe and healthy working 
environment. The Group complies with health and safety legislation including conducting regular inspections 
and risk assessments. 
 
Environmental, social and community matters 
As a result of the size and nature of the Group’s operations, the impact of the Group’s operations on the local 
community and the environment is not considered to be significant. Recycling of office supplies is undertaken 
where possible. 
 
Charitable and political contributions 
No political or charitable donations were made during the year. (2008: £NIL). 
 
Relationship with shareholders 
The Directors seek to build a mutual understanding of objectives between the Company and its 
shareholders. The Group reports formally to shareholders in its interim and annual reports setting out details 
of its activities. In addition, the Group keeps shareholders informed of events and progress through the issue 
of regulatory news in accordance with the AIM rules of the London Stock Exchange. The Chief Executive 
and Finance Director seek to meet with institutional 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. 
  Directors’ report – business overview continued 
 
 
 
Provexis plc Annual report and accounts 2009        15 
Directors’ responsibility statement 
The Directors are responsible for keeping proper accounting records which disclose with reasonable 
accuracy at any time the financial position of the Group, for safeguarding the assets of the Company, for 
taking reasonable steps for the prevention and detection of fraud and other irregularities and for the 
preparation of a Directors’ Report which complies with the requirements of the Companies Act 1985. 
 
The Directors are responsible for preparing the annual report and the financial statements in accordance with 
the Companies Act 1985. The Directors are also required to prepare financial statements for the Group in 
accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”) 
and the rules of the London Stock Exchange for companies trading securities on the Alternative Investment 
Market. The Directors have chosen to continue to prepare financial statements for the Company in 
accordance with UK Generally Accepted Accounting Practice. 
 
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. 
 
Group financial statements 
International Accounting Standard 1 requires that financial statements present fairly for each financial year 
the Group’s financial position, financial performance and cash flows. This requires the faithful representation 
of the effects of transactions, other events and conditions in accordance with the definitions and recognition 
criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s 
‘Framework for the preparation and presentation of financial statements’. In virtually all circumstances, a fair 
presentation will be achieved by compliance with all applicable IFRSs. A fair presentation also requires the 
Directors to: 
 
● consistently select and apply appropriate accounting policies; 
 
● present information, including accounting policies, in a manner that provides relevant, reliable, 
comparable and understandable information; and 
 
● provide additional disclosures when compliance with the specific requirements in IFRS is 
insufficient to enable users to understand the impact of particular transactions, other events and 
conditions on the entity’s financial position and financial performance. 
 
Parent company financial statements 
Company law requires the Directors to prepare financial statements for each financial year which give a true 
and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. 
In preparing these financial statements, the Directors are required to: 
 
● select suitable accounting policies and then apply them consistently; 
 
● prepare the financial statements on the going concern basis unless it is inappropriate to presume 
that the Company will continue in business; 
 
● make judgements and estimates that are reasonable and prudent; and 
 
● state whether applicable accounting standards have been followed, subject to any material 
departures disclosed and explained in the financial statements. 
 
 
By order of the Board 
 
 
 
Ian Ford 
Secretary 
8 June 2009 
  Directors’ report – remuneration report  
 
 
 
Provexis plc Annual report and accounts 2009        16 
Remuneration Committee: composition and terms of reference 
The Group’s Remuneration Committee during the year ended 31 March 2009 comprised two independent 
Non-executive Directors and was chaired by Dawson Buck.  
 
The purpose of the Remuneration Committee is to ensure that the Executive Directors are fairly rewarded for 
their individual contribution to the overall performance of the Company. The Committee considers and 
recommends to the Board the remuneration of the Executive Directors and is kept informed of the 
remuneration packages of senior staff and invited to comment on these. 
 
Policy on Executive Directors’ remuneration 
Executive remuneration packages are designed to attract and retain executives of the necessary skill and 
calibre to run the Company successfully but avoiding paying more than is necessary. Direct benchmarking of 
remuneration is not possible given the specialised nature and size of the Company. The Remuneration 
Committee recommends to the Board remuneration packages by reference to individual performance and 
uses the knowledge and experience of the Non-executive Directors and published surveys relating to AIM 
Directors, and market changes generally. The Remuneration Committee has responsibility for recommending 
any long term incentive schemes. 
 
The full Board determines whether or not Executive Directors are permitted to serve in roles with other 
companies. Such permission is only granted where a role is on a strictly limited basis, where there are no 
conflicts of interest or competing activities and providing there is not an adverse impact on the commitments 
required to the Group. Earnings from such roles are not disclosed nor paid to the Group. 
 
There are four main elements of the remuneration package for Executive Directors and senior staff: 
 
(i) Basic salaries and benefits in kind 
Basic salaries are recommended to the Board by the Remuneration Committee, taking into account the 
performance of the individual and the rates for similar positions in comparable companies. Benefits in kind 
comprising private medical insurance are available to all senior staff and Executive Directors. 
 
(ii) Share option scheme 
The Company operates a share option scheme which was established in June 2005 (”the Provexis 2005 
share option scheme”) to motivate the Executive Directors and employees through equity participation in the 
Company. Options granted pursuant to the Provexis 2005 share option scheme may take the form of either 
unapproved share options or tax favoured EMI options. Exercise of options under the scheme is subject to 
specified exercise periods and compliance with the AIM rules of the London Stock Exchange. 
 
The scheme is overseen by the Remuneration Committee which recommends to the Board all grants of 
share options based on the Committee’s assessment of personal performance and specifying the terms 
under which eligible individuals may be invited to participate. 
 
In June 2005 the Company undertook a reverse takeover of Provexis Natural Products Limited (“PNP”, 
formerly Provexis Limited) through a share for share exchange. Prior to the takeover the Company and PNP 
had granted EMI options and unapproved options. Options granted by the Company prior to the takeover 
remain subject to the same terms as contained in the individual share option contracts under which they 
were originally granted. The PNP EMI options and unapproved options were rolled over into options over the 
Company’s ordinary shares, and these replacement options remain subject to the same terms as contained 
in the individual PNP share option contracts under which they were originally granted. 
 
The Combined Code refers to the requirement for the performance-related elements of remuneration to form 
a significant proportion of the total remuneration package of Executive Directors and should be designed to 
align their interests with those of shareholders. In the development phase of the Group and during the early 
stages of revenue generation, the Remuneration Committee currently considers that the best alignment of 
these interests is through continued use of incentives for performance through the award of share options or 
other share-based arrangements. 
 
(iii) Bonus scheme 
The Company has an established discretionary bonus scheme for staff. No bonuses were awarded to staff 
during the year (2008: The Chief Executive Officer was awarded a bonus of £15,000).  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2009        17 
Policy on Executive Directors’ remuneration (continued) 
(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 2008 to cover the year from 1 April 2008 to 31 March 2009. 
Future reviews will continue to be undertaken on an annual basis each April to enable the Group’s 
performance over the preceding financial year and the strategy for the forthcoming year to be considered. 
 
Service contracts 
The Chief Executive is employed under a service contract requiring twelve months’ notice by either party, 
and the Chief Operating Officer and Finance Director are employed under service contracts requiring three 
months’ notice. All Non-executive Directors receive payments under appointment letters which are 
terminable by three months’ notice from either party. 
 
Policy on Non-executive Directors’ remuneration 
The Non-executive Directors and the Chairman each receive a fee for their services as a director, which is 
approved by the Board, mindful of the time commitment and responsibilities of their roles and of current 
market rates for comparable organisations and appointments. Non-executive Directors are reimbursed for 
travelling and other minor expenses incurred. 
 
Neville Bain, Non-executive Director, received share options prior to the Group joining AIM. However, 
to maintain independence, the independent Non-executive Directors do not participate in any incentive or 
share option arrangements. 
 
The emoluments of the individual Directors for the year were as follows: 
 
 Year ended 31 March 2009 Year ended 
31 March 
2008 
 Salary and 
directors’ fees 
£ 
Benefits 
in kind 
£ 
Pension 
 
£ 
Total 
 
£ 
Total 
 
£ 
Executive Directors      
S N Moon 153,900 801 7,785 162,486 175,109 
S N Morrison (appointed 1 October 2008) 57,504 682 2,875 61,061 —  
I Ford (appointed 19 July 2007) 94,740 1,486 4,827 101,053 69,062 
S W Slade (resigned 4 July 2007) —  —  —  —  59,556 
      
Non-executive Directors      
C D Buck 31,458 —  —  31,458 25,000 
N C Bain 16,459 —  —  16,459 15,000 
J B Diggines (appointed 24 April 2007) 15,000 —  —  15,000 14,044 
K Rietveld (appointed 29 August 2008) —  —  —  —  —  
 369,061 2,969 15,487 387,517 357,771 
 
The above fees and emoluments exclude reimbursed expenditure incurred in the conduct of Group business. 
 
On 4 August 2008 C D Buck, N C Bain and The RisingStars Growth Fund, which is connected to J B 
Diggines, advanced bridging loans to the Company totalling £50,000. The bridging loans were repaid by the 
Company on 28 August 2008. Bridging loan inducement fees totalling £10,000 were paid to C D Buck, N C 
Bain and The RisingStars Growth Fund, see note 8 on page 35 for further details. 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2009        18 
Share re-organisation 
A share re-organisation was carried out on 28 August 2008, sub dividing  each of the 401,724,366 issued 
existing ordinary shares with a nominal value of 1p each in the capital of the Company into one new ordinary 
share with a nominal value of 0.1p and one Deferred Share with a nominal value of 0.9p. The aggregate 
nominal value of the Company’s authorised share capital was not affected by these changes. 
 
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. Holders of the Deferred Shares will not be 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. The Deferred Shares effectively 
carry no value as a result, on which basis the Directors’ interests in Deferred Shares have not been 
disclosed. 
 
See also note 18 to the consolidated financial statements on page 44. 
 
Directors’ interests in shares Ordinary shares of 
0.1 pence each 
 
Ordinary shares of 
1 pence each 
 
 Beneficial interests 
 31 March 2009 1 April 2008 
   
S N Moon 7,540,000 6,000,000 
S N Morrison (appointed 1 October 2008) 1,540,000 —  
I Ford 1,540,000 —  
C D Buck 10,404,332 3,869,332 
N C Bain 5,177,000 2,097,000 
 26,201,332 11,966,332 
 
Other than as shown in the table and as further disclosed above in respect of Deferred Shares, no Director 
had any interest in the shares of the Company or its subsidiary companies at 31 March 2009. 
 
Directors’ interests in share options 
The Board uses share options to align Directors and employees interests with those of shareholders in order 
to provide incentives and reward them based on improvements in Company performance. 
 
On 1 September 2008 the Company announced that further to an announcement on 1 August 2008 the 
Company's Remuneration Committee had approved the grant of options over 44,166,575 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. 
 
The share options held by the Directors and not exercised at 31 March 2009 are summarised below. Neville 
Bain, Non-executive Director, received options prior to the Group joining AIM. 
 
 Number of options over shares 
 At 1 April 2008 Options granted 
in year 
Options cancelled 
in year 
At 31 March 2009 
     
S N Moon 17,455,251 21,117,620 (17,455,251) 21,117,620 
S N Morrison —  12,000,000 —  12,000,000 
I Ford 2,751,479 10,000,000 (2,751,479) 10,000,000 
N C Bain 330,300 —  —  330,300 
 20,537,030 43,117,620 (20,206,730) 43,447,920 
  Directors’ report – remuneration report continued 
 
 
 
Provexis plc Annual report and accounts 2009        19 
Directors’ interests in share options (continued) 
The unapproved share options at 31 March 2009 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 August 2011 August 2018 
N C Bain June 2004 330,300 1.000p June 2007 June 2014 
  7,654,820    
 
The EMI share options at 31 March 2009 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 12,675,480 0.900p August 2011 August 2018 
S N Morrison October 2008 12,000,000 0.900p October 2011 October 2018 
I Ford August 2008 10,000,000 0.900p August 2011 August 2018 
  35,793,100    
 
All options were granted with an exercise price at or above market value on the date of grant. 
 
The Company carried out a share re-organisation on 28 August 2008, which is further detailed on page 18, 
and in note 18 to the consolidated financial statements on page 44. 
 
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 
8 June 2009 
 
  Independent auditors’ report  
 
 
 
Provexis plc Annual report and accounts 2009        20 
To the shareholders of Provexis plc 
We have audited the Group and parent company financial statements (the ''financial statements'') of 
Provexis plc for the year ended 31 March 2009, which comprise: Consolidated Income Statement, 
Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in 
Equity, the Parent company Balance Sheet and the related Notes to the Financial Statements. These 
financial statements have been prepared under the accounting policies set out therein. 
 
Respective responsibilities of directors and auditors 
The Directors' responsibilities for preparing the Annual Report and Group financial statements in accordance 
with applicable law and International Financial Reporting Standards (“IFRS”) as adopted by the European 
Union and for preparing the parent company financial statements in accordance with applicable law and 
United Kingdom accounting standards (United Kingdom Generally Accepted Accounting Practice) are set out 
in the Directors Report: Directors' responsibility statement. 
 
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory 
requirements and International Standards on Auditing (UK and Ireland). 
 
We report to you our opinion as to whether the financial statements give a true and fair view and have been 
properly prepared in accordance with the Companies Act 1985 and whether the information given in the 
Directors’ Report is consistent with those financial statements. We also report to you if, in our opinion, the 
Company has not kept proper accounting records, if we have not received all the information and 
explanations we require for our audit, or if information specified by law regarding directors' remuneration and 
other transactions is not disclosed. 
 
We read other information contained in the annual report and consider whether it is consistent with the 
audited financial statements. This other information comprises only the Corporate Statement, Key Highlights, 
Chairman’s Statement, Chief Executive’s Statement and the Directors’ Report. We consider the implications 
for our report if we become aware of any apparent misstatements or material inconsistencies with the 
financial statements. Our responsibilities do not extend to any other information. 
 
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other 
purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this 
report by virtue of and for the purpose of the Companies Act 1985 or has been expressly authorised to do so 
by our prior written consent. Save as above, we do not accept responsibility for this report to any other 
person or for any other purpose and we hereby expressly disclaim any and all such liability. 
 
Basis of audit opinion 
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by 
the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the 
amounts and disclosures in the financial statements. It also includes an assessment of the significant 
estimates and judgements made by the Directors in the preparation of the financial statements, and of 
whether the accounting policies are appropriate to the Group's and Company’s circumstances, consistently 
applied and adequately disclosed. 
 
We planned and performed our audit so as to obtain all the information and explanations which we 
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the 
financial statements are free from material misstatement, whether caused by fraud or other irregularity or 
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the 
financial statements. 
  Independent auditors’ report continued 
 
 
 
Provexis plc Annual report and accounts 2009        21 
Opinion 
In our opinion: 
 
• the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the 
European Union, of the state of the Group's affairs as at 31 March 2009 and of its loss for the year 
then ended; 
 
• the parent company financial statements give a true and fair view, in accordance with United Kingdom 
Generally Accepted Accounting Practice, of the state of the parent company's affairs as at 
31 March 2009; 
 
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and 
 
• the information given in the Directors’ Report is consistent with the financial statements. 
 
 
BDO STOY HAYWARD LLP 
Chartered Accountants 
and Registered Auditors 
Reading 
8 June 2009 
  Consolidated income statement 
Provexis plc Annual report and accounts 2009        22 
 
 
  Year ended 31 March 2009 Year 
ended 
31 March 
2008 
  Before 
impairment 
of goodwill 
 
Impairment 
of goodwill 
Total  
 Note £ £ £ £ 
      
Revenue 1,3 5,400 — 5,400 161,702 
Grant income 4 20,000 — 20,000 133,649 
Research and development costs  (634,611) — (634,611) (517,243) 
Administrative costs 13 (967,111) (3,099,328) (4,066,439) (986,073) 
Loss from operations 5 (1,576,322) (3,099,328) (4,675,650) (1,207,965) 
Finance income 8 65,161 — 65,161 57,587 
Finance costs 8 (10,017) — (10,017) (1,280) 
Loss before tax  (1,521,178) (3,099,328) (4,620,506) (1,151,658) 
Taxation 9 50,000 — 50,000 134,371 
Loss for the year 
from continuing operations 
  
(1,471,178) 
 
(3,099,328) 
 
(4,570,506) 
 
(1,017,287) 
Discontinued operation 
Loss for the year 
from discontinued operation 
 
 
10 
 
 
— 
 
 
— 
 
 
— 
 
 
(145,397) 
Loss for the year  (1,471,178) (3,099,328) (4,570,506) (1,162,684) 
      
      
Attributable to:      
Equity holders of the parent 20 (1,471,178) (3,099,328) (4,570,506) (1,189,117) 
Minority interest  — — — 26,433 
  (1,471,178) (3,099,328) (4,570,506) (1,162,684) 
      
Loss per share from continuing and 
discontinued operations to equity 
holders of the parent 
     
Basic and diluted – pence 11   0.71 0.30 
      
Loss per share from continuing 
operations to equity holders of the 
parent 
     
Basic and diluted – pence 11   0.71 0.26 
 
 
 
 
  Consolidated balance sheet 
Provexis plc Annual report and accounts 2009        23 
 
 
 
 
  
As at  
31 March 
2009 
As at  
31 March 
2008 
 Notes £ £ 
Non-current assets    
Goodwill 12,13 3,802,685 6,902,013 
Other intangible assets 12 37,287 20,597 
Plant and equipment 14 66,941 74,094 
Total non-current assets  3,906,913 6,996,704 
    
Current assets    
Trade and other receivables 15 76,942 280,100 
Income tax asset 9 103,651 136,774 
Cash and cash equivalents 16 1,678,263 532,581 
Total current assets  1,858,856 949,455 
    
Liabilities    
Current liabilities    
Trade and other payables 17 (233,973) (361,496) 
Total liabilities  (233,973) (361,496) 
    
Total net assets  5,531,796 7,584,663 
    
    
Capital and reserves attributable to equity holders of the 
parent company 
   
Share capital 18 4,434,907 4,017,244 
Share premium reserve 20 7,979,558 5,992,212 
Merger reserve 20 6,273,909 6,273,909 
Retained earnings 20 (13,156,578) (8,698,702) 
Equity attributable to equity holders of the parent  5,531,796 7,584,663 
Minority interests  — — 
Total equity  5,531,796 7,584,663 
 
 
These consolidated financial statements were approved and authorised for issue by the Board on 8 June 
2009. The notes on pages 26 to 49 form part of these consolidated financial statements. 
 
 
Stephen Moon    Ian Ford 
Director     Director 
 
On behalf of the Board of Provexis plc 
8 June 2009 
  Consolidated cash flow statement 
Provexis plc Annual report and accounts 2009        24 
 
 
 Year ended 
31 March  
2009 
Year ended 
31 March  
2008 
 £ £ 
Cash flows from operating activities   
Loss after tax and discontinued operations (4,570,506) (1,162,684) 
Adjustments for:   
Depreciation 20,917 15,229 
Impairment of goodwill 3,099,328 — 
Net finance income (55,144) (56,307) 
Taxation (50,000) (134,371) 
Share-based payment charge 112,630 31,583 
Operating cash outflow before changes in working capital (1,442,775) (1,306,550) 
   
Decrease in inventories — 38,466 
Decrease in trade and other receivables 147,435 159,759 
Decrease in trade and other payables (127,523) (377,479) 
Cash used in operations (1,422,863) (1,485,804) 
   
Tax credits received 83,123 — 
Net cash outflow from operating activities (1,339,740) (1,485,804) 
   
Cash flows from investing activities   
Purchase of plant and equipment (13,764) (76,716) 
Purchase of intangible assets (16,690) (20,597) 
Interest received 61,770 57,587 
Cash generated by / (used in) investing activities 31,316 (39,726) 
   
Cash flows from financing activities   
Proceeds from issue of share capital – share placing 2,714,812 2,149,750 
Expenses paid on share issue (250,689) (188,283) 
Proceeds from exercise of share options — 82,100 
Repayment of borrowings — (100,000) 
Interest paid (10,017) (1,280) 
Cash generated by financing activities 2,454,106 1,942,287 
   
Net increase in cash and cash equivalents 1,145,682 416,757 
Cash and cash equivalents at beginning of year 532,581 115,824 
Cash and cash equivalents at end of year 1,678,263 532,581 
 
 
  Consolidated statement of changes in equity 
Provexis plc Annual report and accounts 2009        25 
 
    Total equity    
     attributable    
     to equity    
 Share  Share  Merger  Retained  holders of  Minority  Total  
 capital  premium  reserve  earnings  the parent  interests  Equity 
 £  £  £  £  £  £  £  
               
At 1 April 2007 2,510,386  5,391,867  6,273,909  (7,541,168) 6,634,994  (26,433) 6,608,561  
        
Share-based charges — — — 31,583  31,583  — 31,583  
        
Issue of shares – placing  
12 April 2007 1,433,166  528,301  — — 1,961,467  — 1,961,467  
        
Issue of shares – exercise  
of share options 73,692  72,044  — — 145,736  — 145,736  
        
Loss for the year — — — (1,189,117) (1,189,117) 26,433  (1,162,684) 
        
At 31 March 2008 4,017,244  5,992,212  6,273,909  (8,698,702) 7,584,663  — 7,584,663  
        
Share-based charges — — — 112,630 112,630 — 112,630 
        
Issue of shares – placing  
28 August 2008 386,894 1,883,229 — — 2,270,123 — 2,270,123 
        
Issue of shares – placing  
2 October 2008 30,769 163,231 — — 194,000 — 194,000 
        
Reduction of premium 
on share issue — (59,114) — — (59,114) — (59,114) 
        
Loss for the year — — — (4,570,506) (4,570,506) — (4,570,506) 
        
At 31 March 2009 4,434,907 7,979,558 6,273,909  (13,156,578) 5,531,796 — 5,531,796 
        
 
The loss for the year represents the total recognised income and expense for the year. 
 
 
  Notes to the consolidated financial statements 
 
Provexis plc Annual report and accounts 2009        26 
1. Accounting policies 
General information 
Provexis plc is a public limited company incorporated and domiciled in Great Britain under the 
Companies Act 1985 (registration number 5102907). The address of the registered office is Thames Court, 
1 Victoria Street, Windsor, Berkshire SL4 1YB, UK. 
 
As described in the Directors’ Report, the main activities of the Group are those of discovering, developing 
and licensing scientifically-proven technologies for the global functional food, medical food and dietary 
supplement sectors. 
 
Basis of preparation 
The Group financial statements have been prepared in accordance with International Financial Reporting 
Standards (“IFRS”) as adopted by the EU. 
 
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 50 to 55. 
 
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 2009.  
 
The following new standards, amendments to standards and interpretations have been issued but are not 
effective for the year ending 31 March 2009. 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: 
 
• Amendment to IAS 1 ‘Presentation of Financial Statements’ effective for accounting periods beginning 
on or after 1 January 2009; 
• IAS 27 (Amendment) ‘Consolidated and Separate Financial Statements’ effective 1 July 2009. 
• Amendment to IFRS 2 ‘Share-based Payments: Vesting Conditions and Cancellations’ effective for 
accounting periods beginning on or after 1 January 2009; 
• IFRS 3 (Revised) ‘Business Combinations’ effective 1 July 2009. 
• ‘Improvements to IFRSs (2009)’ effective 1 January 2009 and 1 January 2010. 
 
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.” 
 
The Group has made estimates under IFRS as at 1 April 2006, the date of transition, which are consistent 
with those estimates made at the same date under UK GAAP and there is no objective evidence that those 
estimates were in error. 
 
Going concern 
The Group’s business activities together with the factors likely to affect its future development are set out in 
the Business Review on pages 10 to 15. The financial position of the Group, its cash flows and liquidity 
position are set out in the Financial Review on pages 8 and 9. In addition note 2 to the financial statements 
includes the Group’s objectives, policies and processes for managing its capital; its financial risk 
management objectives; details of its financial instruments and its exposure to credit and liquidity risk. 
 
The Group made a loss for the year of £4,570,506 (2008: £1,162,684) and expects to make a further loss 
during the year ending 31 March 2010. The loss for the year included a £3,099,328 non-cash goodwill 
impairment charge (2008: £NIL), and the adjusted loss net of the goodwill charge was £1,471,178 (2008: 
£1,162,684). At 31 March 2009 the Company had cash balances of £1,678,263. 
 
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 these 
financial statements. The projections show that at current levels of cash utilisation and without any cash 
inflows being generated the directors estimate they would not need to secure any additional funding until July 
2010. 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        27 
1. Accounting policies (continued) 
Going concern (continued) 
The projected cash flow information prepared by the directors includes various scenarios for the Company’s 
future cash flows which have been considered by the Directors. The Directors are currently in discussions 
with various potential customers and investors and are confident, based on the results of those discussions 
to date, that they will be able to generate the income, or secure the additional funding and cash inflows 
necessary, to enable the Group to meet its projections, such that the Group will be able to continue to trade 
for the foreseeable future. The Directors have also identified a number of steps that could be taken to 
improve the working capital situation, should further cash inflows not be available in the timeframe required. 
 
As a result of the above, the directors consider it appropriate to prepare the financial statements on the going 
concern basis. 
 
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. The existence and effect of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully 
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the 
date that control ceases. 
 
The consolidated financial information presents the results of the Company and its subsidiaries, 
Provexis Nutrition Limited, Provexis Natural Products Limited and Provexis (IBD) Limited as if they formed a 
single entity ("the Group"). All subsidiaries share the same reporting date, 31 March, as Provexis plc 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, plus costs directly attributable to the acquisition. 
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 minority 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. 
 
Revenue 
Revenue comprises the fair value received or receivable for exclusivity arrangements, collaboration 
agreements, royalties and sales of the Group’s Fruitflow
® 
product net of value added tax. 
 
The accounting policies for the principal revenue streams of the Group are as follows: 
 
(i) Exclusivity arrangements and similar agreements are recognised as revenue in the accounting period in 
which the related services, or required activities, are performed or specified conditions are fulfilled in 
accordance with the terms of completion of the specific transaction. 
 
(ii) Royalty income relating to the sale by a licensee of licensed product is recognised on an accruals basis in 
accordance with the substance of the relevant agreement and based on the receipt from the licensee of the 
relevant information to enable calculation of the royalty due. 
 
(iii) Sales of the Group’s Fruitflow® product are recorded net of value added tax when the significant risks 
and rewards of ownership have been transferred to the buyer. 
 
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 income statement on a straight line basis over the lease term. The Group does not hold any 
assets under finance leases. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        28 
1. Accounting policies (continued) 
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 for the amount by which the asset’s carrying amount exceeds its 
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and 
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which 
there are separately identifiable cash flows. 
 
Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the 
carrying amount of goodwill relating to the entity sold. 
 
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 income statement as incurred. 
 
Patents and trademarks 
The costs incurred in establishing patents and trademarks are either expensed or capitalised in accordance 
with the corresponding treatment of the development expenditure for the product to which they relate. 
 
Plant and equipment 
Plant and machinery, fixtures, fittings and computer equipment and laboratory equipment are stated at 
historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost 
includes expenditure that is directly attributable to the acquisition of the items. Depreciation is charged to the 
income statement on all plant and equipment at rates calculated to write off the cost or valuation, less 
estimated residual value, of each asset on a straight line basis over their estimated useful lives, which is 
3 years for plant and machinery, fixtures, fittings and computer equipment and 5 years for 
laboratory equipment. 
 
The assets’ residual values and useful lives are determined by the Directors and reviewed and adjusted if 
appropriate at each balance sheet date in accordance with the Group policy for impairment of assets. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        29 
1. Accounting policies (continued) 
Impairment of assets 
Assets that have a finite useful life but that are not yet in use and are therefore not subject to amortisation or 
depreciation are tested annually for impairment. Assets that are subject to amortisation are reviewed for 
impairment annually and when events or circumstances suggest that the carrying amount may not be 
recoverable, an impairment loss is recognised for the amount by which the asset’s carrying amount exceeds 
its recoverable amount. 
 
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 income 
statement, 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 income statement, 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. 
 
Inventories 
Inventories are materials and supplies to be consumed in the course of research and development and are 
stated at the lower of cost and net realisable value. Cost includes materials, related contract manufacturing 
costs and other direct costs. Cost is calculated using the first-in first-out method. Net realisable value is 
based on estimated selling price, less further costs expected to be incurred to completion and disposal. 
Provision is made for obsolete, slow-moving or defective items where appropriate.  
 
Discontinued operation 
The results of operations discontinued during the year are included in the consolidated income statement 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 its 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 on the income statement (including the comparative period) as a 
single line which comprises the post tax profit or loss of the discontinued operation and the gain or loss 
recognised on the re-measurement to fair value less costs to sell or on disposal of the assets/disposal 
Groups constituting discontinued operations. 
 
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’ and ‘borrowings’. 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 income 
statement in the same period to which the costs that they are intended to compensate are expensed. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        30 
1. Accounting policies (continued) 
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 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. 
 
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 income statement. 
 
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 income statement 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. 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 income statement 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 the 
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 income statement over the 
remaining vesting period. Where equity instruments are granted to persons other than employees and others  
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        31 
1. Accounting policies (continued) 
Employee benefits (continued) 
(iii) Share-based payment transactions (continued) 
providing similar services, the income statement 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. 
 
Critical accounting estimates and judgements 
The preparation of financial statements in conformity with IFRS 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. 
 
(ii) Share-based payments 
The Group operates an equity-settled, share-based compensation plan. Employee and similar services 
received, and the corresponding increase in equity, are measured by reference to the fair value of the equity 
instruments at the date of grant, which is based upon certain assumptions over the future performance of the 
share price. 
 
(iii) Discontinued operation 
The discontinued operation referred to in the accounts is the Sirco
®
 juice drink which ceased production in 
July 2007. There were no stock or other write offs associated with the cessation of Sirco
®
. All costs and 
income relating to the Sirco
®
 business have been recognised as discontinued in the financial statements. 
 
(iv) Goodwill and impairment 
The recoverable amount of goodwill is determined based on value in use calculations, and the Group’s 
activities are treated as a single cash-generating unit. The value in use calculations have used post-tax cash 
flow projections for ten years using data from the Group’s latest internal forecasts. The forecasts are 
extrapolated beyond ten years at growth rates of between 2% and 7% (2008: 2%). The results of the value in 
use calculations are reviewed by the Board. 
 
The key assumptions for the value in use calculations are those regarding discount rates, revenue 
commencement dates, growth rates and expected changes in margins and costs. Management estimate 
discount rates using post-tax rates that reflect the current market assessment of the time value of money and 
the risks specific to the cash-generating unit. Changes in selling prices and direct costs are based on past 
experience and expectations of future changes in the market. 
 
Post-tax cash flow projections are discounted to calculate value in use using a post-tax discount rate. The 
post-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 2009        32 
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. 
 
At 31 March 2009 the Group had trade payables denominated in Euros of £843 (2008: £20,338), translated 
at the year end rate of £1 : 1.0811 Euros (2008: £1 : 1.2566 Euros). If the Euro exchange rate at 31 March 
2009 had weakened / strengthened against the UK pound by 5% the post-tax loss for the year would have 
been £40 lower / £44 higher. 
 
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 balance sheet date of £233,973 (2008: £361,496) as 
disclosed in note 17 on page 43. 
 
2.2 Capital risk management 
The Group remains funded primarily by equity capital which reflects the development status of its products. 
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going 
concern in order to provide returns for equity holders of the Company and benefits for other stakeholders and 
to maintain an optimal capital structure to reduce the cost of capital. 
 
2.3 Fair value estimation 
The Group uses amortised cost, using the effective interest rate method, to determine subsequent fair value 
after initial recognition, for its financial instruments. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        33 
3. Segmental reporting 
Revenue, net assets and results are wholly attributable to the principal activity of the Group and arise solely 
within the United Kingdom, therefore no segmental analysis has been reported. 
 
4. Grant income 
 Year ended 
31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
   
NWDA R&D grant income recognised in income statement 20,000 133,649 
 20,000 133,649 
 
5. Operating loss 
 Year ended 
31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
Operating loss is stated after charging:   
   
Impairment of goodwill 3,099,328 — 
Depreciation of plant and equipment 20,917 15,229 
Operating lease costs – land and buildings 98,709 60,174 
 
The total fees of the Group’s auditor, BDO Stoy Hayward LLP, for services provided are analysed below: 
 
 Year ended 
31 March  
2009 
Year ended 
31 March 
2008 
 £ £ 
Audit services   
Parent company 12,600 19,245 
Subsidiaries 29,400 34,214 
Tax services – compliance   
Parent company 3,600 8,990 
Subsidiaries 8,400 20,010 
Other services   
Parent company – share option scheme advice 6,000 10,000 
Subsidiary – NWDA grant — 3,000 
   
Total fees 60,000 95,459 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        34 
6. Wages and salaries 
The average monthly number of persons (including all Directors) employed by the Group during the year was 
as follows: 
 
  Year ended 
 31 March  
2009 
Year ended 
31 March 
2008 
   
Administrative staff 1 3 
Research and development staff 7 5 
Directors 6 5 
 14 13 
 
Their aggregate emoluments were: 
 
  Year ended 
 31 March  
2009 
Year ended 
31 March 
2008 
 £ £ 
   
Wages and salaries 688,713 701,364 
Social security costs 65,919 64,955 
Other pension and insurance benefits costs 38,640 31,239 
Total cash settled emoluments 793,272 797,558 
Accrued holiday pay 15,078 11,243 
Share-based payment remuneration charge: equity settled 112,630 31,583 
Total emoluments 920,980 840,384 
 
7. Directors’ emoluments 
  Year ended 
 31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
Directors   
Aggregate emoluments 372,030 345,792 
   
Company pension contributions 15,487 11,979 
 
Emoluments disclosed above include the following amounts in respect of the highest paid Director: 
 
  Year ended 
 31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
   
Aggregate emoluments 154,701 167,609 
   
Company pension contributions 7,785 7,500 
 
During the year, three Directors (2008: 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 16 to 19. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        35 
8. Finance income and costs 
  Year ended 
 31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
   
Bank interest receivable 65,161 57,587 
Finance costs payable (10,017) (1,280) 
 55,144 56,307 
 
Finance costs payable include a £10,000 inducement fee for the advancement of bridging loans which were 
provided to the Company on 4 August 2008, and repaid by the Company on 28 August 2008 as follows: 
 
 Bridging loans 
Advanced 4 August 2008 
Repaid 28 August 2008 
   
 Amount 
of loan 
Inducement 
fee payable 
 £ £ 
RisingStars Growth Fund (RSGF) 25,000 5,000 
C D Buck 15,000 3,000 
N C Bain 10,000 2,000 
 50,000 10,000 
 
The loans were effected by the issue by the Company to the Lenders of loan notes. The loan notes were 
unsecured and were not transferable by the relevant holders. 
  
The Company was obliged to pay interest on the principal sum for the period until it was repaid at the rate of 
20 per cent per annum, but the loan note holders waived their entitlement to interest when the loan notes 
were repaid, on 28 August 2008. 
 
The RisingStars Growth Fund is managed by Enterprise Ventures Limited. The Chief Executive of Enterprise 
Ventures Limited is J B Diggines, a Non-executive Director of the Company. C D Buck and N C Bain are also 
Non-executive Directors of the Company. 
 
 
9. Taxation 
 
 
Continuing operations 
Year ended 
31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
Current tax income   
United Kingdom corporation tax research and development credit 61,844 53,651 
Adjustment in respect of prior period   
United Kingdom corporation tax research and development credit (11,844) 80,720 
   
Taxation credit 50,000 134,371 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        36 
9. Taxation (continued) 
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 
2009 
Year ended 
31 March 
2008 
 £ £ 
   
Loss on ordinary activities before tax 4,620,506 1,151,658 
   
Loss on ordinary activities before tax multiplied by the 
standard rate of corporation tax in the UK of 28% (2008: 30%) 
 
1,293,742 
 
345,497 
Effects of:   
Expenses not deductible for tax purposes (892,032) (14,011) 
Difference between depreciation and capital allowances (1,785) (4,546) 
Other short-term timing differences (27,444) 40,340 
Unutilised tax losses and other deductions arising in the year (302,556) (331,359) 
Tax deduction for share options exercised — 26,925 
Additional deduction for R&D expenditure 51,221 30,290 
Surrender of tax losses for R&D tax credit refund (59,302) (39,485) 
Adjustments in respect of prior years (11,844) 80,720 
Total tax credit for the year 50,000 134,371 
 
At 31 March 2009 the Group UK tax losses to be carried forward are estimated to be £11,307,528 
(2008: £9,681,617). 
 
Deferred tax 
Deferred tax assets amounting to £3,217,536 (2008: £2,791,237) have not been recognised on the basis that 
their future economic benefit is not certain. Assuming a prevailing tax rate of 28% when the timing 
differences reverse, the unrecognised deferred tax asset comprises: 
 
  Year ended 
 31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
   
Depreciation in excess of capital allowances 11,049 9,264 
Other short term timing differences — 59,995 
Unutilised tax losses 3,166,108 2,710,853 
Share-based payments 40,379 11,125 
 3,217,536 2,791,237 
 
 
Income tax asset receivable within one year 31 March 
2009 
31 March 
2008 
 £ £ 
   
Corporation tax recoverable 103,651 136,774 
 103,651 136,774 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        37 
10. Discontinued operation 
On 2 July 2007 the Group announced that it had undertaken a strategic review of its Sirco
®
 juice brand and 
that in order to facilitate the negotiation of exclusive rights for potential license partners had decided to cease 
its production. 
 
The table below shows the results of the Sirco
®
 juice drink that are included in the results of the Group for 
the year and the prior year and included within the discontinued operation. 
 
 Year ended 
31 March 
2009 
Year ended 
31 March 
2008 
 £ £ 
Income statement   
Revenue — 113,903 
Cost of sales — (121,179) 
Administrative expenses — (138,121) 
Loss for the year from discontinued operation — (145,397) 
   
Cash flow statement   
Net cash flows from operating activities — (145,397) 
 — (145,397) 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        38 
11. Loss per share 
Basic and diluted loss per share amounts are calculated by dividing the loss attributable to equity holders of 
the parent by the weighted average number of ordinary shares in issue during the period. 
 
There are 65,954,117 share options in issue (2008: 34,473,376) 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. Adjusted basic and diluted loss per 
share amounts exclude goodwill impairment. 
 
 Year ended  Year ended  
 31 March 31 March 
 2009  2008  
     
Loss – £   
Continuing operations 4,570,506 1,043,720  
Discontinued operation — 145,397  
 4,570,506 1,189,117  
   
Weighted average number of shares 644,794,819 395,384,662  
   
Basic and diluted loss per share – pence   
Continuing operations 0.71 0.26  
Discontinued operation — 0.04  
Total 0.71 0.30  
   
   
Loss for the year attributable to equity holders – £   
Continuing operations 4,570,506 1,043,720  
Discontinued operation — 145,397  
 4,570,506 1,189,117  
Adjustment   
Impairment of goodwill (note 13) (3,099,328) — 
Adjusted loss for the year attributable to equity holders – £ 1,471,178 1,189,117  
   
Adjusted basic and diluted loss per share – pence   
Continuing operations 0.23 0.26  
Discontinued operation — 0.04  
Total 0.23 0.30 
 
Share re-organisation 
A share re-organisation was carried out on 28 August 2008, sub dividing  each of the 401,724,366 issued 
existing ordinary shares with a nominal value of 1p each in the capital of the Company into one new ordinary 
share with a nominal value of 0.1p and one Deferred Share with a nominal value of 0.9p. The aggregate 
nominal value of the Company’s authorised share capital was not affected by these changes. 
 
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. Holders of the Deferred Shares will not be 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. The Deferred Shares effectively 
carry no value as a result, and they do not form part of the loss per share calculations. 
 
The weighted average number of shares used for the loss per share calculations represents the existing 
ordinary shares with a nominal value of 1p each in the capital of the Company for the period up to 28 August 
2008, and the new ordinary shares with a nominal value of 0.1p each in the capital of the Company for the 
period thereafter. See also note 18 to the consolidated financial statements on page 44.  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        39 
12. Intangible assets 
 Goodwill Development 
costs 
Total 
 
 £ £ £ 
Cost    
At 1 April 2008 7,265,277 20,597 7,285,874 
Additions  — 16,690 16,690 
At 31 March 2009 7,265,277 37,287 7,302,564 
    
Amortisation and impairment    
At 1 April 2008 363,264 — 363,264 
Impairment of goodwill charge 3,099,328 — 3,099,328 
At 31 March 2009 3,462,592 — 3,462,592 
    
Net book value    
At 31 March 2009 3,802,685 37,287 3,839,972 
At 31 March 2008 6,902,013 20,597 6,922,610 
    
    
Cost    
At 1 April 2007 7,265,277 — 7,265,277 
Additions  — 20,597 20,597 
At 31 March 2008 7,265,277 20,597 7,285,874 
    
Amortisation    
At 1 April 2007 and 31 March 2008 363,264 — 363,264 
    
Net book value    
At 31 March 2008 6,902,013 20,597 6,922,610 
At 31 March 2007 6,902,013 — 6,902,013 
 
Development costs represent costs incurred in registering patents that meet the capitalisation criteria set out 
in IAS 38, see also note 1. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        40 
13. Goodwill and impairment 
Goodwill arising on consolidation represents the excess of the cost of an acquisition over the fair value of the 
Group’s share of the net assets of the acquired subsidiary at the date of acquisition. 
 
Goodwill arose on 23 June 2005 when the Company acquired the entire issued share capital of 
Provexis Natural Products Limited (formerly Provexis Limited), a private company engaged in research and 
development. Provexis Natural Products Limited has been consolidated using the purchase method and its 
results have been incorporated in the Group results from the date of acquisition. 
 
Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual 
basis or more frequently if there are indications that goodwill may be impaired. 
 
The recoverable amount of goodwill is determined based on value in use calculations, and the Group’s 
activities are treated as a single cash-generating unit. 
 
The key assumptions for the value in use calculations are those regarding discount rates, revenue 
commencement dates, growth rates and expected changes in margins and costs. Management estimate 
discount rates using pre-tax rates that reflect the current market assessment of the time value of money and 
the risks specific to the cash-generating unit. Changes in selling prices and direct costs are based on past 
experience and expectations of future changes in the market. 
 
The value in use calculations have used post-tax cash flow projections for ten years using data from the 
Group’s latest internal forecasts. The forecasts are extrapolated beyond ten years at growth rates of between 
2% and 7% (2008: 2%). The results of the value in use calculations are reviewed by the Board. 
 
The values used in the Group’s internal forecasts reflect anticipated market developments, following 
discussions with prospective customers and suppliers. The values used in the Group’s internal forecasts are 
also based on estimates of revenue commencement dates and expected changes in margins and costs. 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 post-tax cash flow projections. 
 
 Goodwill 
 £ 
Cost  
At 1 April 2008 7,265,277 
Additions  — 
At 31 March 2009 7,265,277 
  
Amortisation and impairment  
At 1 April 2008 363,264 
Impairment of goodwill charge 3,099,328 
At 31 March 2009 3,462,592 
  
Net book value  
At 31 March 2009 3,802,685 
At 31 March 2008 6,902,013 
  
  
Cost  
At 1 April 2007 7,265,277 
Additions  — 
At 31 March 2008 7,265,277 
  
Amortisation  
At 1 April 2007 and 31 March 2008 363,264 
  
Net book value  
At 31 March 2008 6,902,013 
At 31 March 2007 6,902,013  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        41 
13. Goodwill and impairment (continued) 
The value in use calculations have been prepared for a period of greater than five years on account of the 
expected lives of the Group’s primary patents. 
 
Post-tax cash flow projections have been discounted to calculate value in use using a post-tax discount rate 
of 23% (2008: 15%), resulting in a goodwill impairment charge for the year of £3,099,328. 
 
The post-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. 
 
The Board considered the discount rate of 15% used in the prior year together with factors including the 
deterioration in the economic climate, corresponding reductions in expected revenues and greater 
uncertainty about the future. It was agreed that in recognition of prevailing conditions, a significantly higher 
discount rate of 23% was to be used for the purpose of determining the value in use of goodwill. 
 
Value in use calculations are sensitive to changes in short and medium term revenue and cost growth 
assumptions, long term growth rates and post-tax discount rates. The impact on value in use of a change in 
the post-tax discount rate is shown below: 
 
 Post-tax discount rate 
 15% 23% 25% 
 £ £ £ 
    
Cost of goodwill at 31-Mar-09 7,265,277 7,265,277 7,265,277 
Goodwill amortisation charge at 31-Mar-09 (363,264) (363,264) (363,264) 
Net book value of goodwill before impairment 6,902,013 6,902,013 6,902,013 
Impairment of goodwill charge required at discount rate — (3,099,328) (3,714,717) 
Net book value of goodwill after impairment 6,902,013 3,802,685 3,187,296 
 
The Group has conducted further goodwill impairment sensitivity analysis to include varying growth rates and 
margins, changes to the Group’s cost base, varying revenue commencement dates and other strategic 
options for the business. 
 
At a post-tax discount rate of 23% a 5% reduction in forecast revenues or a 5% increase in forecast costs 
would result in further goodwill impairment charges at 31 March 2009 as shown below: 
 
 Impact on value in use of 
 5% reduction in 
revenues 
5% increase in 
costs 
 £ £ 
   
Net book value of goodwill after impairment at 31-Mar-09 3,802,685 3,802,685 
Further impairment of goodwill charge required (411,148) (248,550) 
Net book value of goodwill after further impairment 3,391,537 3,554,135 
 
Delays in the forecast revenue commencement dates would also result in an increase in the impairment of 
goodwill charge for the year, although this could be mitigated in part by cost savings. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        42 
14. Plant and equipment 
 Plant and 
machinery 
Fixtures, fittings 
and computer 
equipment 
Laboratory 
equipment 
Total 
 
 £ £ £ £ 
Cost     
At 1 April 2008 — 38,113 68,725 106,838 
Additions  3,320 10,444 13,764 
At 31 March 2009 — 41,433 79,169 120,602 
     
Depreciation     
At 1 April 2008 — 28,204 4,540 32,744 
Charge for year  6,345 14,572 20,917 
At 31 March 2009 — 34,549 19,112 53,661 
     
Net book value     
At 31 March 2009 — 6,884 60,057 66,941 
At 31 March 2008 — 9,909 64,185 74,094 
 
 
 Plant and 
machinery 
Fixtures, fittings 
and computer 
equipment 
Laboratory 
equipment 
Total 
 
 £ £ £ £ 
Cost     
At 1 April 2007 15,315 38,440 — 53,755 
Additions — 7,991 68,725 76,716 
Disposals (15,315) (8,318) — (23,633) 
At 31 March 2008 — 38,113 68,725 106,838 
     
Depreciation     
At 1 April 2007 15,315 25,833 — 41,148 
Disposals (15,315) (8,318) — (23,633) 
Charge for year — 10,689 4,540 15,229 
At 31 March 2008 — 28,204 4,540 32,744 
     
Net book value     
At 31 March 2008 — 9,909 64,185 74,094 
At 31 March 2007 — 12,607 — 12,607 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        43 
15. Trade and other receivables 
 
31 March 
2009 
31 March 
2008 
 £ £ 
   
Amounts receivable within one year:   
Trade debtors 6,210 6,243 
Other debtors 25,995 107,641 
Prepayments and accrued income 44,737 166,216 
 76,942 280,100 
 
The Directors consider that the carrying amount of these receivables approximates to their fair value. 
 
16. Cash and cash equivalents 
 
31 March  
2009 
31 March 
2008 
 £ £ 
   
Cash at bank and in hand 1,678,263 532,581 
 1,678,263 532,581 
 
17. Trade and other payables 
 
31 March 
2009 
31 March 
2008 
 £ £ 
   
Trade creditors 59,663 156,248 
Other taxes and social security 30,415 36,287 
Accruals 143,895 160,362 
Other creditors — 8,599 
 233,973 361,496 
 
The Directors consider that the carrying amount of these liabilities approximates to their fair value. 
 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        44 
18. Share capital 
On 1 August 2008 the Company announced that it had agreed terms for a new share placing to raise 
£2.514m (before expenses) to provide working capital and funding for pipeline development. 
 
The placing involved the issue of 386,894,230 new shares at 0.65p per share and a share re-organisation to 
facilitate the issue of the new shares at the subscription price. 
 
The placing and the share re-organisation were approved at an EGM on 26 August 2008. The 386,894,230 
new placing shares were admitted to AIM on 28 August, and the net proceeds of the placing were £2.270m 
after share issue costs. 
 
The share re-organisation was carried out because the issue price of 0.65p was lower than the nominal 
value of 1p per share, and under English law the Company is not permitted to issue shares at a placing price 
below their nominal value. 
 
It was therefore agreed to sub-divide: 
 
• each of the 401,724,366 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, 
 
thus enabling the Company lawfully to implement the placing at the placing price. The aggregate nominal 
value of the Company’s authorised share capital was not affected by these changes. 
 
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 will not be 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 placing 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. 
 
On 2 October 2008 the Company raised a further £200,000 gross from a further new share placing, involving 
the issue of 30,769,200 new shares at 0.65p per share. The net proceeds of the placing were £194,000 after 
share issue costs. 
 
Authorised Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number Number number 
     
At 31 March 2008 550,000,000 — — 550,000,000 
Sub-division of shares (550,000,000) 1,884,480,706 401,724,366 1,736,205,072 
At 31 March 2009 — 1,884,480,706 401,724,366 2,286,205,072 
 
 Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ £ 
     
At 31 March 2008 5,500,000 — — 5,500,000 
Sub-division of shares (5,500,000) 1,884,481 3,615,519 — 
At 31 March 2009 — 1,884,481 3,615,519 5,500,000 
 
Authorised Ordinary 
1p shares 
Total 
 number number 
   
At 31 March 2007 400,000,000 400,000,000 
Increase in authorised share capital on 10 April 2007 150,000,000 150,000,000 
At 31 March 2008 550,000,000 550,000,000  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        45 
18. Share capital (continued) 
Authorised Ordinary 
1p shares 
Total 
 £ £ 
   
At 31 March 2007 4,000,000 4,000,000 
Increase in authorised share capital on 10 April 2007 1,500,000 1,500,000 
At 31 March 2008 5,500,000 5,500,000 
 
Allotted, called up and fully paid Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number Number number 
     
At 31 March 2008 401,724,366 — — 401,724,366 
Sub-division of shares (401,724,366) 401,724,366 401,724,366 401,724,366 
Share placing 28 August 2008 — 386,894,230 — 386,894,230 
Share placing 2 October 2008 — 30,769,200 — 30,769,200 
At 31 March 2009 — 819,387,796 401,724,366 1,221,112,162 
 
 Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ £ 
     
At 31 March 2008 4,017,244 — — 4,017,244 
Sub-division of shares (4,017,244) 401,725 3,615,519 — 
Share placing 28 August 2008 — 386,894 — 386,894 
Share placing 2 October 2008 — 30,769 — 30,769 
At 31 March 2009 — 819,388 3,615,519 4,434,907 
 
Allotted, called up and fully paid   Ordinary 
1p shares 
Total 
   number number 
     
At 31 March 2007   251,038,472 251,038,472 
Share placing 12 April 2007   143,316,664 143,316,664 
Exercise of share options   7,369,230 7,369,230 
At 31 March 2008   401,724,366 401,724,366 
 
   Ordinary 
1p shares 
Total 
   £ £ 
     
At 31 March 2007   2,510,386 2,510,386 
Share placing 12 April 2007   1,433,166 1,433,166 
Exercise of share options   73,692 73,692 
At 31 March 2008   4,017,244 4,017,244 
 
During the year ended 31 March 2009 the Company issued ordinary shares of 0.1p each as follows: 
 
Date Reason for issue Shares issued 
  £ Number 
    
28.08.08 Placing 386,894 386,894,230 
02.10.08 Placing 30,769 30,769,200 
  417,663 417,663,430 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        46 
18. Share capital (continued) 
During the year ended 31 March 2008 the Company issued ordinary shares of 1p as follows: 
 
Date Reason for issue Shares issued 
  £ Number 
    
12.04.07 Placing 1,433,166 143,316,664 
02.05.07 Exercise of share options 33,659 3,365,871 
15.05.07 Exercise of share options 11,216 1,121,609 
16.08.07 Exercise of share options 18,182 1,818,182 
27.09.07 Exercise of share options 10,635 1,063,568 
  1,506,858 150,685,894 
 
19. 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 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 44,166,575 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. 
 
At 31 March 2009 the number of ordinary shares subject to options granted over the 2005 and prior option 
schemes were: 
 
EMI options 
 31 March 2009 31 March 2008 
 
Weighted 
average 
exercise price 
(pence) 
Number Weighted 
average 
exercise price 
(pence) 
Number 
     
Outstanding at the beginning of the year 3.72 10,274,255 3.32 15,181,064 
Granted during the year 0.91 51,727,855 3.38 2,751,479 
Exercised during the year —  — 1.77 (6,498,207) 
Cancelled during the year 3.18 (7,804,110) 8.62 (1,160,081) 
Outstanding at the end of the year 1.15 54,198,000 3.72 10,274,255 
 
The exercise price of EMI options outstanding at the end of the year ranged between 0.9p and 6.28p 
(2008: 1p and 6.28p) and their weighted average contractual life was 9.3 years (2008: 8.0 years). 
 
Of the total number of EMI options outstanding at the end of the year, 5,355,945 (2008: 4,774,067) had 
vested and were exercisable at the end of the year. Their weighted average exercise price was 3 pence 
(2008: 4 pence). 
 
No EMI options were exercised during the year. The weighted average share price (at the date of exercise) 
of EMI options exercised during the year ended 31 March 2008 was 3 pence.  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        47 
19. Share options (continued) 
Unapproved options 
 31 March 2009 31 March 2008 
 
Weighted 
average 
exercise price 
(pence) 
Number Weighted 
average 
exercise price 
(pence) 
Number 
     
Outstanding at the beginning of the year 2.70 24,199,121 3.17 11,875,701 
Granted during the year 0.90 7,324,520 2.87 17,304,347 
Exercised during the year —  — 3.50 (871,023) 
Cancelled during the year 2.81 (19,767,524) 4.66 (4,109,904) 
Outstanding at the end of the year 1.39 11,756,117 2.70 24,199,121 
 
The exercise price of unapproved options outstanding at the end of the year ranged between 0.9p and 6.28p 
(2008: 1p and 6.28p) and their weighted average contractual life was 8.2 years (2008: 8.6 years). 
 
Of the total number of unapproved options outstanding at the end of the year, 4,431,597 (2008: 5,600,621) 
had vested and were exercisable at the end of the year. Their weighted average exercise price was 2 pence 
(2008: 2 pence).  
 
No unapproved options were exercised during the year. The weighted average share price (at the date of 
exercise) of unapproved options exercised during the year ended 31 March 2008 was 3.75 pence. 
 
Grant of options 
The fair values of the options have been estimated at the date of grant using a Black-Scholes model, using 
the following assumptions: 
 
Tranche 
 
Date of 
grant 
Exercise 
price 
 
 
 
pence 
Number of 
options 
Share 
price at 
grant 
date 
 
pence 
Expected 
volatility 
Risk free 
rate 
Expected 
life 
 
 
 
years 
Fair value 
per share 
under 
option 
 
pence 
         
1 06-Jun-07 2.875 17,304,347 2.75 78% 4.44% 10 1.42 
2 29-Nov-07 3.38 2,751,479 3.00 65% 3.77% 10 1.06 
3 26-Aug-08 0.9 44,166,575 0.87 65% 4.45% 10 0.585 
4 01-Oct-08 0.9 12,000,000 0.725 65% 4.39% 10 0.485 
 
An expected dividend yield of 0% has been used in all of the above valuations. 
 
The expected life of the options is based on historical data and is not necessarily indicative of the exercise 
patterns that may occur. The expected volatility reflects the assumption that the historical volatility 
is indicative of future trends, which may not necessarily be the actual outcome. 
 
The total charge for the year relating to employee share-based payment plans was £112,630 
(2008: £31,583) all of which related to equity settled share-based payment transactions. 
 
Share re-organisation 
A share re-organisation was carried out on 28 August 2008, sub dividing  each of the 401,724,366 issued 
existing ordinary shares with a nominal value of 1p each in the capital of the Company into one new ordinary 
share with a nominal value of 0.1p and one Deferred Share with a nominal value of 0.9p. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        48 
19. Share options (continued) 
Share re-organisation (continued) 
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. 
 
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. 
 
See also note 18 to the consolidated financial statements on page 44. 
 
20. Reserves 
 Share premium 
reserve 
Merger 
reserve 
Retained 
earnings  
Total  
 £ £ £ £ 
     
At 1 April 2007 5,391,867 6,273,909 (7,541,168) 4,124,608 
Loss for the year — — (1,189,117) (1,189,117) 
Share-based charges — — 31,583 31,583 
Issue of shares – placing 528,301 — — 528,301 
Issue of shares – exercise of 
share options 
 
72,044 
 
— 
 
— 
 
72,044 
At 31 March 2008 5,992,212 6,273,909 (8,698,702) 3,567,419 
Loss for the year — — (4,570,506) (4,570,506) 
Share-based charges — — 112,630 112,630 
Issue of shares – placing 2,046,460 — — 2,046,460 
Reduction of premium 
on share issue 
 
(59,114) 
 
— 
 
— 
 
(59,114) 
At 31 March 2009 7,979,558 6,273,909 (13,156,578) 1,096,889 
 
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. 
Merger reserve The merger reserve arose on the reverse takeover in 2005 of Provexis Natural 
Products Limited (formerly Provexis Limited) by Provexis plc through a share for 
share exchange. 
Retained earnings Cumulative net gains and losses recognised in the consolidated income statement. 
 
21. Pension costs 
The pension charge represents contributions payable by the Group to independently administered funds 
which during the year ended 31 March 2009 amounted to £31,726 (2008: £31,239). Pension contributions 
payable but not yet paid at 31 March 2009 totalled £12,450 in respect of pension contribution entitlements 
where employees had not yet provided details of the funds to which the contributions should be made 
(2008: £11,740). In addition, pension contributions payable in arrears at 31 March 2009 totalled £9 
(2008: £2,876). All unpaid contributions are included in accrued social security costs at the balance 
sheet date. 
  Notes to the consolidated financial statements continued 
 
Provexis plc Annual report and accounts 2009        49 
22. Operating lease commitments 
Future minimum rentals payable under non-cancellable operating leases are as follows: 
 
 
31 March 
2009 
31 March 
2008 
 £ £ 
Due within 1 year 82,875 54,760 
Due within 1–2 years — 101,785 
Due within 2–5 years — — 
 82,875 156,545 
 
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. 
 
23. Related party transactions 
Other than as disclosed in note 8 and transactions between Group companies there were no related party 
transactions in the year. 
 
Key management compensation 
The Directors represent the key management personnel. Details of their compensation and share options are 
given in note 7 and within the Remuneration report on pages 16 to 19. 
 
24. Post balance sheet events 
On 28 May 2009 the Company announced the adoption of scientific substantiation of a health claim for the 
Company’s Fruitflow® anti-thrombotic technology by the European Food Safety Authority (“EFSA”). 
 
The European Commission has introduced regulation aimed at harmonizing and approving nutrition and 
health claims on foods. EFSA intends to establish an EU-wide list of permitted claims by 2010 and health 
claims which do not comply will be prohibited. The Company submitted a health claim dossier to EFSA in 
late 2008 under Article 13(5), which regulates newly developed science or claims with proprietary data. 
 
Following a review by the EFSA panel, it was judged that a cause and effect relationship has been 
established between consumption of Fruitflow® and the reduction of platelet aggregation in humans. EFSA 
has now adopted the scientific opinion substantiating the health claim, which is expected to go through the 
final authorization procedure in the coming weeks. A reasonable estimate of the financial effect of this event 
cannot be made at this time. 
 
  Parent company balance sheet 
 
Provexis plc Annual report and accounts 2009        50 
 
  As at  
31 March 
2009 
As at  
31 March 
2008 
 Notes £ £ 
    
Fixed assets    
Investments 3 1,117,336 1,117,336 
    
Current assets    
Debtors - due after one year 4 3,537,113 2,694,107 
Cash and cash equivalents 5 1,664,626 — 
Total current assets  5,201,739 2,694,107 
    
Current liabilities: amounts 
falling due within one year 
   
Bank overdraft 6 — (4) 
   (4) 
    
Net current assets  6,319,075 2,694,103 
    
Total net assets  6,319,075 3,811,439 
    
    
Capital and reserves    
Share capital 7 4,434,907 4,017,244 
Share premium reserve 8 7,979,558 5,992,212 
Retained earnings 8 (6,095,390) (6,198,017) 
Equity shareholders’ funds 9 6,319,075 3,811,439 
 
 
These financial statements were approved and authorised for issue by the Board on 8 June 2009. 
The notes on pages 51 to 55 form part of these parent company financial statements. 
 
 
Stephen Moon    Ian Ford 
Director     Director 
 
On behalf of the Board of Provexis plc 
8 June 2009 
 
  Notes to the parent company financial statements 
 
Provexis plc Annual report and accounts 2009        51 
1. Accounting policies 
The parent company financial statements have been prepared under the historical cost convention and in 
accordance with UK GAAP.  
 
Share-based employee remuneration 
The Company has no employees however the Company will issue shares to satisfy share awards made by 
its subsidiary companies. The Company records a management charge equivalent to the fair value of the 
share-based payment incurred by its subsidiaries as disclosed in note 8 on page 54. 
 
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. 
 
2. Profit attributable to shareholders 
As permitted by Section 230 of the Companies Act 1985 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 £10,003 
(2008: £6,153,751) which is dealt with in the financial statements of the Company. The total fees of the 
Group’s auditor, BDO Stoy Hayward LLP, for services provided are analysed in note 5 to the consolidated 
financial statements on page 33. Total fees for the year were £60,000 (2008: £95,459). 
 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2009        52 
3. Investments 
 
31 March 
2009 
31 March  
2008 
 £ £ 
   
Cost 1,382,919 1,382,919 
Provision for impairment (265,583) (265,583) 
Net book value 1,117,336 1,117,336 
 
 
At 31 March 2009 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 
Altucea Limited 94% England and Wales Dormant 
 
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 1985. 
 
4. Debtors - due after one year 
 
31 March 
2009 
 31 March 
2008 
 £ £ 
   
Amounts owed by subsidiaries 3,537,113 2,694,107 
 3,537,113 2,694,107 
 
5. Cash and cash equivalents 
 
31 March 
2009 
 31 March 
2008 
 £ £ 
   
Cash at bank and in hand 1,664,626 — 
 1,664,626 — 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2009        53 
6. Creditors: amounts falling due within one year 
 
 
31 March 
2009 
 31 March 
2008 
 £ £ 
   
Overdrafts — 4 
 — 4 
 
7. Share capital 
Authorised Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number Number number 
     
At 31 March 2008 550,000,000 — — 550,000,000 
Sub-division of shares (550,000,000) 1,884,480,706 401,724,366 1,736,205,072 
At 31 March 2009 — 1,884,480,706 401,724,366 2,286,205,072 
 
 Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ £ 
     
At 31 March 2008 5,500,000 — — 5,500,000 
Sub-division of shares (5,500,000) 1,884,481 3,615,519 — 
At 31 March 2009 — 1,884,481 3,615,519 5,500,000 
 
Authorised Ordinary 
1p shares 
Total 
 number number 
   
At 31 March 2007 400,000,000 400,000,000 
Increase in authorised share capital on 10 April 2007 150,000,000 150,000,000 
At 31 March 2008 550,000,000 550,000,000 
 
 Ordinary 
1p shares 
Total 
 £ £ 
   
At 31 March 2007 4,000,000 4,000,000 
Increase in authorised share capital on 10 April 2007 1,500,000 1,500,000 
At 31 March 2008 5,500,000 5,500,000 
 
Allotted, called up and fully paid Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 number number Number number 
     
At 31 March 2008 401,724,366 — — 401,724,366 
Sub-division of shares (401,724,366) 401,724,366 401,724,366 401,724,366 
Share placing 28 August 2008 — 386,894,230 — 386,894,230 
Share placing 2 October 2008 — 30,769,200 — 30,769,200 
At 31 March 2009 — 819,387,796 401,724,366 1,221,112,162 
 
 Ordinary 
1p shares 
Ordinary 
0.1p shares 
Deferred 
0.9p shares 
Total 
 £ £ £ £ 
     
At 31 March 2008 4,017,244 — — 4,017,244 
Sub-division of shares (4,017,244) 401,725 3,615,519 — 
Share placing 28 August 2008 — 386,894 — 386,894 
Share placing 2 October 2008 — 30,769 — 30,769 
At 31 March 2009 — 819,388 3,615,519 4,434,907  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2009        54 
7. Share capital (continued) 
 
Allotted, called up and fully paid   Ordinary 
1p shares 
Total 
   number number 
     
At 31 March 2007   251,038,472 251,038,472 
Share placing 12 April 2007   143,316,664 143,316,664 
Exercise of share options   7,369,230 7,369,230 
At 31 March 2008   401,724,366 401,724,366 
 
   Ordinary 
1p shares 
Total 
   £ £ 
     
At 31 March 2007   2,510,386 2,510,386 
Share placing 12 April 2007   1,433,166 1,433,166 
Exercise of share options   73,692 73,692 
At 31 March 2008   4,017,244 4,017,244 
 
Details of the share placings, the share re-organisation carried out and the shares issued by the Company 
during the year ended 31 March 2009 are given in note 18 to the consolidated financial statements on pages 
44 to 46. 
 
8. Reserves 
 Share 
premium 
reserve 
Retained 
earnings 
 £ £ 
   
At 1 April 2008 5,992,212 (6,198,017) 
Retained loss for the year — (10,003) 
Share-based charges — 112,630 
Shares issued during the year - placing 2,046,460 — 
Reduction of premium on share issue (59,114) — 
At 31 March 2009 7,979,558 (6,095,390) 
 
9. Shareholders’ funds 
Reconciliation of movement in shareholders’ funds. 
 31 March  
2009 
31 March  
2008 
 £ £ 
   
Loss for year (10,003) (6,153,751) 
Share-based payment charge 112,630 31,583 
Shares issued during the year 417,663 1,506,858 
Premium on shares issued 2,046,460 600,345 
Reduction of premium on share issue (59,114) — 
Net additions to shareholders’ funds 2,507,636 (4,014,965) 
Opening shareholders’ funds 3,811,439 7,826,404 
Closing shareholders’ funds 6,319,075 3,811,439 
  Notes to the parent company financial statements continued 
 
Provexis plc Annual report and accounts 2009        55 
10. Related party transactions 
The Company has taken advantage of the exemption conferred by Financial Reporting Standard 8 “Related 
party disclosures” not to disclose transactions with members of the Group headed Provexis plc on the 
grounds that at least 90% of the voting rights of the Company are controlled within that Group and the 
Company is included in the consolidated financial statements. 
 
The Company received and repaid £50,000 of bridging loans in August 2008 from certain directors and 
connected parties, and it paid an inducement fee of £10,000 to those parties for the bridging loans. See also 
note 8 to the consolidated financial statements on page 35. 
 
11. Post balance sheet events 
Details of post balance sheet events are given in note 24 to the consolidated financial statements on 
page 49. 
 
  Company information 
 
 
Provexis plc Annual report and accounts 2009        56 
 
Company number   5102907 
 
 
Directors    C D Buck 
     N C Bain 
     J B Diggines 
     K Rietveld 
     S N Moon 
     S N Morrison 
     I Ford 
 
 
Audit committee   N C Bain 
C D Buck 
 
 
Remuneration committee  C D Buck 
N C Bain 
 
 
Registrars    Equiniti Limited 
Aspect House 
Spencer Road 
Lancing 
West Sussex BN99 6DA 
 
 
Secretary and registered office I Ford 
Thames Court 
1 Victoria Street 
Windsor 
Berkshire SL4 1YB 
 
 
Nominated adviser and broker  Arbuthnot Securities Limited 
Arbuthnot House 
20 Ropemaker Street 
London EC2Y 9AR 
 
 
Principal solicitors   Shoosmiths 
Apex Plaza 
Forbury Road 
Reading 
Berkshire RG1 1SH 
 
 
Auditors    BDO Stoy Hayward LLP 
Kings Wharf 
20–30 Kings Road 
Reading 
Berkshire RG1 3EX