The Directors present their report for the year ended 31 December 2018. Additional information which is incorporated by reference into this Directors' Report, including information required in accordance with the Companies Act 2006, can be found as follows:
For the purposes of LR 9.8.4CR, the information required to be disclosed by LR 9.8.4R can be found in the following locations:
|Interest capitalised||Not applicable|
|Publication of unaudited financial information||Not applicable|
|Details of long-term incentive schemes||Directors' Remuneration Report|
|Waiver of emoluments by a Director||Directors' Remuneration Report|
|Waiver of future emoluments by a Director||Directors' Remuneration Report|
|Non pre-emptive issues of equity for cash||Not applicable|
|Non pre-emptive issues of equity for cash in relation to major subsidiary undertakings||Not applicable|
|Parent participation in a placing by a listed subsidiary||Not applicable|
|Contract of significance in which a director is interested||Not applicable|
|Contract of significance with a controlling shareholder||Not applicable|
|Provision of services by a controlling shareholder||Not applicable|
|Shareholder waiver of dividends||Not applicable|
|Shareholder waiver of future dividends||Not applicable|
|Agreements with controlling shareholder||Not applicable|
|Compensation for loss of office arrangements||Directors' Remuneration Report|
The Strategic Report and this Directors' Report have been drawn up and presented in accordance with, and in reliance upon, applicable English company law and any liability of the Directors in connection with these reports shall be subject to the limitations and restrictions provided by such law
The Directors of the Company who held office during the year are:
Professor Sir Chris Evans**
Dr Franz Humer
Professor Trevor Jones
Art Pappas Appointed 12 September 2018
The Right Hon. Lord Hutton of Furness Resigned 31 May 2018
David U'Prichard Resigned 12 September 2018
*Resigned 4 September 2018, re-appointed 19 February 2019
**Resigned 19 February 2019
Results and Dividend
The results for the year ended 31 December 2018 are set out in the Consolidated Statement of Comprehensive Income.
The Board's intention during the current phase of the Group's development is to retain any Group earnings for the foreseeable future to finance growth and expansion and to invest in the infrastructure of portfolio companies. Accordingly, the Board is not recommending a dividend for the year ended 31 December 2018.
Articles of Association
The rules governing the appointment and replacement of Directors are set out in the Company's Articles of Association. The Articles of Association may be amended by a special resolution of the Company's shareholders.
Details of the Company's share capital, including changes during the year, are set out in note 17 to the financial statements. As at 31 December 2018, the Company's share capital consisted of:
- 134,823,243 Ordinary Shares of £0.00001 each (99.96% of total share capital by number, 2.64% by nominal value)
- 49,671 C Shares of £1.00 each (0.04% of total share capital by number, 97.36% by nominal value)
Ordinary shareholders are entitled to receive notice of, and to attend and speak at, any general meeting of the Company. On a show of hands every shareholder present in person or by proxy (or being a corporation represented by a duly authorised representative) shall have one vote, and on a poll every shareholder who is present in person or by proxy shall have one vote for every share they hold. The Notice of Annual General Meeting specifies deadlines for exercising voting rights and appointing a proxy or proxies. Ordinary Shares held as Restricted Shares pursuant to the Restrictive Share Agreement are disenfranchised and, accordingly, holders of such Restricted Shares are not entitled to vote, attend the meetings of the Company or receive dividends or other distributions made or paid on the Ordinary Share capital of the Company.
No voting rights attach to the C Shares and their holders are not entitled to receive notice of, or to attend and speak at, any general meeting of the Company. Holders of C Shares are not entitled to receive any dividend or distributions made or paid on the Ordinary Share capital of the Company.
Other than the general provisions of the Articles of Association (and prevailing legislation), there are no specific restrictions of the size of a holding or on the transfer of any class of shares in the Company except as follows:
- Prior consent of the Directors is required for the transfer of C Shares;
- Holders of Restricted Shares may not dispose of Restricted Shares until and unless the relevant Restricted Shares are released from their respective undertakings pursuant to the Restrictive Share Agreement;
- Pursuant to lock-up arrangements under the Placing Agreement dated 2 February 2017, each of the Directors agreed not to offer, sell, contract to sell, pledge or otherwise dispose of any Ordinary Shares which they hold directly or indirectly for a period of 365 days from the then anticipated date of admission (subject to certain usual and customary exemptions and exceptions on the transfer of shares); these agreements ended on 22 February 2018.
- Pursuant to a lock-up deed, certain shareholders agreed not to offer, sell, pledge or otherwise dispose of any of their interests for specified periods up to a maximum of 365 days from the date of Admission (subject to certain usual and customary exceptions, for example, when the Company has given its consent to any such transfer); all such agreements ended by 22 February 2018.
- Pursuant to a lock-up deed dated 15 August 2018, Christopher Chipperton agreed following a sale of Ordinary Shares not to offer sell, pledge or otherwise dispose of any further Ordinary Shares held by him until 15 August 2019 (subject to usual and customary exceptions, for example when the Company has given consent to any such transfer). Christopher Chipperton further agreed that any disposals made in the 12 months after 15 August 2019 would be effected through the Company’s broker to ensure an orderly market in the Ordinary Shares.
Other than as set out above, the Directors are not aware of any other agreements between holders of the Company's shares that may result in the restriction of the transfer of securities or on voting rights. No shareholder holds securities carrying any special rights or control over the Company's share capital.
Authority for the Company to purchase its own shares
Subject to authorisation by shareholder resolution, the Company may purchase its own shares in accordance with the Act. Any shares which have been bought back may be held as treasury shares or cancelled immediately upon completion of the purchase.
At the AGM on 17 May 2018, the Company was generally and unconditionally authorised by its shareholders to make market purchases (within the meaning of section 693 of the Companies Act 2006) of up to a maximum of 13,476,401 of its Ordinary shares. The Company has not repurchased any of its Ordinary shares under this authority, which is due to expire on the date of this year's AGM or 30 June 2019.
The number of Ordinary Shares of the Company in which the Directors were beneficially interested at 31 December 2018, is set out in the Directors' Remuneration Report.
The Company's Articles of Association (the 'Articles') provide, subject to the provisions of UK legislation, an indemnity for Directors and officers of the Company and the Group in respect of liabilities they may incur in the discharge of their duties or in the exercise of their powers. The Company has made qualifying third party indemnity provisions for the benefit of its Directors during the period and these remain in force at the date of this report.
The Company maintains Directors' and officers' liability insurance cover and this is in place for all the Company's Directors at the date of this report. The Company will review its level of cover annually.
Arix Bioscience, Inc. has an office in New York, USA.
The table below shows the interests in shares notified to the Company in accordance with the Disclosure Guidance and Transparency Rules as at 31 December 2018:
|As at 31 December 2018||As at 21 March 2019|
|Name of Shareholder||Number of Ordinary Shares of 0.001 pence each held||Percentage of total voting rights held||Number of Ordinary Shares of 0.001 pence each held||Percentage of total voting rights held|
|Woodford Investment Management||33,093,560||24.5%||33,093,560||24.5%|
|Christopher Evans (including restricted shares)||7,316,039||5.4%||7,316,039||5.4%|
|Christopher Chipperton (incl. restricted shares)||7,037,914||5.2%||7,037,914||5.2%|
|FIL Investment International||5,008,727||3.7%||4,736,462||3.5%|
|Wicklow Family Office||4,607,999||3.4%||4,607,999||3.4%|
The Group did not make any political donations during the year.
Change of control – significant agreements
There are a number of agreements that may take effect, alter or terminate on a change of control of the Company, such as commercial contracts and property lease agreements.
None of these are considered to be significant in their likely impact on the business as a whole.
At the date of the approval of this report, each Director confirms that:
- so far as they know, the Company's auditors are aware of all relevant audit information;
- each Director has taken all the reasonable steps to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of the information.
The confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
PricewaterhouseCoopers LLP have indicated their willingness to continue in office and a resolution seeking to reappoint them will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The Annual General Meeting will be held at the offices of Brown Rudnick, 8 Clifford Street, London W1S 2LQ on 3 June 2019 at 10.30am. The Notice of Annual General Meeting is contained in a separate letter from the Chairman accompanying this report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently
- make reasonable and prudent judgements and accounting estimates
- state whether IFRS as adopted by the EU and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and Company financial statements respectively
- prepare the financial statements on the going concern basis, unless it is inappropriate to presume the Company will continue in business
The Directors are responsible for keeping adequate accounting records sufficient to show and explain the Group’s and Company’s transactions, and to disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps to prevent and detect fraud and other irregularities.The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that 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.
Each of the Directors, whose names and functions are listed in the Board of Directors, confirm that, to the best of their knowledge:
- the Group financial statements, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
- the Strategic Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
By order of the Board
Chief Financial Officer
28 March 2019