provexis plc
annual report and accounts 2013
company number 05102907
proof128613 1 corporate statement
2 key highlights
3 chairman’s statement
4 chief executive’s statement
6 directors’ report – ﬁnancial review
8 directors’ report – business overview
14 remuneration report
18 independent auditor’s report
20 consolidated statement of comprehensive income
21 consolidated statement of ﬁnancial position
22 consolidated statement of cash ﬂows
23 consolidated statement of changes in equity
24 notes to the consolidated ﬁnancial statements
53 parent company balance sheet
54 notes to the parent company ﬁnancial statements
58 company information
contents the provexis strategy is the development licensing and marketing of scientiﬁcallyproven functional food
and sports nutrition technologies with four areas of focus

to develop sis
1
into the leader in elite endurance sports nutrition in major global markets

collaborate closely with alliance partner dsm nutritional products to maximise the commercial
success of fruitﬂow
1
globally

underpin the competitiveness of these revenue streams with scientiﬁc excellence and regulatory
capability and

seek further opportunities in the global functional food and sports nutrition sectors through being
recognised as a partner of choice
provexis plc annual report and accounts 2013 1
c108597pu010proof2286130927blrevision0operatorputa corporatestatement key highlights

science in sport generated revenues of £552m in the year in line with management expectations
representing like for like revenue growth of 11 compared to the same period last year with
growth in the second half being 17
 substantial investment made in sis
1
in order to execute the board’s growth plan for fy201213
including support for marketing sales and ecommerce
 gross margin for sis
1
improved by 6 as a result of factory efﬁciencies and cost saving
initiatives
 further progress with proprietary fruitﬂow
1
heart health technology in conjunction with alliance
partner dsm with 17 branded consumer products now on sale in various global markets

powder format of fruitﬂow
1
 suitable for dietary supplements now fully commercialised with 4 of
the 17 products in market using this format and strong interest from potential customers

successful efforts to control costs across the group along with revenue growth resulting in a 50
reduction in underlying operating loss and

equity ﬁnancing facility to drawdown £244k in may to support our innovation programme further
£541k drawdown in september to meet the increasing working capital needs of the growing sis
1
business
key ﬁnancial results

revenues £556m 2012 £348m

underlying operating loss reduced to £109m 2012 £218m
 statutory operating loss £466m 2012 £433m statutory loss attributable to owners of the parent
£434m 2012 £387m these losses are after charging £307m 2012 £139m of noncash
amortisation and impairment charges £031m 2012 £046m of restructuring costs and a £018m
2012 £014m noncash share based payment charge

cash balance at 31 march 2013 £062m 2012 £145m

loss per share 029p 2012 028p
beforeimpairment andamortisationof intangible assetssharebasedpayments andexceptionalcostsof £356m 2012£215m
as set out on the face of the consolidated statement of comprehensive income
provexis plc annual report and accounts 2013 2
c108597pu010proof2286130927blrevision0operatorputa keyhighlights the past year has seen substantial progress across the group as a result of our clear focus on the
strategic objectives of developing revenues from our fruitﬂow
1
and sis
1
assets together with reducing
costs and seeking efﬁciencies
sis
1
delivered revenues in line with our expectations and while the summer of 2012 was challenging
due to historically poor weather and adverse trading conditions we ﬁnished the year very strongly and
have carried this momentum into the new ﬁnancial year investment in all our key growth drivers has
seen a good return with the areas of sales excellence and ecommerce staff and infrastructure having
received major focus the new factory has developed well during the year and is now in a position to
effectively meet the growing demand of the sis
1
business we continue to develop new sis
1
products
both inhouse and in collaboration with strategic partners and we believe this to be a key competitive
advantage for us
the completion of a commercially viable powder version of fruitﬂow
1
in the ﬁnal quarter of the year was
an important milestone for our collaboration with dsm given feedback from potential customers in the
global dietary supplement sector dsm have brought 17 products to market in conjunction with their
international consumer brand customers and are seeing strong interest in all major global markets for
the powder version of fruitﬂow
1

we have focused strongly on controlling the cost base of the business and the results of this are evident
given the 50 reduction in underlying operating losses for the group we will continue to seek further
savings and efﬁciencies in the coming months and since the year end we have closed our rd facility
at the university of aberdeen as part of this drive
with the investment cycle for fruitﬂow
1
now complete and given ongoing cost reduction initiatives the
board also propose the demerger of sis
1
from the group in order to optimise the future prospects of
both of our revenue generating assets the details of the proposed demerger are set out in a separate
circular and announcement shareholders will receive one share in the new sis
1
business for each 100
provexis shares already owned allowing investors the ﬂexibility to participate in the growth story for
either or both of our revenue generating assets the demerger will also see a share placing to capitalise
the new sis
1
business and to fund its growth strategy
i would like to thank the executive team and all of our staff and advisors for their high levels of
commitment and professionalism not only in developing the business but in putting in place the strategy
to demerge sis
1
from the group in order to deliver value for shareholders
dawson buck
chairman
provexis plc annual report and accounts 2013 3
c108597pu010proof2286130927blrevision0operatorputa chairman’sstatement strategy
our strategic priority for the year was to focus on developing revenues from the sis
1
business and the
fruitﬂow
1
technology together with our alliance partner dsm in addition further efforts to reduce costs
across the group were a parallel strategic activity we believe we have succeeded in all three areas
with strong revenue growth from sis
1
 good progress with fruitﬂow
1
in bringing a powder version to
market and wide ranging cost reductions reﬂected in the 50 reduction in underlying operating loss for
the group
with these three strategic areas all making good progress in conjunction with the board a next
strategic phase is proposed which will see the separation of sis
1
and fruitﬂow
1
businesses in order
to optimise the proﬁt potential of each the details of this are contained within a circular posted today to
shareholders and an announcement
we used our equity ﬁnancing facility to drawdown £244k in may to support our innovation programme
with a further £541k drawdown in september to meet the increasing working capital needs of the
growing sis
1
business
sis
1
revenue in fy1213 was £552m representing like for like revenue growth of 11 compared to the
same period last year growth was constrained to 7 in the ﬁrst half due to historically poor weather
and adverse trading conditions however trading in the second half was much stronger as a range of
initiatives took effect resulting in second half revenue growth of 17 and ﬁnal quarter revenue growth of
25 this momentum has carried into fy1314
we have continued to invest in the heartland of independent cycle triathlon and running shops through
extra sales staff and capital investment in display stands this has paid dividends as we have seen
growth through all our key wholesale accounts in major grocers and high street accounts we have both
broadened our range and space in key accounts together with extending distribution via the addition of
new accounts including sainsbury’s boots costco and since the year end halfords international
markets have continued to develop well for us with strong performances by our distributors in benelux
and denmark and the appointment of a new distributor in france
direct selling is a strategic growth driver and as a result we developed and launched a new website and
ecommerce platform in the second half and recruited an ecommerce team resulting in good growth in
this channel further investment in direct selling is continuing
good levels of investment have been made in marketing through the acquisition of brand ambassadors
sir chris hoy and helen jenkins taking substantial share of voice through press advertising generating
brand proﬁle through social media channels and substantially increased pr
innovation has been a key growth driver with go hydro tablets go gel
1
plus fruitﬂow
1
and go gel
1
plus nitrates being notable and successful launches in the year we have a strong research programme
in place largely carried out in conjunction with our partner sports teams and athletes and through
collaboration with leading research institutes the directors believe that a promising pipeline is in place
for 2013 and 2014
the move to a new supply facility has proved effective as gross margin improved by 6 in addition the
commissioning of the new go gel
1
ﬁlling machine has given us capacity to deal with the strong growth
in this product format and we have recently moved to a 24 hour manufacturing operation to meet
growing demand
fruitﬂow
1
the alliance with dsm has made good progress during the year with commercial progress with the
existing fruitﬂow
1
syrup format in a range of global markets and the launch of a powder format
suitable for use in dietary supplement formats such as capsules and tablets
there are now 17 consumer brands containing fruitﬂow
1
syrup on sale in a range of global markets as
well as the core blood ﬂow targeted products dsm customers have also launched brands in the sports
nutrition and travelrelated sectors our sis
1
go gel
1
plus fruitﬂow
1
sports recovery product also
launched during the year
provexis plc annual report and accounts 2013 4
c108597pu010proof2286130927blrevision0operatorputa chiefexecutive’sstatement the powder format was completed by the dsm team in the ﬁnal quarter of the year and the product
was ofﬁcially launched at vitafoods in may 2013 the format has broad potential applications in dietary
supplements dairy shots nutrition bars and spreads four products containing this format are now in
market and interest from potential customers is strong especially in the usa
we collaborated with dsm to complete a substantial piece of consumer research to more fully
understand consumer attitudes to fruitﬂow
1
and blood ﬂow in order to support potential customers in
understanding the key success factors for any new brand launches the dsm marketing and sales
teams are using the ﬁndings from this research to assist their customers with potential brand positioning
whilst revenues for fruitﬂow
1
remain low in the year there has been a marked improvement over the
year both in revenues and number of brands in the market in addition interest in the technology and
awareness of fruitﬂow
1
continues to develop these trends together with the availability of the powder
format are a source of continued optimism for the prospects of this novel technology
with the investment cycle completed for fruitﬂow
1
we continue to focus keenly on costs since the year
end we have to this end closed our facility at the university of aberdeen residual ongoing costs for
fruitﬂow
1
are largely related to ip maintenance and management time for the alliance with dsm
outlook
the outlook for sis
1
is positive as we continue to invest in marketing sales and direct selling to drive
revenue growth underpinned by an increasingly effective supply chain with our current sales
momentum the continued resilience in the sports nutrition category the board believes we are placed
for strong growth for the coming year and beyond
while the investment cycle is completed for fruitﬂow
1
we continue to work closely with dsm to explore
all avenues for growing revenues for our novel technology the number of international brands
containing fruitﬂow
1
continues to steadily increase and the availability of the powder format enhances
further the prospects for the technology while the economic climate is still affecting the attitude of global
brand owners towards largescale innovation the general outlook is positive
the proposed demerger of sis
1
 subject to shareholder approval will further optimise the outlook for
both the fruitﬂow
1
and sis
1
businesses
stephen moon
chief executive
provexis plc annual report and accounts 2013 5
c108597pu010proof2286130927blrevision0operatorputa chiefexecutive’sstatementcontinued
fruitﬂow
1
continued underlying operating loss
underlying operating loss has reduced by 50 to £1094937 2012 £2180362 reﬂecting the
signiﬁcant restructuring conducted between 2011 and 2013 and continued progress with sis
1
and
fruitﬂow
1

the group has chosen to report underlying operating loss as the directors believe that the operating
loss before amortisation and impairment of acquired goodwill and other intangible assets share based
payments and exceptional items measure provides additional useful information for shareholders on
underlying trends and performance a reconciliation of underlying operating loss to statutory operating
loss is presented on the face of the consolidated statement of comprehensive income this measure is
used for internal performance analysis
the group’s cost base and its resources have been and will continue to be tightly managed within
budgets approved and monitored by the board
research and development costs
research and development costs for the year ended 31 march 2013 were £501098 2012 £818186
including £25545 capitalised under ias 38 2012 £56729
the suspension of work on the crohn’s disease trial does not constitute discontinued operations as
deﬁned by ‘ifrs 5 noncurrent assets held for sale and discontinued operations’ as the operations
have neither been permanently abandoned nor are being actively marketed for sale at this stage and
therefore no discontinued operations disclosures are necessary
impairment of goodwill – amortisation and impairment charges
the consolidated balance sheet of the group includes goodwill relating to two cash generating units
cgus provexis and sis
under ias 36 management must test this goodwill for impairment annually by comparing the carrying
value of assets in each cgu with either the fair value less costs to sell or value in use
signiﬁcant judgement is exercised in determining the underlying assumptions used in the impairment
review the assumptions include the discount rate operating margin and growth rate as further detailed
in note 12
on 28 june 2013 the company announced its intention to separate sis science in sport limited from
the provexis group by way of a demerger as further detailed in note 26 with a consequent signiﬁcant
reduction envisaged in the annual central running costs of the provexis group for the purposes of ias
36 the proposed demerger amounts to a future restructuring to which an entity is not yet committed at
the year end hence the future estimated cash ﬂows of the provexis cgu used in the calculations do
not include the signiﬁcant annual central cost savings which are expected to result from the demerger
using the discount rate and growth rates shown in note 12 and without taking into account the
signiﬁcant annual central cost savings which are expected to result from the demerger the carrying
amount of the provexis cgu exceeds its recoverable amount hence a total non cash impairment loss of
£2781499 has been recognised in the year as further detailed in notes 11 and 12 the impairment loss
is made up of the existing £2661879 carrying value of the provexis cgu and a related £119620 of
intangible assets in respect of previously capitalised intangible development costs
the directors have concluded that no other indication of impairment to goodwill exists because the
results of sis
1
have been in line with budget since acquisition
a further £269512 non cash amortisation charge has been recognised during the year in respect of the
intangible assets acquired by the company on its acquisition of sis in june 2011
restructuring costs
restructuring costs of £314370 2012 £464513 were incurred during the year primarily in respect of
staff reductions as the group has continued to seek to reduce its cost base the restructuring charge
this year includes all the costs of closing the group’s facility at the university of aberdeen
provexis plc annual report and accounts 2013 6
c108597pu010proof2286130927blrevision0operatorputa directors’report–ﬁnancialreview taxation
a current tax credit of £190304 2012 £150000 primarily in respect of research and development
expenditure incurred and a deferred tax credit of £65682 2012 £178538 primarily in respect of the
amortisation of acquired intangible assets have been recognised in the ﬁnancial statements a £162369
tax credit claim for the year ended 31 march 2011 was paid to the group during the year and further
group tax credit claims amounting to £194927 for the year ended 31 march 2012 were paid to the
group in may 2013 after the year end
losses and dividends
the loss attributable to equity holders of the parent for the year ended 31 march 2013 was £4338600
2012 £3873215 and the basic and diluted loss per share was 029p 2012 028p the directors are
unable to recommend the payment of a dividend 2012 £nil
capital structure and funding
on 23 april 2012 the company announced that application had been made for the admission to aim of
4000000 ordinary shares of 01p each in the company pursuant to the exercise of options by a former
employee the company received net proceeds of £36000 in respect of this transaction
on 17 may 2012 the company announced that it had raised a net £244336 by drawing down on the
company’s equity ﬁnancing facility the ‘‘eff’’ which was arranged by darwin strategic limited
‘‘darwin’’ allotting 13197880 new ordinary shares of 01p each to darwin
on 28 august 2012 the company announced that it had raised a net £541111 by drawing down on the
company’s eff allotting 31620884 new ordinary shares of 01p each to darwin
further details of the eff agreement and the drawdowns made using the eff are available to download
from the announcements section of the company’s website wwwprovexiscom
in september 2012 an asset ﬁnance agreement was secured with hsbc equipment finance for a
number of assets acquired in the last year by sis
1
for the company’s new nelson factory hsbc
remitted £258544 to the group in september 2012
a £200000 bank overdraft facility for sis
1
was additionally agreed with hsbc in september 2012
providing the group with greater headroom
going concern
the group made a loss for the year attributable to owners of the parent of £4338600 2012
£3873215 and expects to make a further loss during the year ending 31 march 2014 the total cash
outﬂow from operating activities in the year was £1433348 2012 £2165267 at 31 march 2013 the
group had cash balances of £616612 2012 £1447405
the directors have prepared projected cash ﬂow information for a period including twelve months from
the date of approval of these ﬁnancial statements on the basis that the demerger of sis science in
sport limited and concurrent placing as further detailed in note 26 will proceed
the demerger is conditional inter alia upon the approval of the company’s shareholders at the general
meeting proposed for 15 july 2013 and the conﬁrmation of the company’s reduction of capital by the
court it is the directors’ current belief and intention that the demerger will proceed as intended and
accordingly the going concern basis has been used in preparing the ﬁnancial statements
should the demerger not proceed the company would be forced to seek further ﬁnance most likely
through the group’s existing equity drawdown facility with darwin or through an equity fundraising with
the company’s shareholders albeit that such funds realised may be insufﬁcient to meet the ongoing
working capital requirements of the group
were the demerger not to proceed it may not be appropriate for the directors to prepare the accounts
on a going concern basis and adjustments may need to be made accordingly the directors have
concluded that these circumstances represent a material uncertainty that casts signiﬁcant doubt upon the
group’s ability to continue as a going concern and that therefore if the demerger is not approved the
group may be unable to realise its assets and discharge its liabilities in the normal course of business
nevertheless after making enquiries the directors have a reasonable expectation that the demerger will
proceed as expected for these reasons they continue to adopt the going concern basis of accounting
in preparing the annual ﬁnancial statements
provexis plc annual report and accounts 2013 7
c108597pu010proof2286130927blrevision0operatorputa directors’report–ﬁnancialreviewcontinued principal activities
provexis plc is a business that develops licenses and markets scientiﬁcallyproven functional food and
sports nutrition technologies
provexis plc has three wholly owned subsidiaries sis science in sport limited ‘‘sis’’ provexis
nutrition limited ‘‘pnl’’ and provexis natural products limited ‘‘pnp’’ which are registered in england
and wales provexis plc also owns 75 of provexis ibd limited ‘‘ibd’’ which is also registered in
england and wales
group strategy
the provexis strategy is the development licensing and marketing of scientiﬁcallyproven functional food
and sports nutrition technologies with four areas of focus
 to develop sis
1
into the leader in elite endurance sports nutrition in major global markets
 collaborate closely with alliance partner dsm nutritional products to maximise the commercial
success of fruitﬂow
1
globally
 underpin the competitiveness of these revenue streams with scientiﬁc excellence and regulatory
capability and
 seek further opportunities in the global functional food and sports nutrition sectors through being
recognised as a partner of choice
review of the performance of the business and future developments
the chairman’s statement on page 3 the chief executive’s statement on pages 4 and 5 and the
financial review on pages 6 and 7 report on the group’s performance during the year ended 31 march
2013 its position at that date and its likely future development
internal control and risk management
the board is responsible for maintaining a sound system of internal control to safeguard shareholders’
investment and the group’s assets as well as reviewing its effectiveness the system of internal control
is designed to manage rather than eliminate the risk of failure to achieve business objectives and can
only provide reasonable and not absolute assurance against material loss and misstatement
the audit committee continues to monitor and review the effectiveness of the system of internal control
and report to the board when appropriate with recommendations there have been no signiﬁcant
changes to the system of internal control throughout the year
the key control procedures operating within the group include but are not limited to
1 a comprehensive system of ﬁnancial budgeting forecasting and then reporting and reviewing actual
monthly results for the current year against these expectations
2 a system of operational and ﬁnancial key performance indicators ‘‘kpis’’ which are reviewed on
a weekly and monthly basis
3 procedures for appraisal review and authorisation of capital expenditure
4 properly authorised treasury procedures and banking arrangements
5 regular review of materials and services supply agreements and
6 regular review of tax insurance and health and safety matters
the principal ﬁnancial kpis monitored by the board relate to underlying operating loss and cash and
cash equivalents
provexis plc annual report and accounts 2013 8
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverview the table below shows the group’s underlying operating loss for the two years ended 31 march 2013
year
ended
31 march
2013
year
ended
31 march
2012
£ £
underlying operating loss 1094937 2180362
the £1085425 reduction in underlying operating loss in 2013 was primarily attributable to the £285904
rd cost savings made during the ﬁnancial year a reduction in central administrative costs of £330075
and a £300013 increase in the underlying operating proﬁt of sis the trading results are further detailed
in the ﬁnancial review on pages 6 and 7
the table below shows the group’s cash position at 31 march 2013 and 31 march 2012
31 march
2013
31 march
2012
£ £
cash and cash equivalents 616612 1447405
the monitoring of cash gives due consideration to anticipated future spend required to prioritise
development opportunities and to plan the resources required to achieve the goals of the business the
£830793 reduction in cash and cash equivalents during the ﬁnancial year is primarily the result of the
operating cash outﬂows arising during the year as further detailed in the consolidated statement of cash
ﬂows on page 22
at this stage in the group’s development the board does not consider it appropriate to establish an
internal audit function
principal risks and uncertainties
in the course of its normal business the group is exposed to a range of risks and uncertainties which
could impact on the results of the group the board considers that riskmanagement is an integral part
of good business process and on a biannual basis reviews the industry operational and ﬁnancial risks
facing the group and considers the adequacy of the controls  mitigants to manage the risks
the directors have identiﬁed the following principal risks and uncertainties that could have the most
signiﬁcant impact on the group’s longterm value generation
intellectual property
the group’s success will depend in part on its ability to obtain and maintain rigorous patent protection
for its technologies both in the uk and internationally the group cannot give deﬁnitive assurance that
pending or future patent applications will be granted or that patents granted will not be challenged
invalidated or held unenforceable
the group cannot assure that its intellectual property rights are sufﬁciently broad to prevent third parties
from producing competing functional food and sports nutrition technologies similar in nature to its own
the group also relies on protection of trade secrets knowhow and conﬁdential and proprietary
information to mitigate this the group enters into nondisclosure agreements with employees
consultants and prospective commercial partners but cannot assure that such agreements will provide
complete safeguards against unauthorised disclosure of conﬁdential information
the group’s commercial success will also depend in part on avoiding infringement of other third parties’
patents or proprietary rights and the breach of any licences in connection with the pursuit of its
technologies management is of the opinion that it does not infringe third parties’ patents or other rights
and is not aware of any such infringements but cannot assure that it will not be found in the future to
infringe such rights
provexis plc annual report and accounts 2013 9
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverviewcontinued
internal control and risk management continued food quality and safety
a major incident resulting from a food quality or health and safety failure could pose a risk to consumers
and therefore have reputational and ﬁnancial implications for the group
the group’s stringent approach to food quality and safety is controlled via quality assurance procedures
which are based on a risk management approach internal systems are reviewed continuously and
potential for improvement is monitored
the group’s sis
1
manufacturing facility is subject to regular food safety and quality control audits
including those carried out by andor for major customers the group’s products are analysed and
tested regularly for banned substances by an experienced independent surveillance company where
appropriate additional investment is made to optimise ingredient screening efﬁciency and effectiveness
the group maintains product liability insurance cover to mitigate the potential impact of such an event
the group believes that the quality of its raw materials is critical to the quality of its product the
availability and resultant price levels of ingredients meeting the group’s high standards of quality may
adversely affect the margins available to the group subject to the ability to pass through corresponding
price increases to customers
movement in the commodity prices of raw materials and in the case of imported raw materials and
other goods the value of sterling against other currencies may have a corresponding impact on ﬁnished
product cost failure to manage the group’s exposure to price increase may adversely affect the
group’s ﬁnancial performance
customers and consumers
the group operates in a competitive market sector and its ability to compete effectively requires an on
going commitment to marketing product development innovation product quality and ability to offer
value for money
a signiﬁcant proportion of the group’s sales is generated from a small number of customers and hence
there is a risk from loss of a key customer of a signiﬁcant piece of business signiﬁcant resources are
devoted to forging strong relationships with customers
the group relies on potential license partners to meet certain commercial and development milestones
and their failure to achieve this or other delays or cancellation of projects due to internal or market
factors affecting potential license partners could affect the execution of the group’s business plan with a
material adverse effect on the business
people
the group recognises that its employees are critical to the successful delivery of service to customers
the failure to retain people of high quality would have an adverse effect on group performance the
group has high expectations of all staff and in return strives to provide an environment that is both
challenging and rewarding
funding and other risks
the group may require additional funding to the extent that the current cash resources of the group
are insufﬁcient to cover the group’s liabilities in the longer term in particular should the demerger and
placing not go ahead it may be necessary to seek additional funds through future equity or debt
ﬁnancings and there is no certainty that such funds would be available any such further ﬁnancings if
available at all may be on terms that are not favourable to the group further if adequate capital
cannot be obtained the group’s operating results and ﬁnancial condition could be adversely affected
provexis plc annual report and accounts 2013 10
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverviewcontinued
principal risks and uncertainties continued policy on the payment of creditors
it is the policy of the group to pay creditors and suppliers in accordance with their normal terms of
business creditor days outstanding for the group at 31 march 2013 amounted to 62 days compared to
51 days at 31 march 2012
board of directors
the board of directors has overall responsibility for the group
the board comprises a nonexecutive chairman two additional nonexecutive directors all of whom are
independent and two further executive directors the board continues to be satisﬁed that it has an
appropriate mix of independence and experience in its nonexecutive directors
the directors of the company during the year and up to the date that the ﬁnancial statements were
approved are shown below
executive directors
s n moon
i ford
nonexecutive directors
c d buck
j m clarke appointed 1 april 2012
k rietveld
a qualifying thirdparty indemnity provision as deﬁned in section 234 of the companies act 2006 is in
force for the beneﬁt of each of the directors in respect of liabilities incurred as a result of their ofﬁce to
the extent permitted by law in respect of those liabilities for which directors may not be indemniﬁed the
company maintained a directors’ and ofﬁcers’ liability insurance policy throughout the ﬁnancial year
audit committee
the audit committee comprises two nonexecutive directors and is chaired by dawson buck as
chairman it meets as required and speciﬁcally to review the interim report and annual report and to
consider the suitability and monitor the effectiveness of the internal control processes there were two
audit committee meetings during the year the audit committee reviews the ﬁndings of the external
auditors and reviews accounting policies and material accounting judgements
the independence of the auditors is considered by the audit committee the audit committee with no
executive director present meets at least once per calendar year with the auditors to discuss their
objectivity and independence the annual report any audit issues arising internal control processes and
any other appropriate matters as well as providing audit related services the auditors provide taxation
advice corporate ﬁnance services and share scheme advice and undertake work in relation to the
interim report the fees in respect of the nonaudit services provided are £10500 for the year ended
31 march 2013 2012 £63500 the audit committee have considered the non audit fees agreed with
chantrey vellacott dfk in respect of the demerger and are satisﬁed that the objectivity and
independence of the auditors is safeguarded
the current terms of reference of the audit committee are set out in the governance pages on the
group’s website wwwprovexiscom
going concern
the directors have a reasonable expectation that the group and the company will continue in
operational existence for the foreseeable future for this reason they continue to adopt the going
concern basis in preparing the group’s ﬁnancial statements
this expectation is contingent upon the successful completion of the demerger and placing as further
detailed in note 1 and note 26 to the consolidated ﬁnancial statements
provexis plc annual report and accounts 2013 11
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverviewcontinued employees
the executive directors keep staff informed of the progress and development of the group regularly
through formal and informal meetings and employee feedback is encouraged the company has a policy
of offering share options to all eligible employees subject to availability under the option plan rules and
with due consideration to the level of dilution to shareholders
the group does not discriminate between employees and prospective employees on grounds of age
race religion or gender every effort is made to provide the same opportunities to disabled persons as
to others
the board recognises its obligation towards its employees to provide a safe and healthy working
environment the group complies with health and safety legislation including conducting regular
inspections and risk assessments
environmental social and community matters
as a result of the size and nature of the group’s operations the impact of the group’s operations on the
local community and the environment is not considered to be signiﬁcant recycling of ofﬁce supplies is
undertaken where possible
relationship with shareholders
the directors seek to build a mutual understanding of objectives between the company and its
shareholders the group reports formally to shareholders in its interim and annual reports setting out
details of its activities in addition the group keeps shareholders informed of events and progress
through the issue of regulatory news in accordance with the aim rules of the london stock exchange
the chief executive and finance director seek to meet with signiﬁcant shareholders following interim
and ﬁnal results the group also maintains investor relations pages and other information regarding the
business its products and activities on its website wwwprovexiscom
where possible the annual report is sent to shareholders at least 20 working days before the annual
general meeting directors are required to attend annual general meetings of the company unless
unable to do so for personal reasons or due to pressing commercial commitments shareholders are
given the opportunity to vote on each separate issue the company counts all proxy votes and will
indicate the level of proxies lodged on each resolution after it has been dealt with by a show of hands
post balance sheet events
on 28 june 2013 the group announced its intention to separate sis science in sport limited from the
provexis group it is proposed that this separation will be effected by way of a demerger of sis
science in sport limited to a new company called science in sport plc science in sport plc will seek
admission of its entire issued and to be issued ordinary share capital to trading on aim on or around
9 august 2013
in order to provide ongoing working capital for each of the demerged businesses and to pay the costs
associated with the demerger science in sport plc has announced that it has undertaken a conditional
placing to raise £225 million before commission and expenses
the demerger and placing are conditional inter alia upon the approval of provexis plc shareholders at a
general meeting proposed for 15 july 2013 and the subsequent conﬁrmation of the company’s
reduction of capital by the court
adequacy of information supplied to auditors
each director has taken all reasonable steps to make himself aware of any information needed by the
company’s auditors for the purpose of their audit and to establish that the auditors are aware of that
information the directors are not aware of any relevant audit information of which the auditors are
unaware
following a tender process chantrey vellacott dfk llp were appointed as the company’s external
auditor commencing with the 2013 ﬁnancial year
chantrey vellacott dfk llp have expressed their willingness to continue in ofﬁce and a resolution to re
appoint them will be proposed at the next annual general meeting
provexis plc annual report and accounts 2013 12
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverviewcontinued directors’ responsibilities
the directors are responsible for preparing the directors’ report and the ﬁnancial statements in
accordance with applicable law and regulations
company law requires the directors to prepare ﬁnancial statements for each ﬁnancial year under that
law the directors have elected to prepare the group ﬁnancial statements in accordance with international
financial reporting standards ifrss as adopted by the european union and the company ﬁnancial
statements in accordance with united kingdom generally accepted accounting practice united kingdom
accounting standards and applicable law under company law the directors must not approve the
ﬁnancial statements unless they are satisﬁed that they give a true and fair view of the state of affairs of
the group and company and of the proﬁt or loss of the group for that period the directors are also
required to prepare ﬁnancial statements in accordance with the rules of the london stock exchange for
companies trading securities on the alternative investment market
in preparing these ﬁnancial statements the directors are required to

select suitable accounting policies and then apply them consistently

make judgements and accounting estimates that are reasonable and prudent

state whether the group ﬁnancial statements have been prepared in accordance with ifrss as
adopted by the european union subject to any material departures disclosed and explained in the
ﬁnancial statements
 state whether the company ﬁnancial statements have been prepared in accordance with applicable
uk accounting standards subject to any material departures disclosed and explained in the
ﬁnancial statements
 prepare the ﬁnancial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business
the directors are responsible for keeping adequate accounting records that are sufﬁcient to show and
explain the company’s transactions and disclose with reasonable accuracy at any time the ﬁnancial
position of the company and enable them to ensure that the ﬁnancial statements comply with the
requirements of the companies act 2006 they are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities
website publication
the directors are responsible for ensuring the annual report and the ﬁnancial statements are made
available on a website financial statements are published on the company’s website in accordance with
legislation in the united kingdom governing the preparation and dissemination of ﬁnancial statements
which may vary from legislation in other jurisdictions the maintenance and integrity of the company’s
website is the responsibility of the directors the directors’ responsibility also extends to the ongoing
integrity of the ﬁnancial statements contained therein
by order of the board
ian ford
secretary
28 june 2013
provexis plc annual report and accounts 2013 13
c108597pu010proof2286130927blrevision0operatorputa directors’report–businessoverviewcontinued remuneration committee composition and terms of reference
the group’s remuneration committee during the year ended 31 march 2013 comprised three
independent nonexecutive directors and was chaired by dawson buck
the purpose of the remuneration committee is to ensure that the executive directors are fairly
rewarded for their individual contribution to the overall performance of the company the committee
considers and recommends to the board the remuneration of the executive directors and is kept
informed of the remuneration packages of senior staff and invited to comment on these
policy on executive directors’ remuneration
executive remuneration packages are designed to attract and retain executives of the necessary skill
and calibre to run the company successfully but avoiding paying more than is necessary direct
benchmarking of remuneration is not possible given the specialised nature and size of the company
the remuneration committee recommends to the board remuneration packages by reference to
individual performance and uses the knowledge and experience of the nonexecutive directors and
published surveys relating to aim directors and market changes generally the remuneration
committee has responsibility for recommending any long term incentive schemes
the full board determines whether or not executive directors are permitted to serve in roles with other
companies such permission is only granted where a role is on a strictly limited basis where there are
no conﬂicts of interest or competing activities and providing there is not an adverse impact on the
commitments required to the group earnings from such roles are not disclosed nor paid to the group
there are four main elements of the remuneration package for executive directors and senior staff
i basic salaries and beneﬁts in kind
basic salaries are recommended to the board by the remuneration committee taking into account the
performance of the individual and the rates for similar positions in comparable companies beneﬁts in
kind comprising private medical insurance are available to all senior staff and executive directors
ii share option scheme
the company operates a share option scheme which was established in june 2005 ’’the provexis 2005
share option scheme’’ to motivate the executive directors and employees through equity participation in
the company options granted pursuant to the provexis 2005 share option scheme may take the form of
either unapproved share options or tax favoured emi options exercise of options under the scheme is
subject to speciﬁed exercise periods and compliance with the aim rules of the london stock exchange
the scheme is overseen by the remuneration committee which recommends to the board all grants of
share options based on the committee’s assessment of personal performance and specifying the terms
under which eligible individuals may be invited to participate
in june 2005 the company undertook a reverse takeover of provexis natural products limited ‘‘pnp’’
formerly provexis limited through a share for share exchange prior to the takeover the company and
pnp had granted emi options and unapproved options options granted by the company prior to the
takeover remain subject to the same terms as contained in the individual share option contracts under
which they were originally granted the pnp emi options and unapproved options were rolled over into
options over the company’s ordinary shares and these replacement options remain subject to the same
terms as contained in the individual pnp share option contracts under which they were originally
granted
the uk corporate governance code refers to the requirement for the performancerelated elements of
remuneration to form a signiﬁcant proportion of the total remuneration package of executive directors
and should be designed to align their interests with those of shareholders in the development phase of
the group the remuneration committee currently considers that the best alignment of these interests is
through continued use of incentives for performance through the award of share options or other share
based arrangements
provexis plc annual report and accounts 2013 14
c108597pu020proof2286130928blrevision0operatorputa remuneration report iii bonus scheme
the company has an established discretionary nonpensionable bonus scheme for executive directors
which is subject to the achievement of agreed goals and targets that are designed to incentivise
directors to perform at the highest levels and align directors’ interests with those of the shareholders
for the executive directors the performancerelated annual bonus potential is up to 40 of basic salary
the remuneration committee approved no bonuses in 2013 or 2012
iv pension contributions
the group pays a deﬁned contribution to the pension scheme of executive directors and employees
the individual pension schemes are private and their assets are held separately from those of the
group
salaries and beneﬁts were reviewed in april 2012 to cover the year from 1 april 2012 to 31 march 2013
future reviews will continue to be undertaken on an annual basis each april to enable the group’s
performance over the preceding ﬁnancial year and the strategy for the forthcoming year to be
considered
service contracts
the chief executive is employed under a service contract requiring twelve months’ notice by either
party and the finance director is employed under a service contract requiring three months’ notice
nonexecutive directors receive payments under appointment letters which are terminable by six months’
notice from either party
policy on nonexecutive directors’ remuneration
dawson buck and john clarke each receive a fee for their services as a director which is approved by
the board mindful of the time commitment and responsibilities of their roles and of current market rates
for comparable organisations and appointments nonexecutive directors are reimbursed for travelling
and other minor expenses incurred
gains made on exercise of directors’ share options
no directors’ share options were exercised during the year 2012 nil
details of directors’ remuneration
the emoluments of the individual directors for the year were as follows
year ended 31 march 2013 year ended
31 march
2012
salary and
directors’
fees
beneﬁts in
kind
pension total total
££££ £
executive directors
s n moon 200364 1109 10018 211491 197553
s n morrison resigned 30 november 2011 —— —— 128006
i ford 129024 1993 6451 137468 127619
p walker appointed 24 september 2011 – resigned
29 november 2011
—— —— 116437
nonexecutive directors
c d buck 35000 — — 35000 27500
j m clarke appointed 1 april 2012 29000 — — 29000 —
n c bain resigned 30 november 2011 —— —— 11667
k rietveld —— —— —
393388 3102 16469 412959 608782
the above fees and emoluments exclude reimbursed expenditure incurred in the conduct of group
business
provexis plc annual report and accounts 2013 15
c108597pu020proof2286130928blrevision0operatorputa remuneration report continued
policy on executive directors’ remuneration continued sharebased payment expense
the sharebased payment expenses of the individual directors recognised for the year were as follows
year ended
31 march
2013
year ended
31 march
2012
£ £
executive directors
s n moon 88087 69504
s n morrison resigned 30 november 2011 — —
i ford 41453 32708
p walker appointed 24 september 2011 – resigned 29 november 2011 — —
nonexecutive directors
c d buck — —
n c bain resigned 30 november 2011 — —
k rietveld — —
129540 102212
directors’ interests in shares ordinary shares of
01 pence each
ordinary shares of
01 pence each
beneﬁcial interests
31 march 2013 1 april 2012
s n moon 2060666 2060666
i ford 2201832 2201832
c d buck 12906433 12906433
17168931 17168931
other than as shown in the table and as further disclosed above in respect of deferred shares in note
20 and disclosed in respect of share options in note 21 no director had any interest in the shares of
the company or its subsidiary companies at 31 march 2013
provexis plc annual report and accounts 2013 16
c108597pu020proof2286130928blrevision0operatorputa remuneration report continued directors’ interests in share options
the board uses share options to align directors and employees interests with those of shareholders in
order to provide incentives and reward them based on improvements in company performance
the share options held by the directors and not exercised at 31 march 2013 are summarised below
31 march
2013
31 march
2012
s n moon 38117620 38117620
i ford 18000000 18000000
56117620 56117620
the unapproved share options at 31 march 2013 of the directors who served during the year are set
out below
grant date number
awarded
exercise
priceshare
earliest
exercise date
expiry date
s n moon august 2008 7324520 0900p april 2011 august 2018
s n moon june 2011 17000000 2800p april 2014 june 2021
i ford june 2011 6350010 2800p april 2014 june 2021
30674530
the emi share options at 31 march 2013 of the directors who served during the year are set out below
grant date number
awarded
exercise
priceshare
earliest
exercise date
expiry date
s n moon august 2008 1117620 1000p august 2008 august 2018
s n moon august 2008 2675480 0900p april 2011 august 2018
s n moon august 2008 10000000 0900p october 2009 august 2018
i ford august 2008 5000000 0900p april 2011 august 2018
i ford august 2008 5000000 0900p october 2009 august 2018
i ford june 2011 1649990 2800p april 2014 june 2021
25443090
all options were granted with an exercise price at or above market value on the date of grant
the company carried out a share reorganisation on 28 august 2008 which is further detailed in note
20 to the consolidated ﬁnancial statements
share options which had been granted prior to 28 august 2008 over existing ordinary shares with a
nominal value of 1p each in the capital of the company became options over new ordinary shares with
a nominal value of 01p each in the capital of the company the options remain subject to the same
terms as contained in the individual option contracts under which they were originally granted
share options issued after 28 august 2008 are options over new ordinary shares with a nominal value of
01p each in the capital of the company
on 28 june 2013 following a recommendation from the company’s remuneration committee at a
meeting on 1 may 2012 the company will grant a further 35000000 options to directors
dawson buck
chairman of the remuneration committee
provexis plc annual report and accounts 2013 17
c108597pu020proof2286130928blrevision0operatorputa remuneration report continued to the members of provexis plc
we have audited the ﬁnancial statements of provexis plc for the year ended 31 march 2013 which
comprise the consolidated statement of comprehensive income the consolidated statement of ﬁnancial
position the consolidated statement of cash ﬂows the consolidated statement of changes in equity the
parent company balance sheet and related notes the ﬁnancial reporting framework that has been
applied in the preparation of the group ﬁnancial statements is applicable law and international financial
reporting standards ifrss as adopted by the european union the ﬁnancial reporting framework that
has been applied in the preparation of the parent company ﬁnancial statements is applicable law and
united kingdom accounting standards united kingdom generally accepted accounting practice
this report is made solely to the company’s members as a body in accordance with chapter 3 of part
16 of the companies act 2006 our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditors’ report and for no
other purpose to the fullest extent permitted by law we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body for our audit work for this
report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement the directors are responsible for the
preparation of the ﬁnancial statements and for being satisﬁed that they give a true and fair view our
responsibility is to audit and express an opinion on the ﬁnancial statements in accordance with
applicable law and international standards on auditing uk and ireland those standards require us to
comply with the auditing practices board’s ethical standards for auditors
scope of the audit of the ﬁnancial statements
a description of the scope of an audit of ﬁnancial statements is provided on the apb’s website at
wwwfrcorgukapbscopeprivatecfm
opinion on ﬁnancial statements
in our opinion
 the ﬁnancial statements give a true and fair view of the state of the group’s and the parent
company’s affairs as at 31 march 2013 and of the group’s loss for the year then ended

the group ﬁnancial statements have been properly prepared in accordance with ifrss as adopted
by the european union
 the parent company’s ﬁnancial statements have been properly prepared in accordance with united
kingdom generally accepted accounting practice and

the ﬁnancial statements have been prepared in accordance with the requirements of the companies
act 2006
emphasis of mattergoing concern
in forming our opinion on the ﬁnancial statements which is not modiﬁed we have considered the
adequacy of the disclosure made in note 1 to the ﬁnancial statements concerning the group’s ability to
continue as a going concern the group incurred a net loss of £4391706 and net cash outﬂows from
operating activities of £1433348 during the year ended 31 march 2013 and the directors expect the
group to incur further losses in the year ended 31 march 2014 the directors have projected cash ﬂows
on the basis that the demerger of sis science in sport limited and concurrent placing will proceed as
planned the demerger is conditional inter alia upon the approval of the company’s shareholders at the
general meeting proposed for 15 july 2013 and the conﬁrmation of the company’s reduction of capital
by the court
these conditions along with the other matters explained in note 1 to the ﬁnancial statements indicate
the existence of a material uncertainty that casts signiﬁcant doubt about the group’s ability to continue
as a going concern the ﬁnancial statements do not include the adjustments that would result if the
group was unable to continue as a going concern
provexis plc annual report and accounts 2013 18
c108597pu020proof2286130928blrevision0operatorputa independent auditor’s report to the members of provexis
plc opinion on other matters prescribed by the companies act 2006
in our opinion the information given in the directors’ report for the ﬁnancial year for which the ﬁnancial
statements are prepared is consistent with the ﬁnancial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires
us to report to you if in our opinion

adequate accounting records have not been kept by the parent company or returns adequate for
our audit have not been received from branches not visited by us or

the parent company ﬁnancial statements are not in agreement with the accounting records and
returns or

certain disclosures of directors’ remuneration speciﬁed by law are not made or

we have not received all the information and explanations we require for our audit
neil tustian senior statutory auditor
for and on behalf of chantrey vellacott dfk llp
chartered accountant and statutory auditor
reading
28 june 2013
provexis plc annual report and accounts 2013 19
c108597pu020proof2286130928blrevision0operatorputa independent auditor’s report to the members of provexis
plc continued year ended
31 march
2013
year ended
31 march
2012
notes £ £
revenue 13 5559591 3477862
cost of goods 2418177 1720241
gross proﬁt 3141414 1757621
research and development costs 4 475553 761457
administrative costs 7322685 5326301
underlying operating loss 1094937 2180362
amortisation and impairment charges 11 3068234 1390638
costs of acquisition 10 — 153163
restructuring costs 4 314370 464513
share based payment charges 21 179283 141461
loss from operations 4 4656824 4330137
finance income 7 12407 46853
finance costs 7 3275 742
loss before taxation 4647692 4284026
taxation 8 255986 328538
loss and total comprehensive expense for the period 4391706 3955488
attributable to
owners of the parent 22 4338600 3873215
noncontrolling interest 22 53106 82273
loss and total comprehensive expense for the period 22 4391706 3955488
loss per share to owners of the parent
basic and diluted – pence 9 029 028
all amounts relate to continuing operations
provexis plc annual report and accounts 2013 20
c108597pu020proof2286130928blrevision0operatorputa consolidated statement of comprehensive income company number 05102907 as at
31 march
2013
as at
31 march
2012
notes £ £
assets
noncurrent assets
intangible assets 11 6553502 9369603
plant and equipment 13 634920 598430
deferred tax 19 110348 128948
total noncurrent assets 7298770 10096981
current assets
inventories 14 913387 635771
trade and other receivables 15 1253305 934773
corporation tax asset 8 288801 300000
cash and cash equivalents 16 616612 1447405
total current assets 3072105 3317949
total assets 10370875 13414930
liabilities
current liabilities
trade and other payables 17 1787569 1541839
borrowings 18 64774 —
current tax liabilities — 39133
total current liabilities 1852343 1580972
net current assets 1219762 1736977
noncurrent liabilities
borrowings 18 161871 —
deferred tax 19 450789 535072
total noncurrent liabilities 612660 535072
total liabilities 2465003 2116044
total net assets 7905872 11298886
capital and reserves attributable to owners of the
parent company
share capital 20 5134170 5085352
share premium reserve 22 20769423 19998832
warrant reserve 22 60000 60000
merger reserve 22 6599174 6599174
retained earnings 22 24385057 20225740
8177710 11517618
noncontrolling interest 22 271838 218732
total equity 7905872 11298886
these consolidated ﬁnancial statements were approved and authorised for issue by the board on
28 june 2013 the notes on pages 24 to 52 form part of these consolidated ﬁnancial statements
stephen moon ian ford
director director
on behalf of the board of provexis plc
provexis plc annual report and accounts 2013 21
c108597pu020proof2286130928blrevision0operatorputa consolidated statement of ﬁnancial position year ended
31 march
2013
year ended
31 march
2012
notes £ £
cash ﬂows from operating activities
loss after tax 4391706 3955488
adjustments for
amortisation and impairment 11 3068234 1390638
impairment of ﬁxed assets 37876 —
depreciation 13 187712 89360
loss on disposal of intangible assets — 9872
loss  proﬁt on sale of ﬁxed assets 1556 3631
net ﬁnance income 9132 46111
taxation 255986 328538
sharebased payment charge 179283 141461
operating cash outﬂow before changes in working capital 1182163 2702437
changes in inventories 338719 42239
changes in trade and other receivables 320590 81419
changes in trade and other payables 245755 320426
total cash outﬂow from operations 1595717 2258353
tax paid — 28134
tax credits received 162369 121220
total cash outﬂow from operating activities 1433348 2165267
cash ﬂow from investing activities
purchase of property plant and equipment 263634 458984
proceeds from sale of property plant and equipment — 4750
purchase of intangible assets 191030 62356
interest received 12427 49762
acquisition of subsidiary net of cash acquired 10 — 6786036
net cash outﬂow from investing activities 442237 7252864
cash ﬂow from ﬁnancing activities
proceeds from issue of share capital 785447 3524694
expenses paid on share issues — 236919
proceeds from borrowings 258544 —
repayment of borrowings 31924 —
proceeds from exercise of share options 36000 27000
interest paid 3275 744
net cash ﬂow from ﬁnancing activities 1044792 3314031
net decrease in cash and cash equivalents 830793 6104100
opening cash and cash equivalents 16 1447405 7551505
closing cash and cash equivalents 16 616612 1447405
provexis plc annual report and accounts 2013 22
c108597pu020proof2286130928blrevision0operatorputa consolidated statement of cash ﬂows share
capital
share
premium
warrant
reserve
merger
reserve
retained
earnings
total equity
attributable
to owners of
the parent
non
controlling
interests
total
equity
££ ££ ££ ££
at 31 march 2011 4812036 16909650 115980 6273909 16493986 11617589 136459 11481130
sharebased charges — — — — 141461 141461 — 141461
issue of shares – acquisition of sis
science in sport 24 june 2011
35336 — — 325265 — 360601 — 360601
issue of shares – placing
24 june 2011
166667 2333333 — — — 2500000 — 2500000
issue costs – placing 24 june 2011 — 199380 — — — 199380 — 199380
issue of shares – open offer
27 july 2011
68313 956381 — — — 1024694 — 1024694
issue costs – open offer 27 july 2011 — 37539 — — — 37539 — 37539
issue of shares – share options
exercised 13 december 2011
3000 24000 — — — 27000 — 27000
cancellation of warrants – equity
ﬁnancing facility 8 november 2011
— 12387 115980 — — 103593 — 103593
issue of warrants – equity ﬁnancing
facility 8 november 2011
— — 60000 — — 60000 — 60000
total comprehensive expense for
the year
— — — — 3873215 3873215 82273 3955488
at 31 march 2012 5085352 19998832 60000 6599174 20225740 11517618 218732 11298886
sharebased charges — — — — 179283 179283 — 179283
issue of shares – share options
exercised 27 april 2012
4000 32000 — — — 36000 — 36000
issue of shares – equity ﬁnancing
facility 23 may 2012
13198 230504 — — — 243702 — 243702
issue of shares – equity ﬁnancing
facility 3 september 2012
31620 508087 — — — 539707 — 539707
total comprehensive expense for
the year
— — — — 4338600 4338600 53106 4391706
at 31 march 2013 5134170 20769423 60000 6599174 24385057 8177710 271838 7905872
provexis plc annual report and accounts 2013 23
c108597pu020proof2286130928blrevision0operatorputa consolidated statement of changes in equity 1 accounting policies
general information
provexis plc is a public limited company incorporated and domiciled in the united kingdom registration
number 05102907 the address of the registered ofﬁce is kings road house 2 kings road windsor
berkshire sl4 2ag uk
the main activities of the group are those of developing licensing and marketing scientiﬁcallyproven
functional food and sports nutrition technologies for the global functional food and sports nutrition
sectors
basis of preparation
the group ﬁnancial statements have been prepared in accordance with international financial reporting
standards international accounting standards and interpretations collectively ifrs issued by the
international accounting standards board iasb as adopted by the european union ‘‘adopted ifrs’’
and those parts of the companies act 2006 that are applicable to ﬁnancial statements prepared in
accordance with ifrs
the company has elected to prepare its parent company ﬁnancial statements in accordance with united
kingdom generally accepted accounting practice ‘‘uk gaap’’ and these are set out on pages 53 to
57
the accounting policies set out below have been applied to all periods presented in these group
ﬁnancial statements and are in accordance with ifrs as adopted by the european union and
international financial reporting interpretations committee ‘‘ifric’’ interpretations that were applicable
for the year ended 31 march 2013
there have been no new or amended standards adopted by the group since the prior ﬁnancial year
the following new standards amendments to standards and interpretations have been issued but are
not effective for the year ended 31 march 2013 the new standards amendments to standards and
interpretations will be relevant to the group but have not been adopted early as the directors do not
expect these standards and interpretations to have a material effect on the consolidated ﬁnancial
statements

ias 1 amended ‘financial statement presentation’ is effective from periods commencing on or
after 1 july 2012
 ifrs 7 amended ‘financial instruments disclosures’ and ias 32 amended financial
instruments presentation’ are effective from 1 january 2013
 ifrs 9 ‘financial instruments’ is effective from periods commencing on or after 1 january 2015

ifrs 10 ‘consolidated ﬁnancial statements’ is effective from periods commencing on or after
1 january 2014

ifrs 12 ‘disclosures of interests in other entities’ is effective from periods commencing on or after
1 january 2014

ifrs 13 ‘fair value measurement’ is effective from periods commencing on or after 1 january
2013

ias 27 amended ‘separate ﬁnancial statements’ is effective from periods commencing on or after
1 january 2014

improvements to ifrs 20092011 cycle effective for periods beginning on or after 1 january 2013
there are a number of standards interpretations and amendments to published accounts not listed
above which the directors consider not to be relevant to the group
phase 1 of ifrs 9 ‘financial instruments’ was issued in november 2009 and has subsequently been
updated and amended the standard is effective for annual periods commencing on or after 1 january
2015 and has not yet been endorsed for use by the eu the group is currently assessing the impact of
this standard on its results ﬁnancial position and cash ﬂows
provexis plc annual report and accounts 2013 24
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatements going concern
the group’s business activities together with the factors likely to affect its future development are set
out in the business overview on pages 8 to 13 the ﬁnancial position of the group its cash ﬂows and
liquidity position are set out in the financial review on pages 6 and 7 in addition note 2 to the ﬁnancial
statements includes the group’s objectives policies and processes for managing its capital its ﬁnancial
risk management objectives details of its ﬁnancial instruments and its exposure to credit and liquidity
risk
the group made a loss for the year attributable to owners of the parent of £4338600 2012
£3873215 and expects to make a further loss during the year ending 31 march 2014 the total cash
outﬂow from operating activities in the year was £1433348 2012 £2165267 at 31 march 2013 the
group had cash balances of £616612 2012 £1447405
the directors have prepared projected cash ﬂow information for a period including twelve months from
the date of approval of these ﬁnancial statements on the basis that the demerger of sis science in
sport limited and concurrent placing as further detailed in note 26 will proceed
the demerger is conditional inter alia upon the approval of the company’s shareholders at the general
meeting proposed for 15 july 2013 and the conﬁrmation of the company’s reduction of capital by the
court it is the directors’ current belief and intention that the demerger will proceed as intended and
accordingly the going concern basis has been used in preparing the ﬁnancial statements
should the demerger not proceed the company would be forced to seek further ﬁnance most likely
through the group’s existing equity drawdown facility with darwin or through an equity fundraising with
the company’s shareholders albeit that such funds realised may be insufﬁcient to meet the ongoing
working capital requirements of the group
were the demerger not to proceed it may not be appropriate for the directors to prepare the accounts
on a going concern basis and adjustments may need to be made accordingly the directors have
concluded that these circumstances represent a material uncertainty that casts signiﬁcant doubt upon the
group’s ability to continue as a going concern and that therefore if the demerger is not approved the
group may be unable to realise its assets and discharge its liabilities in the normal course of business
nevertheless after making enquiries the directors have a reasonable expectation that the demerger will
proceed as expected for these reasons they continue to adopt the going concern basis of accounting
in preparing the annual ﬁnancial statements
basis of consolidation
subsidiaries are all entities including special purpose entities over which the group has the power to
govern the ﬁnancial and operating policies generally accompanying a shareholding of more than one half
of the voting rights subsidiaries are fully consolidated from the date on which control is transferred to
the group they are deconsolidated from the date that control ceases
the consolidated ﬁnancial information presents the results of the company and its subsidiaries provexis
nutrition limited provexis natural products limited provexis ibd limited and sis science in sport
limited as if they formed a single entity ‘‘the group’’ all subsidiaries share the same reporting date
31 march as provexis plc all intra group balances are eliminated in preparing the ﬁnancial statements
the purchase method of accounting is used to account for the acquisition of subsidiaries by the group
the cost of an acquisition is measured as the fair value of the assets given equity instruments issued
and liabilities incurred or assumed at the date of exchange identiﬁable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date irrespective of the extent of any noncontrolling interest the excess of the cost of
acquisition over the fair value of the group’s share of the identiﬁable net assets acquired is recorded as
goodwill the direct costs of acquisition are recognised immediately as an expense
noncontrolling interest
proﬁt or loss and each component of other comprehensive income are attributed to the owners of the
parent and to the noncontrolling interests total comprehensive income is attributed to the owners of the
parent and the noncontrolling interests even if this results in the noncontrolling interests having a deﬁcit
balance
provexis plc annual report and accounts 2013 25
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued revenue
revenue comprises the fair value received or receivable for exclusivity arrangements collaboration
agreements royalties and sales net of sales rebates and excluding vat and trade discounts
the accounting policies for the principal revenue streams of the group are as follows
i exclusivity arrangements and collaboration agreements are recognised as revenue in the
accounting period in which the related services or required activities are performed or speciﬁed
conditions are fulﬁlled in accordance with the terms of completion of the speciﬁc transaction
ii royalty income relating to the sale by a licensee of licensed product is recognised on an accruals
basis in accordance with the substance of the relevant agreement and based on the receipt from
the licensee of the relevant information to enable calculation of the royalty due
iii sales are recorded net of value added tax when the signiﬁcant risks and rewards of ownership
have been transferred to the buyer in accordance with customer terms this is normally when
goods are dispatched to export customers and when the goods are delivered for uk customers
sales rebates and discount reserves are established based on management’s best estimate of the
amounts necessary to meet claims by the group’s customers in respect of these rebates and
discounts the provision is made at the time of sale and released if unutilised after assessment
that the likelihood of such a claim being made has become remote
segment reporting
the group determines and presents operating segments based on the information that internally is
provided to the executive committee of the board of directors which is the group’s ‘chief operating
decision maker’ ‘‘codm’’
an operating segment is a component of the group that engages in business activities from which it
may earn revenues and incur expenses including revenues and expenses that relate to transactions with
any of the group’s other components an operating segment’s operating results are reviewed regularly
by the codm to make decisions about resources to be allocated to the segment and assess its
performance and for which discrete ﬁnancial information is available
segment results that are reported to the group board include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis
segment capital expenditure is the total cost incurred during the period to acquire property plant and
equipment and intangible assets
use of nongaap proﬁt measure – underlying operating proﬁt
the directors believe that the operating loss before amortisation and impairment of acquired intangibles
share based payments and exceptional items measure provides additional useful information for
shareholders on underlying trends and performance this measure is used for internal performance
analysis underlying operating loss is not deﬁned by ifrs and therefore may not be directly comparable
with other companies’ adjusted proﬁt measures it is not intended to be a substitute for or superior to
ifrs measurements of proﬁt
exceptional items are those material items which by virtue of their size or incidence are presented
separately in the statement of comprehensive income to give a full understanding of the group’s
underlying ﬁnancial performance transactions which may give rise to exceptional items include the
restructuring of business activities and acquisitions a reconciliation of underlying operating proﬁt to
statutory operating proﬁt is set out on the face of the statement of comprehensive income
leased assets
leases which contain terms whereby the group does not assume substantially all the risks and rewards
incidental to ownership of the leased item are classiﬁed as operating leases operating lease rentals are
charged to the statement of comprehensive income on a straight line basis over the lease term the
group does not hold any assets under ﬁnance leases
provexis plc annual report and accounts 2013 26
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued intangible assets
goodwill
goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of
the identiﬁable net assets acquired goodwill on acquisition of subsidiaries is included in ‘intangible
assets’ separately recognised goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses
an impairment loss is recognised within administrative expenses in the consolidated statement of
comprehensive income for the amount by which the asset’s carrying amount exceeds its recoverable
amount for the purposes of assessing impairment assets are grouped into cash generating units
‘cgu’ being the lowest levels for which there are separately identiﬁable cash ﬂows the recoverable
amount of a cgu is the higher of a cgu’s fair value less costs to sell and value in use
impairment losses on goodwill are not reversed
research and development
certain group products are in the research phase and others are in the development phase expenditure
incurred on the development of internally generated products is capitalised if it can be demonstrated
that

it is technically feasible to develop the product for it to be sold
 adequate resources are available to complete the development

there is an intention to complete and sell the product
 the group is able to sell the product

sale of the product will generate future economic beneﬁts and
 expenditure on the project can be measured reliably
the value of the capitalised development cost is assessed for impairment annually the value is written
down immediately if impairment has occurred development costs are not being amortised as income
has not yet been realised from the underlying technology development expenditure not satisfying the
above criteria and expenditure on the research phase of internal projects is recognised in the statement
of comprehensive income as incurred
patents and trademarks
the costs incurred in establishing patents and trademarks are either expensed or capitalised in
accordance with the corresponding treatment of the development expenditure for the product to which
they relate
website development costs
website development costs are capitalised to the extent that it is capable of generating direct revenues
from enabling orders to be placed costs associated with the planning stage are recognised in the
income statement
externally acquired intangible assets
externally acquired intangible assets are initially recognised at cost and subsequently amortised on a
straightline basis over their useful economic lives
intangible assets are recognised on business combinations if they are separable from the acquired entity
or give rise to other contractuallegal rights the amounts ascribed to such intangibles are arrived at by
using appropriate valuation techniques
inprocess research and development programmes acquired in such combinations are recognised as an
asset even if subsequent expenditure is written off because the criteria speciﬁed in the policy for
research and development costs above are not met
provexis plc annual report and accounts 2013 27
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued the signiﬁcant intangibles recognised by the group their useful economic lives and the methods used to
determine the cost of intangibles acquired in a business combination are as follows
intangible asset useful economic life valuation method
trademarks 95 relief from royalty rate method
patents  recipes  formulations 45 to 95 relief from royalty rate method
covenants not to compete 30 comparative business valuation
customer relationships 95 multiperiod excess earnings method
website development costs 50 historic cost
noncurrent assets held for sale or distribution and disposal groups
noncurrent assets and disposal groups are classiﬁed as held for sale when at the year end
– they are available for immediate sale
– management is committed to a plan to sell
– it is unlikely that signiﬁcant changes to the plan will be made or that the plan will be withdrawn
– an active programme to locate a buyer has been initiated
– the asset or disposal group is being marketed at a reasonable price in relation to its fair value and
– a sale is expected to complete within 12 months from the date of classiﬁcation
noncurrent assets and disposal groups classiﬁed as held for sale are measured at the lower of
– their carrying amount immediately prior to being classiﬁed as held for sale in accordance with the
group’s accounting policy and
– fair value less costs to sell
following their classiﬁcation as held for sale noncurrent assets including those in a disposal group are
not depreciated
the results of operations disposed during the year are included in the consolidated statement of
comprehensive income up to the date of disposal
a discontinued operation is a component of the group’s business that represents a separate major line
of business or geographical area of operations or is a subsidiary acquired exclusively with a view to
resale that has been disposed of has been abandoned or that meets the criteria to be classiﬁed as
held for sale
discontinued operations are presented in the consolidated statement of comprehensive income as a
single line which comprises the posttax proﬁt or loss of the discontinued operation along with the post
tax gain or loss recognised on the remeasurement to fair value less costs to sell or on disposal of the
assets or disposal groups constituting discontinued operations
plant and equipment
plant and machinery ﬁxtures ﬁttings and computer equipment and laboratory equipment are stated at
cost less accumulated depreciation and any accumulated impairment losses cost includes expenditure
that is directly attributable to the acquisition of the items depreciation is charged to the statement of
comprehensive income on all plant and equipment at rates calculated to write off the cost or valuation
less estimated residual value of each asset on a straight line basis over their estimated useful lives
which is
 between 3 and 8 years for motor vehicles plant and machinery ﬁxtures ﬁttings and computer
equipment and

5 years for laboratory equipment
leasehold improvements are depreciated on a straight line basis over the unexpired portion of the lease
the assets’ residual values and useful lives are determined by the directors and reviewed and adjusted
if appropriate at each balance sheet date in accordance with the group policy for impairment of assets
provexis plc annual report and accounts 2013 28
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued
externally acquired intangible assets continued the gain or loss arising on the disposal of an asset is determined as the difference between the
disposal proceeds and the carrying amount of the asset and is recognised in the income statement
impairment of assets
assets that have a ﬁnite useful life but that are not yet in use and are therefore not subject to
amortisation or depreciation are tested annually for impairment assets that are subject to amortisation
are reviewed for impairment annually and when events or circumstances suggest that the carrying
amount may not be recoverable an impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount
goodwill is allocated to cashgenerating units ‘cgu’ for the purpose of impairment testing to the extent
that it is possible to allocate goodwill to a cgu on a nonarbitrary basis a cgu is identiﬁed at the
lowest aggregation of assets that generate largely independent cash inﬂows and that which is looked at
by management for monitoring and managing the business
if the recoverable amount of an asset is estimated to be less than its carrying amount the carrying
amount of the asset is reduced to its recoverable amount an impairment loss is recognised immediately
in the statement of comprehensive income unless the relevant asset is carried at a revalued amount in
which case the impairment loss is treated as a revaluation decrease
where an impairment loss subsequently reverses the carrying amount of the asset is increased to the
revised estimate of its recoverable amount but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the
asset in prior periods a reversal of an impairment loss is recognised immediately in the statement of
comprehensive income unless the relevant asset is carried at a revalued amount in which case the
reversal of the impairment loss is treated as a revaluation increase impairment losses on goodwill are
not reversed
inventories
inventories are stated at the lower of cost and net realisable value cost is calculated as follows
raw materials – cost of purchase on ﬁrst in ﬁrst out basis
work in progress and ﬁnished goods – cost of raw materials and labour together with attributable
overheads based on the normal level of activity
net realisable value is based on estimated selling price less further costs to completion and disposal a
charge is made to the income statement for slow moving inventories the charge is reviewed at each
balance sheet date
financial instruments
financial assets
the group’s ﬁnancial assets are comprised of ‘trade and other receivables’ and ‘cash and cash
equivalents’ they are recognised initially at their fair value and subsequently at amortised cost the
group will assess at each balance sheet date whether there is objective evidence that the ﬁnancial asset
is impaired if an asset is judged to be impaired the carrying amount of the asset will be adjusted to its
impaired valuation
financial liabilities
the group’s ﬁnancial liabilities comprise ‘trade and other payables’ and ‘borrowings’ these are
recognised initially at fair value and subsequently at amortised cost
cash and cash equivalents
cash and cash equivalents comprise cash at bank and in hand
provexis plc annual report and accounts 2013 29
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued
plant and equipment continued government grants
government grants are recognised when there is reasonable assurance that the grant will be received
and the group will comply with all attached conditions government grants are recognised in the
statement of comprehensive income in the same period to which the costs that they are intended to
compensate are expensed
taxation
current tax is provided at amounts expected to be recovered or to be paid using the tax rates and tax
laws that have been enacted or substantively enacted at the balance sheet date when research and
development tax credits are claimed they are recognised on an accruals basis and are included as a
taxation credit
deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability on
the balance sheet differs from its tax base except for differences arising on
 the initial recognition of goodwill

the initial recognition of an asset or liability in a transaction which is not a business combination
and at the time of the transaction affects neither accounting or taxable proﬁt and

investments in subsidiaries where the group is able to control the timing of the reversal of the
difference and it is probable that the difference will not reverse in the foreseeable future
recognition of deferred tax assets is restricted to those instances where it is probable that taxable
proﬁts will be available against which the difference can be utilised
the amount of the asset or liability is determined using tax rates that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the deferred tax
liabilitiesassets are settledrecovered deferred tax balances are not discounted
deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset
current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the
same tax authority on either
 the same taxable group company or

different group entities which intend to settle current tax assets and liabilities on a net basis or to
realise the assets and settle the liabilities simultaneously on each future period in which signiﬁcant
amounts of deferred tax assets or liabilities are expected to be settled or recovered
foreign currency translation
foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the statement of
comprehensive income
employee beneﬁts
i deﬁned contribution plans
the group provides retirement beneﬁts to all employees and executive directors the assets of these
schemes are held separately from those of the group in independently administered funds contributions
made by the group are charged to the statement of comprehensive income in the period in which they
become payable
ii accrued holiday pay
provision has been made at the balance sheet date for holidays accrued but not taken at the salary of
the relevant employee at that date
provexis plc annual report and accounts 2013 30
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued iii sharebased payment transactions
the group operates an equitysettled sharebased compensation plan vesting conditions are service
conditions and performance conditions only where share options are awarded to employees and others
providing similar services the fair value of the options at the date of grant is charged to the statement of
comprehensive income over the vesting period nonmarket vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each balance sheet date so that
ultimately the cumulative amount recognised over the vesting period is based on the number of options
that eventually vest market vesting conditions are factored into the fair value of the options when
granted as long as all other vesting conditions are satisﬁed a charge is made irrespective of whether
the market vesting conditions are satisﬁed the cumulative charge is not adjusted for failure to achieve a
market vesting condition if market related terms and conditions of options are modiﬁed before they vest
the change in the fair value of the options measured immediately before and after the modiﬁcation is
also charged to the statement of comprehensive income over the remaining vesting period if nonmarket
related terms and conditions of options are modiﬁed before they vest the number of instruments
expected to vest at each balance sheet date and therefore the cumulative charge is therefore amended
accordingly where equity instruments are granted to persons other than employees and others providing
similar services the statement of comprehensive income is charged with the fair value of goods and
services received
the proceeds received when options are exercised net of any directly attributable transaction costs are
credited to share capital nominal value and the remaining balance to share premium
national insurance on share options
all employee option holders sign statements that they will be liable for any employers national insurance
arising on the exercise of share options
interest income
interest income is recognised on a timeproportion basis using the effective interest rate method
warrants
the group has issued warrants to darwin strategic limited as part of the equity financing facility
these warrants have been measured at fair value at the date of grant using an appropriate options
pricing model
this fair value has been held on the balance sheet within prepayments and in the warrants reserve
within equity the prepayment will be released against share premium as the equity ﬁnancing facility is
utilised the warrants reserve will be released to share premium when the warrants are exercised if the
warrants lapse or are cancelled then the reserve is transferred to retained earnings
critical accounting estimates and judgements
the preparation of ﬁnancial statements in conformity with ifrss requires the use of certain critical
accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the
date of the ﬁnancial statements and the reported amounts of revenues and expenses during the
reporting period
estimates and judgements are continually made and are based on historic experience and other factors
including expectations of future events that are believed to be reasonable in the circumstances
as the use of estimates is inherent in ﬁnancial reporting actual results could differ from these estimates
the directors believe the following to be the key areas of estimation and judgement
i research and development
under ias 38 intangible assets development expenditure which meets the recognition criteria of the
standard must be capitalised and amortised over the useful economic lives of intangible assets from
product launch the directors consider that the criteria to capitalise development expenditure were met
in 2007 for one of the group’s products and have continued to be met since
provexis plc annual report and accounts 2013 31
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued
employee beneﬁts continued ii sharebased payments
the group operates an equitysettled sharebased compensation plan the charge for sharebased
payments is determined based on the fair value of awards at the date of grant partly by use of the
blackscholes pricing model which require judgements to be made regarding expected volatility dividend
yield risk free rates of return and expected option lives the inputs used in these pricing models to
calculate the fair values are set out in note 21 an element of the sharebased payment charge also
relies on certain assumptions over the future performance of the share price which may not be met or
may be exceeded by the time the relevant awards vest
iii goodwill and impairment
the recoverable amount of goodwill is determined based on value in use calculations of the cash
generating units to which it relates further detail on key assumptions including growth rates discount
rates and the time period of these value in use calculations is given in note 12
the group prepares and approves formal ﬁve year management plans for its operations which are used
in the value in use calculations in certain cases the ﬁfth year of the management plan is not indicative
of the long term future performance as operations may not have reached maturity in this case
management extends the plan data for a longer period
iv fair value of identiﬁable net assets acquired
upon acquisition of a business its identiﬁable assets and liabilities are assessed to determine their fair
value the values attributed to assets and liabilities as part of this process are where appropriate based
on market values identiﬁed for equivalent assets together with management’s experience and
assessments including comparison to the carrying value of assets of a similar condition and age in the
existing business
v valuation of inventories
inventories are valued at the lower of cost and net realisable value cost comprises direct materials
labour and where appropriate overheads that have been incurred in bringing the inventory to its present
location and condition net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and selling expenses
vi useful economic lives of intangible and tangible assets
in relation to the group’s ﬁnite life intangible assets and property plant and equipment useful economic
lives and residual values of assets have been established using historical experience and an assessment
of the nature of the assets involved assets are assessed on an ongoing basis to determine whether
circumstances exist that could lead to potential impairment of the carrying value of such assets
2 financial risk management
21 financial risk factors
the group’s activities inevitably expose it to a variety of ﬁnancial risks market risk including currency
risk cash ﬂow interest rate risk and fair value interest rate risk credit risk and liquidity risk
it is group policy not to enter into speculative positions using complex ﬁnancial instruments the group’s
primary treasury objective is to minimise exposure to potential capital losses whilst at the same time
securing favourable market rates of interest on group cash deposits using money market deposits with
banks cash balances used to settle the liabilities from operating activities are also maintained in current
accounts which earn interest at variable rates
a market risk
foreign exchange risk
the group primarily enters into contracts which are to be settled in uk pounds however some
contracts involve other major world currencies including the us dollar and the euro where large
contracts of more than £50000 total value are to be settled in foreign currencies consideration is given
to converting the appropriate amounts to or from uk pounds at the outset of the contract to minimise
the risk of adverse currency ﬂuctuations
the group incurred minimal expenditure in foreign currencies during the year and the prior year and
consequently there is no material exposure to foreign currency rate risk
provexis plc annual report and accounts 2013 32
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
1 accounting policies continued
critical accounting estimates and judgements continued cash ﬂow and fair value interest rate risk
the group’s interest rate risk arises from medium term and short term money market deposits deposits
which earn variable rates of interest expose the group to cash ﬂow interest rate risk deposits at ﬁxed
rates expose the group to fair value interest rate risk
the group analyses its interest rate exposure on a dynamic basis throughout the year
b credit risk
credit risk arises from cash and cash equivalents and deposits with banks and ﬁnancial institutions as
well as credit exposure in relation to outstanding receivables group policy is to place deposits with
institutions with investment grade a2 or better moody’s credit rating and deposits are made in sterling
only the group does not expect any losses from nonperformance by these institutions management
believes that the carrying value of outstanding receivables and deposits with banks represents the
group’s maximum exposure to credit risk
c liquidity risk
liquidity risk arises from the group’s management of working capital it is the risk that the group will
encounter difﬁculty in meeting its ﬁnancial obligations as they fall due prudent liquidity risk management
implies maintaining sufﬁcient cash and cash equivalents and management monitors rolling forecasts of
the group’s liquidity on the basis of expected cash ﬂow
the group had trade and other payables at the statement of ﬁnancial position date of £1787569 2012
£1541839 as disclosed in note 17
22 capital risk management
the group considers its capital to comprise its ordinary share capital share premium warrant reserve
merger reserve and accumulated retained earnings as disclosed in the consolidated statement of
ﬁnancial position on page 21
the group remains funded primarily by equity capital the group’s objectives when managing capital are
to safeguard the group’s ability to continue as a going concern in order to provide returns for equity
holders of the company and beneﬁts for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital
3 segmental reporting
the group’s reporting segments are determined based on the group’s internal reporting to the chief
operating decision maker codm the codm has been determined to be the executive committee of
the board of directors as it is primarily responsible for the allocation of resources to segments and the
assessment of performance of the segments
the codm uses underlying operating proﬁtloss as reviewed at monthly executive committee
meetings as the key measure of the segments’ results as it reﬂects the segments’ underlying trading
performance for the ﬁnancial period under evaluation
underlying operating proﬁtloss is a consistent measure within the group which measures the
performance of each segment before goodwill and acquired intangible asset amortisation and impairment
share based payment charges restructuring charges and acquisition costs arising from acquisitions
segment assets include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis
provexis plc annual report and accounts 2013 33
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
2 financial risk management continued
21 financial risk factors continued the segment results the reconciliation of the segment measures to the respective statutory items
included in the group statement of comprehensive income and the segment assets and liabilities are as
follows
year ended 31 march 2013 2012
provexis sis group provexis sis group
£ £££ ££
revenue 37351 5522240 5559591 5779 3472083 3477862
underlying operating loss
proﬁt 1169268 74331 1094937 1954680 225682 2180362
intangible asset amortisation
and impairment charges 2781499 286735 3068234 1179352 211286 1390638
costs of sis acquisition
expensed ——— 153163 — 153163
restructuring costs 135787 178583 314370 205746 258767 464513
sharebased payment
charges 179283 — 179283 141461 — 141461
loss from operations 4265837 390987 4656824 3634402 695735 4330137
net ﬁnance incomeexpense 12407 3275 9132 46853 742 46111
loss before taxation 4253430 394262 4647692 3587549 696477 4284026
additions to noncurrent
assets 28582 487185 515767 85175 7249144 7334319
reportable segment assets 880077 9490798 10370875 4503878 8911052 13414930
reportable segment
liabilities 333672 2131331 2465003 355755 1760289 2116044
external revenue by location of customers 2013 2012
££
uk 4804440 3085147
europe 679830 338634
rest of the world 75321 54081
revenue 5559591 3477862
all operations and assets are based in the uk there were no intersegment sales or transfers for the
period
revenues from three customers individually exceed 10 of group revenue respectively £651768 2012
£406884 £648988 2012 £286690 and £588760 2012 £331770 these major customers purchase
goods from the sis segment
the segments identiﬁed include the following

provexis being the development and marketing of health based nutritional products and

sis being the development and marketing of sports based nutritional products
provexis plc annual report and accounts 2013 34
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
3 segmental reporting continued 4 loss from operations
year ended
31 march
2013
year ended
31 march
2012
£ £
loss from operations is stated after charging
depreciation of plant and equipment 187712 89360
amortisation and impairment of intangible assets 3068234 1390638
research and development costs 475553 761457
foreign exchange gains  losses 6245 2414
costs of acquisition — 153163
restructuring costs 314370 464513
loss on disposal of intangible assets — 9872
loss  proﬁt on disposal of property plant and equipment 1556 3631
changes in inventories of ﬁnished goods and work in progress 338719 42239
grant income 3000 3000
operating lease costs – land and buildings 157374 222441
equitysettled share based payment expense 179283 141461
deﬁned contribution pension expense 24903 42434
restructuring costs of £135787 were incurred as part of the closure of the group’s rd facility at the
university of aberdeen along with other reductions in group administrative headcount the restructuring
costs in 2012 of £205746 were incurred as part of the suspension of work on the crohn’s disease trial
and the cardiovascular inﬂammation project and the closure of the liverpool facility
restructuring and rebranding costs of a further £178583 2012 £258767 have been incurred as part of
the reorganisation and rebranding of the sis
1
business
the total fees of the group’s auditor for services provided are analysed below
chantrey vellacott dfk bdo llp
year ended
31 march
2013
year ended
31 march
2012
year ended
31 march
2013
year ended
31 march
2012
£ ££ £
audit services
parent company 15000 — — 28000
subsidiaries 24500 — — 46500
tax services – compliance
parent company 2500 — — 4000
subsidiaries 6000 — — 12500
other services
ixbrl services 2000 — — —
parent company – share option scheme advice — — — 15000
review of interim statement — — 5000 7000
corporate ﬁnance – due diligence — — — 25000
total fees 50000 — 5000 138000
the group has engaged chantrey vellacott dfk llp to assist the group with the proposed demerger of
sis science in sport limited from the provexis group to a new company called science in sport plc
science in sport plc has engaged chantrey vellacott dfk to assist it with the proposed admission of its
entire issued and to be issued ordinary share capital to trading on aim on or around 9 august 2013 as
further detailed in note 26
further information on the proposed demerger and admission of science in sport plc to aim can be
found in the circular and admission to trading on aim document which were issued on 28 june 2013
copies of the circular and the admission to trading on aim document can be downloaded from provexis
plc’s website wwwprovexiscom
provexis plc annual report and accounts 2013 35
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 5 wages and salaries
the average monthly number of persons including all directors employed by the group during the year
was as follows
year ended
31 march
2013
year ended
31 march
2012
sales staff 8 5
manufacturing staff 33 8
administrative staff 6 12
research and development staff 4 7
directors 4 4
55 36
their aggregate emoluments were
year ended
31 march
2013
year ended
31 march
2012
£ £
wages and salaries 1983247 1736465
social security costs 197930 191772
other pension and insurance beneﬁts costs 27361 69205
total cash settled emoluments 2208538 1997442
accrued holiday pay 5066 42498
sharebased payment remuneration charge equity settled 179283 141461
total emoluments 2382755 2181401
6 directors’ remuneration
year ended
31 march
2013
year ended
31 march
2012
£ £
directors
aggregate emoluments 396490 495223
compensation for loss of ofﬁce — 91250
company pension contributions 16469 22309
412959 608782
share based payment remuneration charge equity settled 129540 102212
total directors’ emoluments 542499 710994
emoluments disclosed above include the following amounts in respect of the highest paid director
year ended
31 march
2013
year ended
31 march
2012
£ £
aggregate emoluments 201473 188191
company pension contributions 10018 9362
share based payment remuneration charge equity settled 88087 69504
total of the highest paid director’s emoluments 299578 267057
during the year two directors 2012 four directors participated in deﬁned contribution pension
schemes
directors’ emoluments include amounts attributable to beneﬁts in kind comprising private medical
insurance on which the directors are assessed for tax purposes the amounts attributable to beneﬁts in
kind are stated at cost to the group which is also the tax value of the attributable beneﬁts
further details of directors’ emoluments are included in the remuneration report on pages 14 to 17
provexis plc annual report and accounts 2013 36
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 7 finance income and costs
year ended
31 march
2013
year ended
31 march
2012
£ £
finance income
bank interest receivable 12407 46853
12407 46853
finance costs
interest payable on bank loans and overdrafts 190 —
interest payable on asset loans 3085 742
3275 742
8 taxation
year ended
31 march
2013
year ended
31 march
2012
£ £
current tax income
united kingdom corporation tax – research and development credit 65740 150000
adjustment in respect of prior period
united kingdom corporation tax – research and development credit 57297 —
united kingdom corporation tax – other adjustments 67267 —
total current tax income 190304 150000
deferred tax
origination and reversal of temporary differences 65682 178538
tax on loss for the year 255986 328538
the tax assessed for the year is different from the standard rate of corporation tax in the uk the
differences are explained below
year ended
31 march
2013
year ended
31 march
2012
£ £
loss before tax 4647692 4284026
loss before tax multiplied by the
standard rate of corporation tax in the uk of 24 2012 26 1115446 1113846
effects of
expenses not deductible for tax purposes 48095 343565
difference between depreciation and capital allowances 17564 19432
other shortterm timing differences 661853 37930
unutilised tax losses and other deductions arising in the year 255246 479391
additional deduction for rd expenditure 154354 221808
surrender of tax losses for rd tax credit refund 77692 150000
share scheme deduction 35676 —
adjustments in respect of prior years 3842 —
effect of rate change on deferred tax balances 14802 15662
total tax credit for the year 255986 328538
at 31 march 2013 the group uk tax losses to be carried forward are estimated to be £17622991
2012 £16504434
the rate change from 24 to 23 had been substantively enacted by the balance sheet date so
deferred tax is provided for at a rate of 23
provexis plc annual report and accounts 2013 37
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued the 2013 budget conﬁrmed that the main rate of uk corporation tax was to be reduced from 23 to
21 from 1 april 2014 and announced a further reduction to 20 from 1 april 2015
the proposed changes had not been substantively enacted by the balance sheet date and it is not yet
possible to quantify the full effect of the further rate reductions although they will further reduce the
company’s future current tax charges and reduce the deferred tax assets accordingly
income tax asset receivable within one year 31 march
2013
31 march
2012
£ £
corporation tax recoverable 288801 300000
288801 300000
9 loss per share
basic and diluted loss per share amounts are calculated by dividing the loss attributable to owners of the
parent by the weighted average number of ordinary shares in issue during the period
there are 90071648 share options in issue 2012 94071648 that are all currently antidilutive and
have therefore been excluded from the calculations of the diluted loss per share
basic and diluted loss per share amounts are in respect of all activities
year ended
31 march
2013
year ended
31 march
2012
loss for the year attributable to owners of the parent – £ 4338600 3873215
weighted average number of shares 1502924005 1398837335
basic and diluted loss per share – pence 029 028
provexis plc annual report and accounts 2013 38
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
8 taxation continued 10 acquisition
on 24 june 2011 the group acquired 100 of the share capital of sis science in sport limited a
company which manufactures and sells sports nutrition products
the purchase has been accounted for under the acquisition method of accounting
the group has identiﬁed the fair values of the assets acquired and liabilities assumed including the
separate identiﬁcation of intangible assets in accordance with ifrs 3 ‘business combinations’ this
formal process involves an assessment of the assets acquired and liabilities assumed with assistance
provided by external valuation specialists where appropriate the assessment period remains open up to
a maximum of 12 months from the relevant acquisition date the assessment was completed in the
period ended 24 june 2012 and accordingly the fair values presented are now ﬁnal
adjustments are made to the assets acquired and liabilities assumed during the assessment period to
the extent that further information and knowledge come to light that more accurately reﬂect conditions at
the acquisition date in this context the fair value of inventories acquired was decreased by £61103
during the year with a commensurate increase in goodwill
goodwill arose on the acquisition of sis
1
because the cost of the combination included amounts in
relation to the beneﬁt of expected synergies revenue growth future market development and the
assembled workforce of sis
1
 these beneﬁts are not recognised separately from goodwill because they
do not meet the recognition criteria for identiﬁable intangible assets a summary of the effect of the
acquisition is detailed below
book value at
acquisition
fair value
adjustments
fair value
££ £
website costs capitalised 16201 — 16201
trademarks — 1004029 1004029
patents  recipes  formulations — 180886 180886
covenants not to compete — 22480 22480
customer relationships — 1228696 1228696
property plant and equipment 140155 — 140155
inventories 711010 94103 616907
trade and other receivables 809444 — 809444
net cash 213964 — 213964
trade and other payables 658223 — 658223
tax and deferred tax 67267 584662 651929
1165284 1757326 2922610
goodwill 4437991
consideration 7360601
satisﬁed by
cash consideration 6750000 — 6750000
noncash consideration issue of shares 1000000 639399 360601
cash consideration held in escrow 250000 — 250000
8000000 639399 7360601
net cash acquired 213964
transaction costs and expenses 153163
total net cost of acquisition 7299800
the company now intends to separate sis science in sport limited from the provexis group by way
of a demerger further details of which are provided in note 26
provexis plc annual report and accounts 2013 39
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 11 intangible assets
goodwill development
costs
trademarks patents 
recipes 
formulations
covenants
not to
compete
customer
relationships
website
development
costs
total
£££ ££££ £
cost
at 1 april 2012 11642165 132621 1004029 180886 22480 1228696 9514 14220391
additions 61103 25545 — — — — 165485 252133
at 31 march 2013 11703268 158166 1004029 180886 22480 1228696 174999 14472524
amortisation and
impairment
at 1 april 2012 4603398 38546 81027 20696 5745 99158 2218 4850788
charge for year — — 105687 26995 7493 129337 17223 286735
impairment 2661879 119620 — — — — — 2781499
at 31 march 2013 7265277 158166 186714 47691 13238 228495 19441 7919022
net book value
at 31 march 2013 4437991 — 817315 133195 9242 1000201 155558 6553502
at 31 march 2012 7038767 94075 923002 160190 16735 1129538 7296 9369603
cost
at 1 april 2011 7265277 75892 — — — — — 7341169
acquisitions 4376888 — 1004029 180886 22480 1228696 16201 6829180
additions — 56729 — — — — 5627 62356
disposals — — — — — — 12314 12314
at 31 march 2012 11642165 132621 1004029 180886 22480 1228696 9514 14220391
amortisation and
impairment
at 1 april 2011 3462592 — — — — — — 3462592
charge for year 1140806 38546 81027 20696 5745 99158 4660 1390638
disposals ———— —— 2442 2442
at 31 march 2012 4603398 38546 81027 20696 5745 99158 2218 4850788
net book value
at 31 march 2012 7038767 94075 923002 160190 16735 1129538 7296 9369603
at 31 march 2011 3802685 75892 — — — — — 3878577
development costs represent costs incurred in registering patents that meet the capitalisation criteria set
out in ias 38 see also note 1
further detail on the components of acquisition intangibles is provided in note 10
provexis plc annual report and accounts 2013 40
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 12 goodwill and impairment
goodwill arising on consolidation represents the excess of the cost of an acquisition over the fair value
of the group’s share of the net assets of the acquired subsidiary at the date of acquisition the
consolidated balance sheet of the group includes goodwill relating to two cash generating units cgus
provexis in respect of fruitﬂow
1
 and sis
the carrying amount of goodwill is allocated to the cgus as follows
goodwill carrying amount
year ended 31 march 2013
£
year ended 31 march 2012
£
provexis sis total provexis sis total
at start of year 2661879 4376888 7038767 3802685 — 3802685
additions — 61103 61103 — 4376888 4376888
impairment charge for year 2661879 — 2661879 1140806 — 1140806
at end of year — 4437991 4437991 2661879 4376888 7038767
under ias 36 management must test this goodwill for impairment annually by comparing the carrying
value of assets in each cgu with either the ‘fair value less costs to sell’ or the ‘value in use’ of the
cgu
the group determines the recoverable amount of goodwill based on value in use calculations of the
cashgenerating units to which goodwill has been allocated the major assumptions used in these
calculations are as follows
2013 2012
provexis sis provexis sis

pretax discount rate 158 130 158 130
growth rate 20 100 20 100
growth rate in perpetuity 00 30 00 30
year 1 to 5 growth rate na 150 — —
gross proﬁt margin na 603 to 640 — —
 the growth rate for cash ﬂows from operating activities applies only to the period beyond the formal
budgeted period with the value in use calculation based on an extrapolation of the budgeted cash ﬂows
for year nine for provexis 2012 year seven and year six 2012 year three for sis
signiﬁcant judgement is exercised in determining the underlying assumptions used in the impairment
review the assumptions include the discount rate operating margin and growth rate
management estimate discount rates using pretax rates that reﬂect the current market assessment of
the time value of money and the risks speciﬁc to the cashgenerating unit the pretax discount rate is
based on a number of factors including the riskfree rate in the uk the group’s estimated market risk
premium and a premium to reﬂect the inherent risk of the forecast income streams included in the
group’s cash ﬂow projections which remain subject to contracts being agreed with prospective
customers
operating margins are based on past practices and expectations of future changes in the market
growth rates are based on information received from commercial partners and market intelligence
reports on expectations of future changes in the market the growth rate used in provexis is below the
longterm growth rate for the nutraceuticals industry
the directors believe that it is appropriate to use internally approved forecasts for a period of more than
the 5 years recommended by ifrs as they consider this will give a more accurate estimate of the likely
growth patterns in the early stages of the product’s life and better reﬂect the growth of the sports
nutrition market than the application of a single growth rate
provexis plc annual report and accounts 2013 41
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued ias 36 stipulates that future cash ﬂows shall be estimated for assets in their current condition estimates
of future cash ﬂows should not include estimated future cash inﬂows or outﬂows that are expected to
arise from a future restructuring to which an entity is not yet committed at the balance sheet date
on 28 june 2013 the company announced its intention to separate sis science in sport limited from
the provexis group by way of a demerger as further detailed in note 26 with a consequent signiﬁcant
reduction in the annual central running costs of the provexis group for the purposes of ias 36 the
proposed demerger amounts to a future restructuring to which an entity is not yet committed hence the
future estimated cash ﬂows of the provexis cgu do not include the signiﬁcant annual central cost
savings which are expected to result from the demerger
using the discount rate and growth rates shown in the table above and without taking into account the
signiﬁcant annual central cost savings which are expected to result from the demerger the carrying
amount of the provexis cgu exceeds its recoverable amount hence a total non cash impairment loss of
£2781499 has been recognised in the year as further detailed in note 11 the impairment loss is made
up of the existing £2661879 carrying value of the provexis cgu and the related £119620 of intangible
assets in respect of previously capitalised intangible development costs
the values used in the group’s internal forecasts reﬂect anticipated market developments following
discussions with prospective customers and suppliers an element of the risk inherent in the forecast
income streams which remain subject to contracts being agreed with prospective customers has been
incorporated in the group’s pretax cash ﬂow projections and discount rates
the results of the value in use calculations for the cgus are as follows
 provexis exceeds its carrying amount by £nil 2012 £971516
 sis exceeds its carrying amount by £8778687 2012 £442581
if any one of the following changes were made to the above key assumptions the carrying amount and
recoverable amount would be equal
provexis sis
2013 
pretax discount rate — increase from 130 to 209
growth ratein perpetuity — reduction from 3 to nil
year 1 to 5 growth rate — reduction from 15 to 96
gross proﬁt margin — reduction from 64 to 53
2012
pretax discount rate increase from 158 to 184 increase from 130 to 135
growth rate not sensitive reduction from 100 to 83
growth ratein perpetuity not sensitive reduction from 3 to 20
provexis plc annual report and accounts 2013 42
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
12 goodwill and impairment continued 13 plant and equipment
leasehold
improvements
fixtures
ﬁttings
plant and
equipment
laboratory
equipment
motor
vehicles
total
££££ £
cost
at 1 april 2012 219247 410395 147145 11527 788314
additions 11709 251925 — — 263634
disposals — 3275 — — 3275
at 31 march 2013 230956 659045 147145 11527 1048673
depreciation
at 1 april 2012 10706 90699 84270 4209 189884
charge for the year 48000 109548 24999 5165 187712
impairment – site closure — — 37876 — 37876
disposals — 1719 — — 1719
at 31 march 2013 58706 198528 147145 9374 413753
net book value
at 31 march 2013 172250 460517 — 2153 634920
at 31 march 2012 208541 319696 62875 7318 598430
leasehold
improvements
fixtures
ﬁttings
plant and
equipment
laboratory
equipment
motor
vehicles
total
££££ £
cost
at 1 april 2011 — 64598 128242 — 192840
acquisitions — 127120 — 13035 140155
additions 219247 220834 18903 — 458984
disposals — 2157 — 1508 3665
at 31 march 2012 219247 410395 147145 11527 788314
depreciation
at 1 april 2011 — 47069 56002 — 103071
charge for the year 10706 44669 28268 5717 89360
disposals — 1039 — 1508 2547
at 31 march 2012 10706 90699 84270 4209 189884
net book value
at 31 march 2012 208541 319696 62875 7318 598430
at 31 march 2011 — 17529 72240 — 89769
the carrying amount of ﬁxtures ﬁttings plant and equipment includes an amount of £245266 2012
£nil in respect of assets held under an asset loan agreement
provexis plc annual report and accounts 2013 43
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 14 inventories
31 march
2013
31 march
2012
£ £
raw materials 503093 351744
finished goods 410294 284027
913387 635771
there is £nil 2012 £61103 included within inventories in relation to assets held at fair value less costs
to sell acquired with sis during the year inventories of £1746504 2012 £1252233 were recognised
as an expense within cost of sales
15 trade and other receivables
31 march
2013
31 march
2012
£ £
amounts receivable within one year
trade receivables 755106 600649
less provision for impairment of trade receivables 32233 32101
trade receivables – net 722873 568548
other receivables 124615 178571
total ﬁnancial assets other than cash and cash equivalents classiﬁed as loans
and receivables 847488 747119
prepayments and accrued income 405817 187654
total trade and other receivables 1253305 934773
trade receivables represent debts due for the sale of goods to customers the provision for impairment
of receivables is estimated by the group’s management based on prior experience
the balance at 31 march 2013 of £1253305 is £318532 greater than the prior year due predominantly
to an increase in trade receivables and prepayments
trade receivables are denominated in sterling the directors consider that the carrying amount of these
receivables approximates to their fair value trade and other receivables are categorised as loans and
receivables under ias 39
all amounts shown under receivables fall due for payment within one year
at 31 march 2013 £nil 2012 £476551 of trade receivables had been sold to a provider of invoice
discounting and debt factoring services the invoice discounting and debt factoring service was cancelled
in september 2012
the group does not hold any collateral as security
as at 31 march 2013 trade receivables of £125319 2012 £154902 were past due but not impaired
they relate to customers with no default history the ageing analysis of these receivables is as follows
31 march
2013
31 march
2012
£ £
up to 3 months 125319 154902
125319 154902
as at 31 march 2013 trade receivables of £32233 2012 £32101 were past due and impaired the
amount of the provision as at 31 march was £32233 2012 £32101
provexis plc annual report and accounts 2013 44
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued movements on the group provision for impairment of trade receivables are as follows
31 march
2013
31 march
2012
£ £
at beginning of the year 32101 —
provided during the year 5750 32101
receivable written off during the year as uncollectible — —
unused amounts reversed 5618 —
32233 32101
the movement on the provision for impaired receivables has been included in administrative expenses in
the consolidated statement of comprehensive income
other classes of ﬁnancial assets included within trade and other receivables do not contain impaired
assets
16 cash and cash equivalents
31 march
2013
31 march
2012
£ £
cash at bank and in hand 616612 1447405
616612 1447405
17 trade and other payables
31 march
2013
31 march
2012
£ £
trade payables 929939 894535
other payables 109171 43341
accruals 680805 513377
total ﬁnancial liabilities measured at amortised cost 1719915 1451253
other taxes and social security 67654 90586
total trade and other payables 1787569 1541839
the directors consider that the carrying amount of these liabilities approximates to their fair value
all amounts shown fall due within one year
18 borrowings
31 march
2013
31 march
2012
£ £
secured borrowings at amortised cost
asset loan agreement at ﬁxed rate 226645 —
226645 —
amounts due for settlement within 12 months 64774 —
amounts due for settlement after 12 months 161871 —
226645 —
the asset loan agreement was provided in september 2012 by hsbc asset finance uk limited and
it is secured over plant and equipment acquired by sis
1
at its nelson factory the asset loan
agreement is for a four year term expiring in september 2016 at a ﬁxed interest rate of 396
provexis plc annual report and accounts 2013 45
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
15 trade and other receivables continued 19 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of
23 2012 24
details of the deferred tax asset and liability amounts recognised in proﬁt or loss and amounts
recognised in other comprehensive income are as follows
asset
2013
liability
2013
net
2013
charged 
credited to
proﬁt or loss
2013
charged 
credited to
equity
2013
££ ££ £
business combinations — 450789 450789 84283 —
available losses 110348 — 110348 18600 —
net tax assets  liabilities 110348 450789 340441 65683 —
asset
2012
liability
2012
net
2012
charged 
credited to
proﬁt or loss
2012
charged 
credited to
equity
2012
££ ££ £
business combinations — 535072 535072 49590 —
available losses 128948 — 128948 128948 —
net tax assets  liabilities 128948 535072 406124 178538 —
a deferred tax asset of £110348 2012 £128948 has been recognised in respect of tax losses in sis
and other temporary differences giving rise to deferred tax assets where the directors believe it is
probable that these assets will be recovered the directors have made this assessment based on the
evidence available from projected budgets forecasts of proﬁtability and post year end proﬁtability of the
entity
deferred tax assets amounting to £4030256 2012 £4199712 have not been recognised on the basis
that their future economic beneﬁt is not certain assuming a prevailing tax rate of 23 2012 24
when the timing differences reverse the unrecognised deferred tax asset comprises
year ended
31 march
2013
year ended
31 march
2012
£ £
depreciation in excess of capital allowances 23068 38846
other short term timing differences 1540 7314
unutilised tax losses 3922672 3832116
sharebased payments 82976 321436
4030256 4199712
provexis plc annual report and accounts 2013 46
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 20 share capital
on 8 november 2011 the company announced that it had signed a new 3 year equity financing facility
‘‘eff’’ of up to £25m with darwin strategic limited ‘‘darwin’’ the new facility replaced the
company’s existing eff and warrant agreements with darwin dated 30 march 2010 which have
accordingly been cancelled
the eff agreement provides the company with a facility which subject to certain limited restrictions
can be drawn down at any time over the 3 years ending on 6 november 2014 the timing and amount
of any draw down is at the discretion of provexis provexis is under no obligation to make a draw down
and may make as many draw downs as its wishes up to the total value of the eff by way of issuing
subscription notices to darwin following delivery of a subscription notice darwin will subscribe and
provexis will allot to darwin new ordinary shares of 01p each ‘‘ordinary shares’’
the subscription price for any ordinary shares to be subscribed by darwin under a subscription notice
will be at a 75 discount to an agreed reference price determined during 5 10 or 15 trading days
following delivery of a subscription notice the ‘‘pricing period’’ the length of the pricing period is at
the discretion of provexis and is set at each relevant subscription notice provexis is also obliged to
specify in each subscription notice a minimum price below which ordinary shares will not be issued
warrant reserve
in consideration of darwin agreeing to provide the eff the company entered into a new warrant
agreement dated 7 november 2011 for the grant to darwin of warrants to subscribe for up to ten million
ordinary shares such warrants to be exercisable at a price of 5 pence per share and to be exercisable
at any time prior to the expiry of 36 months following the date of the new warrant agreement the ten
million warrants issued to darwin in conjunction with the march 2010 eff have been cancelled
the warrants were measured at fair value at the date of grant using a blackscholes model with the
following assumptions
date of grant exercise
price
pence
number of
warrants
share
price at
grant date
pence
expected
volatility
risk free
rate
expected
life
years
fair value
per share
under
warrant
pence
7nov11 50 10000000 20 75 300 3 06
an expected dividend yield of 0 was used in the above valuation
the assumption made for the expected life of the warrants is not necessarily indicative of the exercise
patterns that may occur the expected volatility reﬂects the assumption that the historical volatility is
indicative of future trends which may not necessarily be the actual outcome
the total fair value of the warrants £60000 has been held on the balance sheet within prepayments
and in the warrants reserve within equity the prepayment will be released against share premium as
the equity ﬁnancing facility is utilised the warrants reserve will be released to share premium when the
warrants are exercised if the warrants lapse then the reserve is transferred to retained earnings
darwin or the company may terminate the eff in speciﬁed circumstances the issue of subscription
notices is subject to speciﬁed preconditions the company has provided warranties and indemnities to
darwin and afﬁliated persons if the aggregate price paid for the ordinary shares allotted under the eff
by the second anniversary of the eff is not equal to or more than two and a half million pounds
subject to certain exceptions or if the eff is terminated by darwin in certain circumstances then the
company will be required to pay a fee to darwin amounting to a maximum of £125000 in cash or by an
issue of fully paid ordinary shares at the company’s discretion such fee reducing pro rata with
reference to the aggregate price paid for the ordinary shares allotted under the eff at the date the fee
becomes payable
provexis plc annual report and accounts 2013 47
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued share reorganisation
in august 2008 to facilitate a share placing the company undertook a share reorganisation when it was
agreed to subdivide each of the 401724366 then issued existing ordinary shares of 1p each in the
capital of the company into one new ordinary share of 01p and one deferred share of 09p and each
of the 148275634 unissued ordinary shares of 1p each into 10 new ordinary shares of 01p each
the rights attached to the new ordinary shares are substantially the same as the rights attached to the
original pre placing ordinary shares the deferred shares have very limited rights which are deferred to
the new ordinary shares and effectively carry no value as a result accordingly the holders of the
deferred shares are not entitled to receive notice of attend or vote at general meetings of the
company nor be entitled to receive any dividends or any payment on a return of capital until at least
£10000000 has been paid on each new ordinary share no application will be made for the deferred
shares to be admitted to trading on aim no certiﬁcates for the deferred shares will be issued
full details of the share reorganisation were provided in a circular to shareholders on 1 august 2008
the circular is available to download from the company’s website wwwprovexiscom
allotted called up and fully paid
ordinary
01p shares
deferred
09p shares
total
number number number
at 31 march 2012 1469832215 401724366 1871556581
issued on exercise of share options 4000000 — 4000000
issued on subscription – equity ﬁnancing facility 44818764 — 44818764
at 31 march 2013 1518650979 401724366 1920375345
ordinary
01p shares
deferred
09p shares
total
£££
at 31 march 2012 1469833 3615519 5085352
issued on exercise of share options 4000 — 4000
issued on subscription – equity ﬁnancing facility 44818 — 44818
at 31 march 2013 1518651 3615519 5134170
allotted called up and fully paid
ordinary
01p shares
deferred
09p shares
total
number number number
at 31 march 2011 1196516929 401724366 1598241295
issued on exercise of share options 3000000 — 3000000
issued on acquisition 35335689 — 35335689
issued on placing 166666662 — 166666662
issued on open offer 68312935 — 68312935
at 31 march 2012 1469832215 401724366 1871556581
ordinary
01p shares
deferred
09p shares
total
£££
at 31 march 2011 1196517 3615519 4812036
issued on exercise of share options 3000 — 3000
issued on acquisition 35336 — 35336
issued on placing 166667 — 166667
issued on open offer 68313 — 68313
at 31 march 2012 1469833 3615519 5085352
provexis plc annual report and accounts 2013 48
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
20 share capital continued during the year ended 31 march 2013 the company issued ordinary shares of 01p each as follows
date reason for issue shares issued
£ number
270412 exercise of share options 4000 4000000
230512 share subscription – equity ﬁnancing facility 13198 13197880
030912 share subscription – equity ﬁnancing facility 31620 31620884
48818 48818764
during the year ended 31 march 2012 the company issued ordinary shares of 01p each as follows
date reason for issue shares issued
£ number
240611 acquisition 35336 35335689
240611 placing 166667 166666662
270711 open offer 68313 68312935
131211 exercise of share options 3000 3000000
273316 273315286
as part of the proposed demerger detailed in note 26 the directors intend to cancel the deferred
shares
21 share options
in june 2005 the company adopted a new share option scheme for employees ’’the provexis 2005
share option scheme’’ under the scheme options to purchase ordinary shares are granted by the
board of directors subject to the exercise price of the option being not less than the market value at
the grant date the options typically vest after a period of 3 years and the vesting schedule is subject to
predetermined overall company selection criteria in the event that the option holder’s employment is
terminated the option may not be exercised unless the board of directors so permits the options
expire 10 years from the date of grant
the company undertook a reverse takeover of provexis natural products limited ‘‘pnp’’ formerly
provexis limited in june 2005 through a share for share exchange prior to the takeover the company
and pnp had granted emi options and unapproved options options granted by the company prior to
the takeover remain subject to the same terms as contained in the individual share option contracts
under which they were originally granted the pnp emi options and unapproved options were rolled
over into options over the company’s ordinary shares and these replacement options remain subject to
the same terms as contained in the individual pnp share option contracts under which they were
originally granted
at 31 march 2013 the number of ordinary shares subject to options granted over the 2005 and prior
option schemes were
emi options
31 march 2013 31 march 2012
weighted
average
exercise
price
pence
weighted
average
share price
at date of
exercise
pence
number weighted
average
exercise
price
pence
number
outstanding at the beginning of the year 142 — 59802021 107 51552031
granted during the year —— — 280 27949990
exercised during the year 090 200 4000000 090 3000000
cancelled during the year —— — 280 16700000
outstanding at the end of the year 144 — 55802021 142 59802021
provexis plc annual report and accounts 2013 49
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
20 share capital continued
share reorganisation continued the exercise price of emi options outstanding at the end of the year ranged between 09p and 628p
2012 09p and 628p and their weighted average contractual life was 39 years 2012 69 years
of the total number of emi options outstanding at the end of the year 44552031 2012 37385456
had vested and were exercisable at the end of the year their weighted average exercise price was 109
pence 2012 116 pence
unapproved options
31 march 2013 31 march 2012
weighted
average
exercise
price
pence
number weighted
average
exercise
price
pence
number
outstanding at the beginning of the year 228 34269627 118 10919617
granted during the year —— 280 23350010
outstanding at the end of the year 230 34269627 228 34269627
the exercise price of unapproved options outstanding at the end of the year ranged between 09p and
628p 2012 09p and 628p and their weighted average contractual life was 69 years 2012 8 years
of the total number of unapproved options outstanding at the end of the year 10919617 2012
10919617 had vested and were exercisable at the end of the year their weighted average exercise
price was 123 pence 2012 118 pence
grant of options
the fair values of the options have been estimated at the date of grant using a blackscholes model
using the following assumptions
tranche date of
grant
exercise
price
pence
number of
options
share price
at grant date
pence
expected
volatility
risk free
rate
expected
life
years
fair value
per share
under
option
pence
1 06jun07 2875 17304347 275 78 444 10 142
2 29nov07 338 2751479 300 65 377 10 106
3 26aug08 09 44166575 087 65 445 10 0585
4 01oct08 09 12000000 0725 65 439 10 0485
5 17jun11 28 51300000 200 88 448 10 117
an expected dividend yield of 0 has been used in all of the above valuations
the expected life of the options is based on historical data and is not necessarily indicative of the
exercise patterns that may occur the expected volatility reﬂects the assumption that the historical
volatility is indicative of future trends which may not necessarily be the actual outcome
the total charge for the year relating to employee sharebased payment plans was £179283 2012
£141461 all of which related to equity settled sharebased payment transactions
the company carried out a share reorganisation on 28 august 2008 which is further detailed in note
20 to the consolidated ﬁnancial statements
share options which had been granted prior to 28 august 2008 over existing ordinary shares with a
nominal value of 1p each in the capital of the company became options over new ordinary shares with
a nominal value of 01p each in the capital of the company the options remain subject to the same
terms as contained in the individual option contracts under which they were originally granted
share options issued after 28 august 2008 are options over new ordinary shares with a nominal value of
01p each in the capital of the company
provexis plc annual report and accounts 2013 50
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued
21 share options continued
emi options continued 22 reserves
share
premium
reserve
warrant
reserve
merger
reserve
retained
earnings
total
attributable
to equity
holders of
the parent
non
controlling
interest
total
reserves
££££ £££
at 31 march 2011 16909650 115980 6273909 16493986 6805553 136459 6669094
loss for the year — — — 3873215 3873215 82273 3955488
sharebased charges — — — 141461 141461 — 141461
issue of shares – acquisition — — 325265 — 325265 — 325265
issue of shares – placing 2333333 — — — 2333333 — 2333333
issue costs – placing 199380 — — — 199380 — 199380
issue of shares – open offer 956381 — — — 956381 — 956381
issue costs – open offer 37539 — — — 37539 37539
issue of shares – exercise of share
options
24000 — — — 24000 — 24000
warrants cancelled during the year
– equity ﬁnancing facility
12387 115980 — — 103593 — 103593
warrants issued during the year –
equity ﬁnancing facility
— 60000 — — 60000 — 60000
at 31 march 2012 19998832 60000 6599174 20225740 6432266 218732 6213534
loss for the year — — — 4338600 4338600 53106 4391706
sharebased charges — — — 179283 179283 — 179283
issue of shares – exercise of share
options
32000 — — — 32000 — 32000
issue of shares – equity ﬁnancing
facility 23 may 2012
230504 — — — 230504 — 230504
issue of shares – equity ﬁnancing
facility 3 september 2012
508087 — — — 508087 — 508087
at 31 march 2013 20769423 60000 6599174 24385057 3043540 271838 2771702
the following describes the nature and purpose of each reserve within total equity
share capital amount subscribed for share capital at nominal value
share premium amount subscribed for share capital in excess of nominal value
warrant reserve the warrant reserve arose in march 2010 when the group issued warrants to
evolution securities limited as part of the equity financing facility see note 20
thesewarrantswerecancelledandnewwarrantswereissuedtodarwinstrategic
limited on the renewal of the equity financing facility in november 2011
merger reserve the merger reserve arose on the reverse takeover in 2005 of provexis natural
products limited formerly provexis limited by provexis plc through a share for
share exchange and on the issue of shares for the acquisition of sis science in
sport limited in 2011
retained earnings cumulative net gains and losses recognised in the consolidated statement of
comprehensive income
23 pension costs
the pension charge represents contributions payable by the group to independently administered funds
which during the year ended 31 march 2013 amounted to £24903 2012 £42434 pension
contributions payable but not yet paid at 31 march 2013 totalled £9057 in respect of pension
contribution entitlements where employees had not yet provided details of the funds to which the
contributions should be made 2012 £30474
provexis plc annual report and accounts 2013 51
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued 24 operating lease commitments
future minimum rentals payable under noncancellable operating leases are as follows
31 march
2013
31 march
2012
£ £
due within 1 year 189403 146456
due between 1 year and 2 years 151342 152500
due between 2 years and 5 years 186762 372500
527507 671456
operating lease payments primarily represent rentals payable by the group for various ofﬁces the
leases have various terms escalation clauses and renewal rights typical of lease agreements for the
class of asset
25 related party transactions
on 1 june 2010 the company announced a longterm alliance agreement with dsm nutritional
products which has seen the company collaborate with dsm to develop fruitﬂow
1
in all major global
markets dsm will invest substantially in the manufacture technology development marketing and sale
of fruitﬂow
1
in the coming years provexis will continue to contribute scientiﬁc expertise and will
collaborate in areas such as cost of goods optimisation and regulatory matters the ﬁnancial model is
based upon the division of proﬁts between the two partners on an agreed basis linked to certain
revenue targets following the deduction of the cost of goods and a ﬁxed level of overhead from sales
the company is working closely with dsm in various areas of the project it is not possible to determine
the ﬁnancial impact of the alliance agreement at this time
dsm is classiﬁed as a related party of the group in accordance with ias 24 as it holds shares in the
group further k rietveld is a director of the company and a senior employee of dsm the directors
of provexis the ‘‘directors’’ having consulted with cenkos securities limited ‘‘cenkos securities’’ the
company’s nominated adviser consider that the terms of the alliance agreement are fair and reasonable
insofar as provexis’s shareholders are concerned in providing advice to the directors cenkos securities
has taken into account the directors’ commercial assessments
revenue recognised by the group under agreements with dsm amounted to £34351 2012 £5779 at
31 march 2013 the group was owed £23009 2012 £5779 by dsm
key management compensation
the directors represent the key management personnel details of their compensation and share options
are given in note 6 and within the remuneration report on pages 14 to 17
26 post balance sheet events
on 28 june 2013 the group announced its intention to separate sis science in sport limited from the
provexis group it is proposed that this separation will be effected by way of a demerger of sis
science in sport limited to a new company called science in sport plc science in sport plc will seek
admission of its entire issued and to be issued ordinary share capital to trading on aim on or around
9 august 2013
in order to provide ongoing working capital for each of the demerged businesses and to pay the costs
associated with the demerger science in sport plc has announced that it has undertaken a conditional
placing to raise £225 million before commission and expenses
the demerger and placing are conditional inter alia upon the approval of provexis plc shareholders at a
general meeting proposed for 15 july 2013 and the subsequent conﬁrmation of the company’s
reduction of capital by the court
further information on the proposed demerger and admission of science in sport plc to aim can be
found in the circular and admission to trading on aim document which were issued on 28 june 2013
copies of the circular and the admission to trading on aim document can be downloaded from provexis
plc’s website wwwprovexiscom
provexis plc annual report and accounts 2013 52
c108597pu030proof2286130929blrevision0operatorputa notestotheconsolidatedﬁnancialstatementscontinued company number 05102907
notes
as at
31 march
2013
£
as at
31 march
2012
£
fixed assets
investments 3 7035336 8151922
current assets
debtors – due within one year 4 57962 60000
debtors – due after one year 4 1337898 5206256
total debtors 1395860 5266256
cash and cash equivalents 5 450591 1151476
total current assets and net current assets 1846451 6417732
total assets 8881787 14569654
creditors amounts falling due after more than one year 6 — 239896
net assets 8881787 14329758
capital and reserves
share capital 8 5134170 5085352
share premium reserve 9 20769423 19998832
warrant reserve 9 60000 60000
retained earnings 9 17081806 10814426
equity shareholders’ funds 10 8881787 14329758
these ﬁnancial statements were approved and authorised for issue by the board on 28 june 2013
the notes on pages 54 to 57 form part of these parent company ﬁnancial statements
stephen moon ian ford
director director
on behalf of the board of provexis plc
provexis plc annual report and accounts 2013 53
c108597pu040proof2286130929blrevision0operatorputa parent company balance sheet 1 accounting policies
the parent company ﬁnancial statements have been prepared under the historical cost convention and in
accordance with applicable united kingdom accounting standards
going concern
the going concern basis has been applied in preparing the parent company ﬁnancial statements for the
reasons identiﬁed and disclosed in note 1 to the consolidated ﬁnancial statements
sharebased employee remuneration
the company has no employees however the company will issue shares to satisfy share awards made
by its subsidiary companies the company records a management charge equivalent to the fair value of
the sharebased payment incurred by its subsidiaries as disclosed in note 9
taxation
current tax including uk corporation tax is provided at amounts expected to be paid or recovered
using the tax rates and laws that have been enacted or substantively enacted by the balance sheet
date
deferred tax balances are recognised in respect of all timing differences that have originated but not
reversed by the balance sheet date except that the recognition of deferred tax assets is limited to the
extent that the company anticipates making sufﬁcient taxable proﬁts in the future to absorb the reversal
of the underlying timing differences deferred tax balances are not discounted
valuation of investments
investments are stated at cost less any provision for impairment proﬁts or losses arising from disposals
of ﬁxed asset investments are treated as part of the result from ordinary activities
warrants
the group has issued warrants to darwin strategic limited as part of the equity financing facility
these warrants have been measured at fair value at the date of grant using an appropriate options
pricing model this fair value has been held on the balance sheet within prepayments and in the
warrants reserve within equity the prepayment will be released against share premium as the equity
ﬁnancing facility is utilised the warrants reserve will be released to share premium when the warrants
are exercised if the warrants lapse then the reserve is transferred to retained earnings
post balance sheet events
details of post balance sheet events relevant to the parent company are included in note 26 to the
consolidated ﬁnancial statements
2 proﬁt attributable to shareholders
as permitted by section 408 of the companies act 2006 no separate company proﬁt and loss account
has been included in these ﬁnancial statements the group loss for the year includes a loss after tax of
£6446663 2012 £5091411 which is dealt with in the ﬁnancial statements of the company the total
fees of the group’s auditor chantrey vellacott dfk llp for services provided are analysed in note 4 to
the consolidated ﬁnancial statements total fees for the year were £15000 2012 £28000 payable to
bdo llp
the parent company did not have any employees in the year and therefore there were no payroll costs
or pension costs 2012 nil
provexis plc annual report and accounts 2013 54
c108597pu040proof2286130929blrevision0operatorputa notes to the parent company ﬁnancial statements 3 investments
31 march
2013
31 march
2012
£ £
cost 8418255 8418255
provision for impairment 1382919 266333
net book value 7035336 8151922
at 31 march 2013 the company owned the following material subsidiary undertakings
share of issued
ordinary share
capital and
voting rights
country of
incorporation and
operation
business activity
provexis nutrition limited 100 england and wales functional food
medical food and
dietary supplement
technologies
provexis natural products limited 100 england and wales functional food
medical food and
dietary supplement
technologies
provexis ibd limited 75 england and wales functional food
medical food and
dietary supplement
technologies
sis science in sport limited 100 england and wales sports nutrition
there are no signiﬁcant restrictions on the ability of subsidiary undertakings to transfer funds to the
parent other than those imposed by the companies act 2006
4 debtors
31 march
2013
31 march
2012
£ £
debtors falling due within one year
prepayments 57962 60000
total debtors falling due within one year 57962 60000
debtors falling due after one year
amounts owed by subsidiaries 1337898 5206256
total debtors falling due after one year 1337898 5206256
total debtors 1395860 5266256
5 cash and cash equivalents
31 march
2013
31 march
2012
£ £
cash at bank and in hand 450591 1151476
450591 1151476
provexis plc annual report and accounts 2013 55
c108597pu040proof2286130929blrevision0operatorputa notes to the parent company ﬁnancial statements continued 6 creditors amounts falling due after one year
31 march
2013
31 march
2012
£ £
creditors falling due after one year
amounts owed to subsidiaries — 239896
total creditors falling due after one year — 239896
7 deferred tax
deferred tax assets amounting to £59331 2012 £257959 have not been recognised on the basis that
their future economic beneﬁt is not certain
8 share capital
allotted called up and fully paid ordinary
01p shares
deferred
09p shares
total
number number number
at 31 march 2012 1469832215 401724366 1871556581
issued on exercise of share options 4000000 — 4000000
issued on subscription – equity ﬁnancing facility 44818764 — 44818764
at 31 march 2013 1518650979 401724366 1920375345
ordinary
01p shares
deferred
09p shares
total
£££
at 31 march 2012 1469833 3615519 5085352
issued on exercise of share options 4000 — 4000
issued on subscription – equity ﬁnancing facility 44818 — 44818
at 31 march 2013 1518651 3615519 5134170
allotted called up and fully paid ordinary
01p shares
deferred
09p shares
total
number number number
at 31 march 2011 1196516929 401724366 1598241295
issued on exercise of share options 3000000 — 3000000
issued on acquisition 35335689 — 35335689
issued on placing 166666662 — 166666662
issued on open offer 68312935 — 68312935
at 31 march 2012 1469832215 401724366 1871556581
ordinary
01p shares
deferred
09p shares total
£££
at 31 march 2011 1196517 3615519 4812036
issued on exercise of share options 3000 — 3000
issued on acquisition 35336 — 35336
issued on placing 166667 — 166667
issued on open offer 68313 — 68313
at 31 march 2012 1469833 3615519 5085352
details of the share subscriptions share placings and the shares issued by the company during the two
years ended 31 march 2013 are given in note 20 to the consolidated ﬁnancial statements
details on the share option scheme and share based payment charge for the year are given in note 21
to the consolidated ﬁnancial statements
provexis plc annual report and accounts 2013 56
c108597pu040proof2286130929blrevision0operatorputa notes to the parent company ﬁnancial statements continued 9 reserves
share
premium
reserve
warrant
reserve
retained
earnings
££ £
at 1 april 2012 19998832 60000 10814426
retained loss for the year — — 6446663
sharebased charges — — 179283
issue of shares equity ﬁnancing facility 23 may 2012 230504 — —
issue of shares equity ﬁnancing facility 3 september 2012 508087 — —
issue of shares – exercise of share options 32000 — —
at 31 march 2013 20769423 60000 17081806
10 shareholders’ funds
reconciliation of movement in shareholders’ funds
31 march
2013
31 march
2012
£ £
loss for year 6446663 5091411
sharebased payment charge note 21 179283 141461
shares issued during the year 48818 273316
premium on shares issued 770591 3076795
reduction of premium on share issue — —
warrants cancelled on renewal of eff 8 november 2011 — 103593
warrants issued on renewal of eff 8 november 2011 — 60000
net decrease in shareholders’ funds 5447971 1643432
opening shareholders’ funds 14329758 15973190
closing shareholders’ funds 8881787 14329758
11 related party transactions
the company has taken advantage of the exemption conferred by financial reporting standard 8
‘‘related party disclosures’’ not to disclose transactions with 100 owned members of the group headed
provexis plc on the grounds that 100 of the voting rights of the company are controlled within that
group
provexis ibd limited is 75 owned by provexis plc and 25 owned by the university of liverpool
provexis plc wholly owns provexis nutrition limited sis science in sport limited and provexis natural
products limited provexis nutrition limited provexis natural products limited sis science in sport
limited and provexis ibd limited are under the common control of provexis plc
the company did not trade with provexis ibd limited during the year ended 31 march 2013 2012
nil at 31 march 2013 the company was owed £5509 by provexis ibd limited 31 march 2012 owed
£5509
provexis ibd limited does not have a bank account and all its cash accounting transactions during the
year were processed by provexis plc and provexis natural products limited ‘‘provexis group
companies’’ amounts transacted by provexis ibd limited with provexis group companies are charged
through inter company accounts and the net amount transacted during the year was £212426 2012
£329091 provexis ibd limited owed provexis group companies and provexis nutrition limited a total
of £1968110 at 31 march 2013 31 march 2012 owed £1755684 provisions of £1968110 2012
£1755684 have been recognised in the accounts of provexis group companies and provexis nutrition
limited
details of a related party transaction with dsm are given in note 25 to the consolidated ﬁnancial
statements
provexis plc annual report and accounts 2013 57
c108597pu040proof2286130929blrevision0operatorputa notes to the parent company ﬁnancial statements continued company number 05102907
directors c d buck
j m clarke
k rietveld
s n moon
i ford
audit committee c d buck
j m clarke
k rietveld
remuneration committee c d buck
j m clarke
k rietveld
registrars equiniti limited
aspect house
spencer road
lancing
west sussex bn99 6da
secretary and registered ofﬁce i ford
kings road house
2 kings road
windsor
berkshire sl4 2ag
nominated adviser and broker cenkos securities plc
678 tokenhouse yard
london ec2r 7as
principal solicitors shoosmiths
apex plaza
forbury road
reading
berkshire rg1 1sh
auditors chantrey vellacott dfk llp
prospect house
queens road
reading
berkshire rg1 4rp
provexis plc annual report and accounts 2013 58
c108597pu040proof2286130929blrevision0operatorputa company information


Summary:
 strategy
our strategic priority for the year was to focus on developing revenues from the sis
1
business and the
fruitﬂow
1
technology together with our alliance partner dsm in addition further efforts to reduce costs
across the group were a parallel strategic activity we believe we have succeeded in all three areas
with strong revenue growth from sis
1
 good progress with fruitﬂow
1
in bringing a powder version to
market and wide ranging cost reductions reﬂected in the 50 reduction in underlying operating loss for
the group
with these three strategic areas all making good progress in conjunction with the board a next
strategic phase is proposed which will see the separation of sis
1
and fruitﬂow
1
businesses in order
to optimise the proﬁt potential of each the details of this are contained within a circular posted today to
shareholders and an announcement
we used our equity ﬁnancing facility to drawdown £244k in may to support our innovation programme
with a further £541k drawdown in september to meet the increasing working capital needs of the
growing sis
1
business
sis
1
revenue in fy1213 was £552m representing like for like revenue growth of 11 compared to the
same period last year growth was constrained to 7 in the ﬁrst half due to historically poor weather
and adverse trading conditions however trading in the second half was much stronger as a range of
initiatives took effect resulting in second half revenue growth of 17 and ﬁnal quarter revenue growth of
25 this momentum has carried into fy1314
we have continued to invest in the heartland of independent cycle triathlon and running shops through
extra sales staff and capital investment in display stands this has paid dividends as we have seen
growth through all our key wholesale accounts in major grocers and high street accounts we have both
broadened our range and space in key accounts together with extending distribution via the addition of
new accounts including sainsbury’s boots costco and since the year end halfords international
markets have continued to develop well for us with strong performances by our distributors in benelux
and denmark and the appointment of a new distributor in france
direct selling is a strategic growth driver and as a result we developed and launched a new website and
ecommerce platform in the second half and recruited an ecommerce team resulting in good growth in
this channel further investment in direct selling is continuing
good levels of investment have been made in marketing through the acquisition of brand ambassadors
sir chris hoy and helen jenkins taking substantial share of voice through press advertising generating
brand proﬁle through social media channels and substantially increased pr
innovation has been a key growth driver with go hydro tablets go gel
1
plus fruitﬂow
1
and go gel
1
plus nitrates being notable and successful launches in the year we have a strong research programme
in place largely carried out in conjunction with our partner sports teams and athletes and through
collaboration with leading research institutes the directors believe that a promising pipeline is in place
for 2013 and 2014
the move to a new supply facility has proved effective as gross margin improved by 6 in addition the
commissioning of the new go gel
1
ﬁlling machine has given us capacity to deal with the strong growth
in this product format and we have recently moved to a 24 hour manufacturing operation to meet
growing demand
fruitﬂow
1
the alliance with dsm has made good progress during the year with commercial progress with the
existing fruitﬂow
1
syrup format in a range of global markets and the launch of a powder format
suitable for use in dietary supplement formats such as capsules and tablets
there are now 17 consumer brands containing fruitﬂow
1
syrup on sale in a range of global markets as
well as the core blood ﬂow targeted products dsm customers have also launched brands in the sports
nutrition and travelrelated sectors our sis
1
go gel
1
plus fruitﬂow
1
sports recovery product also
launched during the year
provexis plc annual report and accounts 2013 4
c108597pu010proof2286130927blrevision0operatorputa chiefexecutive’sstatement the powder format was completed by the dsm team in the ﬁnal quarter of the year and the product
was ofﬁcially launched at vitafoods in may 2013 the format has broad potential applications in dietary
supplements dairy shots nutrition bars and spreads four products containing this format are now in
market and interest from potential customers is strong especially in the usa
we collaborated with dsm to complete a substantial piece of consumer research to more fully
understand consumer attitudes to fruitﬂow
1
and blood ﬂow in order to support potential customers in
understanding the key success factors for any new brand launches the dsm marketing and sales
teams are using the ﬁndings from this research to assist their customers with potential brand positioning
whilst revenues for fruitﬂow
1
remain low in the year there has been a marked improvement over the
year both in revenues and number of brands in the market in addition interest in the technology and
awareness of fruitﬂow
1
continues to develop these trends together with the availability of the powder
format are a source of continued optimism for the prospects of this novel technology
with the investment cycle completed for fruitﬂow
1
we continue to focus keenly on costs since the year
end we have to this end closed our facility at the university of aberdeen residual ongoing costs for
fruitﬂow
1
are largely related to ip maintenance and management time for the alliance with dsm
outlook
the outlook for sis
1
is positive as we continue to invest in marketing sales and direct selling to drive
revenue growth underpinned by an increasingly effective supply chain with our current sales
momentum the continued resilience in the sports nutrition category the board believes we are placed
for strong growth for the coming year and beyond
while the investment cycle is completed for fruitﬂow
1
we continue to work closely with dsm to explore
all avenues for growing revenues for our novel technology the number of international brands
containing fruitﬂow
1
continues to steadily increase and the availability of the powder format enhances
further the prospects for the technology while the economic climate is still affecting the attitude of global
brand owners towards largescale innovation the general outlook is positive
the proposed demerger of sis
1
 subject to shareholder approval will further optimise the outlook for
both the fruitﬂow
1
and sis
1
businesses
stephen moon
chief executive
provexis plc annual report and accounts 2013 5
c108597pu010proof2286130927blrevision0operatorputa chiefexecutive’sstatementcontinued
fruitﬂow
1
continued