Vectura Group plc

Annual Report and Accounts for the year ended 31 December 2020, Annual General Meeting 2021 and General Meeting 2021

Chippenham, UK - 23 April 2021: Vectura Group plc (LSE: VEC) ("Vectura", the "Group" or the "Company") announces that it has released the following documents today:

·      Annual Report and Accounts for the year ended 31 December 2020;

·      Notice of Annual General Meeting ("AGM") 2021;

·      Form of Proxy for the AGM;

·      Notice of General Meeting ("GM") 2021;

·      Form of Proxy for the GM;

·      Dividend Reinvestment Plan (''DRIP'') Form of Election; and

·      DRIP Terms and Conditions.

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/#/homepage.

The AGM is scheduled to be held at 10.30 a.m. on Thursday 27 May 2021. 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. However, given the roadmap out of lockdown measures in force, shareholders will not be allowed to attend the AGM in person. Shareholders are requested to submit their votes by proxy and appoint the Chair as their proxy. If the restrictions on public gatherings are lifted in full before the scheduled date of the AGM the Company will notify shareholders of their right to attend the meeting in person, as well as any changes to the time, date or location of the AGM.

The GM is scheduled to be held at 11.00 a.m. on Thursday 27 May 2021 (or as soon thereafter as the AGM is concluded or adjourned). The Board is closely monitoring the impact of Coronavirus (COVID-19) and it remains the intention of the Board to hold the GM as planned. However, given the roadmap out of lockdown measures in force, shareholders will not be allowed to attend the GM in person. Shareholders are requested to submit their votes by proxy and appoint the Chair as their proxy. If the restrictions on public gatherings are lifted in full before the scheduled date of the GM the Company will notify shareholders of their right to attend the meeting in person, as well as any changes to the time, date or location of the GM.

In compliance with DTR 6.3.5, the following information is extracted from the Annual Report and Accounts for the year ended 31 December 2020 and should be read in conjunction with the Company's Final Results announcement issued on 18 March 2021. 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 Annual Report and Accounts for the year ended 31 December 2020. This announcement is not a substitute for reading the Annual Report and Accounts for the year ended 31 December 2020 in full.

-Ends-

For more information, please contact:

Vectura Group plc

John Murphy - Company Secretary                               +44 (0)207 881 1206

Olivia Manser - Director, Investor Relations                  +44 (0)7947 758 259

David Ginivan - VP Corporate Communications           +44 (0)7471 352 720

Consilium Strategic Communications                       +44 (0)20 3709 5700

Mary-Jane Elliott / Melissa Gardiner / David Daley 

About Vectura

Vectura is a leading specialist inhalation contract development and manufacturing organisation that provides innovative inhaled drug delivery solutions that enable customers 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 twelve 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 framework is designed to ensure that existing or emerging significant risks are identified, assessed and managed, and are 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. It is recognised that no risk management process can provide absolute assurance against material misstatement and loss.

At the Board meeting in January 2021, the Board completed its year-end assessment of risks. This followed the Audit Committee's formal assessment of risk and internal controls also in January 2021, which was supported by a detailed risk assessment by the Executive Leadership Team. 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.

Objectives of our risk management process:

•     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.

Evaluation of risks

A risk scoring matrix is used to ensure risks are evaluated on a consistent basis. 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.

Principal risks

Not all the risks identified as part of our risk management processes are considered to be principal risks. The principal risks reported in the following section are those risks that the Directors believe to be the most important and which could cause Vectura's results to differ materially from expected or historical results, or to 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.

Emerging risks

Emerging risks are new risks which may challenge us in the future. They have the potential to crystallise at some point in the future but are unlikely to impact the business during the next year. The potential future impact of such risks is often more uncertain. They may begin to evolve rapidly or simply not materialise.

We monitor our business activities and external and internal environments for new, emerging risks and changes to risks to ensure that these are managed appropriately. This process is fully embedded within the overall risk management framework.

How our principal risks have evolved since the 2019 Annual Report

This year we have seen risk scores for our principal risks increase relative to 2019. This primarily reflects the fact that the business is in a transitionary phase as it pivots towards the new CDMO business model, as well as the impact of a number of changes in the macro environment, most notably the COVID-19 pandemic and the increased frequency of cyber-attacks.

A new principal risk, "COVID-19", has been added to the Group's risk register since the Annual Report and Accounts 2019, reflecting the current pandemic situation. Whilst to date there have been no material adverse impacts of COVID-19 on the Group, the situation is constantly evolving and is being monitored as a principal risk. Refer to pages 6 and 7 for detail on how the Group has responded to the pandemic.

Following the UK exiting the EU on 31 December 2020, it is no longer considered necessary to have specific Brexit-related risks as they have either materialised, or the remaining risks are considered to be adequately managed under other existing principal risks, for example "Supply chain and product quality". The previous principal risk, "Failure of partners to deliver on their obligations" has been disaggregated into "Co-development partner risk" and "flutiform^® partner risk", as it more appropriately reflects how these risks are managed within the Group.

Following the FDA approval for generic Advair^® in December 2020, the principal risk "Failure to launch VR315 in a competitive timeframe" has been removed from the risk register. Reflecting the change in the strategic emphasis of the Group, the risk register has been further simplified with the consolidation of the principal risk "Failure or delay in achieving development milestones required to advance the generic product pipeline" into "Co-development partner risk".

The Audit Committee and Board also considered emerging risks relating to climate change as part of their annual risk reviews. Rather than climate change being a single principal risk for the Group, climate change has the potential to impact on a range of business processes in different ways, requiring a varied set of mitigations. To reflect this, climate change risks are therefore presented and managed under a number of principal risk headings in the risk register.

Our risk management framework

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

Robust risk management underpins our strategic approach, with each risk monitored by the Board and Executive Leadership Team.

flutiform^® partner risk

Risk movement: Increase

Corporate goals impact: 1, 4

What is the risk?

Damage to flutiform^® performance or long-term value due to actions or omissions of licensee partners.

What would the impact be?

•     Product performance below potential, resulting in lost revenues and reduced returns.

•     Potential under or over valuation of flutiform^® future cash flows, leading to under or over valuation of Vectura shares.

•     Potential damage to Vectura reputation.

Causes

•     Poor commercial strategy and/or sub-optimal promotional effort.

•     Poor demand forecasting leading to an inability to plan capacity, and increasing the risk of stock shortages.

•     Significant organisational change leading to sub-optimal partner decision making.

•     Partner reputational damage reflecting badly on the flutiform^® brand, thereby inhibiting commercial potential.

•     Partner legal and/or regulatory non-compliance resulting in product use restrictions or withdrawal.

•     Partner insolvency or change in control resulting in an inability to effectively promote flutiform^®.

•     Inadequate response to environmental concerns leading to loss of market share and/or additional costs.

Managing the risk

•     Regular interactions with partners at all levels of management, including both formal and informal governance.

•     Visibility of partner marketing plans and commercial forecasts.

•     Independent tracking of flutiform^® in market performance, and broader respiratory market intelligence.

•     Contractual protections, including binding demand periods and change of control provisions.

Technology platform innovation

Risk movement: Increase

Corporate goals impact: 1, 2, 4

What is the risk?

Failure to be able to offer robust, differentiated technologies, which meet present and future customer needs.

What would the impact be?

Failure to differentiate versus other inhalation platforms, leading to losing current or future revenue opportunities.

Causes

•     Insufficient insight into changing customer demands and emerging treatment developments, including climate-related requirements, for example GHG or recyclability.

•     Failure to identify and leverage relevant changes in technology.

•     Lack of the right knowledge and skills within the Group.

•     Failure to allocate sufficient investment to technology platform development.

•     Failure to scale up new technologies reliably.

Managing the risk

•     Consistent mapping of market dynamics and the competitive environment.

•     A technology roadmap and associated investment plan, with clear Executive team level ownership, and regular ELT and Board review.

•     Strong, multi-disciplinary teams with clear focus on technology delivery and scale up.

•     Attracting and retaining key skill sets within the organisation.

•     Active use of external advisors with deep domain expertise.

Co-development partner risk

Risk movement: Increase

Corporate goals impact: 1, 3, 4

What is the risk?

Vectura invests in and earns revenues from a limited number of large development programmes which are structured as co-development agreements. Under these agreements, Vectura co-invests alongside partners in the development of products, with revenues earned through milestone payments and material post-launch royalty streams.

The realisation of future financial returns from these programmes is highly dependent on partner development and commercialisation execution, capital availability, and strategic investment priorities.

What would the impact be?

Failure by a strategic partner to either properly execute on or sufficiently invest in key deliverables during the development phase or subsequent commercialisation could result in a project termination, launch delay, or underperformance of the product in the market. These consequences would result in lower returns on investment for Vectura, and may also adversely affect Vectura's reputation and future prospects.

Causes

•     Change in partner strategy or investment priorities.

•     Change in partner assessment of commercial opportunity, for example due to changes in costs, competition, or macro factors, such as climate-related factors.

•     Partner viability or insolvency.

•     Partner development activities poorly executed.

•     Partner's marketing, supply chain or commercialisation strategy is sub-optimal or not executed successfully.

•     Partner failure to obtain appropriate pricing and reimbursement.

•     Partner failure to comply with relevant legislation or regulations, including climate-related regulations.

Managing the risk

•     All collaborations are performed under a suitable legal agreement which is assessed by Vectura and its legal advisors.

•     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. Where the Group supplies product, regular operational meetings take place to review demand forecasts.

•     At a product or project level, regular operational meetings take place to review progress, plans and forecasts.

•     The Commercial and Business Development department maintains regular dialogue with existing partners.

•     Vectura has an established governance process to 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 discussed in a timely manner such that mitigating activities or actions can be put in place as required.

•     Individuals with the necessary skills and experience have been recruited to lead and oversee the development of our co-development assets. Vectura continues to work with a network of experienced consultants and contractors which provide additional support and expertise as required.

•     Vectura regularly reviews the commercial opportunity for these assets, based on data from both partner and independent sources.

CDMO business development

Risk movement: Increase

Corporate goals impact: 1, 2

What is the risk?

Failure to develop a strong pipeline of CDMO opportunities and convert these into revenues, with an acceptable margin profile.

What would the impact be?

Inability to deliver inhaled CDMO market share, revenue growth and profitability expectations, impacting the success of the new CDMO business model.

Causes

•     Insufficient investment in business development resources and marketing to drive presence and awareness.

•     Market offering is not competitive, for example: pricing, service catalogue, differentiated technology, new climate-related requirements, or delivery timelines.

•     Damage to brand reputation, reducing new customer leads, or repeat business.

Managing the risk

•     The Group has significantly increased the size of the Business Development team, appointing CDMO experienced business development personnel in Europe and the US.

•     Significant investment has been made in the Group's branding and marketing, as well as developing effective digital channels for raising awareness and engaging with potential customers.

•     Service catalogue and pricing are well developed, including competitive assessment.

•     A standard selling methodology, with KPIs to assess the size and quality of the pipeline of new business, is established and regularly reviewed.

•     Consistent mapping of market dynamics and the competitive environment.

•     A technology roadmap and associated investment plan, with clear Executive team level ownership, and regular ELT and Board review.

CDMO execution

Risk movement: Increase

Corporate goals impact: 1, 2, 4

What is the risk?

Inability to meet CDMO customer requirements at the right margins, in order to generate expected financial returns.

What would the impact be?

Failure to generate sufficient financial returns from contracts, loss of new, future or repeat business, and reputational damage.

Causes

•     Failure to invest in footprint, physical capacity and capital assets to support the growth potential of the CDMO business.

•     Shortage of staff with requisite technical skills and experience.

•     Organisation structure, processes and systems not fit for purpose.

•     Inefficient or mismatched cost base to deliver inhaled development services.

•     Additional unplanned costs associated with compliance with environmental regulations (e.g. GHG, recyclability and waste management) which reduce profitability of contracts or loss of business.

Managing the risk

•     Key leadership appointments have been made bringing with them significant CDMO experience.

•     Strong project management function, with clear operational governance.

•     Clear set of operational, capital utilisation and financial KPIs reviewed at a senior level.

•     Prioritisation of capital investments to support forecasted revenue profile.

•      Back up plans enabling rapid expansion of capacity to manage unplanned peaks.

Information and cyber security

Risk movement: Increase

Corporate goals impact: 4

What is the risk?

Data and information are critical to our operations. Significant disruption to systems due to computer viruses, cyber threats, malicious intrusions or unintended or malicious behaviour by employees, contractors or service providers could affect the Group's operations. In addition, failure of people, processes or organisation controls to protect, resulting in loss or misuse of confidential information, is a threat to the Group's operations.

What would the impact be?

•     Significant reputational damage.

•     Significant penalties.

•     Loss of customers and revenues.

•     Potential for fraud.

•     The loss of proprietary or other commercially sensitive information may provide competitors with a competitive advantage.

Causes

•     Security vulnerabilities in existing processes and systems.

•     External cyber-criminal activity.

•     Missing or ambiguous policies, data governance and accountability.

•     Malicious, negligent or accidental actions from employees, suppliers or contracted third parties.

•     Increase in employee remote working.

Managing the risk

•     Training, policies and standards with compliance monitored.

•     Dedicated information security expert, supported by external parties.

•     Appropriate backup of systems and data.

•     Employee laptops and mobile phones are protected via secure encryption with multi-factor authentication in place.

•     Cyber risk insurance cover in place.

•     Internal vulnerability scanning performed with annual external penetration testing.

•     Ongoing programme to enhance our information and system capabilities.

•      Code of conduct for working from home.

Supply chain and product quality

Risk movement: Decrease

Corporate goals impact: 1, 4

What is the risk?

The supply chains for flutiform^®, Breelib^™ and other finished or semi-finished products are largely outsourced and cross international borders. Extended disruption to these supply chains could result in loss to the Group. In addition, manufactured products must adhere to strict quality regulations, which may vary according to the end market. Failure to meet these quality standards risks significant loss to the Group.

What would the impact be?

•     Lost revenues and profits.

•     Loss of new business opportunities.

•     Reputational damage.

•     Additional compliance and re-work costs.

•     Regulatory fines, suspension of licences, or legal action.

Causes

•     Disruption to the movement of goods across borders, leading to raw material or component shortages.

•     Inadequate testing of finished goods, and of materials and components used in the production process.

•     Disruption of third-party operations, including capacity limits, industrial action, loss of licences or regulatory actions and financial viability.

•     Increase in costs or disruption to supplies due to failure to comply with new environmental regulations.

•     Increased costs and/or wastage due to additional EU importation testing following the UK exit from the EU.

Managing the risk

•     Vectura has strong working relationships with its suppliers; we have established due diligence processes to ensure that our stringent quality standards are maintained and we have put in place appropriate systems that will provide an early warning of potential issues.

•     A dedicated Commercial Quality Director has oversight of release of commercial product and ensures appropriate management of quality for commercial products.

•     Monthly meetings are held to discuss customer demand forecasts and to review Vectura's ability to meet these forecasts. Vectura has established contingency arrangements to ensure that production capacities exceed forecast demand so that it would be possible to catch up on any shortfall in production or meet unexpected demand. Appropriate levels of safety stock are maintained.

•     Supply chain mapping has been undertaken, and is regularly reviewed, to identify potential points of failure and mitigating actions. Where economically feasible, additional sources of supply are established and contracts negotiated to include appropriate provisions for replacement of defective goods.

•     A risk assessment has been undertaken to assess inventory coverage risks for new business and how CDMO requirements are integrated into the supply chain.

•     New testing arrangements are in place for EU release, and improvement initiatives underway to limit additional costs or wastage.

•     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.

Talent attraction and retention

Risk movement: Increase

Corporate goals impact: 3, 4

What is the risk?

Failure to attract or retain talent/key personnel in the context of our CDMO transformation and a challenging labour market.

What would the impact be?

The loss of experienced talent or the failure to attract required skill sets could adversely affect the effectiveness of the Group's operations, the ability to attract new business and limit progress in the development of our technology platforms.

Causes

•     Inadequate succession planning and talent management.

•     Organisational disruption and/or change fatigue.

•     Failure of reward and/or incentive strategy.

•     Misperceptions of reduced opportunities for personal development, including the opportunity to innovate.

•     Economic uncertainty impacting candidate mobility.

•     Weak external brand versus competitors, including how Vectura is addressing diversity, inclusion and climate-related matters.

Managing the risk

•     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 the Executive Leadership Team. We continue to invest in ongoing training and development with leadership and management development programmes in place.

•     Succession plans for key roles have been developed to ensure a talent pool is identified, developed and ready for implementation.

•     Vectura regularly benchmarks its reward strategy to ensure it continues to incentivise, motivate and retain our talented employees. This benchmarking covers both short and long-term incentives. Salaries of all employees are reviewed annually to ensure we remain market competitive.

•     For major restructuring, the Group uses appropriate retention schemes, and deploys a strong project management approach, including a focus on change management and knowledge transfer aspects.

Intellectual property

Risk movement: Decrease

Corporate goals impact: 1, 2

What is the risk?

Patent infringement by a competitor organisation or failure to obtain patents for technology developed by Vectura could impact the value of Vectura's market offering as a CDMO and inhibit the delivery of the generic pipeline.

What would the impact be?

Such infringement or failure could result in Vectura or a customer having to take a licence to third-party IP in order to develop a product, or even being unable to commercialise a product, materially impacting Vectura's future revenues, profitability and prospects.

Causes

•     Poorly constructed patents, making a successful challenge to Vectura IP more likely.

•     Failure to identify patentable technologies early enough.

•     Failure to identify infringement of Vectura IP.

•     Failure to protect IP sufficiently in key partner or supplier agreements.

Managing the risk

•     Dedicated internal resources, supplemented with external expertise, which files for and prosecutes patents and other forms of intellectual property.

•     In conjunction with our partners where relevant, Vectura takes steps to enforce these rights.

•     Monitoring of third-party rights that may have relevance for the operations of the Group.

COVID-19

Risk movement: New

Corporate goals impact: 1, 2

What is the risk?

COVID-19 could have a material adverse effect on Vectura operations and financial results.

What would the impact be?

•     Inability to grow CDMO business in line with forecast and reduction in cash flows from existing partner products.

•     Loss of revenues due to supply chain disruption and employee absence.

Causes

•     Supply chain disruption, including production shutdowns or lack of availability of raw materials or components.

•     Disruption to customer businesses, delaying demand for CDMO services.

•     Reduced capacity to deliver contracted services, due to employee absences and/or social distancing measures.

•     Disruption to customer due diligence activities, causing delays in contracting.

Managing the risk

•     Crisis management team established with regular reviews by the ELT and the Board.

•     Working closely with partners and suppliers to maintain supply chains.

•     Support for employee remote working.

•     Site risk assessments, with strict measures to support social distancing and personal protection.

Regulatory and compliance

Risk movement: Increase

Corporate goals impact: 1, 2

What is the risk?

Vectura operates in the highly regulated international pharmaceutical services industry. Failure to comply with relevant regulations governing medical devices, pharmaceutical and combination products can result in non-approval by regulatory authorities.

What would the impact be?

•     Risks to patient safety.

•     Potential device and product recalls.

•     Litigation and/or reputational damage.

•     Loss of market access.

•     Suspension of site manufacturing licence/registration.

•     Increased costs and/or delays.

Causes

•     Failure to track changes in regulations as they affect the Group and its products.

•     Inadequate quality management system, resulting in gaps in people, process and system compliance.

•     Inadequate focus from leadership or management on the importance of quality and data integrity.

•     Lack of clear organisational accountabilities.

•     Insufficient control or oversight of contracts and suppliers.

Managing the risk

•     Competent and well-staffed Quality function, reporting directly to CEO.

•     Formal quality management system in place, regularly reviewed.

•     Transparency and governance ensuring gaps are properly reported and addressed promptly.

•     Staff training programmes appropriate to roles.

•     Programme of internal quality audits focused on both Group and supplier operations.

Related-party transactions

During the year, the Group has signed two agreements with Aerami Therapeutics Inc. ("Aerami"). Anne Whittaker, a former Non-Executive Director of Vectura, is the CEO of Aerami. The Director's concluded that this was not a related party transaction in accordance with IAS 24 paragraph 11, which specifies that two entities are not considered to be related parties simply because they have a Director in common. Anne resigned as a Non-Executive Director of Vectura in September 2020.

Remuneration of key management personnel

The remuneration of the Directors, who are the key management personnel of the Group, was £2.5m and is set out below:

Please refer to the Remuneration report for the remuneration of each Director. The Remuneration report only includes Directors who held office in 2020.

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 accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare the parent company financial statements on the same basis.  In addition the Group financial statements are required under the UK Disclosure Guidance and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union ("IFRSs as adopted by the EU").

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 the Group's 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 and reliable; 

·      state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the Group financial statements, International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union ("IFRSs as adopted by the EU"); 

·    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 comply 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 and Accounts

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 17 March 2021.

Will Downie                                         Paul Fry

Chief Executive Officer                      Chief Financial Officer

17 March 2021                                     17 March 2021