annual report and accounts 2010
focused on delivery
nanoco group plc  annual report and accounts 2010
wwwnanocotechnologiescom welcome
nanoco group plc designs develops 
and manufactures quantum dots  
solar inks and other nanomaterials  
in commercial quantities for major  
enduse markets
highlights of the year
 joint development agreement signed with major japanese 
electronics company for led backlighting of televisions
 joint development agreement signed with tokyo electron  
for a photovoltaic film marking our first agreement in the 
solar power sector
 achievement of milestone payments in all our agreements 
including a us2 million payment from a japanese  
led producer
 significant progress towards mass production with new  
scaleup reactors commissioned in manchester producing 
quality material
 procurement of a new production facility in runcorn cheshire
 colin white appointed as new chief financial officer
 cash cash equivalents and deposits of £568 million  
at 31 july 2010 31 july 2009 £659 million
directors
dr peter rowley nonexecutive chairman
dr michael edelman chief executive officer
dr nigel pickett chief technology officer
mr colin white chief financial officer
mr michael bretherton nonexecutive director
mr gordon hall nonexecutive director
st gabrielle llp nonexecutive director represented by mr anthony clinch
secretary
mr m sullivan
nominated adviser 
zeus capital limited
3 ralli courts
west riverside
manchester m3 5ft
corporate broker
bank of america merrill lynch
2 king edward street
london ec1a jhq
auditor
ernst  young llp
100 barbirolli square
manchester m2 3ey 
legal adviser
schofield sweeney
76 wellington street
leeds ls1 2ay
investor relations and financial pr
buchanan communication
45 moorfields 
london ec2y 9ae
registered office
46 grafton street
manchester m13 9nt
website 
wwwnanocotechnologiescom
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investor information 01
nanoco group plc 
annual report and accounts 2010
review of the year
contents
ifc highlights of the year
02 strategic management
04 chairman’s statement
06 core technology
08 key markets
10 ceo’s review of operations
12 financial review
14 delivering production
16 entering the next phase  
of scaleup
18 board of directors
review of the year
27 consolidated statement  
of comprehensive income
28  consolidated statement  
of changes in equity
29  company statement  
of changes in equity
30 statement of financial position
31 cash flow statements
32 notes to the financial statements
 
56 notice of annual general meeting
ibc investor information
financial statements corporate governance
20 directors’ report 
22  directors’ remuneration report
24 corporate governance statement
26 independent auditors’ report 02
rev enue
strategic management
technology innovation has a key role to play 
in the reduction in global carbon emissions 
and quantum dots are at the forefront of this 
innovation today the market for quantum 
dots is small but expected to grow rapidly  
to 1bn by 2015
our strategy is to work in close  
collaboration with corporations across  
the world to incorporate our quantum  
dots into their products
strategy
our vision is to be the world’s leading 
developer manufacturer and supplier  
of quantum dots
focused on delivery
vision
priorities
our highest priority is to commission our first 
large scale manufacturing facility to supply 
customers with high quality heavy metal 
free quantum dots
objectives
our key objective is to utilise our unique 
ability to mass produce quantum dots free 
of heavy metals to meet the needs of our 
customers’ end products
strategic management 03
nanoco group plc 
annual report and accounts 2010
partnership
rev enue
scaleup
research  dev elopment
review of the year
our business model
nanoco’s business is based on forming and 
maintaining strong partnerships with our customers 
this involves fully understanding how our customers 
wish to use quantum dots in their products the 
advantages that the quantum dots will bring to the 
product and initial ideas on how best to incorporate 
the quantum dots into the final product
1 partnership
nanoco invests significant research and 
development resource in the development and 
mass production of high quality quantum dots 
these quantum dots are tuned to work with 
maximum efficiency in our customers’ products
2 research  development
following the successful development of the 
quantum dots which conform to specific customer 
specifications the materials move into the scaleup 
phase of manufacture during scaleup the quantum 
dot manufacturing process is optimised and 
automated in order that they can be mass produced 
on large scale production reactors ensuring the 
materials are produced consistently with high 
production yields is critical to nanoco’s success
3 scaleup 4 revenue
nanoco’s revenue comes from three sources joint 
development where customers contribute to the 
modification of the quantum dots to their specific 
needs materials sales and finally licence royalties  04
chairman’s statement
“ the rapid progress at nanoco since joining 
aim in may 2009 has continued into the 
current year which has started well we are 
making substantial progress in developing our 
business particularly in our manufacturing 
scaleup and in delivering on our  
commercial contracts”
peter rowley
nonexecutive chairman 05
nanoco group plc 
annual report and accounts 2010
review of the year
i am delighted to report  
that nanoco’s first full  
year as a publicly quoted 
company has been one of 
excellent progress across our 
business it was a year during 
which we made significant 
headway in our commercial 
collaborations in our 
manufacturing scaleup  
and in strengthening our 
management team
nanoco’s key asset is its worldclass 
patentprotected technology for the 
design development and commercial 
manufacture of quantum dots and 
other nanomaterials avoiding the 
use of heavy metals our intellectual 
property position has continued  
to strengthen during the year with 
multiple patent filings to protect  
our core technology innovative  
new materials and novel devices
during the year we signed our first 
agreement in the solar power sector 
with the major japanese semi
conductor production equipment 
supplier tokyo electron under  
this agreement we are using our 
nanomaterial technology to develop 
a highly efficient solar ink which will 
be printed to create a photovoltaic 
nanomaterial film 
lightemitting diodes leds for use 
in televisions and in general lighting 
remain the first market from which 
we expect commercial revenues  
the television backlighting market 
moved significantly in our favour 
during the year all of the major 
television manufacturers are now 
focusing on leds for television 
backlighting in part because of the 
decision by california – the world’s 
eighth largest economy – to introduce 
legislation demanding that television 
makers reduce the power consumption 
of televisions by 49 by 2013 leds 
with our quantum dots have the 
potential to achieve this target
during the year we announced a 
second agreement with another 
major japanese company in the  
led sector and this has progressed 
very well with significant milestones 
already achieved good progress  
was also made with the first led 
agreement signed in november 2008 
with further milestones reached  
and we are on track to deliver our 
first commercial quantities early  
next calendar year in parallel with  
the progress in our commercial 
collaborations we are pressing 
forward with scalingup our 
production capability both in 
manchester and in a new facility  
in runcorn 
financials 
our revenues in the year to 31 july 
2010 were £294 million 2009 £199 
million our loss before tax was  
£137 million 2009 £078 million 
cash cash equivalents and deposits 
at the yearend were £568 million 
31 july 2009 £659 million
people
the nanoco team most of whom are 
highly qualified scientists grew to 49 
people at the year end reflecting the 
increased activity with existing and 
potential commercial partners and 
progress in manufacturing scaleup 
the board was strengthened with  
the appointment of anthony clinch  
a highly experienced industrialist  
and financier as a nonexecutive 
andrew gooda an experienced 
production engineer was appointed 
as manufacturing director post the 
year end we welcomed colin white 
to the fulltime role of chief financial 
officer and at the same time 
michael bretherton formerly part
time chief financial officer became  
a nonexecutive director
i would like to offer sincere thanks  
to all at nanoco for their dedication 
and commitment throughout the 
year and to all our commercial 
partners for their contribution to  
the development of the company
outlook
the rapid progress at nanoco  
since joining aim in may 2009 has 
continued into the current year 
which has started well we are 
making substantial progress in 
developing our business particularly 
in our manufacturing scaleup and  
in delivering on our commercial 
contracts we expect to continue  
to meet key milestones and are 
moving close to achieving our first 
kilogram delivery of quantum dots 
we therefore view the future  
with confidence
peter rowley
nonexecutive chairman
15 october 2010
  anthony clinch is the representative of st gabrielle llp nonexecutive director 06
core technology
nanoco’s core intellectual property ip is our patented  
technique for producing high quality heavy metal free 
quantum dots consistently and cost effectively on an 
industrial scale
our process which is more commonly referred to as the “seeding process” provides fine control 
over the size and resulting emission wavelength of any given batch of quantum dots 
nanoco’s customers rely on our proven ability to deliver timely high quality bulk product shipments 
which enable them to take their nextgeneration quantumdotcontaining products to market
nanoco actively protects its ip across the world the company has an active program of pursuing 
new patents arising from ongoing research and development activity
conventional quantum dot synthesis often referred to 
as “high temperature dual injection” is a process which 
is difficult to control uses harsh reaction conditions and 
only affords small quantities of quantum dots per batch
nanoco’s proven manufacturing technology gets around 
this problem the nanoco “seeding process” provides  
a reproducible route to larger quantities of consistent 
high quality quantum dots this involves producing 
nanoparticles from chemical precursors in the 
presence of a molecular cluster compound under 
conditions whereby the integrity of the molecular 
cluster is maintained and acts as a prefabricated  
seed template individual molecules of a cluster 
compound act as a seed or nucleation point upon 
which nanoparticle growth can be initiated in this 
way a high temperature nucleation step is not 
necessary to initiate nanoparticle growth because 
suitable nucleation sites are already provided in  
the system by the molecular clusters a significant 
advantage of this method is that it is highly scalable
about our technology
core technology
2nm
5nm
8nm
energy in  07
nanoco group plc 
annual report and accounts 2010
review of the year
quantum dots
  fluorescent semiconductor 
nanoparticles 10100 atoms  
in diameter
  energy efficiency very bright  
tunable colour versatile 
  the size of a quantum dot  
determines the colour it emits
nanoco’s technology 
  mass production
  world leader in heavy  
metal free technology
  extensive patent  
protection material  
process and applications
blue light out 
green light out 
red light out  08
key markets
key markets
nanoco is currently focused on four target markets  
led lighting for backlighting of liquid crystal display 
lcd televisions and for general lighting solar power 
electroluminescent displays and other applications  
these markets are all very large in their own right  
and represent a huge opportunity for growth
backlighting general lighting
quantum dot leds are increasingly 
being seen as a replacement for 
traditional fluorescent ccfl or 
white leds for the backlighting  
of lcd liquid crystal display tvs 
nanoco has the potential to 
dramatically improve led lighting 
allowing it to be used in a myriad  
of applications including general 
lighting for homes and offices
benefits
quantum dot led backlights for lcd tvs enable tv 
manufacturers to get improved colour performance with  
lower power consumption this is the result of quantum  
dots’ tuneable and narrow emission spectrum
benefits
led or solidstate lighting is expected to successively  
replace traditional light sources owing to its reduced power
consumption long life and compact size leds are already
used in niche applications such as torches car lights and
traffic signals
quantum dots because of their highly tunable colours offer
superior colour performance which means that any warmth
and shade of white light can be created which is essential for
the adoption of leds in general domestic and office lighting
they also offer high consistency of colour and much less
material is used in a quantum dot led 09
nanoco group plc 
annual report and accounts 2010
review of the year
printable nanoparticles for use  
in lowcost high efficiency solar  
cells have the potential to make 
substantial gains in the solar  
cell market
thin film solar other applications
nanoco’s heavy metal free quantum 
dots can be used in a wide variety of 
applications some of these include 
very thin electroluminescent displays 
sensors and anticounterfeiting tags
benefits
quantum dots and other nanomaterials produced  
by nanoco have the ability to absorb a wide spectrum  
of the sun’s energy this makes them ideal for use  
in next generation solar cells 
nanoco has developed inks based on these materials which 
can be fabricated into the solar absorption layer of a solar 
cell the objective is to produce solar cells which are efficient 
and cost effective
electroluminescent displays 
quantum dots have the ability to be excited electronically  
to emit bright pure colours this means the quantum dots 
can be fabricated into very thin electroluminescent displays 
which have a superior picture and consume little power  
using lowcost printing technology
sensors
the properties of quantum dots are such that they can be 
functionalised to emit light on binding to a “target” molecule 
which enables them to be used for example to detect specific 
airborne pollutants
anticounterfeiting
from expensive luxury goods to critical products like drug 
packaging and currency quantum dots provide a method  
of creating unique optical barcodes the precise combinations  
of wavelengths of light emitted by complex combinations  
of different quantum dot embedded in inks plastic glass 
and polymers quantum dots are invisible to the naked eye 
and extremely difficult to counterfeit 10
ceo’s review of operations 
“ we are very focused on delivery  
of technology and new production 
capacity to satisfy our major 
markets including backlighting  
for lcd tvs general lighting and 
thin film solar cells”
quantum dots are nanosized 
semiconductor particles with the 
ability to emit intense light of a 
specific colour dependent on the  
size of the dots which range from  
10 to 100 atoms in width these dots 
which nanoco makes without toxic 
heavy metals such as cadmium  
have multiple commercial applications 
in many industrial and consumer 
markets delivering significant benefits 
including reduced power consumption 
and increased performance our 
technology allows the manufacture  
of other nanomaterials including  
solar inks harnessing the ability of 
nanoparticulate semiconductors to 
absorb light to create highly efficient 
solar panels
owing to the scale of the commercial 
opportunity presented to us we have 
focused initially on a small number  
of high value target markets working 
in collaboration with customers and 
potential customers who have the 
ability to bring products to market 
incorporating our nanomaterials
critical to success is our ability to 
design and develop quantum dots  
to bespoke specifications for our 
customers’ particular end use  
once this design and development  
is successful a material supply and 
licence agreement is signed under 
which nanoco receives payments for 
the supply of material and royalties on 
sales of the customer’s end product 
manufacturing inhouse is central to 
our business model owing to the value 
that control of the supply chain can 
bring to the company we have made 
major progress in the scaleup of our 
manufacturing and remain confident 
that we will be able to deliver large 
quantities of quantum dots in the 
foreseeable future although this has 
never been done before nanoco’s 
solutionbased chemistry uses 
equipment similar to other industries 
significantly reducing risk
we are currently focused on four target 
markets led lighting for backlighting 
of liquid crystal display lcd televisions 
and for general lighting solar power 
electroluminescent displays and other 
applications 
creating white light from blue leds 
through the use of red and green 
quantum dots brings significant benefits 
compared with the currently used 
phosphor technology these benefits 
include reduced power consumption 
and superior colour performance 
michael edelman
chief executive officer
our primary focus at  
nanoco is to commercialise 
our worldclass technology  
but before reviewing the 
significant progress made 
towards achieving this goal  
i would like to provide a brief 
overview of the company
our key asset is our patentprotected 
technology for the design development 
and mass manufacture of quantum 
dots and other nanomaterials which 
have highly attractive commercial 
characteristics the robustness of our 
intellectual property is underlined by  
the recent issuing of patent number 
7 803423 one of nanoco’s fundamental 
manufacturing patents by the united 
states patent and trademark office 11
nanoco group plc 
annual report and accounts 2010
review of the year
quantum dot leds are ideally suited for 
the backlighting of television and other 
displays such as computer screens 
in addition to their ability to emit  
light nanoparticulate semiconductors 
are able to absorb light across  
a very broad spectrum bringing the 
potential for highly efficient solar  
cells to reduce the cost per watt of 
solar energy nanoco has developed 
photovoltaic nanomaterial inks  
which can be printed by conventional 
lowcost printing techniques to create 
thin films for use as solar panels
nanoco’s development work in 
electroluminescent displays – the 
future generation of displays for 
consumer goods including mobile 
phones computers and televisions – 
exploits the ability of quantum dots  
to be used as pixels such displays 
would be very thin and have no 
requirement for a backlight bringing 
benefits including low power 
consumption high colour quality  
and ease of manufacture 
nanoco’s ability to make quantum 
dots free of heavy metals creates the 
opportunity for in vivo imaging which 
has attracted considerable interest 
from the life science industry the 
development cycle is substantially 
longer in this sector owing to the 
regulatory framework but presents a 
significant medium term opportunity
commercial agreements
during the year we signed our first 
agreement in the solar power sector 
with tokyo electron a major japanese 
semiconductor and flat panel display 
production equipment supplier  
we also signed a new agreement  
in the led lighting market and made 
significant progress with our other  
led lighting activities 
under the agreement with tokyo 
electron we are developing solar  
inks for printing into a nanomaterial 
film which will form the solaractive 
component of a new photovoltaic 
panel nanoco received an upfront 
payment and will receive milestone 
payments during the contract  
which began in june 2010 and  
is progressing well
in september 2009 we signed a new 
agreement with a major japanese 
electronics company for the bespoke 
design of quantum dots for use in the 
led backlighting of televisions  
this collaboration is progressing well 
and we have achieved the required 
milestones triggering a payment of 
us600000 in july 2010 and bringing 
the total paid to nanoco from the 
agreement to us18 million
we received a milestone payment of 
us2 million from our first supply and 
licence agreement signed in november 
2008 with a major japanese 
corporation for red and green quantum 
dots for leds it was subsequently 
agreed with this partner that the 
second technical milestone would  
be amended in the light of more 
demanding market requirements 
particularly with regard to the lifetimes 
in service of the leds which have now 
been set at 50000 hours it is pleasing 
to note that our quantum dots have 
met the key technical criteria to date 
except for the final extended lifetime 
tests which are expected to be 
completed successfully in the near 
future our partner has already made 
partial payment for these revised 
intermediate milestones in recognition 
of the successful progress we are 
therefore pressing ahead to deliver  
our first 1kg of red quantum dots to  
the japanese corporation early in the 
next calendar year which will trigger  
a further us2 million milestone 
payment it is expected that the green 
1kg delivery will follow later in the first 
half of 2011 triggering a further us2 
million payment
once the products under this 
agreement are commercialised  
a royalty will be paid to nanoco  
on the net sales of the corporation’s 
products which will comprise an  
led chip quantum dots and an 
encapsulant the packaged leds  
will be sold by the corporation to lcd 
television and display makers and to 
solid state lighting manufacturers 
during the year we have seen 
increasing interest from potential 
customers in the use of our quantum 
dots for use with leds in general 
lighting where nanoco’s technology 
has the potential to provide lighting 
with a high colour rendering index 
current methods for producing white 
light from blue leds tend to be 
relatively weak in the red wavelengths 
with the result that the light can lack 
warmth and fail to show true colours 
the use of nanoco’s quantum dots can 
correct these failings
we continue in discussions with 
potential partners across a range  
of applications 
manufacturingoperations
since joining aim in may 2009  
we have been focused on scaling  
up from the production of very small 
quantities of quantum dots to mass 
production so that customers can 
supply major enduse markets we 
made significant progress during the 
year in achieving this goal including 
the appointment of andrew gooda  
as manufacturing director in january 
2010 he has since developed a clear 
pathway to take us through the steps 
to mass production
during the year we have added a 
series of scaleup reactors in our 
manchester headquarters these 
reactors are critical in the progression 
of the quantum dots from very small 
scale manufacture in the laboratory  
to mass production 
today we announced that we have 
taken a lease on a 3000 square foot 
facility at the heath a technology 
park in runcorn cheshire this facility 
which will involve an initial investment 
of £13 million will be our first 
commercial production plant and we 
expect it to be commissioned later 
this calendar year this sixty acre site 
provides ample room for nanoco’s 
future expansion requirements
our customers are global corporations 
who expect suppliers to perform  
to accepted international standards  
we are committed to exceeding the 
expected quality assurance standards 
and health safety and environmental 
legislation both at runcorn and in 
manchester we have recruited skilled 
staff who are currently developing and 
implementing the systems needed to 
ensure that all of our operations meet 
the highest standards
summary
our first full year as a quoted company 
has been one of rapid progress 
the company has delivered against 
customer contracts and against 
manufacturing scaleup targets whilst 
keeping tight control over our cash  
to ensure we have adequate funds  
to build the company successfully
in the current year we will continue  
to focus on delivery of our commercial 
contracts our manufacturing scaleup 
and on securing new commercial 
agreements across our target markets
michael edelman
chief executive officer
15 october 2010 12
financial review
results
revenue increased by 47 to 
£2937000 2009 £1994000  
the company’s revenue is earned 
primarily through joint development 
agreements with revenue being 
recognised as agreed performance 
milestones are achieved and also 
from a material supply and licence 
agreement of this total £2771000 
2009 £1761000 was earned in us 
dollars and mostly originated from 
customers in the far east
underlying operating loss for  
the year ending 31 july 2010  
was £1262000 2009 underlying 
operating loss of £545000 total 
staffing costs increased by £679000 
to £2093000 2009 £1414000 and 
average staffing numbers increased 
by 12 heads from an average of 27 
heads in 2009 to 39 in 2010 total 
research and development “rd” 
spend which primarily includes the 
employment costs of technical staff 
increased by £591000 to £1850000 
2009 £1259000 reflecting the 
increase in technical staff in support 
of the expansion in the number of 
product development programmes 
investment in scaleup manufacturing 
plant and equipment over the last 
year has increased the level of the 
depreciation charge by £195000 to 
£428000 2009 £233000
the company aims to incentivise  
and retain key staff through the use  
of equitysettled share schemes 
during the year the company also 
introduced a long term incentive  
share option plan in which all staff  
can participate the ifrs2 share
based payment charge in respect  
of share schemes totalled £166000 
2009 £72000 the total number  
of share options in issue as at 31 july 
2010 were 110m 31 july 2009 84m 
in addition a further 38m 31 july 
2009 38m of shares are jointly 
owned by the company’s employee 
benefit trust “ebt” and certain 
senior management through  
a jointly owned agreement “joe” 
under the joe the employee 
beneficiaries have the option to 
acquire the trustees’ share at an 
agreed option price subject to 
meeting certain performance criteria 
no options were capable of being 
exercised during the year share options 
and joe shares that had been issued 
under the nanoco tech share 
incentive plan prior to the reverse 
takeover in 2009 which total 122m 
share options and joe shares are 
capable of being exercised from  
1 august 2010 until 31 august 2016 
details on the various share schemes 
are provided in note 19 to the accounts
the loss before tax was £1371000 
2009 loss of £780000 after 
deducting the sharebased payment 
charge and after crediting net interest 
income of £57000 2009 £32000 
and in 2009 after deducting the cost 
of the reverse acquisition of £195000
taxation
the tax credit for the year is £288000 
2009 £240000 the rd tax credit 
to be claimed in respect of rd 
spend is £433000 2009 £254000 
and this is partially offset in the 
income statement by a deferred  
tax charge for accelerated capital 
allowances of £129000 2009 nil 
and an adjustment in respect of the 
prior year rd tax credit of £16000 
2009 £14000
earnings per share
underlying basic earnings per share 
“eps” was a loss of 051 pence 
2009 underlying loss of 016 
pence basic eps was a loss of 060 
pence 2009 loss of 031 pence
no dividend has been proposed 
2009 nil in order to retain cash 
within the business to fund  
future investment 
cash flow and balance sheet
during the year cash cash equivalents 
and deposits reduced by £907000 
from £6589000 at 31 july 2009 to 
£5682000 at 31 july 2010 purchases 
of capital equipment in the year 
primarily in connection with scaleup 
manufacturing apparatus and 
equipment for the new runcorn 
facility totalled £1136000 of this 
total £615000 was paid for during  
the year and the balance associated 
with equipment for the runcorn 
manufacturing facility which was  
still in the process of construction at 
31 july 2010 was paid for after the 
year end expenditure incurred in 
registering patents totalled £300000 
during the year this is capitalised and 
amortised over ten years in line with 
the company’s accounting policy 
at the yearend current liabilities 
included £539000 of deferred income 
which is recognised in the income 
statement as revenue as performance 
milestones are achieved 
treasury activities and policies
the group carries a significant cash 
sum which is managed prudently  
in order to minimise risk to the 
group’s capital the funds are  
invested across a number of financial 
institutions with strong credit ratings 
the deposits range from instant 
access to 12 month term deposits 
and are regularly reviewed by the 
board cash forecasts are updated 
monthly to ensure that there is 
sufficient cash available for 
foreseeable requirements
credit risk
the company only trades with 
recognised creditworthy third 
parties receivable balances are 
monitored on an ongoing basis  
and any late payments are promptly 
investigated to ensure that the 
group’s exposure to bad debts  
is not significant
 underlying figures are before the sharebased payment charge and before the cost of the reverse acquisition in 2009 colin white
chief financial officer
13
nanoco group plc 
annual report and accounts 2010
review of the year
“ the company ended the year 
with cash and deposit balances 
totalling £57 million”
foreign exchange management
the company invoices most of its 
revenues in us dollars the company 
is therefore exposed to movements  
in the us dollar relative to sterling 
foreign currency balances in excess  
of forecast amounts required to  
fund projected outgoings have been 
converted during the year at spot  
rate no foreign currency hedging 
instruments are currently used due  
to the lack of forward visibility on foreign 
currency receipts this policy will remain 
under review and may change if the 
company is generating predictable 
levels of nonsterling income
at the year end the group had 
£1260000 2009 £40000 in us 
dollar cash or debtor balances the 
group’s net profit and its equity are 
exposed to movements in the value 
of sterling relative to the us dollar 
the estimated impact of movements 
in the sterling exchange rate on 
profits and equity are summarised in 
note 24 to the financial statements 
based on the balances at the year 
end a 10 strengthening in sterling 
against the us dollar would reduce 
group pretax profit and equity by 
£115000 and a 10 strengthening  
in the us dollar relative to sterling 
would increase pretax profit and 
equity by £140000 as us dollar 
revenues increase so the exposure  
of the group’s income statement and 
equity to movements in the sterling
us dollar exchange rate will increase 
as well
colin white
chief financial officer
15 october 2010 14
delivering production
production highlights
roadmap to mass production
  we have had a successful year a year of delivery on  
our contracts and delivering against our scaleup strategy
  we have focused on production shown through the 
appointment of a manufacturing director 
  we have focused on our infrastructure as shown through  
the appointment of new people including a new cfo  
and purchase of new facilities and equipment as well  
as investment in our quality safety and it systems
2010 2009
qd development 
 lab scale development and customer trials
 small scale commercial supply
milestones and objectives
scaleup 
 automated small scale production
 scaleup reactors – current
pilot plant 
 semitech production facility
 kilo lab production facility
mass production 
 mass production – target for 20122013 15
nanoco group plc 
annual report and accounts 2010
review of the year
roadmap to mass production
2011 2012 16
entering the next phase of scaleup
“ our patented production processes  
are unique they enable us to make  
heavy metal free cfqd
tm
 quantum  
dots in kilogram quantities with very  
high performance”
andrew gooda
manufacturing director 17
nanoco group plc 
annual report and accounts 2010
review of the year
q what is your  
experience in the 
manufacturing industry
a i have been involved in 
manufacturing throughout my 
career after completing an 
engineering degree at imperial 
college in 1985 i joined the chemicals 
industry with ici working in crude  
oil refining through to speciality 
chemicals i then spent 10 years  
as site director of croda’s uniqema 
manufacturing facility in merseyside 
making chemicals for consumer  
care and industrial products
q why did you decide  
to join nanoco
a it is such an exciting project  
how often does an engineer get  
the opportunity to develop the 
manufacturing base for a whole new 
technology nanoco’s technology  
is at the cutting edge of science but 
one of the attractions is that it can  
be put into mass production through 
fairly conventional processes
q what have you focused 
on since joining nanoco
a my first task was to understand  
the production process and draw  
up a strategy for scaling up our 
manufacturing capability in 
manageable steps a careful balance 
is required to allow us to develop 
quickly and effectively to meet 
market demand whilst at the same 
time minimising technical risks  
and managing costs the strategy 
includes expanding our facilities  
and staff as well as procuring 
specialised equipment
q what are the main 
challenges in scaling up  
to mass production
a maintaining consistent physical and 
chemical conditions is essential when 
you increase scale by a factor of up  
to 10000 identifying and procuring 
the equipment that will do the job  
is also critical we use standard 
equipment as far as we can but we 
have to customise most of it and 
some of it we design from scratch 
q how big is the new 
production facility  
at the heath
a we have 3000 square feet of high 
specification laboratory space at the 
heath which is located in runcorn 
cheshire we have two large rooms 
for two quantum dot production  
lines with 20 litre reactors and  
a small room for precursor 
manufacture and support activities 
we also have an open plan office  
and external storage space
q is this the only production 
facility of its type in the uk
a absolutely it’s the only one in the 
world nobody else has access to our 
patented production process which 
enables us to make cadmium free 
quantum dots cfqd
™
 in kilogram 
quantities with very high performance
q will manufacturing 
continue to take place  
in manchester
a yes we will continue to operate  
our scaleup facility in manchester  
as well indeed we have expanded 
the capacity there with a new 
multireactor system this gives  
us flexibility to produce smaller  
trial batches of new products for 
customers as well as supporting 
further product and process 
development
q when will the new  
facility be commissioned 
and begin production
a the new multireactor at 
manchester is already operational 
commissioning the production  
lines at runcorn is on schedule  
for completion in q4 this year  
with commercial production  
starting in q1 2011
q how much will it cost  
and how many staff will  
it employ
a the investment cost for the 
production equipment has been 
around £13m including equipping 
the new laboratories to our 
specifications we will initially have 
up to seven staff based at runcorn 
but we expect that to increase next 
year as sales demand grows
q will you produce other 
nanomaterials at the facility
a we will be able to produce  
large scale batches of our solar 
nanomaterials as demand increases
q how much capacity will 
the new facility have and is 
there room for expansion 
a we will start with about 25kg a year 
capacity for the two production lines 
at runcorn but we expect to increase 
this towards 50kg a year we have 
taken sufficient space to allow  
initial expansion within the existing 
laboratory facilities more space  
is available if we need it in future
q what is your vision for  
the facility over the next  
few years
a the new facility will be ground
breaking but it is only one step in  
our strategy we have already started 
design work on the next stage –  
kilolab production lines with up  
to 10 times more capacity i can 
certainly see us building these at 
runcorn and further expanding our 
operations there the heath has 
great facilities a good location and  
is committed to helping technology 
companies grow and prosper
q what initiatives have you 
taken in health and safety 
and quality assurance
a we have recently recruited  
a professional safety health and 
environment she manager with  
over 30 years’ experience in the 
chemical industry we already had 
good systems in place at nanoco  
but we will now develop them 
towards the international standards 
of ohsas 18000 for safety and iso 
14000 for environment we have also 
strengthened our quality team to 
provide the rigorous systems we 
need as we move into commercial 
production we remain on track to 
implement the full iso 9000 system 
for quality assurance in 2011
q what is the  
business’s contribution  
to clean technology 
a i expect our products to  
make a significant contribution to 
sustainability by reducing energy 
consumption in lighting and displays 
and by generating solar power – all 
without using toxic heavy metals  
we are working at nanoparticle sizes 
so the resources used in the new 
facility are at a very small scale but 
even there we have tried to reduce  
our impact – for example by reducing 
energy consumption for air handling 
when the laboratories are not manned 18
board of directors
1 dr peter rowley 
nonexecutive chairman
peter joined the nanoco board  
in 2006 previously he led the 
management buyout of victrex  
from ici in 1993 followed by the 
successful listing of victrex plc on  
the london stock exchange in 1995 
he joined ici in 1968 and progressed 
through a number of positions in the 
organisation in 1983 he became 
international business manager for 
the widely used polymer ptfe and  
in 1989 he was appointed general 
manager for ici advanced materials 
asia pacific peter has a phd in 
inorganic chemistry from kings 
college london
2 dr michael edelman 
chief executive officer
nanoco is led by dr michael edelman 
michael joined nanoco in 2004  
led the initial fundraising and spun 
nanoco out of the university of 
manchester prior to nanoco michael 
was responsible for licensing the 
technology developed by gebayer 
joint venture exatec llp as vice 
president and managing director  
of yet2com michael set up grew  
and ran yet2com’s european 
operation and was instrumental  
in successfully selling the business 
he was main board director for 
colloids ltd a manufacturer of 
colours and additives for plastics  
with responsibility for global sales 
marketing and restructuring of  
the business michael started  
his career with ici has a phd  
in organometallic chemistry from 
the university of sussex uk and 
undergraduate degree in classics  
and chemistry from tufts university 
boston ma usa
3 dr nigel pickett 
chief technology officer
nanoco’s technology team is led by 
dr nigel pickett who is a cofounder 
of nanoco and inventor of nanoco’s 
key quantum dot scaleup technology 
nigel graduated from newcastle 
university in 1991 and chose to 
remain at newcastle to pursue  
a phd in the field of main group 
organometallics after graduation  
in 1994 he undertook a postdoctoral 
fellowship at st andrews university 
scotland in the field of precursor 
design for movpe growth and 
synthesis of nanoparticles using  
cvd techniques in 1996 he won  
a japan society for the promotion  
of science jsps fellowship and  
spent the following year working  
at tokyo university of agriculture  
and technology japan in 1998 he 
became a research fellow at georgia 
institute of technology usa working 
on the design and evaluation of 
precursor used in movpe nigel 
cofounded nanoco technologies  
in 2001
4 colin white 
chief financial officer
colin white is a chartered accountant 
with international experience of publicly 
quoted companies in the manufacturing 
technology and professional services 
sectors prior to joining nanoco  
he held a position of group finance 
director of driver group plc where  
he was involved in implementing  
a range of strategic growth initiatives 
and setting up a number of overseas 
joint ventures he has also held senior 
positions at scapa group plc and  
ti group plc where he worked for 
almost ten years prior to its 
acquisition by smiths group plc 
2
5
3 19
nanoco group plc 
annual report and accounts 2010
review of the year
during this time he held positions 
including finance director of the 
dowty aerospace division finance 
controller of dowty north america 
and group investor relations 
manager colin who graduated from 
cambridge university in 1983 and 
qualified as a chartered accountant 
with grant thornton in 1987 joined 
nanoco and its board in august 2010
5 michael bretherton 
nonexecutive director
michael bretherton graduated  
in economics from the university  
of leeds and then worked as an 
accountant and manager with 
pricewaterhouse for seven years  
in both london and the middle east 
michael subsequently worked for  
the plessey company plc before 
being appointed finance director  
of the fully listed bridgend group plc 
in 1988 where he held the position  
for twelve years more recently he has 
worked at the property and services 
company mapeley limited as financial 
operations director and then at the 
entertainment software games 
developer lionhead studios limited 
where he helped to complete a trade 
sale of the business to microsoft in 
march 2006 michael is currently also  
a director of ora capital partners 
limited and a number of other aim 
listed companies michael held the 
position of chief financial officer for 
nanoco group plc until 9 august 2010
6 gordon hall 
nonexecutive director
after an early career in teaching 
gordon built up substantial 
international sales management 
and development expertise with  
rank xerox and abbott laboratories 
he became chief executive officer of 
shield diagnostic ltd now axis shield 
plc in 1990 and was responsible  
for listing the company on the london 
stock exchange more recently gordon 
has been involved with a range  
of different companies and he is 
currently a nonexecutive director  
of international brand licensing plc 
which is listed on aim
7 anthony clinch  
anthony clinch represents  
st gabrielle llp a corporate 
nonexecutive director 
anthony clinch is a senior advisor  
to cvc capital partners through his 
consultancy business st gabrielle 
llp he was an employee of cvc 
capital partners between 1987 and 
2007 and was actively involved in  
a number of cvc capital partners’ 
international chemical investments 
he previously worked for citibank  
in a number of managerial roles in 
corporate banking via his consulting 
partnership he is a director recently 
chairman of taminco group holdings 
sarl a major international chemical 
manufacturer of alkylamines and 
derivatives he is a chartered 
engineer and a member of the 
institution of engineering and 
technology having spent his early 
career with rolls royce ltd he holds 
a bsc in aeronautical engineering 
and an msc in management science 
and operational research from 
imperial college london he is a 
member of the advisory board of 
imperial college’s chemistry faculty
7
6
4
1 20
the directors present their report and consolidated financial statements for the year ended 31 july 2010 and the 
financial statements for the parent company for the year ended 31 july 2010
principal activity
the principal activity of the group during the year was the research development and manufacture of high performance 
semiconducting nano particles called quantum dots for use in a range of potential commercial applications
review of the business and future developments
a review of the group’s performance and future projects including research and development and manufacturing 
scaleup is included in the chairman’s statement ceo’s review of operations financial review delivering production 
and entering the next phase of scaleup reports on pages 5 10 12 14 and 16 respectively
key performance indicators
key group performance indicators are set out below
      31 july 2010 31 july 2009 
      £000 £000
revenue      2937 1994
net assets      7854 8771
loss attributable to equity holders      1083 540
cash cash equivalents and deposits      5682 6589
research and development spend      1850 1259
results and dividends
turnover for the group increased from £1994000 last year to £2937000 whilst losses after taxation for the year 
increased to £1083000 2009 loss of £540000 
the directors do not recommend payment of an ordinary dividend 2009 nil
share capital and funding
full details of the group and company’s share capital movements during the period are given in note 18 of the 
financial statements
directors and their interests
the following directors held office in the year
dr peter rowley
dr michael edelman
dr nigel pickett
mr michael bretherton
mr gordon hall
st gabrielle llp represented by mr anthony clinch appointed 30 march 2010
details of directors’ interest are shown in the directors’ remuneration report on pages 22 to 23
directors’ indemnity insurance
the group has maintained insurance throughout the year for its directors and officers against the consequences  
of actions brought against them in relation to their duties for the group
directors’ report 21
nanoco group plc 
annual report and accounts 2010
corporate governance
substantial shareholders
the company is aware that the following have at 15 october 2010 an interest in 3 per cent or more of the issued 
ordinary share capital of the company
      number of percentage 
      10p ordinary of the issued 
      shares share capital
ora capital partners limited      52870260 2848
universities superannuation scheme      12968100 699
mitsubishi ufj      11872888 640
gartmore investment management      10975931 591
nigel pickett      10451931 563
paul o’brien      9921843 534
michael edelman      9272940 500
kisco ltd      6026615 325
 includes 2870260 15 held indirectly through a derivative financial instrument
donations
no charitable or political donations were made in the year 2009 nil
policy on payment of suppliers
the group does not follow any code or standard payment practice the group’s policy is to agree the terms of payment 
with key suppliers for all other suppliers terms are agreed for each transaction the group endeavours to abide by the 
terms of payment with suppliers
the group’s trade creditor days as at 31 july 2010 were 31 2009 31 days
employment policies
the group supports employment of disabled people where possible through recruitment by retention of those who 
become disabled and generally through training career development and promotion
the group is committed to keeping employees as fully informed as possible with regard to the group’s performance 
and prospects and seeks their views wherever possible on matters which affect them as employees
health and safety
the group is committed to ensuring the health and safety of its employees in the workplace the business recently 
appointed a fulltime health and safety manager as part of its commitment to further improving health and safety 
processes within the company particularly as the business develops its manufacturing capabilities
disclosure of information to the auditors
so far as each person who was a director at the date of approving this report is aware there is no relevant audit 
information being information needed by the auditor in connection with preparing its report of which the auditor  
is unaware having made enquiries of fellow directors and the company’s auditor each director has taken all the  
steps that he is obliged to take as a director in order to make himself aware of any relevant audit information and  
to establish that the auditor is aware of that information
auditor
a resolution to reappoint ernst  young llp as auditors will be put to the members at the annual general meeting
on behalf of the board
colin white
director
15 october 2010 22
directors’ remuneration report
companies with securities listed on aim do not need to comply with either the directors’ remuneration report regulations 
2002 or the ukla listing rules and the provisions under section 421 of the companies act 2006 the company is  
required to provide details of directors’ remuneration during the financial year for each director acting in such capacity 
the remuneration committee is however committed to maintaining high standards of corporate governance and 
disclosure and has applied the guidelines as far as practical given the current size and development of the company
remuneration committee
the remuneration committee’s primary responsibilities are to review the performance of the executive directors of the 
company and to determine the broad policy and framework for their remuneration and the terms and conditions of their 
service and that of senior management including the remuneration of and grant of options to such persons under any 
share scheme adopted by the company the remuneration committee comprises gordon hall who is chairman of the 
committee and the nonexecutive directors the remuneration of nonexecutive directors shall be a matter for the 
chairman and the executive members of the board of the company
there are three main elements of the remuneration packages for executive directors and senior management
basic annual salary •	
the base salary is reviewed annually at the beginning of each year the review process is undertaken by the remuneration 
committee and takes into account several factors including the current position and development of the group 
individual contribution and market salaries for comparable organisations 
discretionary annual bonus •	
all executive directors and senior managers are eligible for a discretionary annual bonus which is paid in accordance with 
a bonus scheme developed by the remuneration committee this takes into account individual contribution business 
performance and technical and commercial progress along with financial results no bonus is payable to executive 
directors in respect of the financial year ended 31 july 2010
discretionary share schemes •	
all executive directors and senior managers are eligible for discretional share scheme awards to be paid in accordance 
with the company’s long term incentive plan details of the awards made under the scheme are provided in note 19  
to the financial statements relevant scheme this takes into account the need to motivate and retain key individuals 
along with similar performance criteria to the discretionary bonus scheme
remuneration policy for nonexecutive directors
remuneration for nonexecutive directors is set by the board as a whole nonexecutives do not receive any pension 
payments or other benefits nor do they participate in bonus schemes fees are based on a fixed fee plus an additional 
fee for chairmanship of a committee
directors’ remuneration
the remuneration of the directors who served on the board of nanoco group during the year to 31 july 2010  
is as follows
    salary sharebased total total 
    and fees payments 2010 2009 
    £000 £000 £000 £000
dr peter rowley    12 – 12 10
dr michael edelman    120 9 129 192
dr nigel pickett    85 6 91 127
mr michael bretherton    12 – 12 3
mr gordon hall    12 – 12 3
st gabrielle llp appointed 30 march 2010   4 – 4 –
    245 15 260 335
michael edelman and nigel pickett both have contracts with an indefinite term providing for a maximum of twelve 
months’ notice colin white who became chief financial officer on 9 august 2010 has an indefinite term contract 
which provides for a maximum of six months’ notice which will increase to twelve months in the event of a change  
of control of the company in the event of early termination the directors’ contracts provide for compensation up  
to a maximum of basic salary for the notice period
nonexecutive directors are employed on letters of appointment which may be terminated on not less than six months’ 
notice the basic fee payable to the nonexecutive directors is £12000 per annum 23
nanoco group plc 
annual report and accounts 2010
corporate governance
st gabrielle llp nonexecutive director entered into a formal engagement with the company under which it agreed  
to supply the services of anthony clinch as its representative the agreement can be terminated upon not less than  
six months’ notice
directors’ shareholdings
directors’ interests in the shares of the company including family and beneficial interests at 31 july 2010 were
 ordinary shares of 10p each
    31 july 2010 31 july 2010 31 july 2009 31 july 2009 
    number  number 
dr peter rowley    1571820 085 1571820 085
dr michael edelman    9272940 504 9272940 504
dr nigel pickett    10451931 568 10451931 568
mr michael bretherton    227500 012 227500 012
mr gordon hall    100000 005 100000 005
mr anthony clinch    57640 003 – –
 includes the jointly owned ebt shares referred to below
 shares are owned by anthony clinch who represents the director st gabrielle llp
directors’ jointly owned employee benefit trust shares and share options
directors’ interests in jointly owned employee benefit trust “ebt” shares and in share options to acquire ordinary shares 
of 10 pence in the company as 31 july 2010 were
     at granted during at 
   date granted exercise price 31 july 2009 the year 31 july 2010
approved emi scheme
dr michael edelman   1 sept 2006 352p 2843750 – 2843750
   27 nov 2009 7800p – 29005 29005
dr nigel pickett   1 sept 2006 352p 2843750 – 2843750
   27 nov 2009 7800p – 29005 29005
ebt scheme
dr michael edelman   1 sept 2006 352p 3229162 – 3229162
dr nigel pickett   1 sept 2006 352p 530089 – 530089
unapproved scheme
dr michael edelman   27 nov 2009 7800p – 270995 270995
dr nigel pickett   27 nov 2009 7800p – 183495 183495
exercise of the options held at 31 july 2010 which were granted on 1 september 2006 is conditional on achievement 
of share price performance criteria and either a sale or listing of the company all of the relevant conditions have been 
successfully met and the options are capable of being exercised at any time from 1 august 2010 to 31 august 2016
the options granted on 27 november 2009 were granted under the terms of the nanoco group plc long term incentive 
plan and will be exercisable subject to performance conditions being met based on share price and eps targets following 
the publication of the 2012 financial results
the market price at 31 july 2010 was 885 pence per share the highest and lowest price during the year were 
11325 pence and 665 pence respectively
details of share options and shares held in the employee benefit trust are set out in note 19 to the financial statements
on behalf of the board
gordon hall
chairman of the remuneration committee
15 october 2010 24
corporate governance statement
the directors recognise the importance of sound corporate governance and intend to ensure that at all times the 
company continues to apply policies and procedures which reflect the principles of good governance and code of  
best practice as published by the committee on corporate governance commonly known as “the combined code”  
as are appropriate to the size nature and stage of development of the company the directors endeavour to comply 
with the qca guidelines in such respects as are appropriate for a company of its size nature and stage of development 
following admission
the board
the board currently comprises three executive and four nonexecutive directors
audit committee
the audit committee’s primary responsibilities are to monitor the integrity of the financial affairs and statements  
of the company to ensure that the financial performance of the company and any subsidiary of the company  
is properly measured and reported on to review reports from the company’s auditors relating to the accounting  
and internal controls and to make recommendations relating to the appointment of the external auditors
the audit committee comprises two nonexecutive directors michael bretherton and peter rowley with michael  
as chairman michael bretherton replaced gordon hall as from 1 september 2010
remuneration committee
the remuneration committee’s primary responsibilities are to review the performance of the executive directors of  
the company and to determine the broad policy and framework for their remuneration and the terms and conditions 
of their service and that of senior management including the remuneration of and grant of options to such person 
under any share scheme adopted by the company the remuneration committee comprises gordon hall who is 
chairman of the committee and the nonexecutive directors the remuneration of nonexecutive directors shall  
be a matter for the chairman and the executive members of the board of the company
nominations committee
the directors do not consider that given the size of the board it is appropriate at this stage to have a nominations 
committee however this will be kept under regular review by the board
internal controls
the board is responsible for maintaining a sound system of internal control the board’s measures are designed  
to manage not eliminate risk and such a system provides reasonable but not absolute assurance against material 
misstatement or loss
some key features of the internal control system are
i management accounts information budgets forecasts and business risk issues are regularly reviewed by the 
board who meet at least six times per year
ii the company has operational accounting and employment policies in place
iii the board actively identifies and evaluates the risks inherent in the business and ensures that appropriate  
controls and procedures are in place to manage these risks and
iv there is a clearly defined organisational structure and there are wellestablished financial reporting and  
control systems
in addition the company has adopted a model code for directors’ dealings in securities of the company which is 
appropriate for a company quoted on aim the directors comply with rule 21 of the aim rules relating to directors’ 
dealings and also take all reasonable steps to ensure compliance by the group’s “applicable employees” as defined  
in the aim rules 25
nanoco group plc 
annual report and accounts 2010
corporate governance
going concern
the directors confirm they are satisfied that the group has adequate resources to continue in business for the  
foreseeable future for this reason they continue to adopt the going concern basis in preparing the financial statements
risk management
details of the group’s financial risk management objectives and policies are disclosed in note 24 to the  
financial statements
the directors consider that the principal risk facing the group is the speed at which the group’s products can  
be developed into final solutions by its partners the group’s strategy of working with a number of global partners  
in a wide variety of potential applications mitigates this risk
the directors do not consider that the business is at this time significantly exposed to credit interest or currency risk 
and as such these risks are not considered to be material for an assessment of the assets liabilities financial position 
and results
the group seeks to manage liquidity by ensuring funds are available to meet foreseeable needs and to invest cash 
assets safely and profitably the group had net cash cash equivalents and deposit balances of £568 million as at  
31 july 2010 2009 £659 million
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and the financial statements in accordance with the 
applicable law and regulations
uk company law requires the directors to prepare group and company financial statements for each financial year 
under that law the directors are required to prepare group financial statements in accordance with international 
financial reporting standards as adopted by the eu “ifrs” and have elected to prepare the company financial 
statements in accordance with ifrs
the group financial statements are required by law and ifrs to present fairly the financial position and performance  
of the group the companies act 2006 provides in relation to such financial statements that references in the relevant 
part of that act to financial statements giving a true and fair view are references to their achieving a fair presentation
the company financial statements are required by law to give a true and fair view of the state of affairs of the company
in preparing each of the group and company financial statements the directors are required to
a select suitable accounting policies and then apply them consistently
b make judgements and estimates that are reasonable and prudent
c state whether they have been prepared in accordance with ifrs and
d prepare the financial statements on the going concern basis unless it is inappropriate to presume that the  
group and the company will continue in business
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at  
any time the financial position of the company and to enable them to ensure that the financial statements comply  
with the requirements of the companies act 2006 and article 4 of the ias regulation they are also responsible for 
safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud 
and other irregularities
the directors are also responsible for the maintenance and integrity of the company website wwwnanocotechnologiescom
the directors are responsible for the maintenance and integrity of the corporate and financial information included  
on the company’s website legislation in the united kingdom governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions 26
we have audited the financial statements of nanoco group plc for the year ended 31 july 2010 which comprise  
the group statement of comprehensive income the group and parent company statements of changes in equity  
the group and parent company statements of financial position the group and parent company cash flow statements  
and the related notes 1 to 26 the financial reporting framework that has been applied in their preparation  
is applicable law and international financial reporting standards ifrss as adopted by the european union
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 set out on page 25 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 the financial statements in accordance with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or 
error this includes an assessment of whether the accounting policies are appropriate to the company’s circumstances 
and have been consistently applied and adequately disclosed the reasonableness of significant accounting estimates 
made by the directors and the overall presentation of the financial statements
opinion on the financial statements
in our opinion the financial statements
give a true and fair view of the state of the group and company affairs as at 31 july 2010 and of the group’s loss •	
for the year then ended 
have been properly prepared in accordance with united kingdom generally accepted accounting practice and •	
have been prepared in accordance with the requirements of the companies act 2006 •	
opinion on other matter 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 or returns adequate for our audit have not been received  •	
from branches not visited by us or
the 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 •	
jan gregory 
senior statutory auditor
for and on behalf of ernst  young llp statutory auditor
manchester
15 october 2010
independent auditors’ report
for the year ended 31 july 2010 27
nanoco group plc 
annual report and accounts 2010
financial statements
consolidated statement of comprehensive income
for the year ended 31 july 2010
      2010 2009 
     notes £000 £000
revenue     4 2937 1994
cost of sales      495 161
gross profit      2442 1833
administrative expenses      3870 2450
cost of reverse acquisition     23 – 195
operating loss
– before sharebased payment and cost of reverse acquisition    1262 545
– cost of reverse acquisition      – 195
– sharebased payment     19 166 72
     5 1428 812
finance income     7 68 57
finance costs     7 11 25
loss on ordinary activities before taxation     1371 780
tax     8 288 240
 loss for the year and total comprehensive loss for the year    1083 540
loss per share
basic loss for the year     9 060p 031p
diluted loss for the year     9 056p 031p
the loss for the year arises from the group’s continuing operations
there were no other items of comprehensive income for the year 2009 nil and therefore the loss for the year is also 
the total comprehensive loss for the year
the notes on pages 32 to 55 form an integral part of these financial statements 28
consolidated statement of changes in equity
for the year ended 31 july 2010
 attributable to equity holders
    sharebased 
   issued equity payment merger revenue 
   capital reserve reserve reserve total 
   £000 £000 £000 £000 £000
at 1 august 2008   6544 95 1242 1965 3432
loss for the year and total comprehensive loss for the year – – – 540 540
exercise of warrant   108 – – – 108
sharebased payments   – 72 – – 72
reallocation of reserves on reverse acquisition  6154 – – – 6154
expenses on issue of shares   455 – – – 455
at 31 july 2009   12351 167 1242 2505 8771
loss for the year and total comprehensive loss for the year – – – 1083 1083
sharebased payments   – 166 – – 166
at 31 july 2010   12351 333 1242 3588 7854 29
nanoco group plc 
annual report and accounts 2010
financial statements
company statement of changes in equity
for the year ended 31 july 2010
 attributable to equity holders
    sharebased capital 
   issued equity payment redemption revenue 
   capital reserve reserve reserve total 
   £000 £000 £000 £000 £000
at 31 december 2008   27037 – 4804 26050 5791
profit for the period and total comprehensive  
 profit for the year   – – – 287 287
treasury shares reclassified to ebt   20 – – 20 –
sharebased payments   – 167 – – 167
shares issued on acquisition of nanoco tech limited  
 see note 18   63255 – – – 63255
expenses on issue of shares   455 – – – 455
at 31 july 2009   89817 167 4804 25743 69045
profit for the year and total comprehensive  
 profit for the year   – – – 68 68
sharebased payments   – 166 – – 166
at 31 july 2010   89817 333 4804 25675 69279 30
    31 july 2010 31 july 2010 31 july 2009 31 july 2009 
    group company group company 
   notes £000 £000 £000 £000
assets
noncurrent assets
plant and equipment   10 2803 – 2127 –
intangible assets   11 616 – 376 –
investment in subsidiary   12 – 63588 – 63422
    3419 63588 2503 63422
current assets
inventories   13 18 – 17 –
trade and other receivables   14 584 5175 378 –
income tax asset    501 – 135 –
short term investments and deposits   15 2000 – – –
cash and cash equivalents   15 3682 516 6589 5939
    6785 5691 7119 –
total assets    10204 69279 9622 69361
liabilities
current liabilities
trade and other payables   16 1810 – 376 –
financial liabilities   17 63 – 63 –
    1873 – 439 –
noncurrent liabilities
financial liabilities   17 348 – 412 316
deferred tax liability   8 129 – – –
    477 – 412 316
total liabilities    2350 – 851 316
net assets    7854 69279 8771 69045
capital and reserves
issued equity capital   18 12351 89817 12351 89817
sharebased payment reserve   19 333 333 167 167
merger reserve   20 1242 – 1242 –
capital redemption reserve   20 – 4804 – 4804
revenue reserve   21 3588 25675 2505 25743
total equity    7854 69279 8771 69045
approved by the board and authorised for issue on 15 october 2010
the notes on pages 32 to 55 form an integral part of these financial statements
colin white
director
15 october 2010
statement of financial position
at 31 july 2010
registered no 05067291 31
nanoco group plc 
annual report and accounts 2010
financial statements
cash flow statements
for the year ended 31 july 2010
    31 july 2010 31 july 2010 31 july 2009 31 july 2009 
    group company group company 
   notes £000 £000 £000 £000
lossprofit before interest and tax    1428 65 812 287
adjustments for
depreciation   10 428 – 233 –
amortisation of intangible assets   11 60 – 39 –
cost of reverse acquisition   23 – – 195 –
sharebased payment   19 166 – 72 –
impairment of investment in subsidiary   12 – – – 5338
net reversal of provision for nonrecovery of loan  
 to subsidiary   12 – – – 5744
changes in working capital
increase in inventories    1 – 8 –
increasedecrease in trade and other receivables   206 – 162 –
increasedecrease in trade and other payables   913 – 124 312
cash inflowoutflow from operating activities   68 65 243 193
interest paid   7 11 – 25 –
research and development tax credit received   51 – 136 –
net cash inflowoutflow from operating activities   28 65 132 193
cash flows from investing activities
purchases of plant and equipment    615 – 1242 –
related grant received   10 32 – 32 –
net purchases of plant and equipment    583 – 1210 –
purchases of intellectual property   11 300 – 136 –
cash advance toreceipts of repayment  
 of loan from subsidiary   14 17 – 5491 – 6197
increase in cash placed on deposit   15 2000 – – –
interest received   7 68 3 57 4
net cash outflowinflow from investing activities   2815 5488 1289 6201
cash flows from financing activities
cash acquired on reverse acquisition   23 – – 5892 –
proceeds from issues of ordinary share capital   – – 108 –
expenses on issue of shares   18 – – 455 455
loan repayment    64 – 63 –
net cash outflowinflow from financing activities   64 – 5482 455
decreaseincrease in cash and equivalents   2907 5423 4061 5939
cash and cash equivalents at the start of the year   6589 5939 2528 –
cash and cash equivalents    3682 516 6589 5939
monies placed on deposit    2000 – – –
 cash cash equivalents and deposits at the end of the year 15 5682 516 6589 5939
the notes on pages 32 to 55 form an integral part of these financial statements 32
notes to the financial statements
for the year ended 31 july 2010
1 authorisation of financial statements and statement of compliance with ifrss
the financial statements of nanoco group plc and its subsidiaries the “group” for the year ended 31 july 2010 were 
authorised for issue by the board of directors on 15 october 2010 and the statement of financial position was signed 
on the board’s behalf by mr colin white
nanoco group plc “the company” is an aim listed company incorporated and domiciled in the uk
the company’s financial statements have been prepared in accordance with international financial reporting 
standards as adopted by the european union “ifrs” and international financial reporting committee “ifric” 
interpretations as they apply to the financial statements of the group for the period ended 31 july 2010
the principal accounting policies adopted by the group are set out in note 2
2 accounting policies
basis of preparation
these financial statements have been prepared in accordance with ifrs and ifric interpretations as they apply to  
the financial statements of the group for the year ended 31 july 2010 and applied in accordance with the companies 
act 2006
the accounting policies adopted are consistent with those of the previous financial year except as described below
the following new and amended ifrs and ifric interpretations were mandatory as of 1 january 2009 unless 
otherwise stated
amendment to ifrs 2 sharebased payment vesting conditions and cancellations •	
ifrs 8 operating segments •	
ias 1 revised presentation of financial statements •	
amendments to ias 23 borrowing costs •	
ias 39 and ifrs 7 reclassification of financial assets effective 1 july 2008 •	
improvements to ifrss issued may 2008 •	
for each of the new or amended ifrs and ifric interpretations adopted in the period the impact on the financial 
statements or performance of the group is described below
amendment to ifrs 2 sharebased payment vesting conditions and cancellations •	
the amendment to ifrs 2 clarifies the definition of vesting conditions and prescribes the treatment for an award  
that is cancelled this amendment did not have an impact on the financial position or performance of the group
ifrs 8 operating segments •	
ifrs 8 replaces ias 14 segment reporting the group concluded that its operating segments determined in accordance 
with ifrs 8 are the same as the business segments previously identified under ias 14 ifrs 8 disclosures are shown  
in note 4
ias 1 revised presentation of financial statements •	
the revised standard has required the reconciliation of movements in equity previously disclosed in the notes to be 
presented as a primary statement entitled “consolidated statement of changes in equity” in addition the consolidated 
statement of recognised income and expense has been replaced with the consolidated statement of comprehensive 
income the revised standard requires this statement to present all items of recognised income and expense either  
in one single statement or in two linked statements the group has elected to present one statement
amendments to ias 23 borrowing costs •	
the revised ias 23 requires capitalisation of borrowing costs that are directly attributable to the acquisition construction 
or production of a qualifying asset this amendment did not have an impact on the financial position or performance  
of the group
improvements to ifrss issued may 2008 •	
in may 2008 the board issued its first omnibus of amendments to its standards primarily with a view to removing 
inconsistencies and clarifying wording there are separate transitional provisions for each amendment the adoption 
of the amendments resulted in no significant changes to the financial statements or performance of the group 33
nanoco group plc 
annual report and accounts 2010
financial statements
2 accounting policies continued
the accounting policies which follow set out those policies which apply in preparing the financial statements for the year
the financial statements are prepared under the historical cost convention except where otherwise stated
the company has elected to take the exemption under section 408 of the companies act 2006 not to present the 
parent company’s income statement the parent company’s result for the period ended 31 july 2010 was a profit  
of £68000 31 july 2009 profit of £287000
the group financial statements are presented in sterling and all values are rounded to the nearest thousand pounds 
except where otherwise indicated
basis of consolidation
the group financial statements consolidate the financial statements of nanoco group plc and the entities it controls 
its subsidiaries drawn up to 31 july each year
reverse acquisition of evolutec group plc in year ending 31 july 2009
on 30 april 2009 evolutec group plc completed the acquisition of nanoco tech limited formerly nanoco tech plc  
in a share for share consideration exchange as detailed in note 23 at which time the company also changed its name 
to nanoco group plc
the combination was accounted for as a reverse acquisition equity transaction as if nanoco tech limited had issued 
new shares in exchange for evolutec group plc’s cash and other assets
the following accounting treatment was applied in respect of the transaction and is reflected in the prior year 
comparative figures
the retained loss and other equity balances recognised in the group financial statements reflect the consolidated •	
retained loss and other equity balances of nanoco tech limited immediately before the transaction and the 
consolidated results for the period from 1 august 2008 to the date of the transaction are those of nanoco tech 
limited however the equity structure appearing in the group financial statements reflects the equity structure  
of the legal parent including the equity instruments issued under the share for share exchange to effect the 
transaction the effect of using the equity structure of the legal parent gives rise to an adjustment to the group’s 
issued equity capital “the reverse acquisition reserve” see note 18
the fair value of the shares issued by nanoco group plc has been determined from the perspective of nanoco •	
tech limited on the basis set out in note 23
the company’s comparative financial results and related notes are for the legal parent for the period from •	
1 january 2009 to 31 july 2009
subsidiaries
subsidiaries are all entities over which the group has the power to govern the financial and operating policies generally 
accompanying a shareholding of more than half of the voting rights the existence and effects of potential voting rights 
are considered when assessing whether the group controls the entity subsidiaries are fully consolidated from the date 
control passes
the purchase method of accounting is used to account for the acquisition of subsidiaries by the group before 31 july 
2009 the costs of an acquisition are measured as the fair value of the assets given equity instruments issued and 
liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition identifiable 
assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at 
fair value at acquisition date irrespective of the extent of any minority interest the difference between the cost of 
acquisition of shares in subsidiaries and the fair value of the identifiable net assets acquired is capitalised as goodwill 
and reviewed annually for impairment any deficiency of the cost of acquisition below the fair value of identifiable  
net assets acquired ie discount on acquisition is recognised directly in the income statement
all intragroup transactions balances and unrealised gains on transactions between group companies are eliminated  
on consolidation subsidiaries’ accounting policies are amended where necessary to ensure consistency with the policies 
adopted by the group all financial statements are made up to 31 july 2010 34
2 accounting policies continued
foreign currency translation
items included in the financial statements of each entity are measured using the currency of the primary economic 
environment in which the entity operates the functional currency the financial statements are presented in sterling 
being the group’s presentational currency
transactions in foreign currencies are initially recorded in the functional currency by applying the spot rate ruling  
at the date of the transaction monetary assets and liabilities denominated in foreign currencies are retranslated  
at the functional currency rate of exchange ruling at the statement of financial position date all differences are  
taken to the income statement
nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the 
exchange rates as at the dates of the initial transactions nonmonetary items measured at fair value in a foreign 
currency are translated using the exchange rates at the date when the fair value was determined
segmental reporting
an operating segment is a component of an entity that engages in business activities from which it may earn revenues 
and incur expenses whose operating results are regularly reviewed by the entity’s chief operating decision maker  
to make decisions about resources to be allocated to the segment and assess its performance and for which discrete 
financial information is available
revenue recognition
revenue is recognised to the extent that it is probable that economic benefits will flow to the group and the revenue 
can be reliably measured revenue is measured at the fair value of the consideration received or receivable for the  
sale of goods or services excluding discounts rebates vat and other sales taxes or duties
the group’s revenues to date comprise amounts earned under joint development agreements and individual project 
development programmes material supply and licence agreements revenue from the sale of quantum dot products 
and grant income recognised
revenues from development programmes are recognised as development work is performed during the contractual 
term as measured by performance milestones revenue is not recognised where there is uncertainty regarding the 
achievement of milestones
royalties are recognised when goods are supplied by customers under license agreements royalties received  
in advance under material supply and licence agreements are recognised as revenue when goods are supplied  
or contractual rights for the customer to recoup such payments have lapsed 
grant income is recognised as earned based on contractual conditions generally as expenses are incurred
revenue from the sale of products is recognised at the point of transfer of risks and rewards of ownership which  
is generally on shipment of product
interest income
interest income is recognised as interest accrues using the effective interest rate method
research and development
research costs are charged against the income statement as they are incurred certain development costs will be capitalised 
as intangible assets when it is probable that future economic benefits will flow to the company such intangible assets 
will be amortised on a straightline basis from the point at which the assets are ready for use over the period of the expected 
benefit and are reviewed for impairment at each statement of financial position date other development costs are 
charged against income as incurred since the criteria for their recognition as an asset are not met
the criteria for recognising expenditure as an asset are
it is technically feasible to complete the product •	
management intends to complete the product and use or sell it •	
there is an ability to use or sell the product •	
it can be demonstrated how the product will generate probable future economic benefits •	
adequate technical financial and other resources are available to complete the development use and sale of the •	
product and
expenditure attributable to the product can be reliably measured •	
notes to the financial statements
for the year ended 31 july 2010 continued 35
nanoco group plc 
annual report and accounts 2010
financial statements
2 accounting policies continued
the costs of an internally generated intangible asset comprise all directly attributable costs necessary to create produce  
and prepare the asset to be capable of operating in the manner intended by management directly attributable costs 
include employee costs incurred on technical development testing and certification materials consumed and any 
relevant third party cost the costs of internally generated developments are recognised as intangible assets and are 
subsequently measured in the same way as externally acquired intangible assets however until completion of the 
development project the assets are subject to impairment testing only
careful judgement by the directors is applied when deciding whether the recognition requirements for development 
costs have been met this is necessary as the economic success of any product development is uncertain and may  
be subject to future technical problems at the time of recognition judgements are based on the information available  
at each statement of financial position date which includes the progress with testing and certification and progress on 
for example establishment of commercial arrangements with third parties in addition all internal activities related  
to research and development of new products are continuously monitored by the directors
no development costs to date have been capitalised as intangible assets
leases
rentals payable under operating leases which are leases where the lessor retains a significant proportion of the risks 
and rewards of the underlying asset are charged in the income statement on a straightline basis over the expected 
lease term
provisions
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event 
and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation 
and a reliable estimate can be made of the amount of the obligation
the expense relating to any provision is presented in the income statement net of any expected reimbursement  
but only where recoverability of such reimbursement is virtually certain
provisions are discounted using a current pretax rate that reflects where appropriate the risk specific to the liability 
where discounting is used the increase in the provision due to the passage of time is recognised as a finance cost
financial assets and liabilities
financial assets and liabilities are recognised when the group becomes party to the contracts that give rise to them  
and are classified as financial assets at fair value through the income statement the group determines the classification 
of its financial assets and liabilities at initial recognition and reevaluates this designation at each financial year end
at the year end the group had no financial assets or liabilities designated as at fair value through the income 
statement 2009 nil
derecognition of financial assets and liabilities
a financial asset or liability is generally derecognised when the contract that gives rise to it is settled sold cancelled  
or expires
taxation
current income tax •	
current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be 
recovered from or paid to the tax authorities the tax rates and tax laws used to compute the amount are those that 
are enacted or substantively enacted by the statement of financial position date
deferred income tax •	
deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities 
and their carrying amounts in the financial statements with the following exceptions
•	 w h e r e	t h e	t e m p o r a r y	d i f f e r e n c e	a r i s e s	f r o m	t h e	i n i t i a l	r e c o g n i t i o n	o f	g o o d w i ll	o r	o f	a n	a s s e t	o r	li a b i li t y	i n	a	
transaction that is not a business combination that at the time of the transaction affects neither accounting 
nor taxable profit nor loss and
•	 i n	r e s p e c t	o f	t a x a b l e	t e m p o r a r y	d i f f e r e n c e s	a s s o c i a t e d	w i t h	i n v e s t m e n t s	i n	s u b s i d i a r i e s	w h e r e	t h e	t i m i n g	o f	
the reversal of the temporary differences can be controlled and it is probable that the temporary differences 
will not reverse in the foreseeable future 36
2 accounting policies continued
deferred income tax assets and liabilities are measured on an undiscounted basis using the tax rates and tax laws that 
have been enacted or substantially enacted by the statement of financial position date and which are expected to apply 
when the related deferred tax asset is realised or the deferred tax liability is settled 
deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available 
against which differences can be utilised an asset is not recognised to the extent that the transfer or economic 
benefits in the future is uncertain
investments in subsidiaries
investments in subsidiaries are stated in the company statement of financial position at cost less provision for  
any impairment
plant and equipment
plant and equipment is recognised initially at cost after initial recognition these assets are carried at cost less any 
accumulated depreciation and any accumulated impairment losses cost comprises the aggregate amount paid and 
the fair value of any other consideration given to acquire the asset and includes cost directly attributable to making  
the asset capable of operating as intended
depreciation is computed by allocating the depreciable amount of an asset on a systematic basis over its useful life 
and is applied separately to each identifiable component
the following bases and rates are used to depreciate classes of assets
laboratory infrastructure – straight line over ten years
plant and machinery fixtures and fittings – straight line over five years
office equipment – straight line over three years
the carrying values of plant and equipment are reviewed for impairment if events or changes in circumstances indicate 
the carrying value may not be recoverable and are written down immediately to their recoverable amount useful lives 
and residual values are reviewed annually and where adjustments are required these are made prospectively
an item of plant and equipment is derecognised on disposal or when no future economic benefits are expected to arise 
from the continued use of the asset any gain or loss arising on the derecognition of the asset is included in the income 
statement in the period of derecognition
intangible assets
intangible assets acquired either as part of a business combination or from contractual or other legal rights are 
recognised separately from goodwill provided they are separable and their fair value can be measured reliably  
this includes the costs associated with registering patents in respect of intellectual property rights
where intangible assets recognised have finite lives after initial recognition their carrying value is amortised on a straight 
line basis over those lives the nature of those intangibles recognised and their estimated useful lives are as follows
patents – straight line over ten years
impairment of assets
at each reporting date the group reviews the carrying value of its plant equipment and intangible assets to determine 
whether there is an indication that these assets have suffered an impairment loss if any such indication exists  
or when annual impairment testing for an asset is required the company makes an assessment of the asset’s 
recoverable amount
an asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s fair value less costs to sell and its  
value in use and is determined for an individual asset unless the asset does not generate cash inflows that are largely 
independent of those from other assets or groups of assets where the carrying value of an asset exceeds its recoverable 
amount the asset is considered impaired and is written down to its recoverable amount in assessing value in use  
the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current 
market assessments of the time value of money and the risks specific to the asset in determining fair value less costs  
to sell an appropriate valuation model is used these calculations being corroborated by valuation multiples or other 
available fair value indicators impairment losses on continuing operations are recognised in the income statement  
in those expense categories consistent with the function of the impaired assets
notes to the financial statements
for the year ended 31 july 2010 continued 37
nanoco group plc 
annual report and accounts 2010
financial statements
2 accounting policies continued
an assessment is made at each reporting date as to whether there is any indication that previously recognised 
impairment losses may no longer exist or may have decreased if such indication exists the recoverable amount is 
estimated a previously recognised impairment loss is reversed only if there has been a change in the assumptions 
used to determine the asset’s recoverable amount since the last impairment loss was recognised if that is the case 
the carrying amount of the asset is increased to its recoverable amount that increased amount cannot exceed the 
carrying amount that would have been determined net of depreciation had no impairment loss been recognised  
for the asset in prior years such reversal is recognised in the income statement unless the asset is carried at revalued 
amount in which case the reversal is treated as a valuation increase after such a reversal the depreciation charge  
is adjusted in future periods to allocate the asset’s revised carrying amount less any residual value on a systematic 
basis over its remaining useful life
inventories
inventories are stated at the lower of cost and net realisable value cost includes all costs incurred in bringing each 
product to its present location and condition net realisable value is based on estimated selling price less any further 
costs expected to be incurred to disposal provision is made for slowmoving or obsolete items
trade and other receivables
trade receivables which generally have 30 to 60 day terms are recognised and carried at the lower of their original 
invoiced value and recoverable amount the time value of money is not material
provision is made when there is objective evidence that the group will not be able to recover balances in full significant 
financial difficulties faced by the customer probability that the customer will enter bankruptcy or financial reorganisation 
and default in payments are considered indicators that the trade receivable is impaired the amount of the provision is 
the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted  
at the original effective interest rate the carrying value of the asset is reduced through the use of an allowance account 
and the amount of the loss is recognised in the income statement within administrative expenses
when a trade receivable is uncollectible it is written off against the allowance account for trade receivables
government grants
government grants are recognised when it is reasonable to expect that the grants will be received and that all related 
conditions are met usually on submission of a valid claim for payment
government grants of a revenue nature are deferred and recognised in the income statement in line with the terms  
of the underlying grant agreement
government grants relating to capital expenditure are deducted in arriving at the carrying amount of the asset
cash and cash equivalents
cash and cash equivalents comprise cash at hand and deposits with an original term not greater than three months
trade and other payables
trade and other payables are not interest bearing and are initially recognised at fair value they are subsequently 
measured at amortised cost using the effective interest rate method
borrowings
borrowings are recognised when the group becomes party to the related contracts and are measured initially  
at fair value net of directly attributable transaction costs incurred after initial recognition borrowings are stated  
at amortised cost
borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement  
of the liability for at least twelve months after the statement of financial position date 38
2 accounting policies continued
share capital
proceeds on issue of shares are included in shareholder’s equity net of transaction costs the carrying amount is not 
remeasured in subsequent years
shares held by employee benefit trust
the employee benefit trust is consolidated in the financial statements and the shares reported as treasury shares in 
the group’s statement of financial position shares are treated as though they had been cancelled when calculating 
earnings per share until such time that the shares are exercised
the employee benefit trust is treated as a separate legal entity in the separate financial statements of the parent company 
sharebased payments
the company undertakes equitysettled sharebased payment transactions with certain employees
equity settled sharebased payment transactions are measured with reference to the fair value at the date of grant 
recognised on a straight line basis over the vesting period based on the company’s estimate of shares that will eventually 
vest fair value is measured using the blackscholes model in the case of valuation of options with nonmarketbased 
conditions and a binomial model in the case of valuation of options with marketbased conditions where options include 
a range of target share prices a monte carlo simulation model has been used
at each statement of financial position date before vesting the cumulative expense is calculated representing  
the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise 
of nonmarket conditions and the number of equity instruments that will ultimately vest the movement in cumulative 
expense since the previous statement of financial position date is recognised in the income statement with a 
corresponding entry in equity
where the terms of an equitysettled award are modified or a new award is designated as replacing a cancelled or 
settled award the cost based on the original award terms continues to be recognised over the original vesting period  
in addition an expense is recognised over the remainder of the new vesting period for the incremental fair value of any 
modification based on the difference between the fair value of the original award and the fair value of the modified 
award both as measured on the date of the modification no reduction is recognised if this difference is negative
where awards are granted to the employees of the subsidiary company the fair value of the awards at grant date  
is recorded in the company’s financial statements as an increase in the value of the investment with a corresponding 
increase in equity as “sharebased payment reserve”
accounting standards and interpretations not applied
at the date of authorisation of these financial statements the following standards and interpretations relevant  
to the operations of the group that have not been applied in these financial statements were in issue but not yet 
effective or endorsed unless otherwise stated
the effective dates stated here are those given in the original iasb standards and interpretations as the group prepares 
its financial statements in accordance with ifrs the application of new standards and interpretations will be subject to 
their having been endorsed for use in the eu via the eu endorsement mechanism in the majority of cases this will result 
in an effective date consistent with that given in the original standard or interpretation but the need for endorsement 
restricts the group’s discretion to early adopt standards
notes to the financial statements
for the year ended 31 july 2010 continued 39
nanoco group plc 
annual report and accounts 2010
financial statements
2 accounting policies continued
the following standards and interpretations have an effective date after the date of these financial statements
       effective date
ifrs 1 firsttime adoption of international financial reporting standards – 
  additional exemptions for firsttime adopters amendments 1 january 2010
ifrs 1 firsttime adoption of international financial reporting standards – 
  limited exemption from comparative ifrs 7 disclosures for firsttime adopters 1 july 2010
ifrs 2 group cashsettled sharebased payment transactions 1 january 2010
ifrs 9 financial instruments classification  measurement 1 january 2013
ias 24 related party disclosures revised 1 january 2011
ias 27 consolidated and separate financial statements revised january 2008 1 july 2009
ias 32 financial instruments presentation – classification of rights issues 1 february 2010
ifric 14 prepayments of an immediate funding requirement amendment 1 january 2011
ifric 19 extinguishing financial liabilities with equity instruments 1 july 2010
the directors anticipate that the adoption of these standards and interpretations in future periods will have no 
material impact on the financial statements of the group
3 judgements and key sources of estimation uncertainty
the preparation of financial statements requires management to make estimates and assumptions that affect the 
amounts reported for assets and liabilities as at the statement of financial position date and the amounts reported  
for revenues and expenses during the year the nature of estimation means that actual amounts could differ from 
those estimates estimates and assumptions used in the preparation of the financial statements are continually 
reviewed and revised as necessary while every effort is made to ensure that such estimates and assumptions are 
reasonable by their nature they are uncertain and as such changes in estimates and assumptions may have  
a material impact on the financial statements
the key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying 
amount of assets and liabilities within the next financial year are discussed below
fair value of shares issued in reverse acquisition of evolutec group plc
as described in note 23 the shares that were deemed to have been issued as consideration for the assets of evolutec 
group plc have been recorded at the directors’ estimate of fair value at 30 april 2009 in estimating fair value the 
directors concluded that the quoted market price of the evolutec group plc shares at 30 april 2009 was not a reliable 
basis of measurement due to limited liquidity in the market for such shares the directors have based their estimate  
of fair value on forecast financial information supported by the terms on which the reverse acquisition was agreed 
with evolutec group plc and approved by the nanoco tech shareholders
equitysettled sharebased payments
the estimation of sharebased payment costs requires the selection of an appropriate valuation method consideration  
as to the inputs necessary for the valuation model chosen and the estimation of the number of awards that will 
ultimately vest inputs required for this arise from judgements relating to the future volatility of the share price  
of comparable companies the company’s expected dividend yields risk free interest rates and expected lives  
of the options the directors draw on a variety of sources to aid in the determination of the appropriate data  
to use in such calculations 
taxation
management judgement is required to determine the amount of deferred tax assets that can be recognised based 
upon the likely timing and level of future taxable profits together with an assessment of the effect of future tax 
planning strategies the carrying value of the deferred tax losses at 31 july 2010 was £343000 2009 £270000  
the value of deferred tax asset not recognised at the year end is nil as measured at a standard tax rate of 27 40
4 segmental information
operating segments
at 31 july 2010 the group operated as one segment being the provision of high performance nano particles for research 
and development purposes this is the level at which operating results are reviewed by the chief operating decision maker 
ie the ceo to make decisions about resources and for which financial information is available all revenues have been 
generated from continuing operations and are from external customers
      31 july 2010 31 july 2009 
      £000 £000
analysis of revenue
products sold      82 114
rendering of services      1220 372
royalties and licences      1586 1340
grant income      49 168
      2937 1994
included within rendering of services and royalties and licences is revenue from two material customers amounting  
to £839000 and £1586000 respectively
geographical information
the group operates in four main geographic areas although all are managed in the uk the group’s revenue per 
geographical segment is as follows
      31 july 2010 31 july 2009 
      £000 £000
revenue
uk      49 170
europe excluding uk      117 63
asia      2754 1697
usa      17 64
      2937 1994
all the group’s assets are held in the uk and all of its capital expenditure arises in the uk
notes to the financial statements
for the year ended 31 july 2010 continued 41
nanoco group plc 
annual report and accounts 2010
financial statements
5 operating loss
       31 july 2009 
      31 july 2010 restated 
the group      £000 £000
operating loss is stated after chargingcrediting
depreciation on plant and equipment see note 10     428 233
amortisation of intangible assets see note 11     60 39
cost of reverse acquisition see note 23      – 195
staff costs see note 6      2093 1414
foreign exchange lossesgains      44 4
grants receivable      48 168
research and development expense      1850 1259
cost of inventories recognised as an expense included in cost of sales   148 11
operating lease rentals see note 22
land and buildings      140 122
auditor’s remuneration
audit services
– fees payable to company auditor for the audit of the parent and the consolidated accounts 10 11
fees payable to company auditor for other services
– auditing the accounts of subsidiaries pursuant to legislation    13 14
– other services      27 28
total auditor’s remuneration      50 53
  included within research and development expense are staff costs totalling £1429000 2009 £1114000
 in the year to 31 july 2009 additional fees of £65000 were payable to the company auditors in relation to their services in respect of the company’s 
readmission to aim these fees were treated as part of the cost of acquisition and were charged to the statement of financial position
6 staff costs
the average number of employees during the year including directors was as follows
      31 july 2010 31 july 2009 
the group      number number
directors      5 3
laboratory and administrative staff      34 24
      39 27
       31 july 2009 
      31 july 2010 restated 
      £000 £000
wages and salaries      1775 1224
social security costs      152 118
sharebased payments      166 72
      2093 1414
directors’ remuneration included in the aggregate remuneration above comprised
emoluments for qualifying services      287 370
directors’ emoluments excluding social security costs disclosed above include £129000 paid to the highest paid 
director 2009 £192000 42
7 finance incomecost
      31 july 2010 31 july 2009 
the group      £000 £000
finance income
bank interest receivable      68 57
finance cost
loan interest payable      11 25
      57 32
8 taxation
the tax credit is made up as follows
      31 july 2010 31 july 2009 
the group      £000 £000
current income tax
uk corporation tax losses in the year      – –
research and development income tax credit receivable    433 254
prior year adjustment      16 14
total current income tax       417 240
deferred tax
origination and reversal of temporary differences     129 –
total deferred tax       129 –
total tax credit in the income statement      288 240
factors affecting tax charge for the year
      31 july 2010 31 july 2009 
the group      £000 £000
the tax assessed for the year varies from the standard rate of corporation tax  
 as explained below
loss on ordinary activities before taxation     1371 780
tax at standard rate of 28 2009 28      384 218
effects of
expenses not deductible for tax purposes     48 75
capital allowances in excess of depreciation     133 47
additional reduction for research and development expenditure    379 190
surrender of research and development relief for repayable tax credit   867 380
research and development tax credit receivable     433 254
deferred tax provided at 27      129 –
utilisation of brought forward losses      19 –
prior year adjustment      16 14
tax credit in income statement      288 240
the group has accumulated losses available to carry forward against future trading profits the estimated value of the 
deferred tax asset measured at a standard rate of 27 2009 28 is £343000 2009 £270000 
the group also has accelerated capital allowances for which the tax measured at a standard rate of 27 2009 28 
is £472000 2009 £258000 the excess of accelerated capital allowances over accumulated losses has been provided 
for as a deferred tax liability
notes to the financial statements
for the year ended 31 july 2010 continued 43
nanoco group plc 
annual report and accounts 2010
financial statements
9 earnings per share
    31 july 2010 31 july 2009 
the group    £000 £000
loss for the financial year attributable to equity shareholders 1083 540
sharebased payments 166 72
cost of reverse acquisition – 195
loss for the financial year before sharebased payments 917 273
weighted average number of shares
ordinary shares in issue    180397031 171646252
issuable on vesting of share options    13489244 4370927
diluted weighted average number of shares    193886275  176017179
adjusted earnings per share before sharebased payments  
 and cost of reverse acquisition in 2009 pence   051 016
basic earnings per share pence    060 031
diluted earnings per share pence    056 031
weighted average number of shares in issue exclude those held by the employee benefit trust
the weighted average number of shares for the year ended 31 july 2009 is based on the number of shares issued by 
nanoco group plc to acquire nanoco tech limited for the period up to acquisition adjusted for the impact of shares issued 
by nanoco tech limited in the year and the weighted average number of shares in issue for the period since the acquisition
diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period 
to assume conversion of the weighted average of all share options so as to derive the dilutive potential ordinary shares
10 fixed assets
     offi ce 
     equipment  
    laboratory fixtures plant and  
    infrastructure and fittings machinery total 
the group    £000 £000 £000 £000
cost
at 1 august 2008    855 200 316 1371
additions    837 65 340 1242
grant received    32 – – 32
reclassification    – 106 106 –
at 31 july 2009    1660 159 762 2581
additions    24 30 1082 1136
grant received    32 – – 32
at 31 july 2010    1652 189 1844 3685
depreciation
at 1 august 2008    120 41 60 221
provided during the year    94 68 71 233
reclassification    – 41 41 –
at 31 july 2009    214 68 172 454
provided during the year    185 47 196 428
at 31 july 2010    399 115 368 882
net book value
at 31 july 2010    1253 74 1476 2803
at 31 july 2009    1446 91 590 2127 44
10 fixed assets continued
fixed asset additions for the year ended 31 july 2010 include £521000 of equipment that was in the process  
of construction at 31 july 2010 and was paid for after the year end
11 intangible assets
       patents 
the group       £000
cost
at 1 august 2008       323
additions       136
at 31 july 2009       459
additions       300
at 31 july 2010       759
amortisation
at 1 august 2008       44
provided during the year       39
at 31 july 2009       83
provided during the year       60
at 31 july 2010       143
net book value
at 31 july 2010       616
at 31 july 2009       376
12 investment in subsidiaries
    shares loans loan provision total 
the company    £000 £000 £000 £000
at 31 december 2008    5338 26483 26030 5791
increase in respect of sharebased payments   – 167 – 167
impairment    5338 – – 5338
repayment of loan    – 6197 6197 –
increase in loan provision    – – 453 453
acquisition of subsidiary    63255 – – 63255
at 31 july 2009    63255 20453 20286 63422
increase in respect of sharebased payments   – 166 – 166
at 31 july 2010    63255 20619 20286 63588
on 30 april 2009 the company acquired 100 per cent of the issued share capital of nanoco tech limited for a consideration 
satisfied by the issue of 158138036 ordinary shares of 10p each credited as fully paid at 40p each being the quoted 
market price of the company’s shares on completion of the acquisition and readmission to aim see note 23
the impairment of the investment in shares in 2009 relates to the company’s investment in nanoco life sciences 
limited formerly evolutec life sciences limited the directors have concluded that the investment’s recoverable 
amount was nil
notes to the financial statements
for the year ended 31 july 2010 continued 45
nanoco group plc 
annual report and accounts 2010
financial statements
12 investment in subsidiaries continued
loans to subsidiary undertakings carry no interest and are repayable on demand further information in relation  
to these loans is given in note 25
    share of issued  
    ordinary share capital
subsidiary undertakings country of incorporation principal activity 31 july 2010 31 july 2009
nanoco life sciences limited  
 formerly evolutec limited england and wales research and development 100 100
nanoco tech limited england and wales holding company 100 100
nanoco technologies limited england and wales research and develop nano particles 100 100
 share capital is owned by nanoco tech limited all other shareholdings are owned by nanoco group plc
13 inventories
       31 december 
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
raw materials and consumables    18 – 17 –
14 trade and other receivables
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
trade receivables    334 – 101 –
less provision for doubtful debts    – – – –
net trade receivables    334 – 101 –
prepayments    156 – 118 –
intercompany loan to subsidiary    – 5175 – –
other receivables    94 – 159 –
    584 5175 378 –
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
trade receivables are denominated in the following currencies
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
sterling    – – 84 –
us dollars    334 – 17 –
    334 – 101 –
at 31 july the analysis of trade receivables that were past due but not impaired was as follows
     neither  past due but 
     past due or  not impaired 
    total impaired 30 days 30 to 60 days 
    £000 £000 £000 £000
2010    334 334 – –
2009    101 101 – – 46
14 trade and other receivables continued
movements in the provision for doubtful debts were as follows
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
at beginning of year    – – 5 –
amounts written off    – – – –
unused amounts reversed    – – 5 –
at end of year    – – – –
15 cash cash equivalents and deposits
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
shortterm investments    2000 – – –
cash and cash equivalents    3682 516 6589 5939
    5682 516 6589 5939
under ifrs 7 cash held on long term deposits that cannot readily be converted into cash has been classified as a short 
term investment the maturity on this investment was twelve months from the date of investment
cash and cash equivalents at 31 july 2010 include deposits with original maturity of three months or less of £2502000 
2009 £6385000
 
an analysis of cash cash equivalents and deposits by denominated currency is given in note 24
16 trade and other payables
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
trade payables    933 – 144 –
other payables    584 – 72 –
accruals    293 – 160 –
    1810 – 376 –
other payables includes £539000 of deferred revenue
the directors consider that the carrying amount of trade and other payables approximates to their fair value
trade payables include £521000 of equipment additions that were still in the process of construction at 31 july 2010 
and for which payment was made after the year end
notes to the financial statements
for the year ended 31 july 2010 continued 47
nanoco group plc 
annual report and accounts 2010
financial statements
17 financial liabilities
       31 december  
    31 july 2010 31 july 2010 31 july 2009 2009 
    group company group company 
    £000 £000 £000 £000
noncurrent
other loan    348 – 412 –
loan from subsidiary    – – – 316
current
other loan    63 – 63 –
    411 – 475 316
the directors consider that the carrying amount of financial liabilities approximates to their fair value loans from 
subsidiaries bear no interest and have no formal terms of repayment in place see note 25 for further details
the other loan is unsecured bears interest at 2 per cent above base rate and is repayable in quarterly instalments
18 issued equity capital
      reverse 
      acquisition 
    share capital share premium reserve total 
the group   number £000 £000 £000 £000
authorised ordinary shares of 10p
as at 1 august 2008   77000000 7700 – – 7700
increase in authorised share capital   173000000 17300 – – 17300
at 31 july 2010 and 31 july 2009   250000000 25000 – – 25000
allotted issued and fully paid ordinary shares  
 of 10p
as at 1 august 2008   25949996 2595 24442 – 27037
share premium on treasury shares reclassified  
 to ebt see note 21   – – 20 – 20
shares issued to acquire nanoco tech limited  
 see note 12   158138036 15814 47441 – 63255
arising on reverse acquisition of nanoco  
 tech limited   – – – 77466 77466
expenses of issue of shares   – – 455 – 455
other movement   68250 7 8 1 –
as at 31 july 2009   184156282 18416 71400 77465 12351
as at 31 july 2010   184156282 18416 71400 77465 12351
the balances classified as share capital and share premium include the total net proceeds nominal value and share 
premium respectively on issue of the company’s equity share capital comprising 10 pence ordinary shares
as outlined in note 2 the retained loss and other equity balances recognised in the group financial statements reflect  
the consolidated retained loss and other equity balances of nanoco tech limited immediately before the business 
combination the consolidated results for the period from 1 august 2008 to the date of the acquisition by nanoco group 
plc are those of nanoco tech limited however the equity structure appearing in the group financial statements reflects 
the equity structure of the legal parent including the equity instruments issued under the share for share exchange  
to effect the transaction the effect of using the equity structure of the legal parent gives rise to an adjustment to the 
group’s issued equity capital in the form of a reverse acquisition reserve
on 30 april 2009 the authorised share capital was increased from £7700000 to £25000000 by the creation  
of 173000000 ordinary shares of 10p each on 30 april 2009 the company issued 158138036 ordinary shares  
of 10p each as consideration for the acquisition of nanoco tech limited 48
18 issued equity capital continued
     share capital share premium total 
the company    number £000 £000 £000
authorised ordinary shares of 10p
as at 1 august 2008    77000000 7700 – 7700
increase in authorised share capital    173000000 17300 – 17300
at 31 july 2010 and 31 july 2009    250000000 25000 – 25000
allotted issued and fully paid ordinary shares of 10p
as at 1 august 2008    25949996 2595 24442 27037
share premium on treasury shares reclassified to ebt  
 see note 21    – – 20 20
shares issued to acquire nanoco tech limited see note 12  158138036 15814 47441 63255
expenses of issue of shares    – – 455 455
other movement    68250 7 7 –
as of 31 july 2009    184156282 18416 71401 89817
as at 31 july 2010    184156282 18416 71401 89817
19 sharebased payments
the sharebased payment reserve accumulates the corresponding credit entry in respect of sharebased payment 
charges movements in the reserve are disclosed in the statements of changes in equity
a charge of £166000 has been recognised in the income statement for the year 2009 £72000
share option schemes
the group operates the following share option schemes all of which are operated as enterprise management incentive 
“emi” schemes in so far as the share options being issued meet the emi criteria as defined by hm revenue  customs 
share options issued that do not meet emi criteria are issued as unapproved share options but are subject to the same 
exercise performance conditions
nanoco tech share incentive plan •	
share options issued under the nanoco tech share incentive plan had been issued to staff who were employed by 
nanoco tech limited in the period from 1 september 2006 up to the date of the reverse takeover on 1 may 2009 
these options were conditional on achievement of share price performance criteria and either a sale or listing of the 
company all of the relevant vesting conditions have been successfully met and options are capable of being exercised 
following a lock in period at any time from 1 august 2010 to 31 august 2016 following the reverse takeover the 
number of share options in issue were increased in line with the terms of the reverse acquisition by a factor of 455 
times and the exercise price decreased by 455 times this was reflected as a reverse acquisition adjustment in the 
2009 accounts the fair value benefit is measured using a blackscholes valuation model taking into account the  
terms and conditions upon which the share options were issued 
nanoco group plc long term incentive plan “ltip” •	
share options were granted to management and staff on 27 november 2009 under the terms of the nanoco group plc 
long term incentive plan and will be exercisable subject to performance conditions being met based on share price 
following publication of the 2012 results and eps targets relating to the financial year ended 31 july 2012 the exercise 
price was set at 40 pence for all staff apart from michael edelman and nigel pickett for whom the exercise price was 
set at 78 pence the average market price of the company’s shares on the date of issue of the ltip award was 69 
pence the fair value benefit is measured using a monte carlo model taking into account the terms and conditions 
upon which the share options were issued
notes to the financial statements
for the year ended 31 july 2010 continued 49
nanoco group plc 
annual report and accounts 2010
financial statements
19 sharebased payments continued
the key performance target criteria governing the exercise of the share options are summarised as follows
 performance targets  shares vesting
 of award conditions  minimum stretch minimum stretch notes
50 eps  2 pence 4 pence 0 100 1
50 share price  £120 £160 50 100 2
1 to the extent that eps is greater than the eps minimum threshold but less than the eps stretch award the number  
of options that will become exercisable will be calculated prorata on a straight line basis
2 to the extent that the share price is greater than the minimum target but less than the stretch target the number  
of options that will become exercisable will be calculated prorata on a straight line basis
nanoco group share incentive plan •	
share options are awarded to management and key staff on joining the company as a mechanism for attracting  
and retaining key members of staff the options are issued at either market price on the day of joining or in the event  
of abnormal price movements on the day of joining at an average market price for the week preceding start date these 
options are exercisable any time after the third anniversary of the award and prior to the tenth anniversary of the award 
exercise of the award is subject to the employee remaining a fulltime member of staff at the point of exercise the fair 
value benefit is measured using a binomial valuation model taking into account the terms and conditions upon which 
the share options were issued
shares held in the employee benefit trust “ebt”
the group also operates a jointly owned ebt share scheme for senior management under which the trustee of the  
group sponsored ebt has acquired shares in the company jointly with a number of employees the shares were acquired 
pursuant to certain conditions set out in jointly owned agreements “joes” subject to meeting the performance criteria 
conditions set out in the joes the employees are able to exercise an option to acquire the trustee’s interests in the jointly 
owned ebt shares at the option price all of the relevant conditions have been successfully met in respect of options held 
within the ebt and options are capable of being exercised following a lock in period at any time from 1 august 2010 to  
31 august 2016 following the reverse takeover the number of share options in issue were increased in line with the terms 
of the reverse acquisition by a factor of 455 times and the exercise price decreased by 455 times this was reflected as  
a reverse acquisition adjustment in the 2009 accounts the fair value benefit is measured using a blackscholes valuation 
model taking into account the terms and conditions upon which the jointly owned shares were purchased
the following tables illustrate the number and weighted average exercise prices of and movements in share options 
and jointly owned ebt shares during the year
 2010 
2009
   emi ebt unapproved total total 
the group and company   number number number number number
outstanding at 1 august   8044400 3759251 386750 12190401 2521209
granted during the year   1771799 – 825886 2597685 173000
exercised during the year   – – – – 15000
adjustment on reverse acquisition   – – – – 9511192
outstanding at 31 july   9816199 3759251 1212636 14788086 12190401
exercisable at 31 july   – – – – –
weighted average exercise price of options
      2010 2009 
the group and company      pence pence
outstanding at 1 august      52 46
granted during the year      547 145
exercised during the year      – 145
outstanding at 31 july      140 52 50
19 sharebased payments continued
the weighted average fair value of options granted during the year to 31 july 2010 was 547p 2009 145p  
66p preadjustment on reverse acquisition the range of exercise prices for options and jointly owned ebt shares 
outstanding at the end of the year was 35p875p 2009 352p145p 16p to 66p preadjustment in reverse acquisition
for the share options outstanding as at 31 july 2010 the weighted average remaining contractual life is 148 days 
2009 170 days
the weighted average share price at the date of exercise for those share options exercised in the year ended  
31 july 2009 was 66p
the following table lists the inputs to the models used for the years ended 31 july 2010 and 31 july 2009
 
  share options granted in year to 31 july
 nanoco tech  nanoco group  nanoco group 
 share incentive plan 

 ltip plan 

 share incentive plan
the group and company  2010 2009 2010 2009 2010 2009
dividend yield  – – – – – –
expected volatility   – 50 40 – 40 –
risk free interest rate   – 45 09 – 09 –
expected vesting life of options  
 years average  – 30 30 – 30 –
weighted average exercise price pence  – 145p 49p – 86p –
weighted average share price at date of  
 grant pence  – 145p 69p – 86p –
model used  – black monte – binomial – 
   scholes carlo  model 
the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that 
may occur the expected volatility reflects the assumption that the historical volatility is indicative of future trends 
which may also not necessarily be the actual outcome
no other features of options granted were incorporated into the measurement of fair value
20 merger reserve and capital redemption reserve
merger reserve
the group       £000
at 31 july 2008 31 july 2009 and 31 july 2010      1242
the merger reserve arises under section 612 of the companies act 2006 on the shares issued by nanoco tech limited  
to acquire nanoco technologies limited as part of a simple group reorganisation on 27 june 2007
capital redemption reserve
the company       £000
at 31 december 2008 31 july 2009 and 31 july 2010      4804
the capital redemption reserve arises from the offmarket purchase of deferred shares on 4 may 2005 and their 
subsequent cancellation
notes to the financial statements
for the year ended 31 july 2010 continued 51
nanoco group plc 
annual report and accounts 2010
financial statements
21 movement in revenue reserve and treasury shares
       total 
     retained treasury revenue  
     deficit shares reserve 
the group     £000 £000 £000
ordinary shares of 10p
as at 1 august 2008     1420 545 1965
loss for the year     540 – 540
arising on reverse acquisition of nanoco tech limited    20 20 –
as at 31 july 2009     1940 565 2505
loss for the year     1083 – 1083
as at 31 july 2010     3023 565 3588
retained deficit represents the cumulative loss attributable to the equity holders of the parent company
treasury shares represent the cost of nanoco group plc shares purchased in the market and held by the nanoco group 
sponsored employee benefit trust “ebt” jointly with a number of the group’s employees at 31 july 2010 and 31 july 
2009 3771473 shares in the company were held by the ebt
       total 
     retained treasury revenue  
     deficit shares reserve 
the company     £000 £000 £000
ordinary shares of 10p
as at 31 december 2008     26030 20 26050
treasury shares reclassified to ebt see note 18    – 20 20
profit for the period     287 – 287
at 31 july 2009     25743 – 25743
profit for the year     68 – 68
at 31 july 2010     25675 – 25675
22 commitments
operating lease commitments
the group leases premises under noncancellable operating lease agreements the future aggregate minimum lease 
and service charge payments under noncancellable operating leases are as follows
      31 july 2010 31 july 2009 
      group group 
      £000 £000
land and buildings
not later than one year      157 134
after one year but not more than five years     494 400
after five years      267 367
      918 901 52
23 acquisition of subsidiary undertaking in 2009
on 30 april 2009 the company acquired 100 per cent of the issued share capital of nanoco tech limited “nanoco tech” 
for consideration satisfied by the issue of 158138036 ordinary shares of 10 pence each the directly attributable costs of 
the transaction amounted to £455000
as described in note 2 the transaction has been accounted for as a reverse acquisition equity transaction as if nanoco 
tech limited had issued new shares in exchange for evolutec group plc’s cash and other assets the substance of the 
transaction is that of a share issue fundraising under which nanoco tech received cash and bank balances of £5892000 
representing 989 per cent of the value of the net assets of evolutec group plc and the associated costs of the transaction 
have therefore been charged directly against equity share capital
the fair value of the shares issued has been determined from the perspective of nanoco tech the directors of nanoco 
tech negotiated the acquisition terms on the basis that nanoco tech had a total fair value worth of £375 million and 
that its shareholders would be diluted to 141 per cent in the enlarged group this gives an implied fair value of shares 
issued of £6154000 which is £195000 higher than the value of the net assets deemed acquired as set out below
      evolutec group plc 
      £000
net assets acquired
bank and cash       5892
trade and other receivables       308
trade and other payables       241
       5959
cost of reverse acquisition       195
fair value of reverse acquisition       6154
the difference between the fair value of the transaction and the net assets acquired has been recorded as a cost  
of reverse acquisition in the income statement
the fair value of the assets deemed to have been acquired has been assessed as the book value on the acquisition date
as described in note 2 the results of evolutec group plc have been included in the consolidated financial statements 
from 30 april 2009 evolutec group plc and its subsidiary evolutec limited did not contribute any material revenues  
or profitslosses since the date of acquisition if evolutec group plc had been a member of the group from 1 august 2008  
it would have likewise not contributed any material revenues or profitslosses
evolutec group plc changed its name to nanoco group plc on completion of the acquisition on 30 april 2009 and was 
readmitted to aim on 1 may 2009
24 financial instruments
capital risk management
the company reviews its capital to ensure that entities in the group will be able to continue as a going concern while 
maximising the return to stakeholders
the capital structure of the group consists of equity attributable to equity holders of the parent comprising issued 
share capital reserves and retained earnings as disclosed in notes 18 20 and 21 and in the group statement of changes 
in equity total equity was £7854000 at 31 july 2010 £8771000 at 31 july 2009
the group does not currently enter into derivative transactions such as interest rate swaps and forward currency contracts
notes to the financial statements
for the year ended 31 july 2010 continued 53
nanoco group plc 
annual report and accounts 2010
financial statements
24 financial instruments continued
categorisation of financial instruments
      financial  
     loans and liabilities at  
     receivables amortised cost total 
financial assetsliabilities     £000 £000 £000
31 july 2010
trade and other receivables     334 – 334
cash and cash equivalents and deposits     5682 – 5682
trade and other payables     – 1810 1810
financial liabilities     – 411 411
     6016 2221 3795
31 july 2009
trade and other receivables     101 – 101
cash and cash equivalents and deposits     6589 – 6589
trade and other payables     – 376 376
financial liabilities     – 475 475
     6690 851 5839
the main risks arising from the group’s financial instruments are credit risk and foreign currency risk the board  
of directors reviews and agrees policies for managing each of these risks which are summarised below
other loans note 17 are subject to interest at base rate plus 2 per cent however as the group’s cash deposits which 
attract interest at floating rates are of a greater amount any increase in base rate and thus interest payable would  
be more than offset by higher interest income
credit risk
the group’s principal financial assets are cash cash equivalents and deposits the group seeks to limit the level of 
credit risk on the cash balances by only depositing surplus liquid funds with multiple counterparty banks that have  
high credit ratings
the company trades only with recognised creditworthy third parties receivable balances are monitored on an ongoing 
basis with the result that the group’s exposure to bad debts is not significant the group’s maximum exposure is the 
carrying amount as disclosed in note 14
at 31 july 2010 there was a single material receivable balance which was paid in full within one month
foreign currency risk
the company has transactional as well as translational currency exposures such exposure arises from sales or purchases 
in currencies other than the functional currency the split of assets between sterling and other currencies at the year end 
is analysed as follows
 31 july 2010 

 31 july 2009
  gbp usd total gbp usd total 
the group  £000 £000 £000 £000 £000 £000
cash cash equivalents and deposits  4756 926 5682 6566 23 6589
trade receivables  – 334 334 84 17 101
  4756 1260 6016 6650 40 6690 54
24 financial instruments continued
the following table demonstrates the sensitivity to a reasonably possible change in the sterling against us dollar exchange 
rate with all other variables held constant on the group’s profit before tax due to foreign exchange translation of 
monetary assets and liabilities and the group’s equity
      impact  
      on profit impact 
      before tax on equity 
increasedecrease in sterling vs us dollar rate      £000 £000
10      115 115
5      60 60
5      66 66
10      140 140
there was no material impact on loss before tax or equity arising from the retranslation of foreign currency assets  
as at 31 july 2009 due to potential changes in the us dollarsterling rate
interest rate risk
as the group has no significant borrowings the risk is limited to the reduction of interest received on cash surpluses 
held at bank which receive a floating rate of interest the principal impact to the group is the result of interestbearing 
cash and cash equivalent balances held as set out below
 31 july 2010 

 31 july 2009
  fixed rate floating rate total fixed rate floating rate total 
the group  £000 £000 £000 £000 £000 £000
cash cash equivalents and deposits   4004 1678 5682 5896 693 6589
as the majority of cash and cash equivalents are held on fixed deposit the exposure to interest rate movements is 
immaterial
maturity profile
set out below is the maturity profile of the group’s financial liabilities at 31 july 2010 based on contractual undiscounted 
payments including contractual interest
    less than  greater than 
    1 year 1 to 5 years 5 years total 
2010    £000 £000 £000 £000
financial liabilities
trade and other payables    1271 – – 1271
other loans    78 288 100 466
    1349 288 100 1737
    less than  greater than 
    1 year 1 to 5 years 5 years total 
2009    £000 £000 £000 £000
financial liabilities
trade and other payables    376 – – 376
other loans    81 298 168 547
    457 298 168 923
the directors consider that the carrying amount of the financial liabilities approximates to their fair value
the group’s policies in respect of managing liquidity risk are set out in the financial review
as all financial assets are expected to mature within the next twelve months an aged analysis of financial assets has 
not been presented
notes to the financial statements
for the year ended 31 july 2010 continued 55
nanoco group plc 
annual report and accounts 2010
financial statements
25 related party transactions
the group
there were no sales to purchases from or at the year end balances with any related party   
the company
the following table summarises intercompany balances at the yearend between nanoco group plc and subsidiary entities
      31 july 2010 31 july 2009 
     notes £000 £000
loans owed to nanoco group plc by
nanoco life sciences ltd      20286 20286
nanoco technologies ltd      237 71
nanoco tech ltd      96 96
     12 20619 20453
 less provision against debt owed by nanoco life sciences ltd   12 20286 20286
      333 167
 
loan owed tofrom nanoco group plc by
nanoco technologies ltd     14 17 5175 316
 the movement in the loan due from nanoco technologies ltd relates to the transfer of obligation in respect of the charge for sharebased payments  
for staff working for nanoco technologies ltd and is included in investments
 the movement in the current loan due from nanoco technologies ltd relates to transfers of cash balances between the entities for the purposes  
of investing short term funds
there are no formal terms of repayment in place for these loans and it has been confirmed by the directors that the 
loans will not be recalled within the next twelve months
 
none of the loans are interest bearing
26 compensation of key management personnel including directors
      2010 2009 
      £000 £000
shortterm employee benefits      297 296
sharebased payments      25 39
      322 335 56
notice of annual general meeting
notice is hereby given that the sixth annual general meeting of nanoco group plc will be held at the core technology 
facility 46 grafton street manchester m13 9nt on 10 december 2010 at 1000 am for the purpose of considering 
and if thought fit passing the following resolutions of which resolutions numbered 1 to 9 will be proposed as ordinary 
resolutions and resolutions 10 to 12 will be proposed as special resolutions
ordinary resolutions
1 that the company’s annual report and audited financial statements and the reports of the directors and 
auditors for the period ended 31 july 2010 now laid before this meeting be and are hereby approved
2 that the directors’ remuneration report on pages 22 to 23 of the company’s annual report be and is hereby approved
3 that st gabrielle llp a limited liability partnership of which anthony clinch is a partner which retires in accordance 
with the articles of association of the company be and is hereby reelected as a director of the company 
4 that colin white who retires in accordance with the articles of association of the company be and is hereby 
reelected as a director of the company
5 that dr peter rowley who retires by rotation be and is hereby reelected as a director of the company
6 that dr nigel pickett who retires by rotation be and is hereby reelected as a director of the company
7 that ernst  young llp be and are hereby reappointed as auditors of the company to hold office until the 
conclusion of the next general meeting at which accounts are laid before the company
8 that the board of directors be and is hereby authorised to agree the remuneration of the auditors
9 that in accordance with section 551 of the companies act 2006 the “2006 act”
91 the directors be and they are hereby generally and unconditionally authorised to exercise all the powers of 
the company to allot equity securities as defined in section 560 of the 2006 act up to an aggregate nominal 
value of £6187923 approximately one third of the company’s issued share capital at the date of this notice 
and
92 in addition to the authority granted pursuant to subparagraph 91 the directors be and they are hereby 
generally and unconditionally authorised to exercise all the powers of the company to allot equity securities 
up to an aggregate nominal value of £6187923 approximately one third of the company’s issued share 
capital at the date of this notice in connection with a rights issue offered to holders of equity securities and 
other persons who are entitled to participate in proportion as nearly as may be to their then holdings of 
equity securities or as appropriate the numbers of such securities which such other persons are for those 
purposes deemed to hold subject only to such exclusions or other arrangements as the directors may feel 
necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws of 
or the requirements of any recognised regulatory body of or any stock exchange in any territory
 provided that both such authorities shall unless previously revoked varied or renewed expire on the earlier of  
the date of the next annual general meeting of the company and 10 march 2012 save that in respect of either 
authority the company may before such expiry make an offer or agreement which would or might require equity 
securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an 
offer or agreement as if the authority conferred hereby had not expired
 these authorities are in substitution for any and all authorities previously conferred upon the directors for the 
purposes of section 551 of the 2006 act without prejudice to any allotments made pursuant to the terms of  
such authorities 57
nanoco group plc 
annual report and accounts 2010
special resolutions
10 that conditionally upon the passing of resolution numbered 9 above in accordance with section 570 of the 2006 
act the directors be and they are hereby given power to allot equity securities as defined in section 560 of the 
2006 act pursuant to the authority conferred by resolution numbered 9 above and to sell treasury shares as if 
section 561 of the 2006 act did not apply to such allotment or sale provided that this power shall be limited to
101 the allotment or sale of equity securities for cash in connection with or pursuant to an offer to the holders  
of equity securities and other persons entitled to participate in proportion as nearly as may be to their then 
holdings of equity securities or as appropriate the numbers of such securities which such other persons are 
for those purposes deemed to hold subject only to such exclusions or other arrangements as the directors 
may feel necessary or expedient to deal with fractional entitlements or legal or practical problems under the 
laws of or the requirements of any recognised regulatory body of or any stock exchange in any territory and
102 the allotment or sale of equity securities otherwise than pursuant to subparagraph 101 for cash up to a 
maximum nominal value of £1856377 approximately 10 of the company’s issued share capital at the date 
of this notice
 provided that the power granted by this resolution shall unless previously revoked varied or renewed expire on 
the earlier of the date of the next annual general meeting and 10 march 2012 save that the company may before 
such expiry make an offer or agreement which would or might require equity securities to be allotted or sold after 
such expiry and the directors may allot or sell equity securities in pursuance of such an offer or agreement as if 
the power conferred hereby had not expired
11 that the company be and is hereby generally authorised pursuant to section 701 of the 2006 act to make market 
purchases as defined in section 6934 of the 2006 act of its ordinary shares provided that
111 the company does not purchase more than 27827088 ordinary shares approximately 1499 of the 
company’s issued share capital at the date of this notice
112 the company does not pay for any such ordinary share less than its nominal value at the time of purchase and
113 the company does not pay for any such ordinary share more than 5 above the average of the closing 
midmarket price for ordinary shares for the five business days immediately preceding the date on which the 
company agrees to buy the shares concerned based on the share prices published in the daily official list of 
the london stock exchange or the aim supplement thereto
 the authority conferred by this resolution shall unless previously revoked varied or renewed expire on the earlier 
of the date of the next annual general meeting of the company and 10 march 2012 save that the company may 
before such expiry make a contract to purchase ordinary shares which will or may be executed wholly or partly 
after the expiry of such authority and may make a purchase of ordinary shares in pursuance of any such contract 
as if such authority had not expired
12 that the articles of association produced to the meeting and initialled by the chairman of the meeting for  
the purpose of identification be adopted as the articles of association of the company in substitution for  
and to the exclusion of the existing articles of association
by order of the board
m sullivan
secretary
registered office
46 grafton street
manchester
m13 9nt
25 october 2010 58
notes to the notice of annual general meeting
1 as a member of the company you are entitled to appoint a proxy or proxies of your own choice to exercise all  
or any of your rights to attend speak and vote on your behalf at the meeting and you should have received a proxy 
form you can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form
2 a proxy does not need to be a member of the company but must attend the meeting to represent you details  
of how to appoint the chairman of the meeting or another person as your proxy using the proxy form are set out 
in the notes to the proxy form
3 you may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different 
shares you may not appoint more than one proxy to exercise rights attached to any one share to appoint more 
than one proxy you may photocopy the proxy form please indicate the proxy holder’s name and the number  
of shares in relation to which they are authorised to act as your proxy please also indicate if the proxy instruction  
is one of multiple instructions being given all forms must be signed and should be returned together in the  
same envelope
4 if you do not give your proxy an indication of how to vote on any resolution your proxy will vote or abstain from 
voting at his or her discretion your proxy will vote or abstain from voting as he or she thinks fit in relation to any 
other matter which is put before the meeting
5 pursuant to regulation 41 of the uncertificated securities regulations 2001 the company has specified that only 
those shareholders registered on the register of members of the company at 600 pm on 8 december 2010 or  
if the meeting is adjourned on the register of members at 600 pm on the day two days before the date fixed for 
the adjourned meeting as the case may be shall be entitled to attend and vote at the meeting in respect of the 
number of ordinary shares in the company registered in their name at the relevant time changes to entries on 
the register of members after 600 pm on 8 december 2010 or if the meeting is adjourned on the register of 
members after 600 pm on the day two days before the date fixed for the adjourned meeting will be disregarded 
in determining the right of any person to attend and vote at the meeting
appointment of proxy using hard copy proxy form
6 the notes to the proxy form explain how to direct your proxy on how to vote on each resolution or withhold  
their vote to appoint a proxy using the proxy form the form must be
– completed and signed
– sent or delivered to the company’s registrars capita registrars pxs 34 beckenham road beckenham  
br3 4tu and
– received by no later than 1000 am on 8 december 2010
 in the case of a member which is a company the proxy form must be executed under its common seal or signed 
on its behalf by an officer of the company or an attorney for the company any power of attorney or any other 
authority under which the proxy form is signed or a duly certified copy of such power of authority must be 
included with the proxy form
changing your proxy instructions
7 to change your proxy instructions simply submit a new proxy appointment using the methods set out above note 
that the cutoff time for receipt of proxy appointments see above also applies in relation to amended instructions 
any amended proxy appointment received after the relevant cutoff time will be disregarded
 where you have appointed a proxy using the hardcopy proxy form and would like to change the instructions using 
another hardcopy proxy form please contact the company’s registrars capita registrars pxs 34 beckenham road 
beckenham br3 4tu
 if you submit more than one valid proxy appointment the appointment received last before the latest time  
for the receipt of proxies will take precedence
notice of annual general meeting 
continued 59
nanoco group plc 
annual report and accounts 2010
termination of proxy appointments
8 in order to revoke a proxy instruction you will need to inform the company by sending a signed hard copy notice 
clearly stating your intention to revoke your proxy appointment to the company’s registrars capita registrars pxs 
34 beckenham road beckenham br3 4tu in the case of a member which is a company the revocation notice 
must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for 
the company any power of attorney or any other authority under which the revocation notice is signed or a duly 
certified copy of such power of authority must be included with the revocation notice
9 the revocation notice must be received no later than 24 hours before the time and date scheduled for the meeting
10 appointment of a proxy does not preclude you from attending the meeting and voting in person if you have 
appointed a proxy and attend the meeting in person your proxy appointment will automatically be terminated
appointment of proxy using crest electronic proxy appointment service
11 crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service 
may do so for the annual general meeting and any adjournments thereof by using the procedures described  
in the crest manual crest personal members or other crest sponsored members and those crest members 
who have appointed a voting service provider should refer to their crest sponsor or voting service provider  
who will be able to take the appropriate action on their behalf
12 in order for a proxy appointment or instruction made using the crest service to be valid the appropriate crest 
message a “crest proxy instruction” must be properly authenticated in accordance with euroclear’s specifications 
and must contain the information required for such instructions as described in the crest manual the message 
regardless of whether it relates to the appointment of a proxy the revocation of a proxy appointment or an 
amendment to the instruction given to a previously appointed proxy must in order to be valid be transmitted so  
as to be received by the issuer’s agent id ra10 by the latest times for receipt of proxy appointments specified  
in this notice of meeting for this purpose the time of receipt will be taken to be the time as determined by the 
timestamp applied to the message by the crest applications host from which the issuer’s agent is able to retrieve 
the message by enquiry to crest in the manner prescribed by crest after this time any change of instructions to  
a proxy appointed through crest should be communicated to the appointee by other means
13 crest members and where applicable their crest sponsors or voting service providers should note that euroclear 
does not make available special procedures in crest for any particular messages normal system timings and 
limitations will therefore apply in relation to the input of crest proxy instructions it is the responsibility of the 
crest member concerned to take or if the crest member is a crest personal member or sponsored member  
or has appointed a voting service provider to procure that his crest sponsor or voting service provider takes  
such action as shall be necessary to ensure that a message is transmitted by means of the crest system by any 
particular time in this connection crest members and where applicable their crest sponsors or voting service 
providers are referred in particular to those sections of the crest manual concerning practical limitations of the 
crest system and timings
14 the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a  
of the uncertificated securities regulations 2001
communications
15 except as provided above members who have general queries about the annual general meeting should contact 
ruth hailwood 0161 603 7900 46 grafton street manchester m13 9nt no other methods of communication will 
be accepted
documents available for inspection
16 there are available for inspection at the registered office of the company during usual business hours on any  
week day saturdays sundays and public holidays excepted and there will be available for inspection at the  
place of the annual general meeting from at least fifteen minutes prior to and until the conclusion of the annual 
general meeting
– a copy of the proposed new articles of association of the company together with a copy of the existing articles 
of association of the company marked to show the changes being proposed an electronic copy will be available 
on the website wwwnanocotechnologiescom in advance of the agm
– copies of the service contracts of executive directors of the company and
– copies of the letters of appointment of the nonexecutive directors of the company 60
explanatory notes of annual general meeting
these explanatory notes gives further information in relation to the resolutions listed in the enclosed notice of the 
company’s annual general meeting
resolution 1 – receipt of accounts
the directors must lay the company’s accounts the directors’ report and the auditors’ report before the shareholders 
at a general meeting this is a legal requirement after the directors have approved the accounts and the directors’ 
report and the auditors have prepared their report
resolution 2 – directors’ remuneration report
this resolution approves the directors’ remuneration report for the period ended 31 july 2010 the full text of the 
report is contained on pages 22 to 23 of the company’s annual report and sets out the company’s policy towards  
and gives details of directors’ remuneration and other relevant information
resolutions 3 to 6 – reelection of directors
although the company is not bound to adhere to the combined code on corporate governance the “combined code” 
the directors recognise the importance of sound corporate governance and intend to ensure that the company continues 
to comply with such principles of the combined code as are appropriate to the size nature and stage of development  
of the company
therefore in accordance with the combined code and the provisions of the company’s articles of association all directors 
of the company who have been appointed since the company’s last annual general meeting and all other directors  
on a regular basis as set out in the company’s articles of association seek election or reelection as the case may be 
by the shareholders
resolution 3 and 4 – reelection of st gabrielle llp and colin white
each of the above having been appointed since the company’s last annual general meeting offers himself for  
reelection in accordance with the company’s articles of association details of their respective cv’s are on pages  
18 to 19 of the company’s annual report
resolutions 5 and 6 – reelection of dr peter rowley and dr nigel pickett
each of dr peter rowley and dr nigel pickett retiring by rotation offers himself for reelection in accordance with  
the company’s articles of association details of their respective cv’s are on page 18 of the company’s annual report
resolution 7 – reelection of ernst  young llp as auditors
the board of directors on the recommendation of its audit committee recommends the reelection of ernst  young 
llp as auditors to hold office until the next general meeting at which accounts are laid
resolution 8 – remuneration of the auditors
this resolution authorises the board of directors to agree the remuneration of the auditors
resolution 9 – authority to allot shares
the purpose of resolution 9 is to renew the directors’ power to allot shares section 551 of the companies act 2006 
provides that the board of directors may not allot new shares other than for employee share schemes without 
shareholder authority
accordingly resolution 9 will be proposed as an ordinary resolution to authorise the directors pursuant to section 551 
of the companies act 2006
i to allot ordinary shares of 10p each in the capital of the company up to a maximum nominal amount of 
£6187923 being approximately one third of the nominal value of the ordinary shares in issue on 25 october 2010 
and
ii in addition to the authority described above to allot ordinary shares of 10p each in the capital of the company up 
to a maximum nominal amount of £6187923 pursuant to a rights issue in respect of which all shareholders are 
entitled to participate as nearly as possible in proportion to their holding of shares in the company at the time
this authority unless previously revoked varied or renewed will expire on the earlier of the date of the next annual 
general meeting of the company and 15 months after the date of the passing of the resolution the directors will 
exercise the authority to allot only when satisfied that it is in the interests of the company to do so they have no 
present intention of exercising the authority except in connection with the issue of shares under the company’s  
share option and longterm incentive plans 61
nanoco group plc 
annual report and accounts 2010
resolution 10 – disapplication of preemption rights
section 561 of the companies act 2006 confers on shareholders rights of preemption in respect of the allotment  
of “equity securities” which are or are to be paid up in cash otherwise than by way of allotment to employees under  
an employees’ share scheme the provisions of section 561 apply to the ordinary shares of 10p each of the company 
to the extent that they are not disapplied pursuant to section 570 of the companies act 2006 this provision also 
covers the sale of treasury shares should the company elect to hold any for cash
it is proposed that the disapplication of these statutory preemption rights be approved as a special resolution  
to give the directors power to allot shares without the application of these statutory preemption rights first in 
relation to rights issues and secondly in relation to the issue of ordinary shares of 10p each in the capital of the 
company for cash up to a maximum aggregate nominal amount of £1856377 representing approximately 10  
of the nominal value of the ordinary shares in issue on 25 october 2010
this authority unless previously revoked varied or renewed will expire on the earlier of the date of the next annual 
general meeting of the company and 15 months after the date of the passing of the resolution
resolution 11 – purchase by the company of its own shares
the purpose of resolution 11 is to obtain the authority for the company to purchase its ordinary shares under the 
companies act 2006 such an authority must first be sanctioned by an ordinary resolution of the company in general 
meeting but current institutional shareholder voting guidelines require that any such authority should be sanctioned 
by special resolution
accordingly resolution 11 will be proposed as a special resolution to authorise the company to purchase a maximum  
of 27827088 ordinary shares equal to approximately 1499 of the company’s present issued ordinary share capital  
on aim at a price per share of not less than 10p and not more than 5 above the average of the middle market 
quotations for ordinary shares of the company for the five business days immediately preceding the day of purchase  
in order to maximise the benefit to be derived by the company it would be the directors’ intention that any purchases 
should be made at as low a price within the limits specified in resolution 11 as they consider reasonably obtainable
this authority unless previously revoked varied or renewed will expire on the earlier of the date of the next annual 
general meeting of the company and 15 months after the date of the passing of the resolution
pursuant to the companies act 2006 the company can hold the shares which have been repurchased as treasury shares 
and either resell them for cash cancel them either immediately or at a point in the future or use them for the purposes 
of its employee share schemes the directors believe that it is desirable for the company to have this choice and 
therefore currently envisage holding any shares purchased under this authority as treasury shares holding the 
repurchased shares as treasury shares will give the company the ability to resell or transfer them in the future and so 
provide the company with additional flexibility in the management of its capital base no dividends will be paid on and 
no voting rights will be exercised in respect of treasury shares
shares will only be repurchased if the directors consider such purchases to be in the best interests of shareholders 
generally and that they can be expected to result in an increase in earnings per share the authority will only be used 
after careful consideration taking into account market conditions prevailing at the time other investment opportunities 
and the overall financial position of the company shares held as treasury shares will not automatically be cancelled  
and will not be taken into account in future calculations of earnings per share unless they are subsequently resold or 
transferred out of treasury
if any shares repurchased by the company are held in treasury and used for the purposes of its employee share schemes 
so long as required under the guidelines of the association of british insurers investment committee the company will 
count those shares towards the limits on the number of new shares which may be issued under such schemes
purchases will not be made to the extent that they may affect the eligibility of the company for continued listing  
on aim and it is not the board of directors’ current intention that the company should stand in the market for any 
particular period or until any specified number of shares has been acquired 62
the purchase of shares by the company pursuant to these proposals will be a market purchase and thus made through 
aim this means that any shareholder selling shares even if those shares are subsequently acquired by the company  
will not be subject to different tax considerations from those normally applying to a sale of shares in the market provided 
that the purchase by the company is made exclusively through a market maker acting as principal in that event for 
shareholders who held their shares as an investment the sale proceeds will normally be treated as capital and the 
normal capital gains tax rules will apply to those sale shares there will normally be no liability to tax on income unless 
the shareholder’s disposal is by way of trade
resolution 12 – adoption of new articles of association
resolution 12 which is being proposed as a special resolution asks shareholders to approve the adoption of new articles 
of association to reflect the implementation of the final parts of the companies act 2006 and the implementation of the 
companies shareholders’ rights regulations 2009 “regulations” as they affect the company
a copy of the proposed new articles of association “new articles” together with a copy of the existing articles of 
association of the company “current articles” marked to show the changes being proposed will be available for 
inspection at the registered office of the company during usual business hours on any week day saturdays sundays 
and public holidays excepted until the conclusion of the annual general meeting an electronic copy will be available 
on the website wwwnanocotechnologiescom in advance of the meeting
below is a summary of the main changes to the articles of association which would be effective if this resolution is passed
1 general
generally the opportunity has been taken to replace and where appropriate remove obsolete references to the 
companies act 1985 furthermore provisions in the current articles which replicate provisions contained in the 
companies act 2006 are in the main to be removed in the new articles
2 general meetings
the current articles contain provisions which refer to extraordinary general meetings and extraordinary resolutions 
these provisions have been amended or removed as appropriate as the concept of extraordinary general meetings 
and extraordinary resolutions has not been retained under the companies act 2006
the regulations have amended the companies act 2006 so that it now provides that each proxy appointed by a member 
has one vote on a show of hands unless the proxy is appointed by more than one member in which case the proxy has 
one vote for and one vote against if the proxy has been instructed by one or more members to vote for the resolution and 
by one or more members to vote against the resolution
the new articles remove provisions in the current articles dealing with voting rights of proxies on the basis that these 
are dealt with in the companies act 2006 and contain a provision clarifying how the provision of the act giving a proxy 
a second vote on a show of hands should apply to discretionary authorities
the regulations have amended the companies act 2006 so that proxies are required to vote in accordance with 
instructions given by the shareholder by whom the proxy is appointed the new articles state that the company is not 
required to confirm that a proxy has followed instructions and that a failure of the proxy to vote as instructed does not 
invalidate the proceedings of the resolution
the regulations have amended the companies act 2006 in order to enable multiple representatives appointed by the 
same corporate member to vote in different ways on a show of hands and a poll the new articles remove provisions 
in the current articles dealing with voting by corporate representatives on the basis that this is dealt with in the 
companies act 2006
explanatory notes of annual general meeting 
continued 63
nanoco group plc 
annual report and accounts 2010
3 share capital
under the companies act 1985 a company required specific enabling provisions in its articles to purchase its own 
shares to consolidate or subdivide its shares and to reduce its share capital or other undistributable reserves as well 
as shareholder authority to undertake the relevant action the current articles include these enabling provisions 
under the companies act 2006 a company will only require shareholder authority to do any of these things and it will 
no longer be necessary for articles to contain enabling provisions accordingly the relevant enabling provisions have 
been removed in the new articles
the current articles permit the directors to suspend the registration of transfers under the companies act 2006  
share transfers must be registered as soon as practicable the power in the current articles to suspend the registration 
of transfers is inconsistent with this requirement accordingly this power has been removed in the new articles
4 limit on directors’ fees
the limit on the aggregate of fees to be paid to directors pursuant to article 77 has been amended from £100000  
to £150000 to reflect the increased number of nonexecutive directors 64
notes welcome
nanoco group plc designs develops 
and manufactures quantum dots  
solar inks and other nanomaterials  
in commercial quantities for major  
enduse markets
highlights of the year
 joint development agreement signed with major japanese 
electronics company for led backlighting of televisions
 joint development agreement signed with tokyo electron  
for a photovoltaic film marking our first agreement in the 
solar power sector
 achievement of milestone payments in all our agreements 
including a us2 million payment from a japanese  
led producer
 significant progress towards mass production with new  
scaleup reactors commissioned in manchester producing 
quality material
 procurement of a new production facility in runcorn cheshire
 colin white appointed as new chief financial officer
 cash cash equivalents and deposits of £568 million  
at 31 july 2010 31 july 2009 £659 million
directors
dr peter rowley nonexecutive chairman
dr michael edelman chief executive officer
dr nigel pickett chief technology officer
mr colin white chief financial officer
mr michael bretherton nonexecutive director
mr gordon hall nonexecutive director
st gabrielle llp nonexecutive director represented by mr anthony clinch
secretary
mr m sullivan
nominated adviser 
zeus capital limited
3 ralli courts
west riverside
manchester m3 5ft
corporate broker
bank of america merrill lynch
2 king edward street
london ec1a jhq
auditor
ernst  young llp
100 barbirolli square
manchester m2 3ey 
legal adviser
schofield sweeney
76 wellington street
leeds ls1 2ay
investor relations and financial pr
buchanan communication
45 moorfields 
london ec2y 9ae
registered office
46 grafton street
manchester m13 9nt
website 
wwwnanocotechnologiescom
printed on hello matt 
hello matt is an fscrecognised paper produced from 
wellmanaged forests this publication was printed with 
vegetable oilbased inks by an fsc recognised printer  
that holds an iso 14001 certification
investor information annual report and accounts 2010
focused on delivery
nanoco group plc  annual report and accounts 2010
wwwnanocotechnologiescom


Summary:
 10
ceo’s review of operations 
“ we are very focused on delivery  
of technology and new production 
capacity to satisfy our major 
markets including backlighting  
for lcd tvs general lighting and 
thin film solar cells”
quantum dots are nanosized 
semiconductor particles with the 
ability to emit intense light of a 
specific colour dependent on the  
size of the dots which range from  
10 to 100 atoms in width these dots 
which nanoco makes without toxic 
heavy metals such as cadmium  
have multiple commercial applications 
in many industrial and consumer 
markets delivering significant benefits 
including reduced power consumption 
and increased performance our 
technology allows the manufacture  
of other nanomaterials including  
solar inks harnessing the ability of 
nanoparticulate semiconductors to 
absorb light to create highly efficient 
solar panels
owing to the scale of the commercial 
opportunity presented to us we have 
focused initially on a small number  
of high value target markets working 
in collaboration with customers and 
potential customers who have the 
ability to bring products to market 
incorporating our nanomaterials
critical to success is our ability to 
design and develop quantum dots  
to bespoke specifications for our 
customers’ particular end use  
once this design and development  
is successful a material supply and 
licence agreement is signed under 
which nanoco receives payments for 
the supply of material and royalties on 
sales of the customer’s end product 
manufacturing inhouse is central to 
our business model owing to the value 
that control of the supply chain can 
bring to the company we have made 
major progress in the scaleup of our 
manufacturing and remain confident 
that we will be able to deliver large 
quantities of quantum dots in the 
foreseeable future although this has 
never been done before nanoco’s 
solutionbased chemistry uses 
equipment similar to other industries 
significantly reducing risk
we are currently focused on four target 
markets led lighting for backlighting 
of liquid crystal display lcd televisions 
and for general lighting solar power 
electroluminescent displays and other 
applications 
creating white light from blue leds 
through the use of red and green 
quantum dots brings significant benefits 
compared with the currently used 
phosphor technology these benefits 
include reduced power consumption 
and superior colour performance 
michael edelman
chief executive officer
our primary focus at  
nanoco is to commercialise 
our worldclass technology  
but before reviewing the 
significant progress made 
towards achieving this goal  
i would like to provide a brief 
overview of the company
our key asset is our patentprotected 
technology for the design development 
and mass manufacture of quantum 
dots and other nanomaterials which 
have highly attractive commercial 
characteristics the robustness of our 
intellectual property is underlined by  
the recent issuing of patent number 
7 803423 one of nanoco’s fundamental 
manufacturing patents by the united 
states patent and trademark office 11
nanoco group plc 
annual report and accounts 2010
review of the year
quantum dot leds are ideally suited for 
the backlighting of television and other 
displays such as computer screens 
in addition to their ability to emit  
light nanoparticulate semiconductors 
are able to absorb light across  
a very broad spectrum bringing the 
potential for highly efficient solar  
cells to reduce the cost per watt of 
solar energy nanoco has developed 
photovoltaic nanomaterial inks  
which can be printed by conventional 
lowcost printing techniques to create 
thin films for use as solar panels
nanoco’s development work in 
electroluminescent displays – the 
future generation of displays for 
consumer goods including mobile 
phones computers and televisions – 
exploits the ability of quantum dots  
to be used as pixels such displays 
would be very thin and have no 
requirement for a backlight bringing 
benefits including low power 
consumption high colour quality  
and ease of manufacture 
nanoco’s ability to make quantum 
dots free of heavy metals creates the 
opportunity for in vivo imaging which 
has attracted considerable interest 
from the life science industry the 
development cycle is substantially 
longer in this sector owing to the 
regulatory framework but presents a 
significant medium term opportunity
commercial agreements
during the year we signed our first 
agreement in the solar power sector 
with tokyo electron a major japanese 
semiconductor and flat panel display 
production equipment supplier  
we also signed a new agreement  
in the led lighting market and made 
significant progress with our other  
led lighting activities 
under the agreement with tokyo 
electron we are developing solar  
inks for printing into a nanomaterial 
film which will form the solaractive 
component of a new photovoltaic 
panel nanoco received an upfront 
payment and will receive milestone 
payments during the contract  
which began in june 2010 and  
is progressing well
in september 2009 we signed a new 
agreement with a major japanese 
electronics company for the bespoke 
design of quantum dots for use in the 
led backlighting of televisions  
this collaboration is progressing well 
and we have achieved the required 
milestones triggering a payment of 
us600000 in july 2010 and bringing 
the total paid to nanoco from the 
agreement to us18 million
we received a milestone payment of 
us2 million from our first supply and 
licence agreement signed in november 
2008 with a major japanese 
corporation for red and green quantum 
dots for leds it was subsequently 
agreed with this partner that the 
second technical milestone would  
be amended in the light of more 
demanding market requirements 
particularly with regard to the lifetimes 
in service of the leds which have now 
been set at 50000 hours it is pleasing 
to note that our quantum dots have 
met the key technical criteria to date 
except for the final extended lifetime 
tests which are expected to be 
completed successfully in the near 
future our partner has already made 
partial payment for these revised 
intermediate milestones in recognition 
of the successful progress we are 
therefore pressing ahead to deliver  
our first 1kg of red quantum dots to  
the japanese corporation early in the 
next calendar year which will trigger  
a further us2 million milestone 
payment it is expected that the green 
1kg delivery will follow later in the first 
half of 2011 triggering a further us2 
million payment
once the products under this 
agreement are commercialised  
a royalty will be paid to nanoco  
on the net sales of the corporation’s 
products which will comprise an  
led chip quantum dots and an 
encapsulant the packaged leds  
will be sold by the corporation to lcd 
television and display makers and to 
solid state lighting manufacturers 
during the year we have seen 
increasing interest from potential 
customers in the use of our quantum 
dots for use with leds in general 
lighting where nanoco’s technology 
has the potential to provide lighting 
with a high colour rendering index 
current methods for producing white 
light from blue leds tend to be 
relatively weak in the red wavelengths 
with the result that the light can lack 
warmth and fail to show true colours 
the use of nanoco’s quantum dots can 
correct these failings
we continue in discussions with 
potential partners across a range  
of applications 
manufacturingoperations
since joining aim in may 2009  
we have been focused on scaling  
up from the production of very small 
quantities of quantum dots to mass 
production so that customers can 
supply major enduse markets we 
made significant progress during the 
year in achieving this goal including 
the appointment of andrew gooda  
as manufacturing director in january 
2010 he has since developed a clear 
pathway to take us through the steps 
to mass production
during the year we have added a 
series of scaleup reactors in our 
manchester headquarters these 
reactors are critical in the progression 
of the quantum dots from very small 
scale manufacture in the laboratory  
to mass production 
today we announced that we have 
taken a lease on a 3000 square foot 
facility at the heath a technology 
park in runcorn cheshire this facility 
which will involve an initial investment 
of £13 million will be our first 
commercial production plant and we 
expect it to be commissioned later 
this calendar year this sixty acre site 
provides ample room for nanoco’s 
future expansion requirements
our customers are global corporations 
who expect suppliers to perform  
to accepted international standards  
we are committed to exceeding the 
expected quality assurance standards 
and health safety and environmental 
legislation both at runcorn and in 
manchester we have recruited skilled 
staff who are currently developing and 
implementing the systems needed to 
ensure that all of our operations meet 
the highest standards
summary
our first full year as a quoted company 
has been one of rapid progress 
the company has delivered against 
customer contracts and against 
manufacturing scaleup targets whilst 
keeping tight control over our cash  
to ensure we have adequate funds  
to build the company successfully
in the current year we will continue  
to focus on delivery of our commercial 
contracts our manufacturing scaleup 
and on securing new commercial 
agreements across our target markets
michael edelman
chief executive officer
15 october 2010