Corporate social responsibility statement

The Directors recognise the importance of corporate social responsibility and endeavour to take into account the interests of the Group's stakeholders, including its investors, employees, customers, suppliers and business partners when operating the business. The Group believes that having empowered and responsible employees who display sound judgement and awareness of the consequences of their decisions and actions, and who act in an ethical and responsible way, is key to the success of the business.

Our people

Employees

The key to our success is to develop core values within all of our staff which lead to an environment where they believe that what they are doing is making a difference. The core values with which we operate are participation, achievement, trust and respect, innovation and enthusiasm.

The Group recognises that in an industry based on innovation and research and development, its employees are some of its biggest assets and it seeks to communicate and, where appropriate, consult with them on matters affecting them as employees, in the correct manner.

The Group is committed to achieving equality of opportunity in all its employment practices, policies and procedures. Employees are valued highly and their rights and dignity are respected. The Group does not tolerate any harassment or discrimination. The Group practises equal treatment of all employees or potential employees irrespective of, inter alia, their race, creed, colour, sexual orientation, nationality, ethnic origin, religion, disability, age, gender or marital status. The equal opportunities policy covers all permanent and temporary employees (including Non- Executive Directors); all job applicants, agency staff, associates, consultants and contractors. The Group also endeavours to be honest and fair in its relationships with customers and suppliers and to be a good corporate citizen, respecting the laws of countries in which it operates.

The Group provides training and development appropriate to individual needs and offers remuneration packages (including pensions, private medical, permanent health and life insurance) and a working environment that are designed to be both fair and competitive with larger companies within the industry. Participation in the Group's share option schemes is extended to all of the Group's employees. More details are provided in the Report on remuneration.

Employee involvement

During the year, Vectura continued its policy of providing employees with information about the Group through regular presentations by Directors, management and the Group's intranet. In addition, regular meetings are held between management and employees to allow for a free flow of information and ideas. Staff forums are established to comply with the requirements of Information and Consultation of Employees Regulations 2004. The forums ensure implementation of the EC Directive.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. With regard to existing employees and those who may become disabled, Vectura's policy is to examine ways and means to provide continuing employment under its existing terms and conditions and to provide training and career development, including promotion, wherever appropriate.

Family-friendly employment policies and employee welfare

The maternity and paternity leave and pay policies conform to statutory requirements. Flexible approaches to return to work after maternity leave and part-time or non-standard hours and work patterns are considered where viable.

Ms Hyland is the board member responsible for overseeing responsibility for non-discrimination issues.

Health and safety

Vectura has a Health and Safety Committee to review health and safety standards within the Group. The Group considers health and safety to be a priority in its workplaces and a senior person is responsible for overseeing appropriate management. The Group has an excellent safety record and there have been no major incidents or accidents to report to the Health and Safety Committee. The Group has provided specialist training to individuals who are responsible for health and safety, and general health and safety training to all staff.

The Group continues to keep health and safety practices under review.

Environment

We are committed to minimising the impact of our activities on the environment and energy efficiency is the most important means of climate protection currently available to the Group. Due to the nature of its activities, Vectura considers that it has a low environmental impact.

Vectura has adopted an environmental policy, which can be found on our website. The policy sets out a commitment to reducing gas and electricity consumption and CO2 emissions per employee at the first assessed site, Chippenham, from the quantified levels for 2008/09. Quantifiable targets are established and we will monitor performance against these targets and progressively adopt the principles of environmental management systems to ISO14001 standards.

Our modern cleanroom complex at Chippenham for the manufacture of investigational medical products up to Phase III clinical trials was designed to be environmentally friendly by re-circulating treated and filtered air and using fresh air only for pressurisation. The running costs are significantly reduced when compared with a 100% fresh air facility. In addition, the refrigeration system uses a refrigerant which has an ozone depletion factor of zero and also has a very low global warming factor.

A Green Committee meets regularly and has responsibility to pursue objectives for environmental sustainability and carbon reduction within all Vectura operations.

Use is made of the company intranet to communicate widely to all staff on environmental affairs.

Vectura is committed to undertaking an environmental impact review of new product developments, site development and of merger and acquisitions.

Ms Hyland is the board member to whom responsibility for environmental issues has been delegated.

Waste management

Initiatives to effectively manage and reduce waste have been implemented throughout the Group, including recycling of all paper waste, aluminum cans, printer toners/cartridges and redundant mobile telephone handsets. We aim to comply with all legislation in this area, including using registered waste disposal contractors.

Ethical and social policies

The Group's principal activities are undertaken within the pharmaceutical industry, which is subject to a highly regulated ethical framework with which the Group complies. In addition, the Group seeks to conduct its activities generally in accordance with good business ethics.

Vectura has adopted a clear anti-bribery policy and communicated it to all employees so they can recognise and avoid the use of bribery and report any suspicion for rigorous investigation. The Group does not consider it appropriate at its current stage of development to make significant financial donations to charitable, community or social activities, but does encourage its employees to take part in charity fundraising events. Political donations are prohibited and advance approval from management is required before management and staff may accept or solicit a gift of any kind.

Through the use of a risk register the Group has identified specific company-wide risks that include those in the key activities of intellectual property, medical and regulatory affairs, clinical development, pharmaceutical operations and device development.

Conclusion

Vectura considers that its most important contribution to the communities within which it operates is to provide high-quality employment opportunities and to develop therapies for diseases.

Corporate social responsibility matters are considered as part of the risk assessments of the Group and are part of the considerations when setting remuneration targets.