Directors' report



The Directors present their Annual Report on the affairs of the Company and Group, together with the financial statements and Auditors' report for the year ended 31 March 2010.

Principal activity

The principal activity of the Group undertaken during the year was the on-going research and development and commercialisation of novel therapeutic products and drug delivery systems for human use.

Review of business

Key events during the past year are referred to in the Highlights, Chairman and Chief Executive's report, the Business review and the Financial review. During the year, the Board has considered the key risks and uncertainties of the business, which are summarised in the Business review. The Board has reviewed the risk management policies in place, as summarised in the Corporate governance statement.

Results and dividends

The group loss for the year, after taxation, amounted to £10.2m (2009: £16.7m). The Directors do not recommend the payment of a dividend (2009: £nil).

Future developments

The Directors expect the level of investment in research and development expenditure to increase, which will give rise to further losses in the following year.

Directors

Membership of the Board (together with Directors' biographies) is shown in the section on Board of Directors. Details of Directors' remuneration and their interests in the share capital of the Company are given in the Report on remuneration. None of the Directors has any interest in any contract of significance to the financial statements.

Employees

Details on the involvement of employees are disclosed in the Corporate social responsibility statement.

Financial instruments

The policy and practice of the Group with regard to financial instruments is disclosed in note 22 of the financial statements.

Payment of creditors

The Group's policy is to agree payment terms with the suppliers at the start of business relationships and to abide by them. The typical terms are 30 days (2009: 30 days).

Political and charitable donations

Vectura encourages employee involvement in charitable causes. During the year, Vectura made contributions amounting to £350 (2009: £350) to local charitable organisations in the UK. These contributions were made in lieu of posting seasonal greetings to customers. There were no political donations during the year (2009: £nil).

Directors' indemnities

The Company has granted an indemnity to its Directors against liability in respect of proceedings brought by third parties, which remains in force as at the date of approving the Directors' report.

Significant shareholdings

At 31 May 2010, the nearest practical date to the date of this Report, the Company had a total of 3,737 ordinary shareholders and 323,949,323 ordinary shares in issue.

The Directors had been notified of the following substantial holdings in the Company's share capital as at the close of business on 28 May 2010:

Share price

The mid-market share price as shown by the London Stock Exchange Daily Official List was 47p on 31 March 2010. The midmarket share price ranged from 44p to 101.9p during the year to 31 March 2010. The average share price for the period was 73.75p.

Corporate social responsibility statement

The Group's policies on the environment, health and safety, ethical and social issues and its employees are described in the corporate social responsibility statement.

Going concern

Although the current economic conditions may place pressures on customers and suppliers which may face liquidity issues, the Group's product diversity and customer and supplier base substantially mitigate these risks. In addition, the Group operates in the relatively defensive pharmaceutical industry which we expect to be less affected compared to other industries.

The Group has £64m of cash and cash equivalents as at 31 March 2010 (2009: £74m). The Board operates an investment policy under which the primary objective is to invest in low-risk cash or cash equivalent investments to safeguard the principal. The Group's forecasts, taking into account likely revenue streams, show that the Group has sufficient funds to operate for the foreseeable future.

After reviewing the Group's forecasts, the Directors believe that the Group is adequately placed to manage its business and financing risks successfully despite the current uncertain economic outlook. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

Annual General Meeting

The Annual General Meeting will be held at the offices of Olswang, 90 High Holborn, London WC1V 6XX on 22 September 2010 at 11.00 a.m. Details of the business to be transacted at the forthcoming AGM will be sent to shareholders in a circular.

Auditors

Deloitte LLP have expressed their willingness to continue in office as auditors and a resolution to re-appoint them will be put to the members at the forthcoming Annual General Meeting.

The Directors that were members of the Board at the time of approving the Directors' report are listed in the Board of Directors section. Having made enquiries of fellow Directors and of the Company's auditors, each of these Directors confirms that:

  • to the best of each Director's knowledge and belief, there is no information relevant to the preparation of their report of which the Company's auditors are unaware; and
  • each Director has taken all the steps a director might reasonably be expected to have taken to be aware of relevant audit information and to establish that the Company's auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

By order of the Board

Anne Hyland
Company Secretary

6 June 2010

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