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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vectura Group Plc | LSE:VEC | London | Ordinary Share | GB00BKM2MW97 | ORD 0.0271P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 164.80 | 164.80 | 165.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMVEC
RNS Number : 2380K
Vectura Group plc
20 April 2020
Vectura Group plc
Report and Accounts for the year ended 31 December 2019 and Annual General Meeting 2020
Chippenham, UK - 20 April 2020 : Vectura Group plc (LSE: VEC) ("Vectura", the "Group" or the "Company") announces that today it has released the following documents:
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-- Report and Accounts for the year ended 31 December 2019
-- Notice of Annual General Meeting ("AGM") 2020
-- Form of Proxy for the AGM
In accordance with the Listing Rule 9.6.1, a copy of these documents have been uploaded to National Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Board is closely monitoring the impact of Coronavirus (COVID-19) and it remains the intention of the Board to hold the AGM as planned at 10.30 a.m. on 27 May 2020. However, shareholders should note that the time, date and venue may change due to COVID-19 developments. Shareholders will not be allowed to attend the AGM in light of the COVID-19 situation and the Stay at Home measures that have been implemented by the UK government. Therefore, anyone seeking to attend the AGM will be refused entry. Shareholders are requested to submit their votes by proxy and are encouraged to do so by electronic means. Should there be any changes (including adjournment or postponement of the meeting) the Company will notify shareholders in compliance with the Company's articles of association and the Listing Rules. Please see the AGM Notice of Meeting for more information.
In compliance with DTR 6.3.5, the following information is extracted from the Report and Accounts for the year ended 31 December 2019 and should be read in conjunction with the Company's Final Results announcement issued on 17 March 2020. The documents are also available at www.vectura.com and together constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. Page and note references in the text refer to page numbers and notes contained in the Report and Accounts for the year ended 31 December 2019. This announcement is not a substitute for reading the Report and Accounts for the year ended 31 December 2019 in full.
-Ends-
Enquiries
Vectura Group plc +44 (0)1249 667700
Paul Fry - Chief Financial Officer
David Ginivan - VP Corporate Communications
Elizabeth Knowles - VP Investor Relations
John Murphy - Company Secretary
Consilium Strategic Communications +44 (0)20 3709 5700
Mary-Jane Elliott / Sue Stuart /
David Daley
ABOUT VECTURA
Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. With differentiated proprietary technology and pharmaceutical development expertise, Vectura is one of the few companies globally with the device, formulation and development capabilities to deliver a broad range of complex inhaled therapies.
Vectura has eleven key inhaled and eleven non-inhaled products marketed by partners with global royalty streams, and a diverse partnered portfolio of drugs in clinical development. Our partners include Hikma, Novartis, Sandoz (a division of Novartis AG), Mundipharma, Kyorin, GSK, Bayer, Chiesi, Almirall, and Tianjin KingYork.
For further information, please visit Vectura's website at www.vectura.com
RISK MANAGEMENT AND INTERNAL CONTROL
Our risk management process is designed to ensure that existing or emerging significant risks are identified, assessed, managed and reported to relevant stakeholders in a timely manner to inform and support decision making. This process has been in place for the year under review and up to the date of approval of the Annual Report and Accounts.
Our process aims to mitigate the significant risks faced by Vectura in accordance with our risk appetite. As already noted in the Strategic report, the Group is transitioning its business model towards offering development services where a smaller proportion of the overall contract value is delivered through contingent milestones. This new business model is lower risk and provides for a smoother revenue profile.
It is recognised that no risk management process can provide absolute assurance against loss.
This section provides an overview of our risk management process, the key risks faced by the business, and the actions that we have taken to mitigate them. Not all the risks identified as part of our risk management processes are detailed in this section; instead we focus on those risks that the Directors believe to be the most important and which could cause Vectura's results to differ materially from expected and historical results and significantly impact our strategy. Not all of these risks are within the control of the Group and other factors besides those listed may affect the Group's performance. As with all businesses operating in a dynamic environment, some risks may not yet be known whilst other low-level risks could become material in the future.
Objectives of our risk management process:
-- to ensure that the risk appetite of the Board is embedded throughout the organisation and fully understood by those who are responsible for managing risk and making key decisions across the business;
-- to identify and assess the likelihood and potential impact of the risks that Vectura faces in the execution of its strategy and the operation of its business model, and ensure that appropriate mitigating actions and controls are in place, such that the residual risk is aligned to the risk appetite of the Board;
-- to control systematic risks within the organisation by maintaining a system of internal controls to manage risks in decision making, legal contract management, quality and regulatory processes and the processing of financial transactions; and
-- to ensure that identified risks are reported to relevant stakeholders in a timely manner to facilitate effective decision making.
The Audit Committee reviews the effectiveness of Vectura's risk management and internal control at least annually, on behalf of the Board. This review has been undertaken during the year and the Board believes that it has taken all reasonable steps to satisfy itself that the risk management process is effective and fit for purpose. No material control weaknesses or deficiencies were identified as part of this review.
Brexit
In response to the uncertainty as to the terms of the UK exiting the EU following the referendum on 23 June 2016, an internal taskforce was formed with members from the Group's Finance, Legal, Regulatory, Supply Chain and HR functions. The purpose of the taskforce was to identify risks and form risk mitigation strategies in the event of a disorderly or "hard" Brexit. Despite the UK exiting the EU on 31 January on favourable terms under the Withdrawal Agreement, the implementation period completes on 31 December 2020. Therefore, if the UK and EU fail to agree on a beneficial trading relationship by this date, or fail to extend the implementation period, then a hard Brexit will arise. Therefore, risk mitigation in the event of a "hard" Brexit is still relevant and ongoing.
Our approach to assessing risk
Risk is assessed net of the application of current control activities using a standard matrix which considers the potential likelihood of a risk event occurring and the potential impact on the business were such an event to occur. The output of this matrix allows the business to prioritise risks and mitigating actions. Risks are considered within the timeframe of at least three years, which is the same period that has been used in the Viability statement.
How our principal risks have evolved since the 2018 Annual Report
The principal risk of "Failure or delay in partnering VR647 for Phase III development" materialised in 2019. Accordingly, this risk is no longer a principal risk.
Following the shift to a CDMO business model, a new principal risk of "Failure to win new customer contracts for development services and execute these profitably" has been added. In addition, in recognition of the importance of IT to the Group and increased regulation around data privacy, a new principal risk has been added, being "Failure to protect critical and sensitive data and systems".
Our risk management framework
Setting the tone (R) Designing the system (R) Completing the review The Board Executive Leadership Team Project managers and Accountable for carrying Responsible for ensuring senior leaders out a robust assessment that the risk management Responsible for updating of the principal risks and internal control systems project and functional facing Vectura, including are appropriately designed, risk registers and those threatening its business implemented and aligned reporting those considered model, future performance, to the Board's risk appetite. key to the Executive solvency and liquidity. Responsible for ensuring Leadership Team. Responsible for conducting that the risk appetite Responsible for implementing an annual effectiveness of the Board is appropriately and monitoring mitigating review of Vectura's risk understood by risk owners actions and controls. management and internal and key decision makers. Responsible for informing control systems, and the Responsible for reviewing project and functional principal risks facing the teams about risks and Vectura. This review covers business-wide and project ensuring that mitigating
all material controls, risk registers. actions are carried
including financial, operational Responsible for conducting out.
and compliance controls. an annual assessment of
Responsible for reporting its key principal risks
to shareholders about Vectura's to ensure controls are
risk management process. in place and, where gaps
are identified, plans
are assigned to address
them.
------------------------------ -----------------------------
Review of process and outputs -- Review of high risks -- Risk registers
------------------------------ -----------------------------
Our corporate goals
1 Financial accountability
2 Transform the Company into a successful CDMO
3 Drive product development and delivery management excellence
4 Quality and operational excellence
Principal risks specific to Vectura's business model - Brexit
Short-term supply chain disruption Adverse regulatory changes resulting
from the UK exiting the implementation in higher operating costs over the
period on 31 December 2020 without short, medium and longer term
agreeing a beneficial trading relationship
with the EU (a "hard" Brexit)
Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact:
Stable 1, 4 Stable 1, 4
------------------------- ----------------------------------- -------------------------- ---------------------------------
What is the risk? What is the risk?
The Group's largest single product, If the UK fails to agree a beneficial
flutiform(R) , is manufactured in trading relationship before the
the UK and commercialised by its transition period ends on 31 December
partners in Europe, Japan and Rest 2020, future trading with the EU
of World. The Group imports raw and other countries may result in
materials into the UK and the Group's increased costs for Vectura, for
partners export flutiform(R) from example costs associated with the
the UK into overseas markets. Delays application of new import or export
to cross-border movement of goods tariffs.
could disrupt the flutiform(R) supply In addition, from a regulatory perspective,
chain. an EU legal entity is required for
What would the impact be? medicinal product and medical device
Major disruption to the flutiform(R) submissions and clinical trials
supply chain could result in lost in the EU. Vectura also requires
product supply revenues and lost a notified body with a legal entity
in-market sales which generate royalties in the EU. A notified body conducts
for Vectura. If in-market sales conformity assessments for European
are lost, patients may switch to directives related to medical devices.
alternative products and not switch What would the impact be?
back when availability returns. Trading with the EU without a free
What could cause the risk to be trade agreement could impact the
realised? Group as follows:
* Disruption at ports of entry and exit which * tariffs on raw materials imported from the UK for
significantly slows the movement of goods such that flutiform(R) reducing product supply margins. These
stocks of products in overseas markets cannot be are incurred directly or via supplier price
sufficiently replenished, or imports of raw materials increases;
are limited, reducing manufacturing output below
normal levels.
* additional testing or regulatory compliance costs to
Vectura, which erode product supply margins; and
* Alternative routings or methods of transportation are
unavailable.
* adverse regulatory changes increase costs of
compliance, constraining funds for investment.
* New flutiform(R) release testing capability for the
EU does not perform to the required level, slowing or
reducing the release of batches into the EU. What could cause the risk to be
realised?
A beneficial trading relationship
How do we manage the risk? between the UK and EU is not established
* Partners have reviewed stock levels in light of before the transition period ends
Brexit risks, and these have been increased where on 31 December 2020.
deemed appropriate. Mitigation of these risks is Insufficient expertise and resources
reviewed regularly by the Group and its partners. are available to deal with increased
compliance activity.
How do we manage the risk?
* The Group has reviewed its raw material inventory * The Group has sought out guidance and intelligence
levels and has built stocks where appropriate. from the relevant professional bodies and trade
organisations to shape its planning.
* Vectura, partners and suppliers have engaged
third-party logistics providers with import and * The Group has established a legal entity within the
export expertise. EU to enable it to comply with EU regulations for
medicinal products and devices. The Group has also
appointed a new EU notified body.
* Alternative routings or methods of transportation
available to Vectura, suppliers and partners have
been reviewed and contingency plans developed. * The Group has established a capability to perform EU
release testing post 31 December 2020.
* Training of internal supply chain staff on
import/export complexities has been undertaken. * Resource and training requirements have been assessed
and actioned accordingly.
* Provision for flutiform(R) release testing in the EU
has been implemented.
Principal risks specific to Vectura's business model - non-Brexit
Failure to win new customer contracts Supply chain disruption for development services and execute these profitably Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact: New risk 1, 2 Stable 1, 4 --------------------------- --------------------------------- -------------------------- --------------------------------- What is the risk? What is the risk? Developing a strong pipeline of Vectura manages the supply chain opportunities and converting these for certain commercial products (flutiform(R), opportunities into revenues is critical AirFluSal(R) Forspiro(R) and Breelib(TM)) to the success of the new CDMO business and also relies on suppliers for model. the provision of quality compliant In addition, Vectura must be able materials for R&D. to deliver customer requirements What would the impact be? profitably which requires efficient Major disruption to, or failure of, management of development capacity these supply chains, particularly and investment in new technologies for flutiform(R), could result in and intellectual property. lost revenues and business opportunities, What would the impact be? stock shortages, liabilities and Vectura is unable to deliver growth significant damage to profitability from competing in the inhaled CDMO and prospects for Vectura. Such disruption market. could be either quality or capacity What could cause the risk to be related.
realised? What could cause the risk to be realised?
* Insufficient investment in business development * Supply chain disruption involving a single point of
resources and marketing to drive presence and failure for which Vectura has high dependency and
awareness. limited resilience.
* Organisation structure, processes and systems not fit * Supplier capacity constraints.
for purpose.
* Supplier loss of licence or regulatory action
* Market offering not competitive, for example: pricing, impacting Vectura.
technology and delivery timelines.
How do we manage the risk?
* Inefficient cost base to deliver inhaled development * Vectura has strong working relationships with its
services. suppliers; we have established due diligence
processes to ensure that our stringent quality
standards are maintained and we have put in place
How do we manage the risk? appropriate systems that will provide an early
* The recently appointed CEO brings a wealth of CDMO warning of potential issues.
experience.
* A dedicated Commercial Quality Director has oversight
* The Group is recruiting experienced business of release of commercial product and ensures
development personnel in the EU and US and investing appropriate management of quality for commercial
in branding and marketing. products.
* A technology roadmap is in place which is reviewed * Monthly meetings are held to discuss customer demand
annually. Funding for execution of the roadmap is in forecasts and to review Vectura's ability to meet
place. these forecasts. Vectura has established contingency
arrangements to ensure that production capacities
exceed forecast demand so that it would be possible
* A CDMO strategy implementation project is in place to catch up on any shortfall in production or meet
with appropriate governance and resourcing by unexpected demand. Appropriate levels of safety stock
experienced senior leaders. are maintained.
* KPIs have been defined and are currently being * Supply chain mapping has been undertaken, and is
implemented to track progress on business development regularly reviewed, to identify potential points of
and operational efficiency. failure and mitigating actions. Where economically
feasible, additional sources of supply are
established and contracts negotiated to include
* Financial targets set and finance business partners appropriate provisions for replacement of defective
in place to support delivery of an efficient cost goods.
base and appropriate pricing of services.
* The Group also has appropriate insurance, but it is
not possible to insure against all risks and not all
insurable risks can be fully insured on an
economically feasible basis.
Failure to launch VR315 (US) in Failure of partners to deliver on
a competitive timeframe their obligations
Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact:
Decreasing 1, 3 Stable 1, 4
--------------------------- --------------------------------- ------------------------- ----------------------------------
What is the risk? What is the risk?
On 10 May 2017, our partner, Hikma Vectura earns revenues from a number
Pharmaceuticals PLC ("Hikma"), received of partnered in-market assets, most
a Complete Response Letter (CRL) notably flutiform(R), and is dependent
from the US FDA in relation to its upon these partners for maintaining
abbreviated new drug application regulatory approvals and for the
for its generic version of GSK's marketing of the products. Development
Advair Diskus(R). This CRL was categorised service revenues also depend on partners
as "Major". delivering on their obligations in
In November 2019, Hikma submitted order for programmes to progress
responses to the US FDA for review, to plan.
which includes data from a further Royalty revenues depend on partners
clinical endpoint study. both to generate sales of the product
Vectura believes the submission but also to accurately calculate
addresses the outstanding questions and pay over royalties according
raised by the FDA in its CRL and to the terms of the licence.
remains confident in the prospects What would the impact be?
for the approval of VR315 (US). Failure of a partner to maintain
If VR315 (US) is approved, we are regulatory approvals, to comply with
likely to be the second generics relevant codes or regulations, or
company on the market after Mylan to commit an appropriate level of
and the third generic including resource could result in loss of
the authorised generic distributed product supply revenues to Vectura.
by Prasco Laboratories. Failure by a development partner
What would the impact be? to deliver on their obligations during
The product is launched later than the development phase could result
those of competitors resulting in in a delay or cessation of development.
loss of potential future revenues This in turn could cause a delay
and funds for investment. in development activities which could
What could cause the risk to be reduce revenues. It may also delay
realised? the product reaching the market which
* VR315 (US) not being the second generic of GSK's could undermine the product's commercial
Advair Diskus(R) product. potential and result in lower returns
on investment for Vectura.
The marketing, supply chain and commercialisation
* Sales (volumes and/or pricing) of GSK's Advair strategies deployed by partners for
Diskus(R) could decline faster than expected prior to existing on-market products could
launch of VR315 (US). materially impact the level of royalties
and sales milestones earned by Vectura.
What could cause the risk to be realised?
How do we manage the risk? * Change in partner strategy or priorities.
* The Group is unable to take direct action to mitigate
this risk.
* Partner viability or insolvency.
* We will continue to support Hikma in responding to
any queries raised by the US FDA to the November 2019 * Partner's marketing, supply chain or
resubmission. In addition, we will continue to commercialisation strategy is sub-optimal or not
monitor the market and progress of competitors. executed successfully.
Risk movement * Partner failure to obtain appropriate pricing and
Decreasing following resubmission reimbursement.
in November 2019 and Sandoz discontinuing
development of its generic version
in 2020. * Partner failure to comply with relevant legislation
or regulations.
* Partner failure to comply with the terms of a
licence.
How do we manage the risk?
* All collaborations are performed under a suitable
legal agreement which is assessed by Vectura and its
legal advisors. Non-performance of these obligations
can result in escalation within the partner
organisation, or appointment of a third-party audit,
independent arbitration or, in extreme cases, legal
action.
* Typically, for collaborations, a joint steering
committee (JSC) is established involving both Vectura
and partner personnel. This provides Vectura with a
mechanism to ensure that any joint project activity
is managed appropriately, and where concerns can be
escalated.
* At a product or project level, regular operational
meetings take place to review progress, plans and
forecasts.
* The Group also has a Commercial and Business
Development department which maintains regular
dialogue with existing and potential new partners.
Failure or delay in achieving development Failure to develop the FOX(R) nebuliser
milestones required to advance the platforms to secure future growth
generic product pipeline in new customer contracts
Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact:
Stable 1, 4 Stable 1, 2, 4
-------------------------- --------------------------------- -------------------------- ---------------------------------
What is the risk? What is the risk?
Failure or delay in achieving development The Group receives significant interest
milestones for the Group's generic in its FOX(R) nebuliser technology
programmes would have a material from existing and prospective customers.
adverse impact on the value of these The Group is also in the process
programmes. of closing down its German site,
What would the impact be? where its nebuliser technology originated.
Termination of projects or significant Continuing to develop this technology
delays could materially affect future is critical to securing future growth
revenues, profitability and prospects in customer contracts as a provider
of Vectura. of inhalation development services.
What could cause the risk to be What would the impact be?
realised? Failure to be competitive versus
* Manufacturing issues associated with a particular other similar platforms, and risk
device or product for clinical trials. losing current or future revenue
opportunities.
What could cause the risk to be realised?
* Ineffective design and execution of development * Failure to transfer knowledge and skills to the UK
activities. from the Group's German site following the
announcement of the German site closure in 2018.
* Insufficient capacity or prioritisation of competing
projects. * Failure to develop the platform to respond to
customer demands and a growing range of formulations.
How do we manage the risk?
* Vectura has an established governance process to * Failure to maintain quality standards.
oversee the conduct and delivery of all development
programmes and to ensure that any potential changes
to the development plan or budget are identified and How do we manage the risk?
discussed in a timely manner, such that mitigating * In respect of the closure of the Group's German site,
activities or actions can be put in place as transition of knowledge is progressing well. A
required. retention scheme is in place for key employees from
the closing site and resources have been recruited
into receiving sites in the UK. A transition team
* Individuals with the necessary skills and experience continues to exercise oversight.
have been recruited to lead and oversee the
development of our generic pipeline assets. Vectura
continues to work with a network of experienced * We work closely with our third-party suppliers to
consultants and contractors who provide additional continue to improve the platform, including processes,
support and expertise as required. controls and components. These processes and controls
are documented, and supplier audits ensure they are
operated. Remediation is undertaken where issues are
* Operational excellence initiatives within the identified.
development function have been and continue to be
implemented to maximise development capacity.
* An integrated Programme team ensures all activities
which impact the development of the FOX(R) nebuliser
platform are managed cohesively.
Principal risks specific to the industry in which Vectura operates
Changes in the regulatory, operating Failure to attract or retain talent/key
or pricing environment personnel
Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact:
Stable 1, 2 Stable 3, 4
-------------------------- --------------------------------- ------------------------- ----------------------------------
What is the risk? What is the risk?
Vectura operates in the highly regulated Vectura relies upon a number of key
international pharmaceutical industry, qualified management, scientific,
which is subject to change. technical, marketing and support
What would the impact be? personnel. Competition for such personnel
Changes in the pharmaceutical regulatory is intense and there can be no assurance
landscape, operational restrictions that the Group will be able to continue
and downward pricing pressure could to attract and retain such personnel.
adversely impact: What would the impact be?
* the number and value of customer opportunities to The loss of talent or key personnel
provide development services; and could adversely impact the effectiveness
of the Group's operations.
What could cause the risk to be realised?
* the value or viability of the generic pipeline * Inadequate succession planning and talent management.
products or those products already developed and
commercialised by partners.
* Organisational disruption and/or change.
What could cause the risk to be
realised? * Failure of reward and/or incentive strategy.
* Political change.
How do we manage the risk?
* Competitor pricing strategies. * Vectura seeks to develop employees for current and
future roles and our career development and talent
management programmes remain a key area of focus for
* Regulatory action on pricing. the Executive Leadership Team. We continue to invest
in ongoing training and development with leadership
and management development programmes in place.
How do we manage the risk?
* Regulatory changes tend to be considered due to
lengthy consultations and discussions between * Succession plans for key roles have been developed to
regulators and the pharmaceutical industry. We work ensure a talent pool is identified, developed and
closely with expert regulatory advisors and, when ready for appointment. These plans include the
appropriate, seek advice from regulatory authorities identification of "emergency successors" in the case
on the design of key development plans for of unanticipated and immediate absence.
pre-clinical and clinical programmes.
* Vectura regularly benchmarks its reward strategy to
* We work with a number of blue-chip pharmaceutical ensure it continues to incentivise, motivate and
partners who have significant regulatory expertise. retain our talented employees. This benchmarking
covers both short and long-term incentives. Salaries
of all employees are reviewed annually to ensure we
* Our technology roadmap is reviewed at least annually remain market competitive.
and takes account of evolving market trends, customer
needs and the competitive landscape.
Failure to protect intellectual Failure to protect critical and sensitive
property data and systems
Risk movement: Corporate Goals impact: Risk movement: Corporate Goals impact:
Stable 1, 2 New risk 4
-------------------------- ---------------------------------- ------------------------- ---------------------------------
What is the risk? What is the risk?
Patent infringement by a competitor Data and information technology systems
organisation or failure to obtain are critical to our operations. Significant
patents for technology developed disruption to systems due to computer
by Vectura could impact on the value viruses, cyber threats, malicious
of Vectura's market offering as intrusions or unintended or malicious
a CDMO and inhibit the delivery behaviour by employees, contractors
of the generic pipeline. or service providers could affect
What would the impact be? the Group's operations. In addition,
Such infringement or failure could such disruption may compromise the
result in Vectura or a customer integrity of information and result
having to take a license to third-party in the inappropriate disclosure of
IP in order to develop a product, confidential information, or may
or even being unable to commercialise lead to false or misleading information
a product, materially impacting about the Group.
Vectura's future revenues, profitability The cyber security incidents that
and prospects. we have experienced to date have
What could cause the risk to be not resulted in significant disruption
realised? to our operations. However, as the
* Competitor successful in challenging Vectura or threats evolve we cannot provide
partner patent. assurance that our efforts in protecting
our systems and data will always
be successful.
* Critical information missing from filed patent. What would the impact be?
The loss of proprietary or other
commercially sensitive information
How do we manage the risk? may provide competitors with a competitive
* Dedicated internal resource, supplemented with advantage resulting in competitive
external expertise, files for and prosecutes patents or operational damage to the Group.
and other forms of intellectual property. The disclosure of confidential information
about the Group's employees, customers,
suppliers or other third parties
* In conjunction with our partners where relevant, could also expose the Group to liability.
Vectura takes steps to enforce these rights. The potential for fraud from manipulation
of payment processes.
Failure to effectively prevent or
* Third-party rights that may be of interest to and/or respond to a major breach or cyber-attack
have adverse effects on Vectura's activities are also may also subject the Group to significant
monitored so that action can be initiated where reputational damage.
appropriate. What could cause the risk to be realised?
* Security vulnerability in our systems.
* External cyber-criminal activity.
* Employee or contractor non-maliciously introduces a
vulnerability which is exploited by a malicious
actor.
* Lack of employee training around the cyber threat.
How do we manage the risk?
* Security and access control standards in place with
compliance monitored.
* Vectura has a dedicated security engineer who
provides oversight and actively monitors cyber
security.
* Daily backup of systems and data.
* Employee laptops and mobile phones are protected via
secure encryption.
* Cyber security training provided to all employees.
* Cyber risk insurance cover in place.
* Ongoing programme to enhance our information and
system security capabilities.
RELATED PARTY TRANSACTIONS
On 21 June 2019, Vectura Group plc, the parent entity, sold its investment in a subsidiary, Vectura Group Investments Limited, to a fellow subsidiary Vectura Group Services Limited. The transaction was performed at GBP147.6m book value in accordance with s845 of the Companies Act 2006 and settled one-third for cash and two-thirds for a loan receivable. On disposal of the investment in Vectura Group Investments Limited, associated Group merger reserves of GBP125.1m were released to retained earnings, one-third being considered realised and two-thirds considered unrealised until such time in the future that the debtor is repaid.
On 30 June 2019, Vectura's CEO James Ward-Lilley stepped down and left the Group. Remuneration related to his services and departure is provided in the Remuneration report.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, was GBP3.0m and is set out below:
Year ended Year ended
31 December 31 December
2019 2018
GBPm GBPm
----------------------------------------------- ------------- -------------
Short-term employee benefits 1.4 0.8
Annual incentive plan 0.7 0.7
Non-Executive Directors' fees 0.6 0.5
Post-employment benefits 0.1 0.1
Other 0.2 0.3
----------------------------------------------- ------------- -------------
Total remuneration of key management personnel 3.0 2.4
----------------------------------------------- ------------- -------------
Please refer to the Remuneration report for the remuneration of each Director. The Remuneration Report only includes Directors who held office in 2019.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Group and parent company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and applicable law and have elected to prepare the parent company financial statements in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable, relevant, reliable and prudent;
-- for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;
-- for the parent company financial statements, state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the parent company financial statements;
-- assess the Group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' remuneration report and Corporate governance statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the Annual Report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
-- the Strategic report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
Signed on behalf of the Board on 16 March 2020.
Will Downie Paul Fry Chief Executive Officer Chief Financial Officer 16 March 2020 16 March 2020
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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(END) Dow Jones Newswires
April 20, 2020 10:06 ET (14:06 GMT)
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