IQE PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 £ millions
Revenues 2005 - 2014
£ millions
EBITDA 2005 - 2014
0.00
35.00
70.00
105.00
140.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-15.00
0.00
15.00
30.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Track record of more than 20% CAGR over last 10 years 
High operational gearing to transform revenues into profitability 
Operational and financial resilience 
Strong position in high-growth markets provides strong outlook IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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*  The adjusted performance measures are reconciled in note 4 on page 63. 
**  Free cash flow is defined as net cash flow before acquisitions, financing and net interest paid. 
EBITDA has been calculated as follows:
2014 
£’000 
2013 
£’000 
2012 
£’000 
201 1 
£’000 
2010 
£’000 
Revenue 1 12,01 1 126,774 87 ,961 75,318 72,650
EBITDA (see below) 27 ,009 24,920 16,437 13,955 13,1 15
Operating profit
- Adjusted* 17 ,618 14,556 9,202 8,657 8,510
- Reported 7 ,167 7 ,346 7 ,014 7 ,373 7 ,208
Profit after tax
- Adjusted* 16,701 14,202 8,401 9,727 8,808
- Reported 1,996 6,126 6,631 8,443 7 ,506
Net cash flow from operations
- Before exceptional cash flows 19,614 16,173 4,679 10,823 10,250
- Reported 14,861 12,762 4,109 10,823 10,250
Free cash flow**
- Before exceptional cash flows 1 1,446 5,389 (1,569) (8,585) 3,315
- Reported 6,693 1,978 (2,139) (8,585) 3,315
Net (debt) / funds (31,251) (34,351) (15,483) (3,921) 7 ,021
Equity shareholders’ funds 1 19,056 1 10,498 90,189 72,750 62,274
Basic EPS – adjusted* 2.51p 2.09p 1.47p 1.86p 1.91p
Basic EPS – unadjusted 0.25p 0.93p 1.16p 1.62p 1.63p
Diluted EPS – adjusted* 2.42p 2.00p 1.40p 1.74p 1.76p
Diluted EPS – unadjusted 0.24p 0.89p 1.10p 1.51p 1.50p
2014 
£‘000
2013 
£‘000
2012 
£’000
201 1 
£’000
2010 
£’000
Profit after tax 1,996 6,126 6,631 8,443 7 ,506
Tax 3,247 (934) (503) (1,551) (1,172)
Interest 1,924 2,154 886 481 874
Share based payments 1,458 1,415 1,360 1,284 1,302
Profit & loss on disposal 15 - - - -
Exceptional items 7 ,877 5,065 570 - -
Depreciation 6,590 8,503 5,998 4,175 3,619
Amortisation of intangible assets 3,902 2,591 1,495 1,123 986
EBITDA 27 ,009 24,920 16,437 13,955 13,1 15
Five year ﬁnancial summary IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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The way we interact 
with technology as 
we and “things” 
connect, is 
changing - enabled 
by compound 
semiconductors IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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What’s inside?
Five-year financial summary 1 ..........................................................................................................................................
Chairman’s statement 5 .......................................................................................................................................................
CEO’s statement 6 ..................................................................................................................................................................
Our vision 8 ...............................................................................................................................................................................
Why compound semiconductors? 9 ..............................................................................................................................
What we do 1 1 .........................................................................................................................................................................
Strategic report 13 .................................................................................................................................................................
 Our competitive advantage 13      ......................................................................................................................................................
 Our business model 13      .....................................................................................................................................................................
 Our markets 14      .....................................................................................................................................................................................
 Our strategy 22      ....................................................................................................................................................................................
 Operational highlights 22      ...............................................................................................................................................................
 Key development milestones 23      ..................................................................................................................................................
 Current trading and outlook 23      ....................................................................................................................................................
 Financial highlights 24      ......................................................................................................................................................................
 Financial review 25      .............................................................................................................................................................................
 Innovation, research & development 26      ...................................................................................................................................
 Our commitment 27      ..........................................................................................................................................................................
 Risks and risk management 28      .....................................................................................................................................................
Directors’ biographies 30 ....................................................................................................................................................
Directors’ report 32 ................................................................................................................................................................
Remuneration report 36 .....................................................................................................................................................
Corporate governance report 41 .....................................................................................................................................
Independent auditors’ report 45 ......................................................................................................................................
Financial statements 47 .......................................................................................................................................................
 Consolidated income statement 47      ............................................................................................................................................
 Consolidated balance sheet 48      .....................................................................................................................................................
 Consolidated statement of changes in equity 49      .................................................................................................................
 Consolidated cash flow statement 50      ........................................................................................................................................
 Parent company balance sheet 51      ...............................................................................................................................................
 Parent company statement of changes in equity 52      ...........................................................................................................
 Parent company cash flow statement 53      .................................................................................................................................
Notes to the financial statements 54 .............................................................................................................................
Officers and professional advisers 88 ............................................................................................................................ IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Enabling  
            advanced 
                      technologies IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Chairman’s statement
As we, and the world around us become increasingly 
connected, so too does demand increase for the 
compound semiconductor components that are based 
on IQE’s wafer products. IQE’s materials not only enable 
the wireless communications that drive the “Internet of 
Everything” revolution, but also the increasing number 
of sensors, display, gesture recognition and other 
advanced technologies upon which we are already 
dependent.  
It is my pleasure to introduce IQE’s Annual Report for 
2014. 
IQE is a global leader in the fast moving, highly dynamic 
world of semiconductor technology. We estimate that 
during 2014, more than one billion wireless chips and 
over two billion photonics chips containing IQE materials 
were shipped for use in a wide range of industrial and 
consumer applications including smartphones and 
tablets. 
In terms of wireless components, IQE has a market share 
of more than 55% of the global demand for compound 
semiconductor wafers. 
It is testament to the strength and robustness of IQE’s 
business model that, despite the challenges of well 
documented inventory management corrections across 
our core customer base, the Group has delivered a 21% 
year on year increase in adjusted operating profit to 
£17 .6m (reported operating profit £7 .2m) and an increase 
of more than 20% in adjusted, fully diluted earnings per 
share (EPS) of 2.42p (reported fully diluted EPS 0.24p).    
Improvements in operating efficiencies have contributed 
to our ability to generate improved profitability on lower 
revenues, as has the consolidation resulting from our 
strategic acquisitions in previous years which have been 
fully integrated into the Group to help yield significant 
cost savings during 2014.  
All in all, the foundations are in place for a very exciting 
future. We have created a world class platform for the 
development and supply of advanced semiconductor 
materials evidenced by: 
❖ a global footprint spanning US, Europe and Asia; 
❖ an unparalleled portfolio of advanced semiconductor 
materials technology; 
❖ a highly talented, committed and experienced team;  
❖ proven credibility and envied reputation; 
❖ a secure multi-site, multi-platform supply; 
❖ scale and cost leadership; and 
❖ the largest manufacturing, research and development 
capacity in the industry. 
The wireless market, which accounts for approximately 
80% of our sales, remains our key market.   
Communications chips continue to evolve in order to 
meet the challenge of the exponential growth in data 
traffic, whilst bandwidth becomes increasingly more 
fragmented and trends to higher frequency.  Our 
materials will continue to be the key enablers 
underpinning this evolution. 
2014 has seen record growth in our photonics business 
units with demand outstripping supply in a number of 
market segments. Feedback from our customers indicates 
further significant growth in the photonics sector as the 
need for sensors, energy generation (CPV), heating, 
lighting and other energy efficient products come to the 
foreground. 
United Nations Educational, Scientific and Cultural 
Organisation (“UNESCO”) has designated 2015 as the 
International Year of Light in recognition of the growing 
importance of photonics. We believe that the increase in 
demand in this market sector will ensure that we 
continue to deliver strong growth from further diversified 
revenues over the coming years. 
2014 proved to be a challenging year during which we 
made excellent progress with our organisational 
development programme. I would once again like to take 
this opportunity to thank the IQE management and staff  
for their commitment and dedication without which our 
current success and future plans would be impossible. We 
have a great team doing outstanding work. 
Finally, of course, I would also like to thank you, my fellow 
shareholders, for your continued belief in and support of 
IQE.
IQE is the world’s leading manufacturer and supplier of 
advanced semiconductor wafer products. 
Our enabling technology is found at the very heart of billions of 
smartphones, tablets and other advanced high-tech devices that 
are sold each year. IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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CEO’s statement
IQE is a global leader in the supply of advanced wireless 
materials, and aims to replicate this success in its other 
primary markets: photonics, infrared, advanced solar 
(CPV), LED, power switching and advanced electronics.   
The Group has now established the platform for 
delivering this strategy, through the following USPs:     
❖ Global footprint spanning US, Europe and Asia 
❖ Breadth and depth of advanced semiconductor 
materials technology 
❖ Talented, committed and experienced team  
❖ Proven credibility and reputation 
❖ Secure multi-site supply 
❖ Scale and cost leadership 
❖ Largest capacity in the industry 
This platform supports both the continued robust growth 
potential available in our markets and enables us to 
continue to diversify our revenues over the coming years. 
IQE has emerged as a market leader through a period of 
rapid change 
The mobile communications industry has gone through a 
revolution over the past decade.   Less than ten years ago, 
one in every two mobile phones sold was a Nokia, with 
RIM’s Blackberry devices taking a strong second place in 
the market.   Since that time, smartphones have taken the 
world by storm and  communications technology has 
moved rapidly from 2G to 3G and now LTE/4G.  Mobile 
data demand is growing exponentially, requiring ever 
more complex and high performance RF front end 
solutions, with increasing Compound Semiconductor 
content.  Apple and Samsung now dominate the handset 
space, and the mobile revolution has spread to new types 
of devices including tablets and wearables, and is 
enabling the Internet of Things (IoT). Future handset 
designs will include more and more optical content for 
proximity sensing, auto focus, gesture recognition, sensing 
and displays.  
These changes have driven a revolution within the supply 
chain.  Skyworks has emerged as the new leader in the 
chip space, as some chip companies have waned and 
others have consolidated to compete.    Throughout this 
period of rapid change, IQE has also played a major role in 
reshaping the supply chain.  Both through technological 
innovation, and through consolidating the materials 
space, IQE has emerged as the clear industry leader for 
advanced materials. 
IQE is the global leader in the provision of wafers to the 
wireless chip industry, with an estimated market share of 
over 50%.  The wireless market, which accounts for 
approximately 80% of the Group’s sales, remains a key 
market driver for the Group.  With the adoption of 
numerous optical devices in next generation handsets, 
this will continue to be a major part of the Group’s future 
business. 
Furthermore, IQE has developed an unparalleled depth 
and breadth of advanced materials technology which 
spans wireless, infrared, photonics, solar, power electronics 
and CMOS++.   The market drivers for adoption of these 
technologies are very powerful: Big Data; IoT; Energy 
Efficiency (power generation and usage);  Smart Cities; 
Industry 4.0; Space Technologies; Robotics and 
Autonomous Vehicles; and 5G . These will all drive 
increasing adoption of Compound Semiconductor 
Technologies.  As a result, our non-wireless revenues are 
growing rapidly and increasing our overall revenue 
diversity.   
IQE has been at the forefront of the compound semiconductor industry 
for over 25 years, and has developed an unparalleled depth and 
breadth of technology within its industry. 
The Group leverages its technology leadership and scale to deliver the 
performance, cost points and security of supply to support increasing 
mass market adoption across a significant number of high volume 
market verticals. IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Delivering progress through a challenging year 
After several years of strong growth, in 2014 the wireless 
market  paused for breath ahead of the next wave of 
hardware innovation.   Combined with an industry wide 
de-stocking, this volatility created a short term challenge 
for the Group.   We tackled this head on and delivered 
increasing underlying profitability and earnings, as well as 
strengthening our balance sheet as a result of lower 
deferred consideration and net debt.   
We also made solid progress in line with our strategic 
plan, including: 
❖ Our photonics business delivered year on year growth 
of 23% (in constant currency) driven primarily by the 
increasing adoption of  VCSEL technology into a wide 
range of applications from data centres through to 
industrial processes.  This ramp is at an early stage and 
has a long and sustainable future.  
❖ Our solar energy business (CPV) moved into 
production in early 2015, with our material now being 
deployed into the field.   Although this was later than 
originally anticipated, the future for this business 
remains bright as end market pull should see this 
ramp through 2015/16. 
❖ Conversely, our power business  has progressed more 
rapidly than we originally expected.  A number of 
major technical milestones and commercial 
partnerships are positioning the Group in a strong 
position to commercialise this technology.   
❖ The Group made excellent progress with its 
Organisational Development Programme 
which included collaboration between IQE, WIN 
Semiconductors and Nanyang Technological 
University in the formation of the Compound 
Semiconductor Development Centre (“CSDC”), which 
has emerged from the Group’s Singapore operation, 
referred to in the operational highlights section on 
page 22. 
Positioned for continued strong growth over the next 
decade 
Change is a constant in our world.   The inexorable drive 
for electronic devices to continue to achieve higher levels 
of functionality, speed, performance and efficiency  will 
unquestionably necessitate the increasing use of more 
sophisticated semiconductor materials.   These advanced 
semiconductors are enabling a range of new mass market 
applications such as gesture recognition and short range 
optical communication,  and at the same time disrupting 
some existing large markets such as solar energy and  
power switching.  We expect that this rate of change will 
continue to accelerate. 
We have established a global manufacturing platform that 
has the capacity to be able to take advantage of the 
opportunities in our markets.  The Board remains focussed 
on increasing throughput, which with the operational 
gearing is expected to deliver improving margins and 
cash generation. 
This provides a bright outlook for IQE, which through its 
broad technology portfolio has developed a solid 
foundation in the wireless market; a high growth 
photonics business; and transformational opportunities in 
Solar energy and Power electronics.  The Board believes 
that this creates a platform for future growth as well as 
increasing the diversity of the Group’s revenues. 
In addition to our leadership position in the 
wireless sector, our market data indicates that IQE 
has almost 50% global share across all of today’s 
markets for compound semiconductor wafers. 
Epiwafer market share 
(all markets) IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Our strategy 
To use our technology leadership and 
scale to deliver the performance, cost points 
and security of supply required for mass 
market adoption of compound 
semiconductor materials.
Our delivery 
Number one provider of compound 
semiconductor wafer products by market 
share and scale and clear technology leader 
with an unparalleled breadth of technology. 
Leading the advancement of new materials 
Our vision 
To be the global number one provider of 
advanced semiconductor materials. IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Evolution in materials 
Mankind’s ability to master materials is inextricably linked 
to advances in technology to such an extent that key 
milestones throughout human history are identified by 
the dominant material of each era. From the stone age, 
through the iron and bronze ages, innovation in materials 
has played a key role in technological development. We 
now live in the semiconductor age. 
The elements  
Every material in the universe is made from one or more 
of the fundamental elements. There are 1 18 known 
elements. The periodic table is the most common way of 
representing the elements by arranging them in Groups 
according to their properties.  
The semiconductor age 
Elements in groups III, IV and V of the periodic table 
exhibit some important electronic properties that can be 
made to conduct or not conduct an electrical current. 
These materials are known as semiconductors. 
By harnessing the properties of semiconducting materials, 
scientists and engineers have enabled the electronics 
revolution that has transformed our lives since the early 
1960s. 
Silicon has been the backbone of the electronics 
revolution from the 1960s by virtue of the continuous 
miniaturization of the electronic circuits.  This concept, 
which was expressed by one of the founders of Intel, 
Gordon Moore, has become known as “Moore’s Law” . 
Impressive as the impact of silicon has been on our lives, 
it has very basic and limited properties in the context of 
the broader family of semiconducting materials. This is 
why human innovation has turned to the advanced 
properties of other semiconducting compounds to 
compliment silicon and to enable the dawn of the digital 
revolution. It is mankind’s ability to harness the advanced 
properties of the full range of semiconducting materials 
that will drive the digital revolution for generations to 
come.  This is the world of advanced or “compound” 
semiconductors. 
Compound semiconductors 
Most people will be unaware that atomically engineered 
combinations of semiconductor elements called 
compound semiconductors, have already revolutionised 
their lives and are set to do so even more over the 
coming years and decades. 
The early markets for compound semiconductors have 
been in wireless, laser and LED applications. In other 
words, the advent of the internet, fibre-optic 
communication and the smartphone revolution have 
been fundamentally dependent on compound 
semiconductor technologies.    
The future’s bright 
The trends are clear, applications begin their lives based 
on silicon technology, but inevitably transition to 
compound semiconductors as human innovation 
demands more. 
But this is only the tip of the iceberg. Compound 
semiconductor technology will lie at the heart of human 
innovation for generations to come.  We are at an exciting 
inflection point, and at a time when the rate of change 
has never been quicker and continues to gather pace. 
All major chip companies include advanced 
semiconductor materials on their product roadmaps for 
future generations of high performance components. 
Integration is inevitable 
Of course, the mass adoption of new technologies is more 
than just a function of what is possible - it is a function of 
cost versus performance. 
Compound semiconductors will continue to gather 
momentum in their own right as the industry continues 
to increase scale which is enabling multiple technologies 
to advance whilst reducing overall costs. 
As silicon integration has been a key feature in increasing 
performance and reducing costs, so too with the 
integration of silicon with compound semiconductor 
technologies. Better performance, higher efficiencies and 
reduced costs will only be achieved by combining the 
advanced properties of compound semiconductors with 
Why compound semiconductors? IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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North&America&
Bethlehem,(PA((
Greensboro,(NC(
Somerset,(NJ(
Spokane,(WA(
Taunton,(MA(
Global leader
Europe&
Bath,(UK((
Cardiﬀ,(UK(
Cardiﬀ,(UK(
Milton(Keynes,(UK((
Asia&
Singapore(
Taiwan(
global presence IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
11
The supply chain 
IQE designs and manufactures advanced semiconductor 
materials.  Our finished products are compound 
semiconductor wafers (also called “epiwafers”). 
We manufacture atomically engineered wafer products to 
exacting technical specifications required by our 
customers.   
Our customers fabricate our wafers into the “chips” that 
form the critical components for a wide range of wireless 
communication and photonic devices.  
What we do
Our core IP is “Epitaxy” 
IQE manufactures epiwafers using a nano technology 
called “Epitaxy” . 
Epitaxy is a form of atomic engineering that requires high 
specification cleanrooms, sophisticated production tools 
and high levels of intellectual property.  
Essentially, we grow atomically thin films of crystals on a 
substrate.  The substrate is simply a physical and electric 
template required in order to handle our finished product.  
It’s the combination of layers produced by IQE that gives 
the epiwafer its properties.  The films are grown atomic 
layer by atomic layer. 
IQE: 
Materials specialists
We make advanced 
semiconductor wafers in high 
spec cleanrooms using 
sophisticated tools and 
extensive IP
Our customers: 
Chip specialists
Our customers fabricate 
our wafers into chips
OEMs: 
System specialists
OEMs utilise these chips to 
make devices and systems IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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Efﬁcient power 
generation and usage 
is a 21st century 
priority - compound 
semiconductors 
enable high efﬁciency 
energy sources as 
well as power control 
for lighting, electric 
vehicles and mass 
transportation IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
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OUR COMPETITIVE ADVANTAGE 
Global footprint 
IQE’s operations span the US, Asia and Europe which also 
reflects the geographical diversity of our customer base. 
This allows IQE to be positioned close to its customers 
and maintain strong, long-term relationships. 
Breadth of technology 
As a pioneer of compound semiconductor technology, 
IQE has developed an unparalleled and comprehensive 
breadth of technology and advanced production 
platforms. 
Technology leadership 
Through organic development and through acquisition, 
IQE has established clear technology leadership and 
created a virtuous circle, which continues to attract the 
brightest and best talent. 
Cost leadership 
In the electronics industry, cost leadership is achieved 
through advanced technology and scale.  IQE has 
developed leadership in both. 
Security of supply 
Confidence in a secure supply is critical to the supply 
chains in which IQE operates.  IQE offers its customers 
identical supply from multiple locations for all its core 
technologies, allowing it to be a primary and trusted 
supplier to its customers. 
Our risk mitigation strategy 
IQE’s strategy is to be the most significant supplier to all 
of the major wireless chip companies in order to mitigate 
against the impact of swings in market share between the 
chip companies. 
Furthermore, the Group has embarked on a product 
diversification strategy to reduce its dependence on any 
single market whilst taking full advantage of 
opportunities in all new and emerging market segments 
that are and will be enabled by compound 
semiconductor materials. 
OUR BUSINESS MODEL 
Outsourcing pioneer 
In the early days of the industrial revolution it became 
absolutely necessary for manufacturers to be vertically 
integrated since there were no alternative sources of 
specialised goods and services. 
Only towards the middle of the twentieth century did 
specialisation become a competitive advantage. 
However, in new and emerging technologies, the early 
adopters were in a similar position to their industrial 
revolution forefathers in that the development of new 
processes and technologies required the early pioneers to 
establish all key parts of their supply chain. 
Specialisation within the silicon industry 
Early silicon chip manufacturers found it necessary to set 
up complete vertically integrated supply chains to source 
each part of the production process from raw materials 
through to final packaged product.  
As silicon technology matured, the industry saw the 
emergence of businesses specialising in different parts of 
the process to the extent that there now exist a large 
number of fabless companies who outsource the entire 
production process to large specialists such as TSMC Ltd 
and Global Foundries. 
Pioneering specialisation within the compound 
semiconductor industry 
The compound semiconductor industry shares similar 
attributes with the silicon chip industry. Some of the 
processes such as epitaxy require large scale investment, 
complex infrastructure support in the form of cleanrooms, 
environmental controls and most importantly, highly 
specialised skills and expertise. 
In 1988, IQE became the first compound semiconductor 
materials company to recognise the potential value in 
offering specialised outsourcing of compound 
semiconductor wafers and has witnessed an increasing 
trend towards this model over its twenty-five year history. 
By specialising in the complex epitaxy process, IQE offers 
its customers economies of scale, access to leading 
technology and the ability to do what they do best: 
design and refine their products. 
The high level of investment means that IQE’s business is 
highly operationally geared which facilitates significant 
scope for profitability once sales contribution exceed 
fixed costs. 
The last decade has demonstrated an unprecedented 
number of key industry suppliers selecting outsourcing as 
a key business advantage.
Strategic report IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
14
OUR MARKETS 
The key advantages of compound semiconductors over 
silicon are: 
❖ Compound semiconductors are much more efficient at 
emitting and receiving radio waves 
❖ Compound semiconductors are much more efficient at 
emitting and detecting light 
❖ Compound semiconductors operate at much higher 
speeds and lower power consumption 
❖ It is these advanced properties which determine the 
top-level markets for our materials: 
‣ Wireless 
‣ Photonics 
‣ Electronics 
Wireless 
Accounted for 79% of the Group’s sales in 2014. 
The wireless market covers electronic devices that 
communicate wirelessly. 
This includes but is not limited to mobile phones, 
smartphones, mobile networks, WiFi, smart metering, 
satellite navigation, and a plethora of other connected 
devices. 
Photonics 
Accounted for 20% of the Group’s sales in 2014. 
The photonics market covers applications that either emit or 
detect light. 
We segment the photonics market into: 
❖ Emitters and detectors 
❖ Infrared 
❖ Solar (CPV) 
❖ Lighting 
Electronics 
The electronics market combines the advanced properties 
of compound semiconductors with the low cost of silicon. 
We segment the electronics market into: 
❖ Power control 
❖ Advanced materials 
Wireless
79%
Photonics
20% IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
15
High performance wireless applications 
including smartphones, tablets, PCs, base 
stations and WiFi
Multiple Markets
Lasers and optical sensors for data 
communications, data storage, imaging 
and gesture recognition
Infrared materials for advanced sensing 
applications including night vision, 
thermal imaging and security
High efficiency concentrated 
photovoltaic (CPV) solar cells for utility-
scale energy generation
Power control applications including 
energy efficient power supplies, electric 
vehicles and LED lighting
Advanced compound semiconductor on 
silicon technologies for integration of CS 
and CMOS applications
One Focus IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
16 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
17
Wireless 
The wireless communications market has grown rapidly in 
recent years reflecting the increasing adoption of wireless 
technology, coupled with the need for an increased 
compound semiconductor content to support greater 
sophistication of mobile devices.  
Whilst handset replacement cycles have slowed, 
innovations such as wearable devices are expected to 
reignite the desire to upgrade connected devices such as 
smartphones. Coupled with the widely held view that the 
Internet of Everything will see 50 billion connected 
devices by 2020, the overall wireless market is expected to 
continue to grow with the global roll out of LTE, 4G, 5G 
and the evolution of WiFi. 
Smartphone shipments exceeded one billion units in 2014 
and are expected to grow to more than 1.5 billion in 2017 
(Source: IDC). This growth will be driven by new features, 
apps, social networking, entertainment and location 
based services. 
High-speed connectivity and added functionality drive 
the requirement for the advanced properties offered by 
compound semiconductor epiwafers.  The global roll-out 
of wireless broadband networks such as 4G/LTE devices 
increasingly rely on compound semiconductor content 
with 5G expected to demand a quantum leap in speed, 
power and efficiency. 
The migration to new WiFi standards is another major 
driver for RF components.  
The 802.1 1ac WiFi standard operates at 5GHz rather than 
the 2.6GHz currently used. The higher frequency which 
greatly increases the range and reliability of WiFi networks 
will further raise the demand for compound 
semiconductor based RF devices. 
Growth in the compound semiconductor content in 
smartphones will be driven by the need for more radio 
frequency functionality and greater complexity in wireless 
circuitry but will be partly mitigated by improved 
efficiencies and a drive towards reduced component 
footprints. 
Photonics 
Photonics represents applications which emit and detect 
light.  We segment this market into emitters and 
detectors, infra-red, solar and lighting. 
Emitters and detectors 
This encompasses a wide range of applications including 
optical interconnects, laser projectors, optical storage, 
cosmetic applications, gesture recognition, finger 
navigation and a wide range of other sensing 
applications. 
Optical interconnects 
Currently, wired data transmission in the home, the office 
and in data centres is largely undertaken using copper 
cables. However, data traffic is growing at an explosive 
rate due to technologies such as high definition imaging, 
video streaming, “Big Data” and cloud computing. This 
phenomenon is necessitating a switch from copper wires 
to optical communication.  This is a natural evolution 
which mirrors the transformation that has already taken 
place in the telecoms infrastructure. 
Optical interconnects offer significantly higher-speed data 
transfers over much longer distances than their copper 
counterparts, and are much more efficient.  Data centres 
have become major consumers of electrical energy, 
rivalling traditional heavy industries in terms of the power 
requirements needed to keep large warehouses full of 
servers operating and cooled. It is therefore of little 
surprise that enterprises such as data centres are amongst 
the first adopters, where optical technology now offers 
both higher performance and lower overall operating cost 
compared with copper. A number of contract wins for 
both production and development contracts were 
announced during 2014. 
Compound semiconductor technology that enables 
optical interconnects include Vertical Cavity Surface 
Emitting Lasers (VCSELs). VCSELs are an advanced laser 
technology geared to mass production and low cost.   IQE 
is the market and technology leader for VCSEL products, 
with world record data speeds in excess of 64 Gb/s 
already demonstrated.  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
18
Laser projection 
Conventional projection technologies utilise incandescent 
or halogen lamps as their light sources. Such devices are 
power hungry, physically bulky, have relatively short 
lifetimes and require focusing optics which can limit the 
image quality and flexibility.   
The emergence of lasers in each of the primary colours 
(red, green and blue) enables a low cost, high quality laser 
projection solution which can be miniaturized and does 
not require focusing optics.  This technology is called pico 
projection. 
Early pico projector technologies utilise LEDs for the light 
source but the next generation of devices is incorporating 
miniature laser projection units. 
Gesture recognition 
Gesture recognition represents the ability of electronic 
devices to recognise hand and body gestures and 
movements in order to control any device.  The advanced 
properties of compound semiconductor epiwafers are a 
key component in gesture recognition devices which are 
expected to appear in many new product launches over 
the coming years.  
The potential applications for this technology extend far 
beyond gaming, from medical applications, disability aids, 
remote controls, to sign language recognition, and more.  
In fact, the use of this technology is only limited by 
human imagination, and has far reaching implications for 
how we will interface with technology in the near future. 
It is anticipated that many household appliances will be 
controlled by gesture.  
Infrared 
IQE is the clear market leader in advanced gallium 
antimonide and indium antimonide substrates for use in a 
range of infrared and heat sensing applications.  
The sensitivity of current heat sensors enables a 
monochrome image so that applications such as night 
vision devices can only see in tones of green and black, 
whereas the new antimonide materials allow greater 
sensitivity so that different shades and colours can be 
distinguished, effectively producing full colour night 
vision images.  
The improved sensitivity is useful for search and rescue 
operations and the full colour night vision capability has 
major military potential in terms of enabling effective 
identification of personnel and equipment in low or zero 
visibility conditions. 
IQE is actively engaged in a number of collaborative 
programmes with leading industry players and 
government agencies in the development and supply of 
infrared materials based on antimonide (Sb) materials.  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
19
Solid state lighting (LEDs) 
Light emitting diodes (LEDs) are a high performance, low 
cost, green alternative to incandescent light bulbs. 
Global concerns about climate change and the Earth’s 
dwindling natural resources continue to be a priority for 
governments worldwide. Significant new policies and 
legislation continue to be introduced in the direction of 
renewable and highly efficient energy devices. 
Already, many continents have introduced wide-ranging 
legislation to progressively ban incandescent lighting. 
Alternative low energy, compact fluorescent lighting is 
unpopular because of perceptions of low quality lighting 
and on-going issues with heavy metal content including 
mercury. 
Solid state lighting is widely viewed as the only credible 
solution to replace the incandescent light bulb.  Efficient 
energy consumption will remain a key driver in the 
development and adoption of this technology, but the 
critical success factors are reducing cost and improving 
the ambience of these units.   
High quality gallium nitride on silicon (GaN on Si) 
provides the route map to achieving this, which will 
revolutionise residential and commercial lighting around 
the planet over the coming years. 
Solar (CPV) 
Solar cells utilising compound semiconductors (called CPV or Concentrated PhotoVoltaics) provide the highest 
efficiencies by using multiple layers of finely tuned materials to absorb sunlight across a wider range of wavelengths.   
As a result the efficiency of this material is already in excess of 44%, with a roadmap to increase this to beyond 50%.   
This compares with typical efficiencies of around 18% from amorphous silicon solar panels, while thin film technology is 
typically around 10 to 15% efficient. There is very little scope to improve the efficiency of these technologies due to the 
fundamental properties of the materials used.  
A further advantage of compound semiconductors is their tolerance of higher temperatures.  This means the cost of CPV 
systems is also reduced by using lenses which intensify sunlight and thereby reduce the amount of semiconductor 
required. 
Industry analysts IHS estimates that the addressable market for this technology will reach almost 8GW in 2018 (IHS CPV 
Report 2014). To put this in context, 1 GW represents approximately $150m of revenue for IQE, at a margin consistent with 
our existing business.  
The key milestone for adoption of volume production is the demonstration of a robust supply chain.  IQE has now 
qualified and demonstrated high volume capability and is working closely with its partners to ensure all the building 
blocks are in place for an efficient and robust supply chain. 
IQE has been through an extensive programme of product development and customer qualification and reached a 
major milestone in January 2015, moving into production.  Our material is now being deployed into field installations, 
and this business is expected to ramp through 2015/16.  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
20
Electronics 
Power 
Gallium nitride (GaN) is a compound semiconductor that 
offers a diverse range of RF, photonic and electronic 
properties. 
Of particular interest is the material’s ability to cope with 
high voltages, high temperature, and high power which 
makes it an ideal candidate for power control systems 
which are growing in demand driven by alternative 
energy sources such as solar, wind and wave power, and 
also the adoption of electric vehicles. 
It is estimated that globally, more than 10% of all 
electricity is ultimately “lost” due to conversion  
inefficiencies, as energy is switched from generation, to 
grid, and through to consumption. The scale of this loss 
exceeds the world’s entire supply of renewable energy 
generation.  
The power adapters that we use for our electronic 
devices, such as laptop power supplies, provide a vivid 
example of this phenomenon by virtue of the electrical 
energy that is lost in the form of heat generated through 
the conversion process. 
GaN offers superior performance and efficiency that are 
orders of magnitude better than the silicon technologies 
that dominate power switching devices today.   Indeed, 
this technology has the potential to eliminate up to 90% 
of the energy lost through switching. 
Our power business has made strong progress through 
2014, achieving several key technical milestones and 
building commercial partnerships. 
Advanced technologies 
IQE has developed a powerful range of advanced, 
engineered wafers such as germanium-on-insulator 
(GeOI), germanium-on-silicon (GeOSi) and silicon-on-
sapphire (SOS), which offer a high performance and low 
cost solution for next generation microprocessors, ultra-
high speed/high density flash memory and MEMS devices 
such as motion sensors. 
IQE has established a powerful position in these advanced 
technologies, working with some of the biggest names in 
the industry, which is reflected in a number of joint 
patents awarded in conjunction with Intel for the 
production of compound semiconductor materials on 
silicon substrates.  
We believe that our intellectual property in this field has 
the potential to revolutionise the semiconductor world, 
and in so doing will create significant long-term value to 
IQE stakeholders. 
Compound semiconductors enable the key twenty-first century technologies IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
21
The relationship between gallium 
arsenide (GaAs) and Silicon in 
wireless communication 
The first mobile phones in the 
1980’s used communication chips 
made from silicon.  As mobile 
communication evolved, higher 
levels of performance were 
demanded of these communication 
chips, which necessitated the use of 
gallium arsenide (GaAs).  In the 
many years since, there has been 
speculation periodically, that Silicon 
would recapture this market.  
In reality, the wireless 
communications revolution would 
not have been possible without 
GaAs technology. Indeed, even the 
current silicon technology is unable 
to meet the higher levels of today’s 
performance requirements.  
But that does not mean that there 
is no place for silicon in the wireless 
market. 
So what does this mean for the 
future?   
We believe that for the near future, 
both technologies will continue to 
address these different market 
segments with some areas of 
overlap.  In the longer term, the 
disruptive technology will be a 
hybrid between compound 
semiconductors and silicon.  This 
hybrid offers the performance 
advantages of compound 
semiconductors with the large scale 
production infrastructure of silicon.    
We are already beginning to see 
this hybrid technology making 
inroads in adjacent electronics 
markets.  Through its investment 
and innovation, IQE is continuing to 
position itself at the heart of this 
emerging technology revolution. 
Material Properties  Silicon has limited properties as a 
semiconductor material.  The 
shortcomings in the wireless 
communication properties of  
silicon can be partially overcome 
by using very complex circuit 
design.  However,  the level of 
complexity necessary is 
significantly more expensive to 
develop, and has much longer 
design cycles.  In contrast,  the 
highly advanced wireless 
communication performance of 
GaAs makes the circuits 
considerably less complex and 
hence considerably cheaper and 
quicker to design.   GaAs can 
inherently operate at much 
higher frequencies than silicon. 
Gallium arsenide (GaAs) vs silicon (Si)?  
Characteristics  The volume of global data 
traffic will continue to grow at 
an exponential rate for the 
foreseeable future.  
At the same time, the radio 
frequencies (bandwidth) 
available for radio 
communication are becoming 
significantly more complex 
(fragmented) eg 2G – single 
band; 3G – 5 bands; 4G/LTE – 
over 40 bands. In addition, 
wireless communication is 
trending to higher frequencies 
in order to pack more 
information into radio signals.  
These characteristics necessitate 
wireless chips becoming 
increasingly more complex. 
Market requirements   The increasing complexity of 
wireless communication 
necessitates bespoke radio 
solutions at the leading edge.  
For example, the communication 
chips in iPhones not only vary 
between territories, but between 
different carriers within the same 
territory.  A ‘one size fits all’ 
approach simply does not work. In 
addition, the continuing shift to 
higher frequencies goes beyond 
the capabilities of silicon, and 
necessitates the use of GaAs.  
Furthermore, time-to-market is 
critical and can make the difference 
between success and failure, so the 
handset OEMs are demanding 
rapid design iterations.
Economic models  
Chip designers use the 
technology which can deliver 
the threshold performance at 
the lowest cost.  Threshold 
performance continues to 
increase. 
Silicon technology is cost 
competitive  where the high 
design costs can be defrayed 
over larger volume. 
In contrast higher performance 
GaAs enables more complex 3G, 
4G and LTE solutions and is cost 
effective. 
Clearly, there is  a middle 
ground where the material 
chosen  will depend on the 
individual architecture adopted.   
The relationship between GaAs and Silicon in wireless communication is 
best explained by comparing the properties of these materials,  the 
characteristics of wireless communication, the markets requirements 
and the economics models of these materials IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
22
OUR STRATEGY 
Industry positioning 
IQE has been at the forefront of the compound 
semiconductor industry for over 25 years, and has 
developed an unparalleled depth and breadth of 
technology with in its industry. 
The Group leverages its technology leadership and scale 
to deliver the performance, cost points and security of 
supply to support increasing mass market adoption 
across a significant number of high volume market 
verticals. 
IQE is currently global leader in the supply of advanced 
wireless materials, and has aims to replicate this success 
in its other primary markets: photonics, infrared, 
advanced solar (CPV), LED, power switching and 
advanced electronics. 
The Group has established the platform for delivering this 
strategy: 
❖ Global footprint spanning US, Europe and Asia 
❖ Breadth and depth of advanced semiconductor 
materials technology 
❖ Talented, committed and experienced team  
❖ Proven credibility and reputation 
❖ Secure multi-site supply 
❖ Scale and cost leadership 
❖ Largest capacity in the industry 
The three primary strands of our strategy are: 
1. Diversify our end markets to exploit the strengths of 
each of our business units to enable new and 
emerging opportunities in areas such as “big data” , 
aerospace, safety & security, robotics & autonomous 
systems, energy efficiency & sustainability 
2. Maintain our technology leadership through which 
IQE will continue to exploit and commercialise its 
diverse IP portfolio 
3. Exploit our global presence and world leading 
technology platforms to maximize operational 
efficiencies and cost savings to maintain our 
competitive advantage 
These opportunities support both continued strong 
growth and the diversification of revenues over the 
coming years. 
Risk mitigation strategy 
The Wireless chip market, into which IQE supplies the 
core wafer technology, is dominated by a relatively small 
number of large chip manufacturers. These in turn supply 
very large end market customers such as Apple and 
Samsung.  
Large supply contracts, major platform design wins and 
the demand for a fast and flexible supply chain mean that 
big shifts in market share between chip suppliers is 
commonplace.  
IQE has implemented a strategy to mitigate against being 
overly dependent on a limited number of chip 
manufacturers by establishing strong supply relationships 
with all major chip companies, thereby ensuring IQE will 
always be part of the supply chain, regardless of who 
wins the large contracts.  
Through a combination of organic development and 
acquisition, IQE is now the clear global leader in the 
provision of wafers to the wireless chip industry, with an 
estimated market share of between 50%-60%.  The 
wireless market, which accounts for approximately 80% of 
the Group’s sales, remains a key market for the Group.   
OPERATIONAL HIGHLIGHTS 
Organisational development and market diversification 
The Group continued with its Organisational 
Development  Programme which was set out in 2013.  
This has involved transferring production between sites 
to improve operational efficiency,  enabling the Group to 
reduce its operating costs and achieve its cost reduction 
targets, and the creation of specific end market focussed 
Business Units.   
The Group has now established six Business Units along 
market lines, to address its primary and emerging 
markets :  
❖ IQE Wireless  
❖ IQE Photonics  
❖ IQE InfraRed  
❖ IQE Solar 
❖ IQE Power 
❖ IQE CMOS++  
Each Business Unit  has a clear product and customer 
focus, but continues to benefit from the production and 
technology synergies of the whole IQE Group. Each 
business unit’s KPIs in terms of production, delivery and 
quality metrics are monitored, managed and aligned with 
the overall Group KPIs. 
The Organisational Development  Programme has also 
included the formation of the Compound Semiconductor 
Development Centre (“CSDC”), which has emerged from 
the Group’s Singapore operation.  This was announced 
during the second half of 2014, and has become 
operational in Q1 2015.  This is a collaboration between 
IQE, WIN Semiconductors and Nanyang Technological 
University with the purpose of accelerating the 
development of compound semiconductor technology in 
Singapore, and providing an effective incubator for 
bringing new innovations to market.  IQE will be the 
wafer provider to the new high volume applications 
which emerge.  As detailed in Note 4, this programme 
necessitated the Group incurring cash costs relating to 
the reorganisation of £4.8m (2013: £3.4m), provisions for 
asset impairment of £6.3m, and provisions for onerous 
leases of £6.7m.   IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
23
Wireless 
IQE has continued to develop leading edge materials 
solutions in conjunction with its customer base to 
improve the performance of front end modules for the 
ever increasing demands on reduced power, size and fit 
for function.  This has resulted in ongoing improvements 
in efficiency of Power Amplifiers (PAs), which have 
consequently been able to continue to dominate the 
other solutions for this critical application. Device and 
systems architectures continue to evolve, and several 
programs have the potential to further increase 
compound semiconductor content. In addition, work is 
now beginning to address the requirements of 5G, which 
because of the higher frequencies are highly likely to 
require even more compound semiconductor content. 
Photonics 
VCSEL is the key enabling technology behind a number 
of high growth photonics markets including data 
communications, data centres, sensing applications, 
gesture recognition, health, cosmetics, illumination and 
heating applications.   
IQE is the market leader for outsourced VCSEL materials, 
which has been achieved by virtue of its technology 
leadership.  This includes the demonstration of VCSELs 
with record speeds, efficiencies and temperatures.  In 
addition, the 6” capability IQE demonstrated in 2014 has 
been significant in reducing the unit cost of chips and 
accelerating the adoption of this technology.   This is 
evident in the strong year on year growth in photonics 
sales, which was c.30% in constant currency for non-
infrared applications. 
The Group also announced its participation in a €23M 
programme to establish a Pan European pilot line for the 
production of VCSEL components. 
InfraRed 
IQE is a global leader in the supply of indium antimonide 
and gallium antimonide wafers for advanced infrared 
applications.   We made sound technical progress during 
2014 with the launch of the industry’s first 150mm indium 
antimonide wafers, a major milestone in reducing the 
overall cost of chips to drive increasing adoption.   This 
success was followed up with a number of significant 
contract wins for the division. In addition, there has been 
significant work in developing these materials for 
consumer sensing applications, which will drive much 
higher volumes of wafers in the future. 
Advanced Solar (CPV) 
As announced on 24 March 2014, IQE’s stake in Solar 
Junction (“SJC”)  was acquired by a new strategic investor 
with a strong interest in accelerating the deployment of 
CPV systems on a global basis.   IQE remains the materials 
partner to SJC by virtue of its exclusive wafer supply 
agreement.    IQE achieved full qualification with SJC  on 
its high volume manufacturing platform, and pilot 
production for field deployment commenced in January 
2015.   We expect this to ramp into volume through 2015 
and 2016. 
IQE also became a key partner in a EU funded 
programme during 2014, to develop 4-junction advanced 
solar cells for space applications. 
Power 
Gallium nitride on Silicon (GaN on Si) is driving a 
technology shift in the multi-billion dollar power 
switching and LED markets.  IQE has continued to push 
the technology boundaries and is making rapid progress 
both technically and in developing commercial 
relationships in the supply chain.   This includes an 
agreement with M/A-COM Technology Solutions Inc to 
deliver 200mm GaN on Si.   IQE was also selected as a key 
partner in the Clean Energy Manufacturing Innovation 
Institute announced by President Obama. 
Gallium nitride on Silicon Carbide (GaN on SiC) is similarly 
driving a technology shift in a number of high power 
radio applications such as radar, CATV and base stations.  
IQE has developed  high quality 150mm GaN on SiC 
material, which is enabling the supply chain to improve 
efficiency and reduce cost  in order to accelerate the 
adoption of this material.   The progress made by IQE was 
recognised during 2014 with an award from CS 
International. 
CURRENT TRADING AND OUTLOOK 
The Group’s global leadership in wireless and its 
developing pipeline of high growth opportunities 
positions it well to continue its growth profile over the 
coming years. 
The current financial year has started in line with 
expectations, and the outlook for the full year remains 
positive, with strong prospects driven by the Group’s 
diversification strategy.  The Board remains confident of 
achieving our expectations for the full year earnings and 
we anticipate that we will continue to benefit from strong 
cash flows.  
KEY DEVELOPMENT MILESTONES IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
24
FINANCIAL HIGHLIGHTS
£ millions
Revenues
UK pence
Fully diluted EPS
1
£ millions
Operating profit
1
£ millions
Net debt
2
£ millions
Cash from operations
1
£ millions
Deferred consideration
0
15
30
45
60
2012 2013 2014
0
33
65
98
130
2012 2013 2014
0
5
9
14
18
2012 2013 2014
0
5
10
15
20
2012 2013 2014
0
1
1
2
3
2012 2013 2014
0
10
21
31
41
2012 2013 2014
1
 before exceptional items 
2
 restated FY12 to include balances from acquisition on 15 Jan 2013     IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
25
Overview 
The Group’s underlying financial performance includes a 
number of adjusted profit measures that adjust for the 
impact of non-cash charges  and exceptional items as 
detailed in note 4.   These largely relate to a two year 
restructuring programme that was flagged in early 2013.  
No further restructuring costs are anticipated in 2015.  
Revenue 
Revenues of £1 12m were in line with expectations, 
reflecting H2 revenues of £60m up 15% from H1.   
Revenues were down from £126.8m in 2013 due to the 
impact of an industry wide inventory correction, foreign 
exchange (approx. 5%), and lower underlying growth in 
demand for wireless wafers.  
EPS 
Strong margins and cost reductions helped improve 
profitability.  This enabled the Group to generate an 
adjusted fully diluted EPS of 2.42p, up 21% from 2.00p in 
the prior year.  Reported diluted EPS was 0.24p, down 
from 0.89p.  
Gross profit 
Adjusted gross profit increased from £27 .9m to £31.6m, 
due largely to cost reductions and improved efficiencies.  
Reported gross profit increased from £23.1m to £26.0m.  
As a percentage of sales, adjusted gross margins 
increased from 22.0% to 28.2%, whereas reported gross 
margins  increased from 18.2% to 23.2% .  
Other Income 
Other income and expense has increased from a net 
charge of £0.2m to a net charge of £1.7m.  This relates to 
the following one-off items as detailed in note 4: gain on 
release of contingent deferred consideration, provision 
for onerous leases and impairment of fixed assets. 
SG&A 
Adjusted selling, general and administration expenses 
(SG&A) increased from £13.4m to £13.9m, largely 
reflecting the impact of foreign currency exchange.  
Reported SG&A increased from £15.6m to £17 .1m. 
Operating profit 
Adjusted operating profit increased by 21% from £14.6m 
to £17 .6m. Reported operating profit, which includes 
exceptional items, remained broadly flat at £7 .2m (2013: 
£7 .3m). 
Interest 
Interest costs reduced from £2.2m to £1.9m reflecting the 
reduction in borrowings,  and a reduction in the imputed 
interest relating to the discounting of long term balances. 
Pre-tax profit 
Adjusted pre tax profit increased by 25% from £13.0m to 
£16.2m. Reported pre tax profit remained flat at £5.2m. 
(2013: £5.2m) 
Taxation 
The income tax charge of £3.2m  primarily reflects 
deferred tax on exceptional items of £3.8m.  Excluding 
exceptionals, there was an underlying tax credit of £0.6m 
(2013: £0.6m) largely reflecting the benefit of R&D tax 
credits and deferred tax credits on losses recognised.    
The Group has sufficient tax losses available to shield 
future tax payable of up to £39.1m. 
Profit after tax 
Adjusted profit after tax increased by 23% from £13.6m to 
£16.7m.  Reported retained profit decreased from £6.1m 
to £2.0m, largely reflecting the exceptional deferred tax 
charge of £3.7m. 
Cash 
Cash inflow from operations, before exceptional items, 
increased 21% from £16.2m to £19.6m.  After exceptional 
items, cash generated from operations increased 16% 
from £12.8m to £14.9m.  
Capital investment 
Cash investments (excluding acquisitions) reduced £0.7m 
from £10.1m to £9.4m,  reflecting reduced spend on 
property, plant and equipment (down £2.0m) partially 
mitigated by higher spend on product development (up 
£0.6m)  and new IT systems (up £0.8m).  
Deferred consideration 
Deferred consideration at the year end was  £20.6m, 
down £15.0m (42%) from £35.6m 
Debt 
Net debt at the year end was £31.3m (2013: £34.4m), 
reflecting net cash generation. The Board will not be 
recommending the payment of a dividend.
FINANCIAL REVIEW IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
26
R&D activity 
Technology leadership lies at the heart of IQE’s strategy.   
This is supported by a culture of innovation and constant 
improvement.    
We are engaged in a number of research and 
development programmes in collaboration with 
customers, academia, research organisations and 
government agencies.    These programmes are funded 
through a combination of internal cash generation, 
customer funding, and government support. 
Development programmes are geared towards next 
generation applications as well as process improvements 
leading to greater throughput, higher-quality products, 
better manufacturing yield, increased production uptime 
and new product development. 
Whilst many R&D programmes are subject to non-
disclosure agreements and confidentiality, there are some 
programmes in the public domain, examples of which 
include: 
❖ Multi junction CPV solar cells 
❖ Integration of III-V with Si 
❖ Graphene for RF electronics 
❖ Sb-based materials 
❖ QD VCSELs (EU VISIT program) 
❖ Dilute nitrides for lasers and SWIR detectors 
❖ Mixed nitride-antimonide-based detectors 
❖ High power InP-based quantum cascade lasers 
A list of technical publications is available within the 
research pages of the IQE website at www.iqep.com. 
Industry events 
IQE actively participates in major industry events and 
frequently chairs, hosts and presents technical papers at 
international conferences. 
Government 
Many governments worldwide are recognising the 
importance of Key Enabling Technologies (KETs) in driving 
economic growth.   Indeed, the European Government’s 
economic growth strategy (“Horizon 2020”) has identified 
six such KETs which it believes will drive the economic 
growth of Europe over the remainder of this decade.  
Under Horizon 2020, European funding will be channelled 
towards supporting the commercialization of KETs, 
including pilot line production.  IQE’s products are well 
aligned with these KETs.  During 2013, Dr Drew Nelson 
was appointed to the High Level Group, which is advising 
the European Commission on the implementation of this 
strategy. 
With over 25 years’ of experience, IQE is widely 
recognised by government departments and agencies as 
world experts in advanced materials. Consequently, IQE 
has developed strong relationships with government 
agencies across the US, Europe and Asia, and is actively 
involved in several high profile government funded 
programmes.    By way of example, IQE was selected as a 
key partner is the Clean Energy Manufacturing Innovation 
Institute announced by President Obama in January 2014. 
Innovation 
Open Innovation 
IQE is classified by the Welsh Government as an “Anchor 
Company” in acknowledgement of its status as an 
exemplar in terms of its global leadership.   
As an Anchor Company, IQE was invited by the Welsh 
Government to run an Open Innovation pilot programme 
which has been highly successful in establishing new 
technology networks to identify long-term opportunities. 
IQE’s open innovation programme, ‘OpenIQE’ is actively 
helping to boost regional economies by collaborating 
with industrial and academic partners to identify supply 
chain opportunities within Wales and across Europe. 
Further details about IQE’s open innovation programme 
can be found on a dedicated website: 
www.openiqe.com. 
CoInnovate 
As part of IQE’s open innovation programme, a key 
“CoInnovate” conference is planned in the UK for mid 2015 
and is sponsored by a number of major industry and 
academic players.  
The CoInnovate conference website is at: 
www.coinnovate.co.uk.
INNOVATION, RESEARCH AND DEVELOPMENT IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
27
Corporate social responsibility 
The IQE Group actively promotes a philosophy of 
corporate social responsibility across all of its operations 
and engages in a number of local, national and 
international initiatives working with a wide range of third 
party organisations and authorities in areas such as ethical 
employment policies, educational and community work.  
Every effort will be made by all Group companies to 
ensure best business practice is deployed by: 
❖ Respecting the need for confidentiality across our 
global customer base by ensuring that any references 
to customers' names, products or services are not 
disclosed to third parties without the customer's 
consent; 
❖ Being open and honest about our products and 
services and communicating with customers all 
appropriate information they need to make informed 
decisions; 
❖ Ensuring that any issues or problems are dealt with 
efficiently, with fairness and in a timely manner; 
❖ Working closely with customers and potential 
customers to help us improve the value of the 
products and services we offer them; 
❖ Ensuring that we benchmark and evaluate what we do 
in order to constantly improve products and services 
in the marketplace; 
❖ Communicating with all stakeholders as and when 
appropriate, effectively and transparently subject to 
ensuring confidential information is not compromised; 
❖ Identifying and selecting suppliers using fair and 
reasonable methodologies; 
❖ Identifying and using suppliers who operate to ethical 
business standards; 
❖ Identifying and using local suppliers wherever 
possible; 
❖ Working closely with suppliers to help us improve the 
value of the products and services we offer customers 
to the benefit of the supply chain; 
❖ Ensuring that our terms and conditions are fair and 
reasonable; 
❖ Ensuring employment practices throughout the Group 
are fair and in full compliance with employment 
legislation; 
❖ Working with and supporting local and national 
charities; 
❖ Encouraging volunteer work in community activities; 
❖ Supporting local academic establishments; and 
❖ Participating in voluntary business advisory services 
via professional bodies. 
Each of the Group's subsidiaries is responsible for 
communicating and applying Group policies within their 
businesses taking account of local legislation and 
potential risks. The Group also actively engages with a 
number of industry Groups, educational bodies and 
charities to promote science and technology and to help 
contribute to community causes. 
As an AIM listed company, IQE is not eligible to participate 
in the London Stock Exchange FTSE4 Good programme, 
but nevertheless maintains standards and applies the 
principles of this index. The Group also actively engages 
with a number of industry Groups, educational bodies and 
charities to promote science and technology and to help 
contribute to community causes. 
Business conduct and ethics 
Our Code of Conduct requires our employees to carry on 
their business activities in a respectful manner and to 
avoid bringing IQE’s reputation into disrepute.   This 
includes complying with the laws and regulations in the 
countries in which we operate and do business.   
Our Code of Conduct also requires staff to uphold high 
standards of ethics throughout the Group.  Our policy and 
controls are designed to prevent bribery, and contain 
whistle blowing provisions which enable any employee to 
raise concerns about a potential breach of policy or 
malpractice. 
OUR COMMITMENT IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
28
Quality 
IQE’s reputation for quality and excellence in products and 
service is second to none. A philosophy of total quality is 
integrated throughout the Group’s operations and each of 
the Group’s manufacturing facilities worldwide is 
independently accredited to the international standard for 
Quality Management: ISO9001. 
IQE's ongoing commitment to provide the highest quality 
of service ensures customer satisfaction covering the 
entire customer relationship experience, from order 
inception through to delivery and after-sales support.  
IQE's quality assurance program includes wafer evaluation 
using the most advanced measurement techniques 
applied specifically to its customers' structures, thereby 
ensuring consistent delivery of the highest-quality 
products. Rigorous data logging and documentation of all 
manufacturing processes and procedures maintain a 
system of full product traceability. IQE's thorough 
materials characterization processes ensure excellent 
repeatability and reproducibility.  
Customers strongly value the trust and confidence they 
have established with IQE as a "pure play" supplier with 
whom they share their most confidential and proprietary 
device design information. The IQE strategy is to 
consolidate and maintain its position as the pre-eminent 
supplier of epiwafers rather than vertically integrate into 
device or component manufacturing. This philosophy 
protects customer interests to the fullest and facilitates 
excellent supply chain relationships.  
Employing its extensive wafer production experience, IQE 
continually maintains its technological leadership through 
the development and implementation of new growth and 
characterization technologies and new materials 
solutions. IQE is actively involved in partnerships with its 
suppliers of crystal growth and characterization 
equipment to develop the next generations of epitaxy 
and metrology equipment with specific focus on 
increasing production efficiencies, reducing epiwafer 
costs, and maintaining its technological leadership.  
The environment  
IQE is fully committed to creating business growth whilst 
ensuring that the impact on the environment is 
minimised and that all activities are conducted safely by 
appropriately trained and qualified employees. The Group 
works closely with all key stakeholders to ensure that its 
global facilities, and those activities over which it has 
influence through its supply chain, operate in a way that is 
ethical and in accordance with best practice. 
Policies relating to quality and environmental standards 
are available on the company’s website at www.iqep.com 
along with access to third party accreditation certificates. 
Raw materials 
The primary raw materials used in IQE’s processes are not 
scarce and are in general sourced from multiple 
continents.  
In some cases, materials may have uses in multiple 
industries and as such, may be prone to temporary 
fluctuations in supply and demand where there are surges 
in usage. 
One such example is Indium which is in relatively 
abundant supply. Indium is used in small quantities in the 
manufacture of flat panel displays. A sudden surge in 
demand for flat panels had a short term impact on global 
indium pricing but such impacts are normally short-lived 
and their affect on IQE usually negligible.  
Natural disasters 
IQE operates multiple global manufacturing facilities 
which customers see as key mitigation against the impact 
of natural disasters.  
However, the impact of such disasters on other parts of 
the supply chain cannot be ruled out but such macro-
economic factors would have a much wider impact on the 
global economy. 
RISKS AND RISK MANAGEMENT IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
29
Supply chain risk mitigation 
Upstream supply chain 
The Company nurtures close working relationships with 
its supply chain and works closely with vendors to resolve 
potential supply issues as well as to develop new 
products.  
Wherever practicable, the Group qualifies and utilizes 
multiple sources for its key raw materials and 
continuously monitors its supply chains.  
Downstream supply chain 
Approximately 80% of the Group’s sales are concentrated 
in the wireless communications market, where we supply 
advanced semiconductor materials to the companies (RF 
chip companies) that make the wireless communication 
chips used in smartphone, tablets, and other wireless 
devices. 
The top dozen RF chip companies account for the vast 
majority of all advanced communication chips made 
globally.  IQE’s strategy is to embed itself as a significant 
supplier of advanced semiconductor materials with all of 
the major RF chip companies in order to reduce the 
potential impact of swings in market share between 
these companies.  
This risk mitigation strategy for wireless products was 
significantly enhanced following the acquisitions in 2012 
and 2013, which brought significant supply relationships 
with two of the worlds largest RF chip companies.  
Following these acquisitions, it is estimated that IQE has 
in excess of 50% market share globally.  
Process improvements 
IQE’s strategy is to focus on high-growth technology 
markets that are characterized  by their greater demand 
for higher performance materials such as those supplied 
by IQE.  
Constant improvement and innovation throughout the 
supply chain can reduce the area of advanced 
semiconductor required, for example by shrinking chip 
size or improving production yields.  Whilst such 
improvements can be a drag on demand, the resulting 
cost reduction can greatly assist even faster adoption of 
wireless technology in new devices and applications 
thereby stimulating overall growth. 
Alternative technologies 
There are many examples in history where innovation has 
led to new technologies that disrupt demand for well 
established, incumbent technologies.    
The Board believes that this represents much more of an 
opportunity than a threat for IQE’s business, where 
compound semiconductors are seen as the disruptive 
technology.  Indeed, as expectations and demand for 
higher performance and greater efficiencies continue to 
increase, this creates new market opportunities for 
compound semiconductors. 
There has been much commentary in the UK about the 
threat that silicon will replace compound semiconductor 
technology in mobile communication.  The Board 
believes that this is contrary to both the underlying 
technology trends, and the fundamental properties of 
these respective materials.  Indeed, it is widely expected 
that the next disruptive technology in the semiconductor 
industry will be the combination of compound 
semiconductor and silicon technologies, which will 
enable true ‘System on Chip’ integration.  IQE concurs 
with this view and is positioning itself to play a significant 
role in this transformation. 
As a world leader in advanced semiconductor materials, 
IQE is actively engaged on a number of collaborative 
activities in areas of research and development including 
materials such as graphene. 
Strategic Report 
A report of the Group’s performance during the year and 
future developments is given in the Chairman’s 
Statement and Chief Executive’s Review on pages 5 to 7 .  
Principal risks and uncertainties attributable to the Group 
are given in Directors’ report on page 33 to 34.  
Analysis of development and performance of the 
business and its financial position is given in the financial 
review on pages 24 to 25  
The directors use a number of key performance indicators 
to manage the business, disclosed in the financial review 
on page 25. Non financial KPIs are not disclosed. 
These areas form the required elements of the strategic 
report presented on pages 13 to 29 and has been 
approved by the Board of Directors and signed on its 
behalf by: 
Dr Andrew Nelson 
Chief Executive Officer 
24 March 2015 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
30
Phillip Rasmussen (44) 
Group Finance Director and 
Company Secretary 
Phillip Rasmussen qualified as a 
Chartered Accountant with 
Coopers and Lybrand, a 
predecessor firm of PwC. During 
his career with PwC he spent two 
years in Toronto, Canada and 
gained significant experience of 
working with and advising a 
broad range of companies in a 
variety of sectors, including 
multinational main market and 
AIM listed companies.  Before 
joining IQE, Mr Rasmussen was 
Director of Transaction Services 
with PwC in Bristol and worked 
with IQE on two major 
acquisitions during 2006.  He was 
appointed to the Board of IQE Plc 
in March 2007 and appointed as 
Company Secretary in January 
2009. 
Howard Williams (60) 
Operations Director 
Dr Howard Williams has held a 
number of positions within both 
Manufacturing and Service 
industry sectors, with roles 
ranging from Engineering 
Management to General 
Management. He was a member 
of the founding team of EPI in 
1988 and was appointed 
Operations Director for EPI in 
1996.  He was appointed General 
Manager of IQE Inc in 2002 and 
General Manager of IQE (Europe) 
Limited in 2003.  He was 
subsequently appointed Chief 
Operations Officer in 2004 and 
was appointed to the Board of IQE 
Plc as Operations Director in 
December 2004. 
Drew Nelson OBE (60) 
President and  
Chief Executive Officer 
Dr Drew Nelson has over 30 years 
experience in the semiconductor 
industry in a variety of research and 
managerial positions. Following a 
PhD in Semiconductor Physics, he 
joined BT Research Laboratories in 
1981, leading the Group responsible 
for the development of advanced 
optoelectronic devices for optical 
fibre communications. He 
subsequently managed the 
technology transfer from BT to 
Agilent for mass production. He co-
founded EPI in 1988 (which became 
IQE in 1999) and was appointed Chief 
Executive Officer of IQE Plc in April 
1999. Dr Nelson has held several Non-
Executive Directorship appointments, 
and served on several Government 
and Industry bodies. He received an 
OBE in 2001 for services to the 
Electronics Industry. He is currently a 
member of the High Level Group 
appointed by the EC to oversee the 
implementation of Key Enabling 
Technologies (KETs) throughout 
Europe. 
Current directorships:  PhotonStar 
LED Group plc. 
Directors’ biographies IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
31
Simon J Gibson OBE (57) 
Non-Executive Director, Chairman of 
the Remuneration Committee 
Professor Simon Gibson is Chief 
Executive of Wesley Clover 
Corporation. Wesley Clover is an 
investment vehicle and holding 
company. He has broad management 
experience in high-technology 
industries in both North America and 
Europe. Before joining Wesley Clover, 
he was co-founder, President and 
CEO of Ubiquity Software 
Corporation.  Ubiquity was acquired 
by Avaya Inc in 2007 . Prior to Ubiquity 
he held senior management roles at 
Newbridge Networks and Mitel. 
He is the Chairman and founder of 
the Alacrity Foundation, a graduate 
entrepreneurship program which 
operates in the UK and Canada. The 
Foundation provides young people 
with post graduate education, 
opportunity alignment and access to 
capital; with the objective of creating 
new companies. He was appointed to 
the Board of IQE in January 2002. 
Current Directorships:  Wesley Clover 
Wales Limited, Celtic Manor Resort 
Limited, Alacrity Foundation. 
Godfrey Ainsworth (59) 
Chairman, Non-Executive Director, 
Chairman of the Audit Committee 
Dr Godfrey Ainsworth qualified as a 
Chartered Accountant and was 
employed by Coopers & Lybrand 
before becoming an audit partner 
and then corporate finance partner 
with Spicer & Oppenheim.  He 
founded Gambit Corporate Finance 
in 1992, a practice specialising in 
the provision of corporate finance 
services where he was Managing 
Partner until his retirement from 
the firm on 30 November 2009.  He 
has held several Non-Executive 
Directorship appointments, 
including assignments for 3i plc 
and the Welsh Development 
Agency.  He has provided advice to 
IQE (formerly EPI) since its inception 
and was appointed to the Board in 
1997 .  He was appointed to the 
Board of IQE Plc in April 1999, and 
was appointed chairman in 
February 2002. 
Current directorships:  Omniport 
Holdings Limited, Seren Photonics 
Limited, Cardiff Partnership Fund, 
McMillan Williams Solicitors Limited.
David Grant CBE (67) 
Senior Independent Director 
Dr David Grant has a background in 
engineering and technology and 
was appointed to the Board of IQE 
Plc in September 2012. He was Vice-
Chancellor of Cardiff University from 
2001 to 2012. Previously he held 
leadership positions in a number of 
international businesses including 
United Technologies Corp., Dowty 
Group plc and GEC plc. He has been 
a Vice-President of the IET, and was a 
Vice-President of the Royal Academy 
of Engineering from 2007 to 2012. He 
was awarded the IEE's Mensforth 
Gold Medal in 1996 and in 1997 he 
was made a CBE for his contribution 
to the UK's Foresight Programme. He 
has a PhD in Engineering Science 
from the University of Durham. 
Current directorships:  Renishaw plc, 
DSTl, STEMNET, INNOVATE UK, NPL. 
   IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
32
The directors present their annual report and the 
audited consolidated financial statements for the year 
ended 31 December 2014. 
Activities 
The principal activity of the Group during the year was the 
development, manufacture and sale of advanced 
semiconductor materials.  The principal activity of the 
company is that of a holding company for the Group, the 
provision of services to subsidiary companies, and the 
research, development and provision of engineering 
consultancy services to the compound semiconductor 
industry. 
Business review 
A review of the Group’s trading during the year and its 
position at the year end is provided on pages 15 to 23.  
The review includes key performance indicators as 
detailed in the Five Year Financial Summary. The principal 
risks and uncertainties facing the Group are set out on 
page 28. The future outlook for the Group is set out on 
page 23.  
As part of the rationalisation and re-organisation 
programme further details of which are provided in note 4 
and the post balance sheet events note 27 the Group has 
entered into a joint venture agreement with WIN 
Semiconductors Corp and Nangyang Technological 
University to create the Compound Semiconductor 
Development Centre (“CSDC”) in Singapore. 
The CSDC is a centre of excellence for compound 
semiconductor technology, with the aim of accelerating 
the development and commercialisation of new advanced 
semiconductor products. IQE has a 50% equity stake in the 
new venture, and as part of its contribution to the 
establishment of the CSDC IQE is providing facilities, 
equipment and IP on favourable terms.  Further details are 
set out in note 4. 
This project forms part of IQE's global reorganisation plan, 
which in total is on track to deliver annual recurring 
synergies in excess of £7m per annum. As part of its 
contribution to this joint venture, IQE will be providing 
facilities, equipment and IP on favourable terms to the 
CSDC.  
Dividends 
The directors do not recommend the payment of a 
dividend (2013: £nil). 
Directors 
The directors in office at 31 December 2014 and 
throughout the year and their beneficial interests in the 
company’s issued ordinary share capital and share options 
are set out in the remuneration report on page 36.  
Substantial interests in shares 
As at 27 February 2015 , the company had been notified 
pursuant to the Companies Act of the following 
substantial interests in the shares of the company as 
defined by the Listing Rules in addition to those disclosed 
for the directors: 
T Rowe Price International 10.77%                               
AXA Investment Mgrs 8.85%                                        
Barclays Wealth 5.60%                                                  
Hargreaves Lansdown Asset Mgt 5.47%                      
Mr Richard I Griffiths 5.43%                                          
Herald Investment Mgt 5.26%                                      
Sanlam Four Investments UK 4.93%                            
TD Direct Investing 4.1 1%                                              
M&G Investment Mgt 3.66%                                         
shareholder analysis by Equinity  Research and development 
The Group incurred costs in respect of research and 
development during the year of £5,655,000 (2013: 
£5,271,000) of which £4,957 ,000 (2013: £4,346,000) has 
been capitalised in accordance with IAS 38 (“Intangible 
assets”).  The remaining research and development costs 
totalling £698,000 (2013: £925,000) have been charged to 
the income statement. 
Payment terms 
The Group seeks to agree favourable credit terms with its 
suppliers where possible, and adhere to the agreed terms. 
The Group’s average number of days’ purchases 
outstanding in respect of trade creditors at 31 December 
2014 was 74 days (2013: 88 days). 
Directors’ report IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
33
Employment policies 
It is the Group’s policy that there should be no 
discrimination in considering applications for 
employment including those from disabled persons.  All 
employees, including the disabled, are given equal 
opportunities in terms of career development and 
promotion.  Appropriate training is arranged for disabled 
persons, including retraining for alternative work of 
employees who become disabled, to promote their 
career development within the organisation.    
The Group remains committed to its policy of keeping 
employees fully informed about all matters which 
concern them.  Formal communications are used to 
achieve this objective, including intranet, e-mail and 
notice board announcements.  Employee involvement 
takes different forms in each subsidiary, ranging from 
formal committee meetings to less formal discussion 
Groups.  Schemes have been implemented to ensure 
that employees are properly rewarded for performance 
and loyalty. 
Going concern 
The directors, after making enquiries, and considering 
financial forecast to enable them to assess the future 
prospects of the Group and have a reasonable 
expectation that it will have adequate resources to 
continue operating for the foreseeable future and 
therefore the going concern basis has been adopted in 
preparing these financial statements. 
Principal risks and uncertainties 
The Board considers that the principal risks and 
uncertainties facing the Group are: 
Competition 
IQE’s business model involves building close working 
relationships with its customers and often involves 
forming multilevel partnerships from the product design 
stages through to pilot and volume production. Such 
arrangements can lead to long qualification timescales 
but once a product range and relationship is established, 
it can also create significant barriers to entry for 
competitors. 
In some cases, customers seek second source supply 
arrangements to meet their own business continuity 
planning policies. As such, there is a risk that market 
share may be eroded. The Board believes that IQE’s 
strategy to provide multiple site capabilities for all 
leading product lines provides an effective mitigation 
against this risk.      
Technological change 
Any technology based company faces a threat from 
technology change that has not been anticipated. IQE 
actively engages with customers, educational institutions 
and government agencies on a range of research and 
development (“R&D”) programmes. The company’s 
involvement in R&D activities coupled with its broad 
range of products and process technologies helps 
ensure a forward looking approach that positions IQE as 
a driver of technological change.  
Supply chain 
Changes in the supply chain such as scarcity of key raw 
materials could impact the business. IQE builds close 
relationships with its key suppliers in order to keep well 
informed about potential supply issues. The raw 
materials which sustain IQE’s products are not scarce 
resources. 
Retention of key employees 
The Board recognises that the retention and 
development of its workforce is critical to its long term 
success as a leading technology Group. IQE’s people are 
the heart of the business and in order to promote the 
development and retention of its staff IQE offers career 
progression, personal development and a range of 
benefits and incentives to its staff. This is reflected in low 
staff turnover, with many employees who have been 
with the company since it was formed over twenty years 
ago.  
In addition, IQE operates a highly effective, robust, and 
fully documented quality management system across all 
of its operations. These systems ensure that all key data 
and procedures are fully documented, reflecting IQE’s 
“learning organisation” philosophy. These rigorous 
systems provide IQE and its customers with a high level 
of confidence in terms of process reproducibility and 
product traceability, and minimise the potential impact 
of losing key personnel.   
Treasury 
IQE operates a central treasury function which acts in 
accordance with specific board policies. Speculative 
transactions are not permitted. The significant treasury 
policies relate to interest rates, foreign currency and 
liquidity, details are provided below.     IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
34
Interest rate risk 
The Board is aware of the risks associated with changes 
in interest rates and does not speculate on future 
changes in interest rates or currencies.  
The Group’s policy is to regularly review its exposure to 
interest rate risk, and in particular the mix between fixed 
and floating rate facilities.   The percentage of 
borrowings on fixed rate terms at 31 December 2014 was 
8% (2013: 10%). Floating rate liabilities are primarily 
indexed to LIBOR. The Group did not enter into any 
interest rate swap instruments during 2014.  This remains 
under regular review. 
As a guide to the sensitivity of the Group’s results to 
movements in interest rates, a 50 basis point (0.5%) 
movement in interest rates would have impacted the 
2014 annual interest charge by approximately £170,000 
(2013: £180,000). 
Further details are provided in note 19. 
Currency risk 
(a) Cash flow risk 
The Group’s presentational currency is sterling. However, 
the majority of sales are denominated in US dollars.  
Therefore, the Group’s cash flows are affected by 
fluctuations in the rate of exchange between sterling 
and the US dollar.  
This exposure is managed by a natural currency hedge 
because a significant portion of the Group’s cost base is 
also denominated in US dollars.  In particular, the 
majority of the Group’s raw materials are purchased in 
US dollars, and a significant portion of labour and 
overheads are also denominated in US dollars as five of 
the Group’s principal subsidiaries are situated in North 
America.    
To a lesser extent, the Group also generates sales in 
other currencies including Yen and Euros which are 
partially hedged where possible by purchases of some 
raw materials in these currencies. 
Taking into account the extent of the natural hedge 
within the business model, management periodically use 
forward exchange contracts to mitigate the impact of 
the residual foreign currency exposure. As at 31 
December 2014 there were no contracts in place. 
(b) Fair value risk 
The Group has operations in the UK, North America and 
Asia. Translation exposures that arise on converting the 
results of overseas subsidiaries are not hedged.  Net 
assets held in foreign currencies are hedged wherever 
practical by matching borrowings in the same currency.   
As a guide to the sensitivity of the Group’s results to 
movements in foreign currency exchange rates, a one 
cent movement in the US dollar to sterling rate would 
impact annual earnings by approximately £200,000 
(2013: £300,000). 
Further details are provided in note 19. 
Liquidity risk 
Prudent liquidity risk management requires maintaining 
sufficient cash and cash equivalents and the availability 
of funding through committed credit facilities. 
Management utilises detailed rolling cash flow forecasts 
as part of its cash management. This includes weekly 
forecasts for the next quarter and monthly forecasts for 
the next 12 months. 
Further details are provided in note 19. 
Credit risk 
The majority of the Group’s revenues are derived from 
large multinational organisations. Therefore the credit 
risk is considered to be small.  
Where the Group assesses a potential credit risk, this is 
dealt with either by up-front payment prior to the 
shipment of goods or by other credit risk mitigation 
measures. As a result the Group has historically had and 
continues to have a very low level of payment default. 
Further details are provided in note 19. 
Capital risk 
The Group’s main objectives when managing capital are 
to safeguard the Group’s ability to continue as a going 
concern in order to provide returns for shareholders and 
benefits for other stakeholders and to maintain an 
optimal capital structure to reduce the cost of capital. 
The Group defines total capital as equity in the 
consolidated balance sheet plus net debt or less net 
funds (note 24). Total capital at 31 December 2014 was 
£152,426,000  (2013: £146,602,000).  
Consistent with others in the industry, the Group 
monitors capital on the basis of the gearing ratio. This 
ratio is calculated as net debt divided by total capital. At 
31 December 2014 the gearing ratio was 21% (2013: 23%). 
All covenants in relation to the Group’s borrowing 
facilities have been complied with during the year. IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
35
Statement of directors’ responsibilities 
The directors are responsible for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and regulations. 
Company law requires the directors to prepare financial 
statements for each financial year. Under that law the 
directors have prepared the Group and parent company 
financial statements in accordance with International 
Financial Reporting Standards (IFRSs) as adopted by the 
European Union. Under company law the directors must 
not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of 
affairs of the Group and the company and of the profit or 
loss of the Group for that period.   
In preparing these financial statements, the directors are 
required to: 
❖ select suitable accounting policies and then apply 
them consistently; 
❖ make judgements and accounting estimates that are 
reasonable and prudent; 
❖ state whether applicable IFRSs as adopted by the 
European Union have been followed, subject to any 
material departures disclosed and explained in the 
financial statements; 
❖ prepare the financial statements on the going 
concern basis unless it is inappropriate to presume 
that the company will continue in business. 
The directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the company’s transactions and disclose with 
reasonable accuracy at any time the financial position of 
the company and the Group and enable them to ensure 
that the financial statements and the Directors’ 
Remuneration Report comply with the Companies Act 
2006. They are also responsible for safeguarding the 
assets of the company and the Group and hence for 
taking reasonable steps for the prevention and detection 
of fraud and other irregularities. 
The directors are responsible for the maintenance and 
integrity of the Group’s website, www.iqep.com. 
Legislation in the United Kingdom governing the 
preparation and dissemination of financial statements 
may differ from legislation in other jurisdictions.   
Provision of information to auditors  
So far as the directors are aware, there is no relevant audit 
information of which the company’s auditors are 
unaware.  The directors have taken all the steps that 
ought to have been taken as directors in order to make 
themselves aware of any relevant audit information and 
to establish that the company’s auditors are aware of that 
information.   
Independent Auditors 
A resolution to reappoint PricewaterhouseCoopers LLP 
will be proposed at the forthcoming Annual General 
Meeting. 
Approved by the Board of Directors and signed on its 
behalf by: 
Phillip Rasmussen 
Finance Director & Company Secretary 
24 March 2015  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
36
This report has been prepared applying the principles 
of the disclosures required for quoted companies under 
the Companies Act 2006 which were last amended in 
2013 to introduce enhanced statutory requirements for 
the disclosure of directors’ remuneration. Although not 
required to, the directors have decided to provide some 
of the directors’ remuneration disclosures similar to 
those that would be required of a fully listed company.   
In particular, the Remuneration Report describes how 
the Board has applied the principles of good 
governance relating to directors’ remuneration 
adopting the spirit of the UK Corporate Governance 
guidance.  A resolution to approve the report will be 
proposed at the forthcoming Annual General Meeting 
of the company. 
The report has been divided into separate sections for 
unaudited and audited information. 
(a) Remuneration Committee 
The Board considers itself ultimately responsible for the 
framework and cost of executive remuneration, but has 
delegated responsibility for determining the 
remuneration levels and conditions of service for 
executive directors and senior executives to the 
remuneration committee.  The committee’s approach is 
fully consistent with the company’s overall philosophy 
that all employees should be competitively rewarded in 
order to attract and retain their valued skills in the 
business, as well as supporting corporate strategy by 
directly aligning executive management with the 
company’s strategic business goals.  
The remuneration committee is comprised exclusively of 
independent non-executive directors of the company 
who have no personal financial interest, other than as 
shareholders, in the matters to be decided.  The members 
of the committee throughout the year were Dr G H H 
Ainsworth and S J Gibson.   The Chairman of the 
committee is S J Gibson.   
The committee follows the principles of the UK Corporate 
Governance guidance, and is responsible for determining 
the company’s policy on compensation of executive 
directors and the basis of their service agreements with 
due regard to the interests of shareholders.   It also 
approves the allocation of share options to employees.      
The committee operates under clear written terms of 
reference and has access to and takes independent 
professional advice as appropriate.  The committee met 
twice during 2014 to review the performance of the 
executive directors and other senior executives, and set 
the scale and structure of their remuneration.  
(b) Remuneration policy 
In establishing its remuneration policy, the committee has 
given consideration to Schedule B of the Best Practices 
Provisions annexed to the Listing Rules of the Financial 
Conduct Authority. The remuneration packages for 
executive directors and senior executives, as determined 
by the committee, are intended to attract and retain high 
quality executives, induce loyalty and motivate them to 
achieve a high level of corporate performance in line with 
the best interests of shareholders, while not being 
excessive. The remuneration of the executive directors 
consists of annual salary, performance bonus, share 
options, taxable benefits in kind and pension 
contributions. 
There is an annual review at which the committee 
approves the basic salary and profit sharing bonus 
scheme for each executive director. The committee 
receives input from the Chief Executive regarding 
recommended packages for executive directors and 
senior executives. 
(c) Basic salary 
Basic salary is determined by reference to individual 
responsibilities, performance and external market data. 
(d) Performance bonus 
Bonus payments are linked to the executive directors 
achieving internal annual plan targets in respect of 
profitability and other non-financial performance criteria.  
(e) Taxable benefits in kind 
The company reimbursed all fuel and maintenance costs 
in respect of the executive directors’ private cars, and 
these costs are treated as taxable benefits in kind.  Other 
taxable benefits comprise medical health and life 
insurance. 
(f) Share incentive schemes 
The company operates a number of share incentive 
schemes. The IQE Plc Share Option Scheme, as adopted 
on 26 May 2000 and amended by shareholders at the 
company’s Annual General Meeting on 17 May 2002, 
allows the company to grant options over up to 15% of 
the issued share capital and those options are subject to 
performance conditions.    
During the year, the committee approved the grant of 
7 ,095,762 share options to staff (2013: 13,513,274 share 
options). During 2014, Directors were awarded no nil cost 
options over ordinary shares in the company (2013: 
6,050,881).   
As at 31 December 2014, 50,536,520 share options (2013: 
56,152,601 share options) granted under the IQE Plc Share 
Option Scheme remain outstanding with exercise prices 
ranging from nil cost to 86p/option (2013: nil cost to 86p/
option).  8,541,823 share options were exercised by 
directors during the year (2013: nil). None of the directors’ 
share options lapsed during the year (2013: nil). The 
numbers and prices of share options at 31 December 2014 
and 31 December 2013 were as follows:
Remuneration report IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
37
(g) Pension arrangements 
The executive directors are members of the Group 
defined contribution pension schemes and their pension 
contributions are based on a percentage of basic annual 
salary.  Their dependants are eligible for the payment of 
a lump sum in the event of death in service.  There have 
been no changes in the terms of directors’ pension 
entitlements during 2014, and there were no unfunded 
pension promises or similar arrangements for directors 
at 31 December 2014.  
(h) Executive Directors’ service contracts 
It is the company’s policy to appoint executive directors 
under service agreements which are terminable by 
either party giving between six and twelve months’ 
notice.   Each of the agreements contain post-
termination restrictive covenants, which place limitations 
on solicitation of customers and employees of the Group 
and on acting in competition with the business of the 
Group.  There are no predetermined provisions for 
compensation on termination within executive directors’ 
service agreements.  However, the company is against 
rewards for failure and believes that severance 
arrangements should be restricted to basic pay and 
consequential payments such as earned bonus. In 
circumstances where there is no conflict of interest, the 
company allows executive directors to serve as non-
executive directors elsewhere. In such circumstances the 
remuneration received is retained by the director. 
(i) Non-Executive Directors’ contracts 
The non-executive directors have entered into service 
agreements with the company, and these are terminable 
by either party on three months’ notice.  Non-executive 
directors have specific terms of engagement, and their 
fees are determined by the Board within the limits set by 
the company’s Articles of Association.   Non-executive 
directors do not take part in discussions on their own 
remuneration.  
Dr G H H Ainsworth service fees of £125,000 (2013 
£70,000).  These fees were paid via a combination of cash 
and shares to Horton Corporate Finance.  Dr G H H 
Ainsworth is a managing partner of Horton Corporate 
Finance. VAT was charged on the invoices from Horton 
Corporate Finance and this was recovered by the 
company.   The cash element was £95,000 (2013 £70,000).  
The shares issued were to a value of £30,000 in the form 
of 105,340 new ordinary shares of 1p issued during 2014 
and 46,816 new ordinary shares issued in January 2015.  
S J Gibson service fees of £46,250 (2013 35,000) were 
paid in cash.  Of these fees £8,000 (2013 £6,000) was paid 
to S J Gibson and £38,250 (2013: £29,000), was paid to 
Fishstone Limited. S J Gibson is a shareholder in 
Fishstone Limited. VAT was charged on the invoices from 
Fishstone Limited and this was recovered by the 
company.  
Dr D Grant service fees of £46,250 (2013: £35,000) were 
paid in cash.   
The non-executive directors receive no other pay or 
benefits, do not participate in the company’s share 
schemes, and are not eligible for pension scheme 
membership.  Neither had any share options in the 
company at 31 December 2014 and it is not intended 
that share options will be issued to them in the future in 
accordance with Best Practice Guidelines issued by the 
Association of British Insurers. 
Option price
2014 
No. of options
2013 
No. of options
Share options of nil cost to 10p/option 16,364,700 25,781,307
Share options in excess of 10p/option to 20p/option 28,272,562 24,901,338
Share options in excess of 20p/option to 30p/option 4,335,000 4,120,000
Share options in excess of 30p/option 1,564,258 1,349,956
Total 50,536,520 56,152,601 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
38
(j) Share price performance 
The IQE plc share price has been compared with the AIM market all-share index for the five year period 2010 to 2014 as 
this was considered to be the most representative market Group.   
0"
400"
800"
1200"
1600"
2000"
2400"
2800"
0"
10"
20"
30"
40"
50"
60"
70"
AIM$
IQE$
IQE$vs$AIM$Share$Price$Performance$
1"Jan"2010"to"31"Dec"2014"
IQE"
AIM"
(k) Directors’ interests in ordinary shares of IQE Plc 
The interests in ordinary shares of IQE Plc of those directors holding office at 31 December 2014 were as follows: 
During the year, the Executive Directors purchased a total of 3.3 million shares. Dr Drew Nelson also entered into a 
share sale and repurchase agreement with Equities First Holdings (EFH) on 10th October 2014 for a total of 18 million 
existing shares.  He is obligated to repurchase all these shares at the end of a three year term, ending on 10th October 
2017 . The agreement provides that he has transferred all title and waives his voting rights in these shares. Under the 
terms of the agreement, EFH is prohibited from short selling or voting the shares during the term of the agreement. 
Furthermore, EFH will pay Dr Nelson income that reflects any dividends as they arise from all of these shares during the 
entire period as if Dr Nelson had continued owning all the shares himself. As part of this overall arrangement, Phillip 
Rasmussen and Dr Howard Williams have agreed to enter into separate loan agreements with Dr Nelson by pledging 
2.72 million  shares each to Dr Drew Nelson as security for loans provided by him of £274,000 to each of them. The 
monies raised by the Executive Directors have been used in part to fund the purchase of the shares and to satisfy 
income tax and NI obligations following the exercise of share options announced on 10th October 2014. Under HMRC 
rules, income tax and National Insurance becomes payable directly upon the exercise of options. Consequently, 
Directors often need to immediately sell at least half of the exercised shares to cover this tax and NI liability.  In the case 
of the IQE Directors, they have elected to raise the tax and NI monies through these arrangements in order to retain all 
of the exercised share options, thereby increasing their respective holdings in the company, in addition to purchasing 
additional shares. The share option exercises were part of IQE's LTIP , and the Directors were under no time obligation to 
exercise such share options, but chose to do so at this time in order to maximise their respective shareholdings in the 
Company. The table above includes the shares which are the subject of the repurchase obligation by Dr Nelson.
Name of director As at  
1 January 2014
As at  
31 December 2014
Executive:
Dr A W Nelson 29,325,132 35,259,218
Dr H R Williams 1,672,430 4,292,965
P J Rasmussen 852,822 3,473,357
Non-Executive:
Dr G H H Ainsworth 3,121,999 3,227 ,339
S J Gibson 301,855 301,855
Dr D Grant 215,000 215,000
Total 35,489,238 46,769,734
2010                          201 1                          2012                          2013                          2014 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
39
Post year end Dr G H H Ainsworth received 46,816 shares in settlement of Non-executive directors fees relating to the 
period from 1 October to 31 December 2014. Following this issue of New Ordinary Shares, Dr Ainsworth's total beneficial 
interest in the Company is 3,274,155 shares. There have been no other changes to the director’s interests between the year 
end and the date the accounts were issued. 
(a) Aggregate directors’ remuneration 
The total amounts paid for directors’ remuneration during 2014 were as follows: 
(b) Directors’ emoluments  
The aggregate emoluments paid to each director during 2014 were as follows: 
Notes: 
In aggregate, the executive directors made a gain of £1,058,584 (2013: nil) on the exercise of share options during the year. 
The majority of these shares were retained by the executive directors. Those sold were sold in order to satisfy the option 
price and tax arising on the exercise. The shares retained are included in the closing totals shown on page 38. Dr Nelson 
made a gain of £581,594 (2013: £nil) as part of these exercises. 
2014 
£’000
2013 
£’000
Basic salaries 858 801
Bonuses - 41 5
Non-executive fees 21 7 140
Subtotal salaries and fees 1,075 1,356
Car allowance 107 100
Benefits in kind 21 20
Money purchase pension contributions 56 83
Total 1,259 1,559
Name of director Salary  
fees and bonuses
Car 
allowance
Benefits in 
kind
Pensions 2014  
Total
2013 
Total
£’000 £’000 £’000 £’000 £’000 £’000
Executive:
Dr A W Nelson 366
47
8 - 421 497
Dr H R Williams 246
30
1 28 305 410
P J Rasmussen 246
30
12 28 31 6 512
Non-Executive:
Dr G H H Ainsworth 125 70
S J Gibson 46 35
Dr D Grant 46 35
Total 1,259 1,559 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
40
(c) Directors’ interests in share options of IQE Plc 
The interests in share options in IQE Plc of those directors who held office at 31 December 2014 were as follows: 
The directors do not hold shares or share options in any Group company other than IQE plc. 
The highest and lowest mid-market share prices in respect of the shares of IQE Plc during 2014 were 27 .50p/share 
and 12.50p/share respectively (2013: 36.50p /share and 18.00p/share respectively).  The mid-market price of IQE plc 
shares closed at 17 .75p/share as at 31 December 2014 (2013: 23.50p/share). 
Approval  
This report was approved by the Board of Directors on 24 March 2015 and signed on its behalf by: 
S J Gibson, OBE 
Remuneration Committee Chairman
Name of director As at  
1 January 
2014
Options 
granted
Options 
exercised
Options 
Cancelled
As at  
31 December 
2014
Date(s) from  
which exercisable
Executive:
Dr A W Nelson 7 ,946,186 - (4,800,753) - 3,145,433 1 Jan 2014 to 1 Jan 2017
Dr H R Williams 5,140,250 - (1,870,535) - 3,269,715 1 Jan 2014 to 1 Jan 2017
P J Rasmussen 4,261,787 - (1,870,535) - 2,391,252 1 Jan 2014 to 1 Jan 2017
Non-Executive:
Dr G H H Ainsworth - - - - -
S J Gibson - - - - -
Dr D Grant - - - - -
Total 17 ,348,223 - (8,541,823) - 8,806,400
Name of director As at  
1 January 
2013
Options 
granted
Options 
exercised
Options 
Cancelled
As at  
31 
December 
2013
Date(s) from  
which exercisable
Executive:
Dr A W Nelson 4,932,574
3,013,612
- - 7 ,946,186 1 Jan 2013 to 1 Jan 2016
Dr H R Williams 3,342,001
1,798,249
- - 5,140,250 1 Jan 2013 to 1 Jan 2016
P J Rasmussen 2,928,227
1,333,560
- - 4,261,787 1 Jan 2013 to 1 Jan 2016
Non-Executive:
Dr G H H Ainsworth -
-
- - -
S J Gibson -
-
- - -
Dr D Grant - - - - -
Total 1 1,202,802 6,145,421 - - 17 ,348,223 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
41
Although not required to, the directors have decided 
to provide corporate governance disclosures similar to 
those that would be required of a fully listed company. 
The Board recognises that it is accountable to the 
Group’s shareholders for the standard of governance and 
therefore seeks to maintain high standards in its 
management of the affairs of the Group, seeing it as a 
fundamental part of discharging its stewardship 
responsibilities.  Accordingly, both the Board and the 
audit committee continue to keep under review the 
Group’s whole system of internal control, which 
comprises not only financial controls but also 
operational controls, compliance and risk management. 
Throughout the year ended 31 December 2014, the 
company has continued to apply the principles of best 
practice governance adopting the spirit of the UK 
Corporate Governance guidance. 
The Board of Directors 
The management of the Group is directed by the Board 
of directors, which is responsible for ensuring the 
development and implementation of the Group’s overall 
strategy.   The Board of directors comprises the non-
executive Chairman Dr G H H Ainsworth, the Chief 
Executive Dr A W Nelson, two executive directors and 
two non-executive directors.  There is a clear division of 
responsibility between the non-executive Chairman, who 
is responsible for the running of the Board, and the Chief 
Executive, who is responsible for the running of the 
Group in accordance with the authority delegated by the 
Board.  This ensures that there is a balance of power and 
authority such that no one individual has unfettered 
powers of decision.  
The fees of the non-executive directors are paid in cash 
and or shares. The Board considers that the non-
executive directors are independent of management 
and free from any business or other relationship which 
could materially interfere with the exercise of their 
independent judgement.   The terms and conditions of 
appointment of the non-executive directors are available 
for inspection upon request to the Company Secretary.   
Dr David Grant is recognised as the senior independent 
non-executive director to whom concerns by staff of any 
suspected impropriety can be conveyed in private and 
investigated as required by the Code of Best Practice.   
Under the Company’s Articles of Association each of the 
directors is required ordinarily to retire by rotation once 
every three years. 
The Board held regular meetings during the year. The 
Board has a formal schedule of matters referred to it for 
decision, which includes the approval of interim and 
annual results, the annual budget, acquisitions and 
disposals, major items of capital expenditure, share 
capital issues, governance issues and executive 
appointments.  The Board is provided with appropriate 
strategic and financial information prior to each meeting 
together with monthly reports to enable it to monitor 
the performance of the Group.   The Chief Executive 
reviews the performance of the executive directors on 
an annual basis.  
All directors have direct access to the advice and services 
of the Company Secretary who is responsible for 
ensuring that Board procedures are followed, and are 
allowed to take independent professional advice if 
necessary at the company’s expense.  
Board committees 
The Board has delegated specific responsibilities to the 
following committees: 
(a) Executive Committee 
The executive committee consists of the executive 
directors under the chairmanship of Dr A W Nelson and 
is responsible for the development of strategy, annual 
budgets and operating plans linked to the management 
and control of the day-to-day operations of the Group.  
The executive committee is also responsible for 
monitoring key research and development programmes 
and for ensuring that the Board policies are carried out 
on a Group-wide basis.  
(b) Audit Committee 
The audit committee consists of the non-executive 
directors, Dr G H H Ainsworth, S J Gibson and Dr D Grant. 
The committee meets at least twice a year under the 
chairmanship of Dr G H H Ainsworth.   
The audit committee has specific written terms of 
reference which deal with its authority and 
responsibilities and these are available for inspection 
upon request to the Company Secretary.   Its duties 
include monitoring internal controls throughout the 
Group, approving the Group’s accounting policies, and 
reviewing the Group’s interim results and full year 
financial statements before submission to the full Board.  
The audit committee also reviews and approves the 
scope and content of the Group’s annual risk assessment 
programme and the annual audit, and monitors the 
independence of the external auditors.   
The Group has an Internal Audit function, with a scope 
of evaluating and testing the Group’s financial control 
procedures. The Internal Audit function reports directly 
to the chairman of the audit committee, and liaises with 
the external auditors as appropriate.  
The Finance Director, other financial management and 
the external auditors attend meetings of the audit 
committee by invitation.  The committee also holds 
separate meetings with the external auditors, as 
appropriate. 
Corporate governance report IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
42
(c) Remuneration and Nominations Committees 
The remuneration committee consists of two non-
executive directors, S J Gibson and Dr G H H Ainsworth. 
The committee meets at least twice a year under the 
chairmanship of S J Gibson.  The Chief Executive attends 
meetings of the remuneration committee by invitation 
to respond to questions raised by the committee, but he 
is excluded from any matter concerning the details of his 
own remuneration. 
The remuneration committee has specific terms of 
reference which deal with its authority and duties and 
these are available for inspection upon request to the 
Company Secretary.  The remuneration committee is 
responsible for setting salaries, incentives and other 
benefit arrangements of executive directors and senior 
executives and overseeing the Group’s employee share 
schemes.  The Group's policy on directors’ remuneration 
has been in line with the Code provisions throughout 
the year, full details of which are given in the 
remuneration report.  Members of the remuneration 
committee do not participate in decisions concerning 
their own remuneration.    
The Board has not established a separate nominations 
committee and has delegated responsibility for 
nominations to the remuneration committee.  There are 
currently no plans for further appointments to the Board. 
Attendance at meetings 
The number of meetings held during 2014 by the Board, 
the audit committee and the remuneration committee 
are as shown below.  The number of meetings attended 
by the executive and non-executive directors is also 
shown below:
  Board
Audit Committee Remuneration 
Committee
Number of meetings held in 2014 8 4 2
Number of meetings attended in 2014:
Executive
Dr A W Nelson 8 n/a 2
P J Rasmussen 8 4 n/a 
Dr H R Williams 8 n/a n/a 
Non-executive
Dr G H H Ainsworth 8 4 2
S J Gibson 8 4 2
Dr D Grant 7 4 n/a IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
43
Internal control 
The Board acknowledges its responsibility for the 
Group’s system of internal control, the effectiveness of 
which has been reviewed by the audit committee during 
the year and reported on to the Board.  The review has 
taken account of any material developments up to the 
date of the signing of the financial statements. 
The processes to identify and manage key risks to the 
success of the Group are an integral part of the internal 
control environment. Such processes are on-going, are 
regularly reviewed and improved as necessary, and are in 
accordance with the internal control guidelines for 
directors.  They include strategic planning, the 
appointment of senior executives, the monitoring on a 
regular basis of performance, control of capital 
expenditure and significant revenue investment, and the 
setting of high standards for health, safety and 
environmental performance.  These processes have been 
in place throughout the financial year and up to the date 
of approval of the financial statements. 
The effectiveness of the control systems and procedures 
is monitored regularly through management self-
assessment and review by internal audit.   In addition, 
recognition is given to the external audit findings, which 
inform the audit committee’s views of areas of increased 
risk. 
The system of internal control comprises those controls 
established in order to provide assurance that the assets 
of the Group are safeguarded against unauthorised use 
or disposal and to ensure the maintenance of proper 
accounting records and the reliability of financial 
information used within the business or for publication. 
Any system of internal control can only provide 
reasonable, but not absolute, assurance against material 
misstatement or loss, as it is designed to manage rather 
than to eliminate the risk of failing to achieve the 
business objectives of the Group. 
The key procedures that the directors have established 
with a view to providing effective internal control are as 
follows: 
❖ a clearly defined organisational structure and limits 
of authority; 
❖ corporate policies and procedures for financial 
reporting and control, project appraisal, human 
resources, quality control, health and safety, 
information security and corporate governance; 
❖ the preparation of annual budgets and regular 
forecasts which require approval from both the 
Group executive committee and the Board; 
❖ the monitoring of performance against budget and 
forecasts and the reporting of any variances in a 
timely manner to the Board; 
❖ regular review and self-assessment of the risks to 
which the Group is exposed, taking steps to monitor 
and mitigate these wherever possible including, 
where appropriate, taking out insurance cover; and 
❖ approval by the audit committee of audit plans and, 
on behalf of the Board, receipt of reports on the 
Group’s accounting and financial reporting practices 
and its internal controls together with reports from 
the external auditors as part of their normal audit 
work. 
❖ an internal audit function, which is mandated to 
evaluate and test the Group’s financial control 
procedures, reporting directly to the chairman of the 
audit committee.  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
44
Shareholder relations 
The Chief Executive and the Finance Director meet on a 
regular basis with representatives of institutional 
shareholders to discuss their views and to ensure that 
the strategies and objectives of the Group are well 
understood.  The Chief Executive keeps the Board fully 
informed of the views of institutional shareholders.  
Issues discussed with institutional shareholders include 
the Group’s performance and the impact of any major 
transactions. The Chairman has met with individual 
shareholders on an ad hoc basis.   
The company also has a manager responsible for 
investor relations and operates a web site, which 
provides details of the Group’s facilities and products 
and includes a separate investor relations section on 
which financial data and other significant 
announcements are published. The web site can be 
found at www.iqep.com.  The Group’s annual report and 
financial statements, interim reports and other 
documentation is available online and by mail where 
requested.  
The Annual General Meeting allows shareholders to raise 
questions with the Board, although shareholder 
enquiries and questions are also addressed throughout 
the year. In accordance with the recommendation of the 
Hampel Code, the company will advise shareholders 
attending the Annual General Meeting of the number of 
proxy votes lodged for each resolution in the categories 
‘For’ and ‘Against’ , together with the numbers ‘at the 
Chairman’s discretion’ and abstentions.  These will be 
advised after the resolutions have been dealt with on a 
show of hands. 
Audit and related services 
The Board is aware of the importance of maintaining the 
independence of the Group auditors, and does not 
contract for additional services from them which would 
compromise their audit independence.  Additional 
services are also subject to appropriate market testing.  
The Audit Committee keeps under review the nature and 
extent of audit and non-audit services provided to the 
Group by the auditors in accordance with a policy which 
it established in 2004.  Under this policy, the award to 
the Group’s auditors of audit-related services, tax 
consulting services or other non-audit related services in 
excess of £10,000 must first be approved by the 
Chairman of the Audit Committee.  In addition, the 
Group’s auditors will be required to make a formal report 
to the Audit Committee annually on the safeguards that 
are in place to maintain their independence and the 
internal safeguards in place to ensure their objectivity. 
The nature of the services provided by the auditors and 
the amounts paid to them are as detailed below:
Total 
2014 
£’000
Total 
2013 
£’000
PricewaterhouseCoopers LLP (Group auditors) 
Fees payable to company’s auditor and its associates for the audit of parent 
company and consolidated financial statements
19 18
Fees payable to company’s auditor and its associates for other services:
- The audit of company’s subsidiaries
94 93
- Audit-related assurance services
15 15
- Tax compliance service
- -
Ernst and Young (auditors of MBE Technology Pte Limited)
- Subsidiary company’s audit
16 17
- Tax services 3 -
Total 147 143 IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
45
Report on the financial statements 
Our opinion 
In our opinion: 
❖ IQE plc’s Group financial statements and parent 
company financial statements (the “financial 
statements”) give a true and fair view of the state of 
the Group’s and of the parent company’s affairs as at 
31 December 2014 and of the Group’s profit and the 
Group’s and the parent company’s cash flows for the 
year then ended; 
❖ the Group financial statements have been properly 
prepared in accordance with International Financial 
Reporting Standards (“IFRSs”) as adopted by the 
European Union; 
❖ the parent company financial statements have been 
properly prepared in accordance with IFRSs as 
adopted by the European Union and as applied in 
accordance with the provisions of the Companies Act 
2006; and 
❖ the financial statements have been prepared in 
accordance with the requirements of the Companies 
Act 2006. 
What we have audited 
IQE plc’s financial statements comprise: 
❖ the consolidated and parent company balance sheets 
as at 31 December 2014; 
❖ the consolidated income statement and consolidated 
statement of comprehensive income for the year then 
ended; 
❖ the consolidated and parent company cash flow 
statements for the year then ended; 
❖ the consolidated and parent company statements of 
changes in equity for the year then ended; and 
❖ the notes to the financial statements, which include a 
summary of significant accounting policies and other 
explanatory information. 
Certain required disclosures have been presented 
elsewhere in the Annual Report, rather than in the notes 
to the financial statements. These are cross-referenced 
from the financial statements and are identified as 
audited. 
The financial reporting framework that has been applied 
in the preparation of the financial statements is 
applicable law and IFRSs as adopted by the European 
Union and, as regards the parent company financial 
statements, as applied in accordance with the provisions 
of the Companies Act 2006. 
In applying the financial reporting framework, the 
directors have made a number of subjective judgements, 
for example in respect of significant accounting 
estimates. In making such estimates, they have made 
assumptions and considered future events. 
Opinion on other matter prescribed by the Companies 
Act 2006 
In our opinion, the information given in the Strategic 
Report and the Directors’ report for the financial year for 
which the financial statements are prepared is consistent 
with the financial statements. 
Other matters on which we are required to report by 
exception 
Adequacy of accounting records and information and 
explanations received 
Under the Companies Act 2006 we are required to report 
to you if, in our opinion: 
❖ we have not received all the information and 
explanations we require for our audit; or 
❖ adequate accounting records have not been kept by 
the parent company, or returns adequate for our audit 
have not been received from branches not visited by 
us; or 
❖ the parent company financial statements are not in 
agreement with the accounting records and returns. 
We have no exceptions to report arising from this 
responsibility. 
Directors’ remuneration 
Under the Companies Act 2006 we are required to report 
to you if, in our opinion, certain disclosures of directors’ 
remuneration specified by law are not made. We have no 
exceptions to report arising from this responsibility.
Independent auditors’ report to the members of IQE plc
Independent auditors’ report IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
46
Responsibilities for the financial statements and the 
audit 
Our responsibilities and those of the directors 
As explained more fully in the Statement of directors’ 
responsibilities set out on page 35, the directors are 
responsible for the preparation of the financial 
statements and for being satisfied that they give a true 
and fair view. 
Our responsibility is to audit and express an opinion on 
the financial statements in accordance with applicable 
law and International Standards on Auditing (UK and 
Ireland) (“ISAs (UK & Ireland)”). Those standards require us 
to comply with the Auditing Practices Board’s Ethical 
Standards for Auditors. 
This report, including the opinions, has been prepared for 
and only for the company’s members as a body in 
accordance with Chapter 3 of Part 16 of the Companies 
Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any 
other purpose or to any other person to whom this 
report is shown or into whose hands it may come save 
where expressly agreed by our prior consent in writing. 
What an audit of financial statements involves 
We conducted our audit in accordance with ISAs (UK & 
Ireland). An audit involves obtaining evidence about the 
amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether 
caused by fraud or error. This includes an assessment of:  
❖ whether the accounting policies are appropriate to 
the Group’s and the parent company’s circumstances 
and have been consistently applied and adequately 
disclosed;  
❖ the reasonableness of significant accounting 
estimates made by the directors; and 
❖ the overall presentation of the financial statements.  
We primarily focus our work in these areas by assessing 
the directors’ judgements against available evidence, 
forming our own judgements, and evaluating the 
disclosures in the financial statements. 
We test and examine information, using sampling and 
other auditing techniques, to the extent we consider 
necessary to provide a reasonable basis for us to draw 
conclusions. We obtain audit evidence through testing 
the effectiveness of controls, substantive procedures or a 
combination of both.  
In addition, we read all the financial and non-financial 
information in the Annual Report to identify material 
inconsistencies with the audited financial statements and 
to identify any information that is apparently materially 
incorrect based on, or materially inconsistent with, the 
knowledge acquired by us in the course of performing 
the audit. If we become aware of any apparent material 
misstatements or inconsistencies we consider the 
implications for our report.
Mark Ellis (Senior Statutory Auditor)  
for and on behalf of PricewaterhouseCoopers LLP  
Chartered Accountants and Statutory Auditors  
Cardiff  
24 March 2015 
(a) The maintenance and integrity of the IQE plc website is the responsibility of the directors; the work carried out by the auditors does 
not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have 
occurred to the financial statements since they were initially presented on the website. 
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation 
in other jurisdictions.  
Consolidated income statement for the year ended 31 December 2014 
Adjusted basic and diluted earnings per share is presented in note 10. 
The notes on pages 54 to 87 form part of these financial statements. 
Consolidated statement of comprehensive income for the year ended 31 December 2014 
Note
2014 
£’000
2013 
£’000
Revenue 3 1 12,01 1 126,774
Cost of sales (86,015) (103,669)
Gross profit 25,996 23,105
Other income and expenses 4 (1,726) (179)
Selling, general and administrative expenses (17 ,103) (15,580)
Operating profit 5 7 ,167 7 ,346
Finance costs 7 (1,924) (2,154)
Adjusted profit before tax 16,189 13,010
Adjustments 4 (10,946) (7 ,818)
Profit before tax 5,243 5,192
Taxation 8 (3,247) 934
Profit for the year 1,996 6,126
Profit attributable to:
Equity shareholders 1,632 5,955
Non-controlling interest 364 17 1
1,996 6,126
Basic earnings per share 10 0.25p 0.93p
Diluted earnings per share 10 0.24p 0.89p
Financial statements
2014 
£’000
  2013 
£’000
Profit for the year 1,996 6,126
Currency translation differences on foreign currency net investments* 5,192 (3,294)
Total comprehensive income for the year 7 ,188 2,832
*This may be subsequently reclassified to profit or loss
Total comprehensive income attributable to:
Equity shareholders 6,822 2,779
Non-controlling interest 366 53
7 ,188 2,832
47
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726 !
Consolidated balance sheet as at 31 December 2014   
The notes on pages 54 to 87 form part of these financial statements. These financial statements were approved by the Board of 
Directors on 24 March 2015. Signed on behalf of the Board of Directors. 
Note
2014 
£’000
2013 
£’000
Non-current assets:
Intangible assets 11 82,079 75,859
Property, plant and equipment 12 66,588 71,840
Deferred tax assets 8 12,332 16,040
Total non-current assets 160,999 163,739
Current assets:
Inventories 14 18,276 17 ,702
Trade and other receivables 15 24,463 22,907
Cash and cash equivalents 5,584 3,258
Total current assets 48,323 43,867
Total assets 209,322 207 ,606
Current liabilities:
Borrowings 17 (14,720) (4,804)
Trade and other payables 16 (30,396) (31,1 14)
Provisions for other liabilities and charges 18 (1,551) -
Total current liabilities (46,667) (35,918)
Non-current liabilities:
Borrowings 17 (22,1 15) (32,805)
Other payables 16 (15,431) (26,632)
Provisions for other liabilities and charges 18 (3,934) -
Total non-current liabilities (41,480) (59,437)
Total liabilities (88,147) (95,355)
Net assets 121,175 1 12,251
Equity attributable to the shareholders of the parent: 
Share capital 20 6,603 6,475
Share premium 49,108 48,958
Retained earnings 50,336 48,704
Other reserves 13,009 6,361
1 19,056 1 10,498
Non-controlling interest 2,1 19 1,753
Total equity 121,175 1 12,251
P J Rasmussen Dr A W Nelson
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
48  
Consolidated statement of changes in equity for the year ended 31 December 2014 
The notes on pages 54 to 87 form part of these financial statements. 
Share  
capital
Share  
premium
Retained  
earnings
Exchange  
rate  
reserve
Other  
reserves
Non- 
controlling  
interests
Total  
equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2014 6,475 48,958 48,704 (401) 6,762 1,753 1 12,251
Comprehensive income
Profit for the year - - 1,632 - - 364 1,996
Foreign exchange - - - 5,190 - 2 5,192
Total comprehensive income - - 1,632 5,190 - 366 7 ,188
Transactions with owners
Share based payments - - - - 1,458 - 1,458
Issues of ordinary shares 128 150 - - - - 278
Total transactions with owners 128 150 - - 1,458 - 1,736
Balance at 31 December 2014 6,603 49,108 50,336 4,789 8,220 2,1 19 121,175
Share  
capital
Share  
premium
Retained  
earnings
Exchange  
rate  
reserve
Other  
reserves
Non- 
controlling  
interests
Total  
equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2013 5,882 33,445 42,749 2,775 5,347 - 90,198
Comprehensive income
Profit for the year - - 5,955 - - 17 1 6,126
Foreign exchange - - - (3,176) - (1 18) (3,294)
Total comprehensive income - - 5,955 (3,176) - 53 2,832
Transactions with owners
Acquisition of Kopin wireless - - - - - 1,700 1,700
Share based payments - - - - 1,415 - 1,415
Issues of ordinary shares 593 15,513 - - - - 16,106
Total transactions with owners 593 15,513 - - 1,415 1,700 19,221
Balance at 31 December 2013 6,475 48,958 48,704 (401) 6,762 1,753 1 12,251
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
49  
Consolidated cash flow statement for the year ended 31 December 2014 
The notes on pages 54 to 87 form part of these financial statements. 
  Note
2014 
£’000
2013 
£’000
Cash flows from operating activities:
Adjusted cash inflow from operations 19,614 16,173
Cash impact of adjustments 4 (4,753) (3,41 1)
Cash inflow from operations 23 14,861 12,762
Net interest paid (1,428) (1,546)
Income tax received / (paid) 1,258 (686)
Net cash generated from operating activities 14,691 10,530
Cash flows from investing activities:
Acquisition of Kopin - (36,533)
Capitalised development expenditure (4,957) (4,346)
Investment in other intangible fixed assets (1,291) (556)
Purchase of property, plant and equipment (3,178) (5,196)
Net cash used in investing activities (9,426) (46,631)
Cash flows from financing activities:
Issues of ordinary share capital 278 16,106
Repayment of borrowings 23 (4,680) (4,437)
Increase in borrowings 23 1,305 25,000
Net cash (used in)/generated from financing activities (3,097) 36,669
Net Increase in cash and cash equivalents 2,168 568
Cash and cash equivalents at 1 January 24 3,258 2,773
Exchange gains/(losses) on cash and cash equivalents 158 (83)
Cash and cash equivalents at 31 December 24 5,584 3,258
50
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Parent company balance sheet for the year ended 31 December 2014
  
   
The notes on pages 54 to 87 form part of these financial statements. 
These financial statements were approved by the Board of Directors on 24 March 2015 
  . 
Signed on behalf of the Board of Directors 
 
Note
2014 
£’000
2013 
£’000
Non-current assets:
Investments 13 28,430 13,265
Intangible assets 11 332 -
Property, plant and equipment 12 18 43
Total non-current assets 28,780 13,308
Current assets:
Trade and other receivables 15 81,606 99,342
Cash and cash equivalents 2,065 172
Total current assets 83,671 99,514
Total assets 1 12,451 1 12,822
Current liabilities:
Trade and other payables 16 (2,753) (1,054)
Borrowings 17 (12,800) (2,400)
Total current liabilities (15,553) (3,454)
Non-current liabilities:
Trade and other payables 16 (484) (484)
Borrowings 17 (19,673) (28,915)
Total non-current liabilities (20,157) (29,399)
Total liabilities (35,710) (32,853)
Net assets 76,741 79,969
Shareholders’ equity:
Share capital 20 6,603 6,475
Share premium 49,108 48,958
Retained earnings 12,624 17 ,588
Other reserves 8,406 6,948
Total equity 76,741 79,969
P J Rasmussen Dr A W Nelson
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
51  
Parent company statement of changes in equity for the year ended 31 December 2014 
The notes on pages 54 to 87 form part of these financial statements. 
  Share capital Share  
premium
Retained  
earnings
Other  
reserves
Total 
 equity
£’000 £’000 £’000 £’000 £’000
Balance at 1 January 2013 5,882 33,445 20,103 5,533 64,963
Comprehensive expense
Loss for the year - - (2,515) - (2,515)
Total comprehensive expense - - (2,515) - (2,515)
Transactions with owners
Share based payments - - - 1,415 1,415
Share placing 569 15,336 - - 15,905
Other issues of ordinary shares 24 177 - - 201
Total transactions with owners 593 15,513 - 1,415 17 ,521
Balance at 31 December 2013 6,475 48,958 17 ,588 6,948 79,969
Comprehensive expense
Loss for the year - - (4,964) - (4,964)
Total comprehensive expense - - (4,964) (4,964)
Transactions with owners
Share based payments - - - 1,458 1,458
Issues of ordinary shares 128 150 - - 278
Total transactions with owners 128 150 - 1,458 1,736
Balance at 31 December 2014 6,603 49,108 12,624 8,406 76,741
52
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Parent company cash flow statement for the year ended 31 December 2014 
The notes on pages 54 to 87 form part of these financial statements. 
  Note
2014 
£’000
2013 
£’000
Cash flows from operating activities:
Cash inflow/(outflow) from operations 23 4,152 (40,759)
Interest paid (1,092) (1,189)
Taxation 86 -
Net cash generated from/(used in) operating activities 3,146 (41,948)
Cash flows from investing activities: 
Investment in Seren Photonics Limited
13 (50)
  -
Investment in other intangibles 11 (316) -
Purchase of property plant and equipment 12 (7) (57)
Net cash used in investing activities (373) (57)
Cash flows from financing activities:
Issues of ordinary share capital 278 16,106
Repayment of borrowings (2,463) (2,090)
Increase in borrowings 1,305 25,000
Net cash (used)/generated from financing activities (880) 39,016
Net increase/(decrease) in cash and cash equivalents 1,893 (2,989)
Cash and cash equivalents at 1 January 172 3,161
Cash and cash equivalents at 31 December 2,065 172
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
53  
1. Significant accounting policies 
The principal accounting policies adopted in the preparation of these financial statements are set out below.  These policies have been 
consistently applied to all years presented. 
General Information 
IQE plc Group’s principal activity are set out on page 32 of the directors report. The company is a public limited company, which is listed on 
the Alternative Investment Market (AIM) and incorporated and domiciled in England and Wales. The address of its registered office is Pascal 
Close, St Mellons, Cardiff, CF3 0LW. 
Basis of preparation 
This financial information has been prepared on a going concern basis under the historical cost convention except where fair value 
measurement is required by IFRS, and in accordance with the Companies Act 2006 applicable to companies reporting under IFRS, 
International Financial Reporting Standards (“IFRS”) as adopted by the European Union and IFRS IC interpretations.  The application of these 
standards and interpretations necessitates the use of estimates and judgements.  The main areas involving estimates are set out below in 
note 2.  
Changes in accounting policy and disclosures 
(a) New standards, amendments and interpretations adopted by the group The following standards have been adopted by the group for the first 
time for the financial year beginning on or after 1 January 2014. They do not materially impact on the group results:  
IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in 
whether an entity should be included within the consolidated financial statements of the parent company. The standard provides 
additional guidance to assist in the determination of control where this is difficult to assess.  
IFRS 1 1, ‘Joint arrangements’ focuses on the rights and obligations of the parties to the arrangement rather than its legal form. There are two 
types of joint arrangements: joint operations and joint ventures. Joint operations arise where the investors have rights to the assets and 
obligations for the liabilities of an arrangement. A joint operator accounts for its share of the assets, liabilities, revenue and expenses. Joint 
ventures arise where the investors have rights to the net assets of the arrangement; joint ventures are accounted for under the equity 
method. Proportional consolidation of joint arrangements is no longer permitted.  
IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other entities, including 
joint arrangements, associates, structured entities and other off balance sheet vehicles. 
Amendment to IAS 32, ‘Financial instruments, Amendments to IAS 36, ‘Impairment of assets’ IFRIC 21, ‘Levies’ are standards, amendments 
and interpretations which are effective for the financial year beginning on 1 January 2014 and are not material to the group. 
(b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2014 and not early 
adopted 
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 
2014, and have not been early adopted in preparing these consolidated financial statements. None of these are expected to have a 
significant effect on the consolidated financial statements of the group. 
Basis of consolidation 
The consolidated financial statements incorporate the financial statements of the company and its subsidiary undertakings.  Subsidiaries 
are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable 
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.  
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date that 
control ceases.   
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses 
resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been 
changed where necessary to ensure consistency with the policies adopted by the group.  
Joint ventures 
The group applies IFRS 1 1 to all joint arrangements. Under IFRS 1 1 investments in joint arrangements are classified as either joint operations 
or joint ventures depending on the contractual rights and obligations each investor. We have assessed the nature of our joint arrangements 
and determined them to be joint ventures. Joint ventures are accounted for using the equity method.  
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the 
group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the group’s share of losses in 
a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of 
the group’s net investment in the joint ventures), the group does not recognise further losses, unless it has incurred obligations or made 
payments on behalf of the joint ventures.  
  Notes to the ﬁnancial statements
54
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent of the group’s interest in the joint 
ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. 
Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the 
group. 
Business combinations 
The acquisition of subsidiaries is accounted for using the purchase method.  The cost of an acquisition is measured at the fair value of the 
consideration. The acquired identifiable assets, liabilities and contingent liabilities are recognised at their fair value at the date of 
acquisition.  
Where the fair values of contingent deferred consideration, assets and liabilities acquired are initially recognised on a provisional basis, 
these are reassessed during the 12 month period following the date of the business combination. Adjustments to the fair values as at the 
date of acquisition within this ‘measurement period’ are recorded, with any net impact being added to or deducted from the goodwill 
recognised. Such adjustments are recognised in both the current period and restated comparative period balance sheets as if the final fair 
values had been used in the initial recognition of the acquisition. 
Subsequent to the measurement period, any adjustments to the recorded fair value of contingent deferred consideration are taken 
through the income statement as an exceptional income or expense. 
The group recognises any non-controlling interest on an acquisition-by-acquisition basis, either at fair value or at the non-controlling 
interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. 
Acquisition related costs are expensed as incurred. 
Intangible assets 
a) Goodwill 
Goodwill arising on an acquisition is recognised as an asset and initially measured at cost, being the excess of the fair value of the 
consideration over the fair value of the identifiable assets, liabilities and contingent liabilities acquired. 
Goodwill is not amortised. However, it is reviewed for potential impairment at least annually or more frequently if events or circumstances 
indicate a potential impairment.  For the purpose of impairment testing, goodwill is allocated to each of the Cash Generating Units to 
which is relates. Any impairment identified is charged directly to Consolidated Income Statement.  Subsequent reversals of impairment 
losses for goodwill are not recognised. 
b) Patents trademarks and licences 
Separately acquired patents, trademarks and licences are shown at historical cost. Patents, trademarks and licences acquired in a business 
combination are recognised at fair value at the acquisition date. Patents, Trademarks and licences have a finite useful life and are carried at 
cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and 
licences over their estimated useful lives of 10 to 15 years.    
The carrying value of patents, trademarks and licences is reviewed for potential impairment at least annually, or more frequently if events or 
circumstances indicate a potential impairment.  Any impairment identified is immediately charged to the Consolidated Income Statement. 
c) Development costs 
Expenditure incurred that is directly attributable to the development of new or substantially improved products or processes is recognised 
as an intangible asset when the following criteria are met: 
• the product of process is intended for use or sale; 
• the development is technically feasible to complete; 
• there is an ability to use or sell the product or process; 
• it can be demonstrated how the product or process will generate probable future economic benefits; 
• there are adequate technical, financial and other resources to complete the development; and 
• the development expenditure can be reliably measured. 
Directly attributable costs refers to the materials consumed; the directly attributable labour; and the incremental overheads incurred in the 
development activity.  General operating costs, administration costs and selling costs do not form part of directly attributable costs.      
All research and other development costs are expensed as incurred. 
Capitalised development costs are amortised in-line with the revenue profile over the period during which the economic benefits are 
expected to be received, which typically range between 3 and 8 years.  The estimated remaining useful lives of development costs are 
reviewed at least on an annual basis. Amortisation commences once the project is completed and revenues are being generated. 
The carrying value of capitalised development costs is reviewed for potential impairment at least annually, or more frequently if events or 
circumstances indicate a potential impairment.  Any impairment identified is immediately charged to the Consolidated Income Statement. 
  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
55  
d) Software 
Directly attributable costs incurred in the development of bespoke software for the group’s own use are capitalised and amortised on a 
straight line basis over the expected useful life of the software, which typically range between 3 and 8 years.   
The carrying value of capitalised software costs is reviewed for potential impairment at least annually, or more frequently if events or 
circumstances indicate a potential impairment. Any impairment identified is immediately charged to the Consolidated Income Statement.  
The costs of maintaining internally developed software, and annual license fees to utilise third party software, are expensed as incurred.  
e) Other intangibles recognised on acquisition 
Other intangible assets which form part of the identifiable net assets of an acquired business are recognised at their fair value and 
amortised on a systematic basis over their useful economic life which is up to 7 years. 
This includes customer contracts, the fair value of which has been evaluated using the multi period excess earnings method “MEEM” . The 
MEEM model valuation was cross checked to the cost of product development and qualification to which the contract relates. 
The carrying value of other intangible assets is reviewed for potential impairment at least annually, or more frequently if events or 
circumstances indicate a potential impairment.  Any impairment identified is immediately charged to the Consolidated Income Statement. 
Property, plant and equipment 
Property, plant and equipment is stated at cost less accumulated depreciation and any provision for impairment. Cost comprises all costs 
that are directly attributable to bringing the asset into working condition for its intended use. Depreciation is calculated to write down the 
cost of fixed assets to their residual values on a straight-line basis over the following estimated useful economic lives: 
 Freehold buildings 25 years   .....................................................................................................
 Short leasehold improvements 5 to 27 years   ...................................................................
 Plant and machinery 5 to 15 years   ........................................................................................
 Fixtures and fittings 4 to 5 years ............................................................................................
No depreciation is provided on land or assets yet to be brought into use. 
The assets residual values and useful economic lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The 
carrying value of property, plant and equipment is reviewed for potential impairment at least annually.  Any impairment identified is 
immediately charged to the Consolidated Income Statement. 
Impairment of non-current assets 
Non-current assets are reviewed for potential impairment at least annually, or more frequently if events or circumstances indicate a 
potential impairment.  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 disposal costs) and value in use. 
Value in use is based on the present value of the future cash flows relating to the asset, discounted at the Group’s weighted average cost of 
capital.  For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash 
flows (Cash Generating Units). 
Inventories 
Inventories are stated at the lower of cost and net realisable value.  Cost is determined using the first-in, first-out (FIFO) method. Cost 
comprises direct materials and, where applicable, direct labour costs and attributable overheads that have been incurred in bringing the 
inventories to their present location and condition based on normal operating capacity. Net realisable value is the estimated selling price in 
the ordinary course of business, less applicable variable selling expenses. 
Trade receivables 
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If 
collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If 
not, they are presented as non-current assets. 
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, 
less provision for impairment. 
Cash and cash equivalents 
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-
term highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated balance sheet, bank 
overdrafts are shown within borrowings in current liabilities. 
Trade payables 
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. 
Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the 
business if longer). If not, they are presented as non-current liabilities.  
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 
  56
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Provisions 
Provisions are recognised when: 
• the Group has a legal or constructive obligation as a result of a past event; 
• it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. 
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation. Where a leasehold 
property, or part thereof, is vacant or sub-let under terms such that the rental income is insufficient to meet all outgoings, provision is made 
for the anticipated future shortfall up to termination of the lease, or the termination payment, if smaller. 
Financial instruments 
Financial assets and liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual provisions 
of the financial instrument. 
The financial assets held by the group are other equity investments, receivables and cash and cash equivalents. Receivables do not carry 
interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Cash and cash 
equivalent comprise cash in hand. Other equity investments are held at cost less provision for impairment. 
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An 
equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Trade 
payables are stated at their nominal value and do not bear interest. 
Equity instruments issued by the company are recorded at the proceeds received net of any direct issue costs. 
Interest bearing loans are recorded at the proceeds received net of any direct issue costs. Finance charges are accounted for on an accrual 
basis using the effective interest method. 
The group does not use derivative financial instruments for speculative purposes.  The group uses forward currency contracts as 
appropriate to manage foreign exchange risk. 
Detailed disclosures of the group’s financial instruments are provided in notes 15, 16,17 and 19. 
Leases 
Leases which transfer substantially all the risks and rewards of ownership of an asset are treated as a finance lease.  Assets held under 
finance leases are capitalised at their fair value at the inception of the lease and depreciated over the estimated useful economic life of the 
asset or lease term if shorter.  The finance charges are allocated to the Consolidated Income Statement in proportion to the capital amount 
outstanding. 
All other leases are classified as operating leases. Operating lease rentals are charged to the Consolidated Income Statement in equal 
annual amounts over the lease term.   
Revenue recognition 
Revenue represents the amounts receivable for goods and services provided in the ordinary course of business net of value added tax and 
other sales related taxes. Revenue is recognised when the risks and rewards of the underlying sale have been transferred to the customer, 
which is on the delivery of the goods or services and acceptance by the customer. 
Accrued income is recognised for sales where, at the balance sheet date, billing has not yet taken place but contractual terms dictate that 
the risks and rewards have been transferred to the customer and the customer is committed to payment. Billing is deferred to a 
contractually defined trigger point. 
An acquisition was made during 2012, where the consideration is being settled through agreed contractual price discounts. Subsequent to 
the measurement period, any adjustments to the recorded fair value of contingent deferred consideration are taken through the income 
statement within other income as an exceptional income or expense. The revenues of products sold which are subject to this discount are 
recognised at full market value. On settlement of the transaction, the discount is applied to reduce the deferred consideration balance.  
Segmental reporting 
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors, who oversee the 
allocation of resources and the assessment of operating segment performance. 
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that 
are different from those of other business segments.   
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks 
and returns that are different from those of components operating in other economic environments. 
Pension costs 
The group operates defined contribution pension schemes.  Contributions are charged in the Consolidated Income Statement as they 
become payable in accordance with the rules of the scheme.  
  IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726
57  
Share based payments 
The group operates a Share Option Scheme, under which the group receives services from employees as consideration for share options in 
IQE plc.  The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in the 
Consolidated Income Statement. The total amount to be expensed is determined by reference to the fair value of the options granted 
including any market performance conditions (for example, an entity's share price); excluding the impact of any service and non-market 
performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified 
time period) and including the impact of any non-vesting conditions (for example, the requirement for employees to save). 
Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The 
total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. 
At the end of each reporting period, the group revises its estimates of the number of options that are expected to vest based on the non-
market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a 
corresponding adjustment to equity. 
When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs 
are credited to share capital (nominal value) and share premium. The scheme is equity settled. 
In the company’s own financial statements, the grant of share options to the employees of subsidiary undertakings is treated as a capital 
contribution. Specifically, the fair value of employee services received (measured at the date of grant) is recognised over the vesting period 
as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity financial statements. 
The social security contributions payable in connection with the grant of the share options is considered an integral part of the grant itself, 
and the change will be treated as a cash-settled transaction. 
Exceptional items 
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the 
financial performance of the group. They are material items of income or expense that have been shown separately due to the significance 
of their nature or amount. Details of the exceptional items are included in note 4. 
Foreign currencies 
Items included in the financial statements of each subsidiary are measured using the currency of the primary economic environment in 
which the subsidiary operates (“the functional currency”).  The consolidated financial statements are presented in sterling, which is the 
group’s functional and presentational currency. 
Foreign currency transactions are translated into the subsidiaries functional currency at the rates of exchange ruling at the date of the 
transaction, or at the forward currency hedged rate where appropriate.  Monetary assets and liabilities in foreign currencies are translated 
into the subsidiaries functional currency at the rates ruling at the balance sheet date.  All exchange differences are taken to the income 
statement. 
The balance sheets of overseas subsidiaries are translated into sterling at the closing rates of exchange at the balance sheet date, whilst the 
income statements are translated into sterling at the average rate for the period.  The resulting translation differences are taken directly to 
reserves. 
Foreign exchange gains and losses on the retranslation of foreign currency borrowings that are used to finance overseas operations are 
accounted for on the ‘net investment’ basis and are recorded directly in reserves provided that the hedge is ‘effective’ as defined in IAS 39 
“Financial Instruments : recognition and measurement” . 
Taxation 
Income tax on the profit or loss for the year comprises current and deferred tax. 
Current tax is the expected tax payable on the taxable income for the year using rates substantially enacted at the balance sheet date, and 
any adjustments to tax payable in respect of prior years. 
Amounts receivable from tax authorities in relation to R&D tax relief claims for fiscal year 2013 and before are recognised as a credit within 
the group's tax charge. For subsequent years the R&D tax credits are under the RDEC scheme and are recognised with operating profit. 
Where amounts are outstanding at the year end and have not been formally agreed, an appropriate estimate of the amount is included 
within other receivables. 
Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities in the financial statements 
and the amounts used for taxation purposes. Deferred tax is calculated at the tax rates that have been enacted or substantially enacted at 
the balance sheet date.  Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available 
against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for taxable temporary differences, 
unless specifically exempt.  
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current taxation assets against current 
taxation liabilities and it is the intention to settle these on a net basis.   
Tax is recognised in the Consolidated Income Statement except to the extent that it relates to items recognised directly in equity, in which 
case it is recognised in equity. 
  58
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Investment in subsidiaries  
Investments in subsidiaries are held at cost of investment less provision for impairment in the parent company financial statements. 
Other equity investments 
Other equity investments are held at cost less provision for impairment in both the parent company and group financial statements on the 
basis that the Group (and Company) does not have the ability to exert significant influence or control over the strategic and operating 
activities of the other equity investments. 
2. Critical accounting judgements and key sources of estimation uncertainty 
The group’s principal accounting policies are described in note 1.  The application of these policies necessitates the use of estimates and 
judgements in a number of areas.  Accordingly, the actual amounts may differ from these estimates.  The main areas involving estimation 
are set out below: 
(a) Impairment of tangible and intangible assets 
Goodwill on the group’s balance sheet is not subject to amortisation because it is assumed to have an indefinite useful life.   In accordance 
with IAS 36 “Impairment of assets” , the carrying value of goodwill is assessed at least annually for impairment.   This assessment is based on 
cash flow forecasts.   In light of these forecasts the Board has concluded that goodwill is not impaired. 
The group capitalises the cost of developing new and substantially improved products and processes if there is a reasonable expectation of 
obtaining an appropriate economic return.  This necessitates an assessment of the future technical viability and future commercial benefits 
of the product or process.  The carrying value for each project is assessed for impairment on an on-going basis. 
The key assumptions and judgements adopted in preparing the impairment review are set out in note 1 1 . 
As part of the rationalisation and re-organisation programme further details of which are provided in note 4 and the post balance sheet 
events note 27 the Group has entered into a joint venture agreement with WIN Semiconductors Corp and Nangyang Technological 
University to create the Compound Semiconductor Development Centre (“CSDC”) in Singapore. 
The CSDC is a centre of excellence for compound semiconductor technology, with the aim of accelerating the development and 
commercialisation of new advanced semiconductor products. IQE is has a 50% equity stake in the new venture, and as part of its 
contribution to the establishment of the CSDC IQE is providing facilities, equipment and IP on favourable terms.  Further details are set out 
in note 4. As a consequence, IQE has booked provisions of £4.9m for asset impairment comprising the transfer of tools to the CSDC.  
(b) Impairment of receivables 
Trade and other receivables are carried at the contractual amount due less any estimated provision for non-recovery.   Provision is made 
based a number of factors including the age of the receivable, previous collection experience and the financial circumstances of the 
counterparty.   
(c) Inventory provisions 
Inventories are carried at the lower of cost and net realisable value.  Provision is made based on a number of factors including the age of 
inventories, the risk of obsolescence and the expected future usage. As set out in note 4 the group has recorded one off inventory write 
downs of £1.4m primarily relating to the expected formation of the Compound Semiconductor Development Centre (CSDC) in Singapore.  
(d) Acquisition fair values 
An assessment of the fair value of the purchase consideration and net assets acquired was undertaken for the acquisitions made during 
2012 and 2013.  We have reassessed the fair value of the deferred contingent consideration in relation to the 2012 RFMD acquisition. This 
resulted in an exceptional release of £9.9m to other income as a result of the re-assessment of the forecast volumes. Further details are 
provided in note 4. 
(e) Deferred tax assets 
Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which 
deductible temporary differences can be utilised. This necessitates an assessment of future trading forecasts for each relevant tax authority, 
capital expenditures and the utilisation of tax losses.  
The forecast used to support deferred tax asset recognition are the same forecast used in the impairment review and support partial 
recognition of the available deferred tax assets. 
(f) Onerous lease provision 
A provision for onerous leases has been made in the year. The provision assumes that the lease will be onerous for the next four and a half 
years. Subsequent to this period we expect to be able to sublet the premises or negotiate to exit the lease. The full term of the lease 
obligation is 7 years with the lease running until 2021. 
(g) Adjustments to profit 
The board provides an adjusted profit measure to provided additional information to aid an understanding of the group’s performance as 
set out in note 4 we have detailed all of the items which are included within the adjustments to profit. 
  59
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
3. Segmental analysis 
The board of directors considers that the wireless, photonics and electronics markets are the group’s primary reporting segments. The 
board of directors assesses the performance of these operating segments based on their earnings before interest, tax, depreciation, 
amortisation, exceptional items and share based payments (EBITDA).  
Further detail on the nature of the segments is provided in the Chief Executive’s Review. 
  2014 Wireless   £’000
Photonics  £’000
Electronics  £’000
Total  £’000
Income statement
Revenue 89,1 10 21,761 1,140 1 12,01 1
EBITDA 22,164 5,603 (758) 27 ,009
Exceptional items (2,891) (30) - (2,921)
Share based payments (1,160) (283) (15) (1,458)
Profit and Loss on disposal (3) - (12) (15)
Impairment (4,956) - - (4,956)
Depreciation (5,472) (982) (136) (6,590)
Amortisation (2,605) (1,017) (280) (3,902)
Operating profit/(loss) 5,077 3,291 (1,201) 7 ,167
Finance costs (1,924)
Tax (3,247)
Profit after tax 1,996
Segment assets
Operating assets 156,1 16 29,859 5,431 191,406
Deferred tax asset 6,935 5,294 103 12,332
Cash 5,584
Total assets 209,322
Segment liabilities
Operating liabilities (41,197) (4,205) (425) (45,827)
Provisions (5,485) - - (5,485)
Borrowings (36,835)
Total liabilities (88,147)
Other segmental information
Capital expenditure - intangible assets 4,625 1,454 196 6,275
Capital expenditure - property, plant and equipment 1,687 1,334 150 3,171
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IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Costs not directly attributable to a segment are allocated based on the proportion of revenue attributable to that segment. 
Finance costs are not allocated to the segments because treasury is managed centrally. 
  
In the years set out below, certain customers, all within the Wireless operating segment, accounted for greater than 10% of the Group’s total 
revenues: 
There are no customers in the photonics or electronics segments that accounted for greater than 10% of the Group’s total revenues.   2013 Wireless   £’000
Photonics  £’000
Electronics  £’000
Total  £’000
Income statement
Revenue 107 ,219 18,685 870 126,774
EBITDA 22,541 2,279 100 24,920
Exceptional items (1,860) (3,205) - (5,065)
Share based payments (1,129) (269) (17) (1,415)
Depreciation (7 ,580) (792) (131) (8,503)
Amortisation (2,1 13) (467) (1 1) (2,591)
Operating profit/(loss) 9,859 (2,454) (59) 7 ,346
Finance costs (2,154)
Tax 934
Profit after tax 6,126
Segment assets
Operating assets 157 ,626 25,326 5,356 188,308
Deferred tax assets 13,258 2,727 55 16,040
Cash 3,258
Total assets 207 ,606
Segment liabilities
Operating liabilities (54,220) (3,249) (277) (57 ,746)
Borrowings (37 ,609)
Total liabilities (95,355)
Other segmental information
Capital expenditure - intangible assets 23,586 1,174 1,521 26,281
Capital expenditure - property, plant and equipment 18,089 1,849 46 19,984
2014 
£’000
2014 
% revenue
2013 
£’000
2013 
% revenue
Customer 1 33,001 29% 23,899 19%
Customer 2 27 ,025 24% 40,480 32%
61
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Geographical information 
Disclosure of group revenues by location of customer: 
Disclosure of non-current assets by location of assets: 
  2014 
£’000
2013 
£’000
Americas 75,740 105,21 1
United States of America 75,552 105,168
Rest of Americas 188 43
Europe, Middle East & Africa (EMEA) 7 ,325 5,959
France 447 155
Germany 2,249 91 7
Israel 1,609 1,156
United Kingdom 1,680 1,171
Rest of EMEA 1,340 2,560
Asia Pacific 28,946 15,604
People’s Republic of China 768 442
Japan 5,023 5,324
Taiwan 21,572 8,461
Rest of Asia Pacific 1,583 1,377
Total revenue 1 12,01 1 126,774
Property, plant and equipment Intangible assets
By location
2014 
£’000
2013 
£’000
2014 
£’000
2013 
£’000
USA 45,944 49,450 59,226 56,252
Singapore 6,762 8,775 8,646 8,405
Taiwan 7 ,555 7 ,555 1,155 848
UK 6,327 6,060 13,052 10,354
66,588 71,840 82,079 75,859
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IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
4. Adjusted profit measures 
The group’s results are reported after a number of imputed non-cash charges and non-recurring items.  Therefore, we have provided 
additional information to aid an understanding of the group’s performance. 
  
As previously reported, through 2013 and 2014 the group was engaged in restructuring and reorganising its global operations.   This has 
necessitated incurring certain cash costs and creating provisions for asset impairments and future lease costs. No further restructuring costs 
are anticipated in 2015. 
The cash costs incurred were £4.8m (2013: £3.4m) which related to redundancy costs, requalification costs and the duplication of overheads 
to support the transition of customers between production facilities.   
The asset and lease provisions primarily related to the group setting aside its Singapore facility and certain equipment for use by a new 
joint venture called the Compound Semiconductor Development Centre (“CSDC”).  The CSDC has been established to accelerate the 
development of compound semiconductor technology in Singapore, and to provide an effective incubator for bringing new innovations to 
market. In return, IQE will be the production partner for the high volume manufacturing that emerges from this incubator.  The asset 
impairments related to equipment (£4.9m) and inventories (£1.4m), and the provision for onerous leases £6.7m.  There were no provisions 
relating to restructuring in 2013. These provisions are accounting estimates based on judgements, accordingly, the actual amounts may 
differ from these estimates. 
The Group also generated a non-cash profit of £9.9m (2013 £3.0m) arising from a reduction in the estimated remaining deferred 
consideration (settled via trade discount) in respect of a previous acquisition. This has been classified within other income and expenses in 
the consolidated income statement. 
The investment in Solar Junction Corporation was fully provided for at 31 December 2013, and classified within other income and expenses 
in the consolidated income statement  
In 2013 in fair valuing the assets of the acquired Kopin Wireless business, the inventories were recorded in the Group’s financial statements 
at their fair value. Therefore, the reported gross margin reflects a reduced profit on the sale (post acquisition) of the inventories acquired. 
The £1.5m adjustment above eliminates this fair value uplift so that the adjusted gross margin reflects the normal trading profit. 
The deferred tax charge of £3.8m (2013: £0.3m credit) reflects the net deferred tax impact associated with these items. 
The adjustments above which are classified within gross margin are £3.1m (2013: £2.4m) of the cash costs of restructuring, £1.4m (£nil) 
inventory provision and £1.0m (£0.9m) of the share based payment charge. In 2013, the acquisition related inventory fair value adjustment 
was also classified within gross margin 
             2014  
£’000
2013  
£’000
Restructuring and reorganisation 17 ,780 3,41 1
Gain on release of contingent deferred consideration (9,903) (3,026)
Amortisation of acquired intangibles 1,1 16 730
Discounting of long term acquisition related balances 495 608
Share based payments 1,458 1,415
Write down of investment in Solar Junction - 3,205
Acquisition related inventory fair value adjustment - 1,475
Total before tax 10,946 7 ,818
Deferred tax on adjustments 3,759 (330)
Total after tax 14,705 7 ,488
63
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
  * Exceptional items impacting EBITDA include the following items: acquisition related inventory fair value adjustments, impairment of 
assets/investments, provision for onerous lease, wireless business unit re-organisation costs and the release of contingent deferred 
consideration.  
  2014  
£’000
2013  
£’000
Adjusted gross margin 31,552 27 ,939
Reported gross margin 25,996 23,105
Adjusted sales, general and administrative expenses (13,935) (13,383)
Reported sales, general and administrative expenses (17 ,103) (15,580)
Adjusted operating profit 17 ,618 14,556
Reported operating profit 7 ,167 7 ,346
Adjusted profit before tax 16,189 13,010
Reported profit before tax 5,243 5,192
Adjusted profit after tax 16,701 13,614
Reported profit after tax 1,996 6,126
2014 
£’000
2013  
£’000
Profit attributable to equity shareholders 1,632 5,955
Minority interest 364 17 1
Tax 3,247 (934)
Share based payments 1,458 1,415
Finance costs 1,924 2,154
Depreciation of tangible fixed assets 6,590 8,503
Amortisation of intangible fixed assets 3,902 2,591
Profit and loss on disposal 15 -
Provision for onerous lease* 6,673 -
Acquisition related inventory fair value adjustment* - 1,475
Impairment of assets/investments* 6,354 3,205
Release of contingent deferred consideration* (9,903) (3,026)
Restructuring and re-organisation* 4,753 3,41 1
EBITDA 27 ,009 24,920
64
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
5. Operating profit 
*A schedule of services provided by the group’s auditors is disclosed in the Corporate Governance Report. 
**Exceptional items include the following items: acquisition related inventory fair value adjustments, wireless business unit re-organisation 
costs, impairment of assets, onerous lease provision and the release of contingent deferred consideration. Further details are provided in 
note 4.  
6. Employee costs 
Directors’ emoluments and share option details are disclosed in the Remuneration Report on page 36 to 40.  Key management within the 
group comprises the executive and non-executive directors, the business unit and group senior management and the site general 
managers.  Compensation to key management, including pensions of £139,000 (2013: £171,000), was £3,198,000 (2013: £3,654,000) and the 
charge for share-based payments was £917 ,000 (2013: £894,000).  2014 
£’000
2013 
£’000
The operating profit is stated after charging/(crediting):
Depreciation of  property, plant and equipment 6,590 8,503
Amortisation of non-current intangible assets 3,902 2,591
Services provided by auditors* 147 143
Operating lease rentals 3,209 3,109
Research and development 698 925
Exchange gains (26) (254)
Share based payments 1,458 1,415
Cost of inventories consumed 43,741 49,727
Exceptional items** 7 ,877 5,065
2014 
£’000
2013 
£’000
Employee costs (including directors’ remuneration)
Wages and salaries 25,525 26,521
Social security costs 2,799 2,437
Other pension costs 1,107 1,249
Charge for share based payments 1,458 1,415
30,889 31,622
2014 2013
Number Number
Average number of employees (including directors)
Cost of sales 449 494
Selling, general and administrative 132 125
581 61 9
65
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
7 . Finance costs 
8. Taxation 
Factors affecting total tax (charge)/credit 
The tax credit assessed for the year is different from that resulting from applying the standard rate of corporation tax in the UK: 21.5% (2013: 
23.25%).   The differences are explained below:   
    2014 
£’000
2013 
£’000
Bank and other loans 1,347 1,464
Finance lease interest 82 82
Unwind of discount on long term balances 495 608
1,924 2,154
Current tax credit 2014 
£’000
2013 
£’000
United Kingdom research and development tax credits receivable 1,569 750
Overseas adjustments in respect of prior years - (428)
Overseas taxes charges (444) (171)
Total current tax credit 1,125 15 1
Deferred tax (charge)/credit (4,372) 783
Total tax (charge)/credit (3,247) 934
2014 
£’000
2013 
£’000
Profit on ordinary activities before taxation 5,243 5,192
Tax charge at 21.5% thereon (2013: 23.25%) (1,127) (1,207)
Effects of :
Expenses not deductible for tax purposes (41) (40)
Overseas tax rate differences (5,584) (3,382)
Decrease in unrecognised tax losses 964 6,484
Other deferred tax movements 972 (1,198)
Impact on deferred tax as a result of changes in tax rates - (45)
Overseas adjustments in respect of prior years - (428)
United Kingdom research and development tax credits receivable 1,569 750
Total tax (charge)/credit for the year (3,247) 934
66
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
The Finance Act 2013, which was substantively enacted on 2 July 2013, included legislation to reduce the main rate of corporation tax from 
23% to 21% from 1 April 2014 and to 20% from 1 April 2015. Accordingly, the closing UK deferred tax asset/liability in the financial 
statements has been recognised at 20%. 
Deferred tax is measured at the tax rates that are expected to apply in the relevant territory in the period when the asset is realised or the 
liability is settled, based on tax rates and tax laws that have been substantively enacted at the balance sheet date. 
The majority of the deferred tax assets arise in the United States, these are provided at the effective United States Federal and State tax 
rates where appropriate. 
The current portion of the deferred tax asset is £600,000 (2013: £780,000) in relation to utilization of tax losses.  
The deferred income tax asset recognised at 31 December 2014 of £12,332,000 (2013: £16,040,000) relates mainly to tax losses carried 
forward, as well as timing differences on fair value adjustments in respect of previous acquisitions and an element of accelerated 
depreciation. These are recognised to the extent that the realisation of the related tax benefit through future taxable profits from the same 
trade is probable.  
The net amount not recognised is an asset of £19,600,000 (2013: £20,708,000). The unrecognised amounts relate to a mix of losses, 
temporary timing differences including accelerated depreciation and income tax deductions receivable on the exercise of employee share 
options. The asset would be recognised if sufficient profits from the same trade arise in future periods. 
Total tax losses carried forward account for a potential deferred tax asset of £39,076,000 (2013: £25,078,000). 
Company 
There is an unrecognised deferred tax asset of £585,000 (2013: £800,000) which relates primarily to short term timing differences arising on 
share option charges. 
9. Dividends 
No dividend has been paid or proposed in 2014 (2013: £nil). 
  Deferred tax asset 2014 
£’000
2013 
£’000
At 1 January 16,040 14,549
Deferred tax (charge)/credit recognised in the year (4,372) 783
Deferred tax assets recognised on acquisition - 625
Foreign exchange differences 664 83
At 31 December 12,332 16,040
67
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726 !
10. Earnings per share 
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of 
ordinary shares in issue during the year.   
Diluted earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of 
shares and ‘in the money’ share options in issue. Share options are classified as ‘in the money’ if their exercise price is lower than the 
average share price for the year. As required by IAS 33, this calculation assumes that the proceeds receivable from the exercise of ‘in the 
money’ options would be used to purchase shares in the open market in order to reduce the number of new shares that would need to be 
issued.   
The directors also present an adjusted earnings per share measure which eliminates certain non-cash items in order to provide a more 
meaningful underlying profit measure.  The adjustments are detailed in note 4. 
  2014 
£’000
2013 
£’000
Profit attributable to ordinary shareholders 1,632 5,955
Adjustments to profit after tax (note 4) 14,705 7 ,488
Adjusted profit attributable to ordinary shareholders 16,337 13,443
2014 
Number
2013 
Number
Weighted average number of ordinary shares 650,836,462 642,239,979
Dilutive share options 25,1 16,813 30,127 ,305
Adjusted weighted average number of ordinary shares 675,953,275 672,367 ,284
Adjusted basic earnings per share 2.51p 2.09p
Basic earnings per share 0.25p 0.93p
Adjusted diluted earnings per share 2.42p 2.00p
Diluted earnings per share 0.24p 0.89p
68
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
1 1. Intangible assets 
* Acquisition intangibles relate to customer contract intangible assets  The Group Goodwill 
£’000
Patents 
£’000
Development 
 costs 
£’000
Software 
£’000
Acquisition  
intangibles* 
£’000
Total 
£’000
Cost
At 1 January 2014 52,861 526 23,167 1,595 5,941 84,090
Additions - 60 4,957 1,231 27 6,275
Disposals - - - (25) - (25)
Foreign exchange 3,024 5 890 5 398 4,322
At 31 December 2014 55,885 591 29,014 2,806 6,366 94,662
Accumulated amortisation and impairment
At 1 January 2014 - 11 8 6,578 61 9 916 8,231
Charge for the year - 56 2,609 12 1 1,1 16 3,902
Charge for Impairment - - - 39 - 39
Disposals - - - (25) - (25)
Foreign exchange - - 31 4 6 11 6 436
At 31 December 2014 - 174 9,501 760 2,148 12,583
Net book value
At 31 December 2014 55,885 41 7 19,513 2,046 4,218 82,079
At 31 December 2013 52,861 408 16,589 976 5,025 75,859
The Group Goodwill 
£’000
Patents 
£’000
Development 
 costs 
£’000
Software 
£’000
Acquisition  
intangibles* 
£’000
Total 
£’000
Cost
At 1 January 2013 36,365 393 19,082 1,160 2,962 59,962
Additions - 129 4,346 427 29 4,931
Acquisitions 18,206 - - 19 3,125 21,350
Foreign exchange (1,710) 4 (261) (1 1) (175) (2,153)
At 31 December 2013 52,861 526 23,167 1,595 5,941 84,090
Accumulated amortisation and impairment
At 1 January 2013 - 56 5,135 360 246 5,797
Charge for the year - 63 1,557 241 730 2,591
Foreign exchange - (1) (1 14) 18 (60) (157)
At 31 December 2013 - 11 8 6,578 61 9 91 6 8,231
Net book value
At 31 December 2013 52,861 408 16,589 976 5,025 75,859
At 31 December 2012 36,365 337 13,947 800 2,716 54,165
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IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
  The amortisation charge of: £3,902,000 (2013: £2,591,000) has been charged to selling, general and administrative expenses in the 
Consolidated Income Statement. 
The carrying value of deferred development costs continue to be supported by forecast cash flows.  
Impairment tests for goodwill 
Goodwill is allocated to the group’s cash generating units (CGUs) identified according to operating segment. An operating segment level 
summary of the goodwill allocation is presented below: 
Multiple production facilities are included in a single CGU reflecting that production can (and is) transferred between sites to suit capacity 
planning and operational efficiency. 
The recoverable amount of all CGUs has been determined based on value in use calculations, using pre-tax cash flow projections for a five 
year period plus a terminal value assuming no subsequent growth. The Board approved budget is used for the first year of the forecast.  
Beyond this the Board has used assumptions which are below expectations in order to “stress test” for potential impairment, namely: 
• Wireless revenue growth 3.5% pa (2013: 3% pa);  
• Photonics revenue growth 10.5% pa (2013: 3% pa) which is significantly lower than the 2014 Photonics revenue growth rate of 
~23% in constant currency,   
• Sales into new markets of £10m over 5 years, 
• Margin erosion 1% pa (2013: 1% pa),  
• Cost inflation 3% (2013: 3% pa),   
• A pre-tax discount rate of 1 1% (2013: 1 1%).  
Management believes it is appropriate to use the same discount rate for each CGU given that they have similar risk profiles and common 
funding.  
Even on this “stressed” basis, there remains a significant level of headroom in the calculations.  In addition, to test the sensitivity of the 
discount rate, if a 12.5% discount rate is used there is still no impairment of assets. 
!
2014 
£’000
2013 
£’000
Allocation of goodwill by operating segment
Wireless 48,610 45,971
Photonics 7 ,275 6,890
Total Goodwill 55,885 52,861
The Company
Software
£’000
Cost  
At 1 January 2014 -
Additions 31 6
Reclassification to intangibles 16
At 31 December 2014 332
Accumulated depreciation
At 1 January 2014 -
Charge for the year -
Adjustment -
At 31 December 2014 -
Net book value
At 31 December 2014 332
At 31 December 2013 -
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IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
12. Property, plant and equipment 
  a) The Group
Land and 
 buildings
Short  
leasehold  
improve- 
ments
Fixtures  
and fittings
Plant and  
machinery Total
£’000 £’000 £’000 £’000 £’000
Cost  
At 1 January 2014 7 ,796 26,604 3,650 138,898 176,948
Additions 2 57 82 3,030 3,171
Disposals (275) (31) - (29) (335)
Foreign exchange 157 1,323 84 5,527 7 ,091
At 31 December 2014 7 ,680 27 ,953 3,816 147 ,426 186,875
Accumulated depreciation
At 1 January 2014 3,121 1 1,836 2,458 87 ,693 105,108
Charge for the year 187 1,140 274 4,989 6,590
Impairment charge for the year - 353 24 4,540 4,917
Disposals (275) (31) - (14) (320)
Foreign exchange 26 441 78 3,447 3,992
At 31 December 2014 3,059 13,739 2,834 100,655 120,287
Net book value
At 31 December 2014 4,621 14,214 982 46,771 66,588
At 31 December 2013 4,675 14,768 1,192 51,205 71,840
Land and 
 buildings
Short  
leasehold  
improve- 
ments
Fixtures  
and fittings
Plant and  
machinery Total
£’000 £’000 £’000 £’000 £’000
Cost  
At 1 January 2013 6,298 23,654 2,449 128,607 161,008
Additions - 264 262 4,605 5,131
Acquisitions 1,637 3,188 1,037 8,991 14,853
Foreign exchange (139) (502) (98) (3,305) (4,044)
At 31 December 2013 7 ,796 26,604 3,650 138,898 176,948
Accumulated depreciation
At 1 January 2013 2,938 10,540 2,185 83,025 98,688
Charge for the year 194 1,501 31 1 6,497 8,503
Foreign exchange (1 1) (205) (38) (1,829) (2,083)
At 31 December 2013 3,121 1 1,836 2,458 87 ,693 105,108
Net book value
At 31 December 2013 4,675 14,768 1,192 51,205 71,840
At 31 December 2012 3,360 13,1 14 264 45,582 62,320
71
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
  As part of the rationalisation and re-organisation programme, IQE will be providing facilities, equipment and IP on favourable terms to the 
CSDC as set out in the critical accounting judgments (note 2) and the post balance sheet events note 27 .  As a consequence, IQE has 
booked provisions of £4.9m for asset impairment relating to the transfer of tools to the CSDC. The impairment provision writes the assets 
down to their recoverable amount. 
b)  Capitalised finance leases  
Plant and machinery includes the following amounts where the group is a lessee under a finance lease:!
The group leases various plant and machinery assets under non-cancellable finance lease agreements. The lease terms are up to three 
years, and the ownership of the assets lie within the group. 
 
2014 
£’000
2013 
£’000
Cost 2,728 2,557
Accumulated Depreciation (216) (41)
Net book value 2,512 2,516
c) The Company Fixtures  
and fittings
£’000
Cost  
At 1 January 2014 78
Additions 7
Reclassification to intangibles (16)
At 31 December 2014 69
Accumulated depreciation
At 1 January 2014 35
Charge for the year 16
Adjustment -
At 31 December 2014 51
Net book value
At 31 December 2014 18
At 31 December 2013 43
Fixtures  
and fittings
£’000
Cost  
At 1 January 2013 21
Additions 57
At 31 December 2013 78
Accumulated depreciation
At 1 January 2013 21
Charge for the year 14
At 31 December 2013 35
Net book value
At 31 December 2013 43
At 31 December 2012 -
72
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
13. Investments 
  a) Company
Details of principal subsidiaries are set out in note 26.  Investments in  
subsidiaries   £’000
Other equity  
investments  £’000
  Total   £’000
Cost
At 1 January 2014 83,703 3,205 86,908
Additions 15,652 50 15,702
Disposal - (3,205) (3,205)
Subsidiaries share based payments charge 539 - 539
At 31 December 2014 99,894 50 99,944
Provisions for impairment
At 1 January 2014 70,438 3,205 73,643
Disposal - (3,205) (3,205)
Impairment charge 1,076 - 1,076
At 31 December 2014 71,514 - 71,514
Net book value
At 31 December 2014 28,380 50 28,430
At 31 December 2013 13,265 - 13,265
Investments in 
 subsidiaries  £’000
Other equity 
 investments  £’000
  Total  
£’000
Cost
At 1 January 2013 83,376 3,205 86,581
Subsidiaries share based payments charge 327 - 327
At 31 December 2013 83,703 3,205 86,908
Provisions for impairment
At 1 January 2013 70,438 - 70,438
Impairment charge - 3,205 3,205
At 31 December 2013 70,438 3,205 73,643
Net book value
At 31 December 2013 13,265 - 13,265
At 31 December 2012 12,938 3,205 16,143
73
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
The additions in the year relate to the capitalization of an inter-company loan balance. 
Investments are reviewed for impairment annually, where the net asset value is lower than the investment carrying value an impairment 
charge is recognised in the income statement.  
In the year impairment charges of £1,076,000 have been recognised to the write down of the investment in subsidiaries to recoverable 
amount. 
The other equity investments of £3.2m in 2012 related to the equity investment in Solar Junction Corporation. A provision for impairment 
was recorded in 2013 prior to the disposal in 2014 where the Group sold its minority equity interest in Solar Junction Corporation.  The 
acquirer was a strategic investor with strong interests in accelerating the large scale adoption and commercialisation of Solar Junction’s 
technology.  IQE’s long term wafer supply agreement was unaffected by this transaction.  
14. Inventories 
The directors are of the opinion that the replacement values of inventories are not materially different to the carrying values stated above. 
These carrying values are stated net of impairment provisions of £5,937 ,000 (2013: £4,800,000). £1,399,000 (2013: 2,412,000) of inventories 
were written down during 2014 and an expense recognised in the income statement.  
15. Trade and other receivables 
As at 31 December 2014, 88% (2013: 91%) of trade receivables were within terms.  Of the other trade receivables, 93% (2013: 58%) were less 
than 30 days past due.  An allowance has been made for estimated irrecoverable amounts from the sale of goods of £330,000 (2013: 
£121,000).  This allowance has been determined by reference to past default experience. Included in other receivables is accrued income of 
£8,806,000 (2013: £10,269,000). 
Our trade receivables are with established customers, we monitor customer D&B credit ratings and have had no material defaults in the 
past. None of our receivables are with customers where we have had any history of default.  
The carrying values of trade and other receivables also represent their estimated fair values.    
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable as set out above.  In terms of 
trade receivables, the terms of sale provide that the group has recourse to the products sold in the event of non-payment by a customer. 
Trade receivables and accrued income are primarily denominated in US dollars, as are trade payables (note 16). The natural hedge between 
these financial instruments limits the exposure of the group to movements in foreign exchange rates. Based on the balances held at 31 
December 2014 a 1 cent movement in the US dollar to Sterling rate would impact the net value of these instruments by £47 ,000 (2013: 
£1 1,000) (before the mitigating impact of cash flow hedges).   2014 2013
£’000 £’000
Raw materials and consumables 13,177 12,856
Work-in-progress and finished goods 5,099 4,846
18,276 17 ,702
2014 
Group 
£’000
2014 
Company 
£’000
2013 
Group 
£’000
2013 
Company 
£’000
Trade receivables 12,809 - 9,312 -
Amounts owed by group undertakings - 81,224 - 98,380
Other receivables and prepayments 1 1,654 382 13,595 962
24,463 81,606 22,907 99,342
74
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
16. Trade and other payables 
Within deferred consideration is £10.7m (2013: £26.6m) being the best estimate of the amount that will be settled through contractually 
agreed price discounts over the next two years. Long term contingent deferred consideration balances are discounted at 2.5%. 
The fair value of the contingent deferred consideration has been re-assessed during the year resulting in a reduction of £9.9m (2013: £3.0m). 
This has been credited to the consolidated income statement within other income and expenses. The exceptional income has been 
excluded from our adjusted profit measure set out in note 4. 
The carrying values of trade and other payables also represent their estimated fair values. 
There is no foreign currency exchange contracts held at 31 December 2014 or 31 December 2013.  
17 . Borrowings  
Current 2014 
Group 
£’000
2014 
Company 
£’000
2013 
Group 
£’000
2013 
Company 
£’000
Trade payables 14,518 57 15,090 -
Amounts owed by group undertakings - 1,457 - 446
Deferred consideration 5,183 - 9,000 -
Other taxation and social security 1,072 728 626 73
Accruals and deferred income 9,623 51 1 6,398 535
30,396 2,753 31,1 14 1,054
Non-current 2014  
Group 
£’000
2014 
Company 
£’000
2013 
Group 
£’000
2013 
Company 
£’000
Deferred consideration 15,431 484 26,632 484
The Group 2014 2013
£’000 £’000
Non-current borrowings:
Bank borrowings 22,002 31,902
Finance leases 11 3 903
22,1 15 32,805
Current borrowings:
Bank borrowings 13,867 4,002
Finance leases 853 802
14,720 4,804
Total borrowings 36,835 37 ,609
75
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
a) Bank borrowings 
b) Finance leases 
Lease liabilities are effectively secured as the rights to the leased asset reverts to the lessor in the event of default. 
The company 
The borrowings of the parent company comprise the bank loan of £32,473,000 (2013 £31,315,000) which comprise mutli-currency 
acquisition and RCF facilities.  
  2014 2013
£’000 £’000
Bank borrowings fall due for repayment as follows:
Within one year 13,867 4,002
Between one and five years 22,002 31,902
After five years - -
35,869 35,904
2014 2013
£’000 £’000
Gross finance lease liabilities – minimum lease payments:
Within one year 873 85 1
Between one and five years 11 4 922
987 1,773
Finance charges (21) (68)
Present value of finance lease liabilities 966 1,705
2014 2013
£’000 £’000
Present value of finance lease liabilities:
Within one year 853 802
Between one and five years 11 3 903
966 1,705
76
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
18. Provisions for other liabilities and charges  
As part of the re-organisation and rationalisation of the Group’s facilities the Group is ceasing activates at its Singapore facility and 
establishing the Compound Semiconductor development Centre. The provision above represents the onerous lease obligation in respect of 
the Singapore property. This is expected to be utilised over the next four and a half years. The provision has been discounted using a risk 
free rate of 2.5%. 
19.  Financial Instruments  
Financial instruments by category 
Trade and other receivables (excluding prepayments) and cash and cash equivalents are classified as 'loans and receivables'. Borrowings 
and trade and other payables are classified as 'other financial liabilities at amortised cost'. Both categories are initially measured at fair value 
and subsequently held at amortised cost. 
Derivatives (forward exchange contracts) are classified as 'derivatives used for hedging' and accounted for at fair value with gains and 
losses taken to reserves through the consolidated statement of comprehensive income. 
Financial risk and treasury policies 
The Group's finance team maintains liquidity, manages relations with the Group’s bankers, identifies and manages foreign exchange risk 
and provides a treasury service to the Group’s businesses. Treasury dealings such as investments, borrowings and foreign exchange are 
conducted only to support underlying business transactions. 
The Group has clearly defined policies for the management of foreign exchange rate risk. The Group finance team does not undertake 
speculative foreign exchange dealings for which there is no underlying exposure. Exposures resulting from sales and purchases in foreign 
currency are matched where possible and the net exposure may be hedged by the use of forward exchange contracts.  2014 2013
£’000 £’000
Bank borrowings fall due for repayment as follows:
Within one year 12,800 2,400
Between one and five years 19,673 28,915
After five years - -
32,473 31,315
2014 2013
(All figures £’000s) £’000 £’000
As at 1 January - -
Charged/(Credited) to the income statement 6,673 -
Utilised during the year (1,206) -
Foreign exchange 18 -
As at 31 December 5,485 -
2014 2013
(All figures £’000s) £’000 £’000
Current 1,551 -
Non-Current 3,934 -
Total Provisions for other liabilities and charges 5,485 -
77
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Credit risk 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations, and arises principally from the Group’s receivables from customers and monies on deposit with financial institutions. 
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable as set out above.  In terms of 
trade receivables, the terms of sale provide that the group has recourse to the products sold in the event of non-payment by a customer. 
Included in other receivables is accrued income of £8,806,000 (2013: £10,269,000). 
Our trade receivables are with established customers, we monitor customer D&B credit ratings and have had no material defaults in the 
past. None of our receivables are with customers where we have had any history of default.  
An allowance has been made for estimated irrecoverable amounts from the sale of goods of £330,000 (2013: £121,000).  This allowance has 
been determined by reference to past default experience. The individually impaired receivables mainly relate to a number of independent 
customers. A portion of these receivables is expected to be recovered. 
The carrying values of trade and other receivables also represent their estimated fair values.    
Trade receivables and accrued income are primarily denominated in US dollars, as are trade payables (note 16). The natural hedge between 
these financial instruments limits the exposure of the group to movements in foreign exchange rates.  
Based on the balances held at 31 December 2014 a 1 cent movement in the US dollar to Sterling rate would impact the net value of these 
instruments by £47 ,000 (2013: £1 1,000) (before the mitigating impact of cash flow hedges).  
Liquidity risk 
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages its funding to 
ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed 
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. 
The Group uses weekly cash flow forecasts to monitor cash requirements and to optimise its borrowing position.  
Typically the Group ensures that it has sufficient borrowing facilities to meet foreseeable operational expenses. At the year end the group 
had available facilities of £44.8m (2013: £47 .3m). 
  Carrying amount 2014 
Group 
£’000
2014 
Company 
£’000
2013 
Group 
£’000
2013 
Company 
£’000
Cash and Cash equivalents 5,584 2,065 3,258 172
Trade receivables 12,809 - 9,312 -
Amounts owed by group undertakings - 81,224 - 98,380
Other receivables – (accrued income) 8,806 10,269
27 ,199 83,289 22,839 98,552
Gross 
2014
Provision 
2014
Net 
2014
Gross 
2013
Provision 
2013
Net 
2013
£’000 £’000 £’000 £’000 £’000 £’000
Not past due 10,929 - 10,929 7 ,364 - 7 ,364
Past due 0-30 2,056 176 1,880 1,210 - 1,210
Past due more than 30 154 154 - 859 12 1 738
13,139 330 12,809 9,433 12 1 9,312
78
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
The following shows the contractual maturities of financial liabilities, including interest payments, where applicable and excluding the 
impact of netting agreements and on an undiscounted basis:!
Market risks 
1.  Currency risk 
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than Sterling.  
The currencies giving rise to this risk are primarily the US dollar. Full disclosures are provided in the Director’s report on page 34. 
2. Interest rate risk 
Historically the Group has not undertaken any hedging activity in this area however the board keeps this under regular review. All foreign 
currency cash deposits are made at prevailing interest rates. The main element of interest rate risk concerns borrowings. 
The group’s bank borrowings consist of a series of variable and fixed rate term loans, and a revolving credit facility. Bank loans are secured 
against the assets of the group. 
The variable rate US dollar term loans, which had a principal outstanding at 31 December 2014 of £1.3m (2013: £2.6m), and bear interest of 
between 2.0% to 2.95% over LIBOR. These loans are repayable by monthly instalment with remaining terms of up to 4 years.  
The fixed rate US dollar term loans, which had a principal outstanding at 31 December 2014 of £2.1m (2013: £2.0m), and bear interest of 5% 
until 2017 and is variable thereafter. These loans are repayable by monthly instalment with remaining terms of up to 20 years.  
The US Dollar acquisition facility, which had a principal outstanding at 31 December 2014 of £20.2m (2013: £21.4 million), bears interest of 
between 2.5% to 2.95% over LIBOR. This loan is repayable by quarterly instalments with a remaining term of 4 years 
The UK Pound revolving credit facility is a multi-currency facility of up to £21 million, committed until 2018.  It bears interest of between 
1.75% to 1.95% over LIBOR. The balance drawn at 31 December 2014 was £12.3m (2013: £9.9m). 
The carrying value of loans approximates to their fair value based on the net present value of future cash flows.!
Further disclosure in respect of the interest rate risk is provided in the Directors report on page 34. 
  Analysis of contractual cash flow maturities Carrying 
amount 
Contractual 
cash flows
Less than 
12 months
1 – 2 
Years 
2 - 5 
Years
5+ 
Years
31 December 2014 £’000 £’000 £’000 £’000 £’000 £’000
Trade and other payables 24,141 24,141 24,141 - - -
Deferred consideration 9,860 10,084 - 9,600 484 -
Secured bank loans 35,869 38,555 14,852 15,893 5,334 2,476
Finance leases 966 987 869 11 8 - -
70,836 73,767 39,862 25,61 1 5,818 2,476
Analysis of contractual cash flow maturities Carrying 
amount 
Contractual 
cash flows
Less than 
12 months
1 – 2 
Years 
2 - 5 
Years
5+ 
Years
31 December 2013 £’000 £’000 £’000 £’000 £’000 £’000
Trade and other payables 21,488 21,488 21,488 - - -
Deferred consideration 9,064 9,484 - - 9,484 -
Secured bank loans 35,904 40,017 5,430 14,937 17 ,020 2,630
Finance leases 1,705 1,773 786 869 11 8 -
68,161 72,762 27 ,704 15,806 26,622 2,630
79
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
Capital risk management 
The capital risk management disclosures are provided in full within the Directors report on page 34. 
Fair values 
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows: 
Basis for determining fair value 
The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments reflected in 
the table above. 
Secured loans 
As the loans are floating rate borrowings, amortised cost is deemed to reflect fair value excluding unamortised transaction fees. 
Trade and other receivables/payables 
As receivables/payables have a remaining life of less than one year, the notional amount is deemed to reflect the fair value.   2014 
Carrying 
amount 
£’000
2014 
Fair  
value 
£’000
2014 
Carrying 
amount 
£’000
2014 
Fair  
value 
£’000
Cash and Cash equivalents 5,584 5,584 3,258 3,258
Trade receivables 12,809 12,809 9,312 9,312
Amounts owed by group undertakings - - - -
Other receivables – (accrued income) 8,806 8,806 10,269 10,269
Trade and other payables (29,324) (29,324) (21,488) (21,488)
Deferred consideration (9,860) (9,860) (9,064) (9,064)
Secured bank loans (35,869) (36,104) (35,904) (36,216)
Finance leases (966) (966) (1,705) (1,705)
(48,820) (49,055) (45,322) (45,634)
80
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
20. Share capital 
The movement in the number of ordinary shares during the year was: 
12,814,106 ordinary shares (2013: 59,297 ,910  ordinary shares) were issued during the year as follows: 
The group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern so that it can continue to 
provide returns for shareholders and benefits for other stakeholders. 
The group sets the amount of capital in proportion to risk.   The group manages the capital structure and makes adjustments to it in the 
light of changes in economic conditions and the characteristic of the underlying assets. The group monitors capital by reviewing net debt 
against shareholders’ funds.  The position of these indicators and the movement during the year is shown in the Five Year Financial 
Summary and on page 34 of the Directors’ Report. 
  2014 2014 2013 2013
Group and Company
Number  
of shares £’000
Number  
of shares £’000
Allotted, called up and fully paid
Ordinary shares of 1p each 660,327 ,767 6,603 647 ,513,661 6,475
2014 
Number
2013 
Number
At 1 January 647 ,513,661 588,215,751
Employee share schemes 12,814,106 2,396,949
Placing - 56,900,961
At 31 December 660,327 ,767 647 ,513,661
2014 
Number  
of shares
2014 
Consideration
2013 
Number  
of shares
2013 
Consideration
Employee share schemes 12,814,106 Nil to 19.97p 2,396,949 3.65p to 23.08p
Placing - - 56,900,961 29.00p
12,814,106 59,297 ,910
81
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
21.  Share based payments 
The total amount charged to the income statement in 2014 in respect of share based payments was £1,458,000 (2013: £1,415,000).  
Share option scheme 
The IQE Plc Share Option Scheme was adopted on 26 May 2000 and amended by shareholders at the Annual General Meeting on 17 May 
2002.   Under the scheme, the Remuneration Committee can grant options over shares in the company to employees of the group.  
Options are granted with a contractual life of ten years and with a fixed exercise price equal to the market value of the shares under option 
at the date of grant or as otherwise disclosed in the remuneration report. Options become exercisable between one and four years from 
the date of grant subject to continued employment and the achievement of performance conditions, including growth in EBITDA and 
earnings per share against various targets. The group has no legal or constructive obligation to repurchase or settle the options in cash. 
Options are valued using the Black-Scholes option-pricing model and the total amount to be expensed is charged to income statement 
over the vesting period of the option. The principal assumptions used in the calculation of the fair value of share options are as follows:  
The expected volatility factor is based on historical share price volatility over the three years immediately preceding the grant of the option.  
The expected life is the average expected period to exercise.  The risk free rate of return is the yield of zero-coupon UK government bonds 
of a term consistent with the assumed option life.  
Performance conditions are incorporated into the calculation of fair value by estimating the proportion of share options that will vest and 
be exercised based on a combination of historical trends and future expected trading performance. These are reassessed at the end of each 
period for each tranche of unvested options.     
The fair value of options granted during the year ended 31 December 2014 was £342,000 (2013: £2,139,000).  
The movements on share options during the year were as follows: 
The weighted average share price at the time of the options exercised during 2014 was 21.04p (2013: 25.73p). 
  Principal assumptions 2014 2013
Weighted average share price at grant date 17 . 1 2 25.73p
Weighted average exercise price 12.94 13.16p
Weighted average vesting period (years) 3 3
Option life (years) 10 10
Weighted average expected life (years) 3 3
Weighted average expected volatility factor 61% 61%
Weighted average risk free rate 1.25% 0.64%
Dividend yield 0% 0%
   2014 
Number 
 of options
2014 
Average  
exercise price  
(pence)
   2013 
Number 
 of options
2013 
Average  
exercise price  
(pence)
At 1 January 56,152,601 11 .24 38,693,514 10.12
Granted 7 ,095,762 12.94 19,564,155 13. 1 6
Exercised (1 1,282,603) 2.87 (1,992,560) 10.07
Cancelled/lapsed (1,429,240) 19. 1 7 (1 12,508) 18.72
At 31 December 50,536,520 13. 1 2 56,152,601 1 1.24
82
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
As at 31 December 2014, the total number of options held by employees was 50,536,520 (2013: 56,152,601) as follows: 
22. Parent company profit and loss  
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these 
financial statements.  The parent company’s loss for the financial year amounted to £4,964,000 (2013: Loss £2,515,000).    
!
Option price pence/share Option period ending
 2014 
  
Number of options
 2013 
 Number of options
5.63p - 10.17p 31 December 2014 -   973,922
6.87p - 10.25p 31 December 2015 558,173 610,539
10.40p - 19.42p 31 December 2016 1,453,888 1,640,388
13.58p - 19.42p 31 December 2017 4,647 ,872 5,254,470
16.10p - 16.10p 31 December 2018 194,306 233,278
3.65p - 17 .07p 31 December 2019 6,614,693 7 ,620,931
0.00p – 45.58p 31 December 2020 1,602,277 6,819,449
9.15p – 50.25p 31 December 2021 5,675,400 5,928,249
0.00p – 28.17p 31 December 2022 5,367 ,392 7 ,294,981
0.00p – 27 .75p 31 December 2023 16,939,534 19,776,394
0.00p – 86.20p 31 December 2024 7 ,482,985 -
At 31 December 50,536,520 56,152,601
83
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726 !
23. Cash generated from operations 
!
  
The Group
2014 
£’000
2013 
£’000
Profit before tax 5,243 5,192
Finance costs 1,924 2,154
Depreciation of property, plant and equipment 6,590 8,503
Amortisation of intangible assets 3,902 2,591
Profit and loss on disposal 15 -
Acquisition related inventory fair value adjustments - 1,475
Impairment of assets / investments 6,354 3,205
Onerous lease provisions 6,673 -
Release of contingent deferred consideration (9,903) (3,026)
Contingent deferred consideration (settled through contractual discounts) (7 ,981) (14,191)
Share based payments 1,458 1,415
Cash inflow from operations before changes in working capital 14,275 7 ,318
(Increase)/decrease in inventories (792) 6,405
Decrease in trade and other receivables 760 2,308
Increase/(decrease) in trade and other payables 61 8 (3,269)
Cash inflow from operations 14,861 12,762
The Company
2014 
£’000
2013 
£’000
Loss before tax (5,044) (2,574)
Finance income (2,666) (4,024)
Foreign exchange 2,238 237
Impairment of investments 1,076 3,205
Depreciation 16 14
Share based payments 91 9 1,088
Cash outflow from operations before changes in working capital (3,461) (2,054)
Decrease/(Increase) in trade and other receivables 5,927 (39,094)
Increase in trade and other payables 1,686 389
Cash inflow/(outflow) from operations 4,152 (40,759)
84
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726 !
24. Reconciliation of net cash flow to movement in net debt 
25. Analysis of net debt 
Cash and cash equivalents at 31 December 2014 comprised balances held in instant access bank accounts. 
Non-cash movements include the new finance leases and foreign exchange movements on US dollar denominated borrowings.  
 
2014 2013
£’000 £’000
Increase in cash in the year 2,168 568
Increase in borrowings (1,305) (25,000)
Repayment of borrowings 3,867 3,660
Repayment of leases 81 3 777
Net movement resulting from cash flows 5,543 (19,995)
Net debt at 1 January (34,351) (15,483)
Net movement resulting from cash flows 5,543 (19,995)
Non-cash movements (note 25) (2,443) 1,127
Net debt at 31 December (31,251) (34,351)
At 1  
January 
2014 
£’000
Cash 
flow 
£’000
Other 
non-cash 
movements 
£’000
At 31 
December 
2014 
£’000
Cash and cash equivalents 3,258 2,168 158 5,584
Bank borrowings due after one year (31,902) (1,305) 1 1,205 (22,002)
Bank borrowings due within one year (4,002) 3,867 (13,732) (13,867)
Finance leases due after one year (903) - 790 (1 13)
Finance leases due within one year (802) 81 3 (864) (853)
Total borrowings (37 ,609) 3,375 (2,601) (36,835)
Net debt (34,351) 5,543 (2,443) (31,251)
85
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
26. Principal subsidiary undertakings 
* Indirect holdings 
The proportion of voting rights of subsidiaries held by the group is the same as the proportion of shares held. 
All UK subsidiaries are exempt from the requirements to file audited financial statements by virtue of section 479A of the Companies Act 
2006. In adopting the exemption IQE plc has provided statutory guarantee to these subsidiaries in accordance with section 479C of the 
Companies Act 2006. 
  Name of company Class of capital
Proportion of 
shares held Activity
Country of 
incorporation
IQE (Europe) Limited Ordinary shares of £1 100%* Manufacture of advanced 
semiconductor materials 
UK
IQE Inc Common stock of 
$0.001
100%* Manufacture of advanced 
semiconductor materials 
USA
IQEKC LLC Limited liability 
company
100% Manufacture of advanced 
semiconductor materials 
USA
IQE Taiwan ROC Ordinary shares of NT
$10 
90%* Manufacture of advanced 
semiconductor materials 
Taiwan
IQE RF LLC Limited liability 
company
100%* Manufacture of advanced 
semiconductor materials 
USA
IQE Silicon Compounds Limited Ordinary shares of £1 100% Manufacture of silicon epitaxy UK
MBE Technology Pte Ltd Preferred shares of S
$1 
Ordinary shares of S
$1 
100% 
100%
Manufacture of advanced 
semiconductor materials
Singapore
Wafer Technology Limited Ordinary shares of £1 100%* Manufacture of semiconductor 
compounds and ultra high 
purity materials 
UK
NanoGaN Limited Ordinary shares of 
£0.001
100% Development of advanced 
semiconductor materials 
UK
Galaxy Compound 
Semiconductors Inc 
Common stock of 
$0.00 par value
100%* Manufacture of semiconductor 
compounds and ultra high 
purity materials
USA
86
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726  
27 . Post balance sheet event 
On 23 March the group entered into a joint venture agreement with WIN Semiconductors Corp and Nangyang Technological University to 
create the Compound Semiconductor Development Centre (“CSDC”) in Singapore.  The CSDC is a centre of excellence for compound 
semiconductor technology, with the aim of accelerating the development and commercialisation of new advanced semiconductor 
products.        IQE is has a 50% equity stake in the new venture, and as part of its contribution to the establishment of the CSDC IQE is providing facilities, 
equipment and IP on favourable terms.  Further details are set out in note 4. 
28. Related party transactions 
The group incurred professional fees and expenses during the year of £125,000 (2013: £70,000) payable to Horton Corporate Finance and 
£38,000 (2013: £29,000) payable to Fishstone Limited.  Dr G H H Ainsworth, who is a director of IQE Plc, is a managing partner of Horton 
Corporate Finance.   S J Gibson, who is a director of IQE Plc, is also a director of Fishstone Limited.  An amount of £43,000 (2013: £35,000) was 
outstanding to these parties at the year-end.  
During the year the group made purchases of £nil (2013 £88,904) from Greenlux limited. Dr A W Nelson who is a Director of IQE Plc is an 
equity shareholder of Greenlux Limited. No amounts were payable to Greenlux Limited at the end of the year. 
During the year the group recognised Revenue of £145,000 with Seren Photonics Limited. Dr G H H Ainsworth is a Director of IQE plc and 
Seren Photonics Limited. As at the 31 December 2014 £148,000 was receivable from Seren Photonics Limited. IQE made a £50,000 
investment in Seren Photonics Limited during the year in return for 69 “B” ordinary shares. 
29. Operating lease commitments 
The group was committed at 31 December 2014 and 31 December 2013 to making the following aggregate payments in respect of non-
cancellable operating leases: 
30. Commitments 
The group had no capital commitments at 31 December 2014 or 31 December 2013.   2014 2013
£’000 £’000
Due within one year 3,174 2,552
Due between two and five years 12,099 10,843
Due after five years 5,985 7 ,403
21,258 20,798
87
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726   IQE plc is a public limited company incorporated in England and Wales.   Directors 
Dr G H H Ainsworth BSc, Ph.D, FCA (Chairman, Non-Executive) 
Dr A W Nelson OBE, BSc, Ph.D, FREng (President and Chief Executive Officer) 
Mr S J Gibson OBE (Non-Executive) 
Dr D Grant CBE, FREng, FLSW, CEng, FIET (Senior Independent Non-Executive Director)  
Mr P J Rasmussen BSc, ACA (Finance Director and Company Secretary) 
Dr H R Williams BSc, Ph.D, CEng, MIMechE, MCIBSE (Operations Director) 
Registered office 
Pascal Close, Cardiff, United Kingdom, CF3 0LW 
Principal Bankers 
HSBC Bank Plc  8 Canada Square, London, E14 5HQ 
Auditors 
PricewaterhouseCoopers LLP 
One Kingsway, Cardiff, CF10 3PW 
Nominated advisers and brokers 
Canaccord Genuity Limited 
88 Wood Street, London, EC2V 7QR 
Joint brokers 
Peel Hunt LLP 
Moor House, 120 London Wall, London EC2Y 5ET 
Registrars 
Capita Registrars 
Northern House, Woodsome Park, Fenay Bridge, Huddersfield, HD8 0GA 
Investor relations 
Chris Meadows 
Tel +44(0)29 2083 9400 
Fax +44(0)29 2079 4592 
investors@iqep.com 
Ofﬁcers and professional advisers
88
IQE plc | Annual Report & Financial Statements 2014 
Company No: 3745726   IQE plc 
Pascal Close 
Cardiff 
United Kingdom 
CF3 0LW 
tel: +44 (0)29 2083 9400 
Fax: +44 (0)29 2079 4592 
www.iqep.com 
© 201 5 IQE plc