TIDMAKT
RNS Number : 7305M
Ark Therapeutics Group PLC
29 August 2013
Ark Therapeutics Group plc
Interim Results for the First Half of 2013
London, UK, 29 August 2013- Ark Therapeutics Group plc today
announces its interim results for the six months ended 30 June
2013.
For further information please contact:
Ark Therapeutics Group plc Tel: +44 (0)207 002 1005
Iain G Ross, Non-Executive Chairman
David Venables, Non-Executive
Director
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding Ark's financial
position, business strategy, plans and objectives of management for
future operations, and any statements preceded by, followed by or
that include forward-looking terminology such as the words
"targets", "believes", "estimates", "expects", "aims", "intends",
"will", "can", "may", "anticipates", "would", "should", "could" or
similar expressions or the negative thereof. Such forward-looking
statements involve known and unknown risks, uncertainties and other
important factors beyond Ark's control that could cause the actual
results, performance or achievements of Ark to be materially
different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such
forward-looking statements are based on numerous assumptions
regarding Ark's present and future business strategies and the
environment in which Ark will operate in the future. These
forward-looking statements speak only as at the date of this
announcement. Ark expressly disclaims any obligation or undertaking
to disseminate any updates or revisions to any forward-looking
statements contained in this announcement to reflect any change in
Ark's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.
As a result of these factors, readers are cautioned not to rely on
any forward-looking statement.
INTERIM MANAGEMENT REPORT
Chairman's Review
As detailed in the Company's financial results for the year
ended 31 December 2012 published on 30 April 2013 and in the first
Interim Management Statement for 2013 issued on 17 May 2013, the
key events for the first six months of the reporting year have been
as follows:
-- On 30 January 2013 the Company announced that having failed
to gain sufficient support for an institutional fundraising in late
2012/early 2013 it had appointed WG Partners to assist the Company
in reviewing and evaluating a number of strategic options open to
the Company to maximise value for Shareholders. These options
included a formal sale process, which was initiated on 30 January
2013.
-- On 28 February 2013 the Company announced that it had not
received any indicative offers pursuant to the formal sale process.
In parallel, the Board had attempted at various points to obtain
finance from clients, direct competitors, banks and via the
disposal of non-core product assets. However, all such steps proved
unsuccessful.
-- On 7 March 2013 Wölbern Private Equity ("WPE") made a formal
offer for the acquisition of the operating subsidiaries of the
Company - Ark Therapeutics Limited, Ark Therapeutics Oy and
Lymphatix Oy (the "Subsidiaries") (the "Disposal"). This offer was
expressly conditional on the UKLA (UK Listing Authority) agreeing
to apply a waiver under Listing Rule 10.8 to the Disposal. WPE
therefore confirmed to the Board on 10 March 2013 that the
transaction had to be completed on or before 15 March 2013
otherwise its offer would lapse.
-- On 15 March 2013 the Company made a comprehensive and
detailed announcement that it had disposed of the Subsidiaries
having been granted a Listing Rule 10.8 waiver. The Company
received GBP1.335m in consideration and recognised a profit of
GBP1.146m.
Post-period end on 9 July 2013 the Company announced that it had
amicably negotiated and settled a potential dispute with Crawford
Healthcare. As a result, the contract with Crawford Healthcare
relating to the sale of the Company's Woundcare Business to
Crawford Healthcare in 2011 was terminated and in return for an
immediate payment of GBP300,000, Ark agreed to release Crawford
Healthcare from any future obligations under the contract.
Since the date of the Disposal the Board has ensured that the
Company has maintained its London Stock Exchange listing and met
its financial, fiduciary and reporting obligations.
Board and Management
As a result of the Disposal, Professor Seppo Ylä-Herttuala and
David Prince both resigned as Non-Executive Directors on 15 March
2013 and Dr David Venables' employment as Chief Executive Officer
and my employment as Executive Chairman were terminated on 31 March
2013. However, both Dr Venables and I, along with Dr David Bloxham
and Charles Spicer, continue to serve on the Board as Non-Executive
Directors.
Basis of Preparation
Subsequent to the Disposal, there has been an ongoing exercise
to finalise the completion accounts of the Subsidiaries, and due to
timing and resource limitations this exercise is not yet complete.
As such, it has not yet been possible to allocate accurately the
March results of the Subsidiaries to the appropriate period -
before or after the Disposal. Therefore, at this time, we present
the results of Ark Therapeutics Group plc company only for the six
months ended 30 June 2013. We expect to complete the exercise to
finalise the completion accounts, such that by the year end we will
be able to consolidate the formerly owned Subsidiaries up to the
date of the Disposal.
Financial Review
Following the Disposal, (as mentioned in the Chairman's review
above), the profit before tax from Company operations totalled
GBP1.4m. The Group's loss from operations for the six months ended
30 June 2012 was 6.0m and for the year ended 31 December 2012 was
GBP12.9m.
Other administrative expenses for the period totalled GBP0.9m.
Administrative expenses for the Group were GBP1.8m for the six
months ended 30 June 2012 and GBP4.3m for year ended 31 December
2012.
The Company share-based compensation charge for the period was
GBP38,000 (for the Group, six months ended 30 June 2012: GBP46,000
and GBP95,000 for the year ended 31 December 2012).
Total Company net assets following the Disposal were GBP1.2m at
30 June 2013. Net assets for the Group were GBP9.4m at 30 June 2012
and GBP2.8m at 31 December 2012.
Cash and cash equivalents attributable to the Company were
GBP0.8m as at 30 June 2013 (for the Group, at 30 June 2012: GBP4.9m
and GBP2.1m at 31 December 2012).
Net cash outflow from operating activities for the period was
GBP1.7m (Group: six months ended 30 June 2012: cash inflow of
GBP4.6m and year ended 31 December 2012: GBP7.4m).
Risks and Uncertainties
Following the Disposal, the key risk facing the Company is the
non-completion of the currently planned, or an equivalent,
transaction as this would impact on the Company's ability to
continue in operational existence. The financial risks identified
and outlined in the Annual Report and Accounts 2012 in the
Directors' Report on page 25, which does not form part of this
interim statement, remain pertinent and relevant for the remaining
six months of 2013.
Summary and Outlook
During the period the Company has received a number of
approaches from third parties interested in possible transactions
with the Company. As of the time of writing we are progressing
discussions with a specific third party which may or may not lead
to a transaction. The Company will make further announcements as
appropriate.
Iain Ross, Non-Executive Chairman
29 August 2013
Condensed consolidated income statement
For the six months ended 30 June 2013 (unaudited)
Company Consolidated Consolidated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Note 2013 2012 2012
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Continuing operations
Revenue - 780 1,818
Cost of sales - (357) (584)
------------------------------------- ------- ------------- ------------- -------------
Gross profit - 423 1,234
Research and development
expenses - (3,849) (7,076)
Selling, marketing and distribution
costs (2) (3) (7)
Other administrative expenses (859) (1,757) (4,261)
Impairment of intangible
assets - (1,089) (1,101)
Impairment of property,
plant and equipment - - (1,855)
Impairment of other current
assets - - (163)
Share-based compensation
charge (38) (46) (95)
------------------------------------- ------- ------------- ------------- -------------
Administrative expenses (897) (2,892) (7,472)
------------------------------------- ------- ------------- ------------- -------------
Profit on disposal of subsidiaries 4 1,146 - -
Other income 1,149 283 578
Other expenses - (219) (226)
Operating profit/(loss) 1,396 (6,257) (12,969)
Investment income 1 35 47
Finance costs - (22) (41)
------------------------------------- ------- ------------- ------------- -------------
Profit/(loss) on ordinary
activities before taxation 1,397 (6,244) (12,963)
Taxation - 222 23
------------------------------------- ------- ------------- ------------- -------------
Profit/(loss) from continuing
operations after taxation 1,397 (6,022) (12,940)
------------------------------------- ------- ------------- ------------- -------------
Discontinued operations
Profit from discontinued
operations after taxation - - 206
------------------------------------- ------- ------------- ------------- -------------
Profit/(loss) on ordinary
activities after taxation,
being retained loss for
the period 1,397 (6,022) (12,734)
------------------------------------- ------- ------------- ------------- -------------
Profit/(loss) per share
(basic and diluted) 5
Basic 0.7 pence (3.0 pence) (6.2 pence)
Diluted 0.6 pence (3.0 pence) (6.2 pence)
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2013 (unaudited)
Company Consolidated Consolidated
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Profit / (loss) on ordinary activities
after taxation, being retained
profit/( loss) for the period 1,397 (6,022) (12,734)
Exchange differences on translating
foreign operations recognised
directly in equity - (28) (31)
---------------------------------------- ------------- ------------- -------------
Total comprehensive income for
the period 1,397 (6,050) (12,765)
---------------------------------------- ------------- ------------- -------------
All results for the six months ended 30 June 2013 relate wholly
to continuing activities. All results are attributable to equity
holders of the parent.
Condensed consolidated balance sheet
As at 30 June 2013 (unaudited)
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Non-current assets
Other intangible assets - 503 427
Property, plant and equipment - 5,499 2,696
- 6,002 3,123
---------------------------------- ------------- ------------- ------------
Current assets
Inventories - 236 117
Trade and other receivables 518 569 414
Research and development tax -
credits receivable 879 -
Cash and cash equivalents 790 4,896 2,055
---------------------------------- ------------- ------------- ------------
1,308 6,580 2,586
---------------------------------- ------------- ------------- ------------
TOTAL ASSETS 1,308 12,582 5,709
---------------------------------- ------------- ------------- ------------
Non-current liabilities
Government grants - 457 433
Obligations under finance leases - 58 41
Loans - 249 253
---------------------------------- ------------- ------------- ------------
- 764 727
---------------------------------- ------------- ------------- ------------
Current liabilities
Trade creditors and accruals 119 1,696 1,829
Deferred income - 194 9
Government grants - 419 304
Obligations under finance leases - 19 25
Loans - 62 62
119 2,390 2,229
---------------------------------- ------------- ------------- ------------
TOTAL LIABILITIES 119 3,154 2,956
---------------------------------- ------------- ------------- ------------
Equity
Share capital 2,093 2,093 2,093
Share premium 118,937 118,937 118,937
Merger reserve 1,521 38,510 38,510
Foreign currency translation
reserve - 137 134
Share-based compensation 439 3,966 4,006
Reserve for own shares - (2,286) (2,286)
Retained loss (121,800) (151,929) (158,641)
---------------------------------- ------------- ------------- ------------
TOTAL EQUITY 1,189 9,428 2,753
---------------------------------- ------------- ------------- ------------
TOTAL LIABILITIES AND EQUITY 1,308 12,582 5,709
---------------------------------- ------------- ------------- ------------
Condensed Company statement of changes in equity
For the six months ended 30 June 2013 (unaudited)
Share Share Merger Share-based Retained Total
capital premium reserve compensation loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31 December
2011 2,093 118,937 1,521 356 (120,674) 2,232
Total comprehensive
income for the period - - - - (232) (232)
Share-based compensation - - - 19 - 19
Balance as at 30 June
2012 2,093 118,937 1,521 375 (120,906) 2,019
Total comprehensive
income for the period - - - - (2,291) (2,291)
Share-based compensation - - - 26 - 26
Balance as at 31 December
2012 2,093 118,937 1,521 401 (123,197) (246)
Total comprehensive
income for the period - - - - 1,397 1,397
Share-based compensation - - - 38 - 38
Balance as at 30 June
2013 2,093 118,937 1,521 439 (121,800) 1,189
--------------------------- --------- ---------- ---------- -------------- ---------- ---------
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2013 (unaudited)
Share Share Merger Foreign Share-based Reserve Retained Total
capital premium reserve currency compensation for own loss
translation shares
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as
at 31 December
2011 2,093 118,937 38,510 165 3,920 (2,286) (145,907) 15,432
Total
comprehensive
income for
the period - - - (28) - - (6,022) (6,050)
Share-based
compensation - - - - 46 - - 46
Balance as
at 30 June
2012 2,093 118,937 38,510 137 3,966 (2,286) (151,929) 9,428
Total
comprehensive
income for
the period - - - (3) - - (6,712) (6,715)
Share-based
compensation - - - - 40 - - 40
Balance as
at 31 December
2012 2,093 118,937 38,510 134 4,006 (2,286) (158,641) 2,753
---------------- -------- ---------- ---------- ------------ ------------- ----------- ------------ ----------
Condensed consolidated cash flow statement
For the six months ended 30 June 2013 (unaudited)
Company Consolidated Consolidated
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2012
2013 2012 GBP'000
GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Operating loss from continuing
operations 1,397 (6,257) (12,969)
Operating loss from discontinued
operations - - 206
---------------------------------------- ------------- ------------- -------------
Total operating loss 1,397 (6,257) (12,763)
Adjustment for non-cash items
Depreciation - 1,179 2,344
Impairment of intangible assets - - 1,101
Impairment of property, plant and
equipment - - 1,855
Impairment of other current assets - - 163
Impairment of goodwill - 1,089 -
Share-based compensation 38 46 92
Loan forgiveness (882) (120) (120)
Gain on disposal of discontinued
operations - - (206)
Gain on disposal of subsidiaries (1,146) - -
EU and Government grants - (162) (304)
Unrealised exchange losses - 230 166
Changes in working capital
(Increase)/decrease in receivables (469) 706 819
Decrease/(increase) in accrued
income - 1 (36)
(Increase)/decrease in inventories - (4) 34
Decrease in payables (329) (1,250) (1,028)
Decrease in deferred income - (15) (200)
---------------------------------------- ------------- ------------- -------------
Net cash used in operations (1,391) (4,557) (8,083)
Research and development tax credit
received - - 680
---------------------------------------- ------------- ------------- -------------
Net cash used in operating activities (1,391) (4,557) (7,403)
---------------------------------------- ------------- ------------- -------------
Investing activities
Interest received 1 35 50
Disposal of subsidiary 1,335 - 206
Purchases of property, plant and
equipment - (106) (108)
Purchases of intangible assets - - (40)
Funding of subsidiary companies (810) - -
Net cash generated from/(used in)
investing activities 526 (71) 108
---------------------------------------- ------------- ------------- -------------
Financing activities
Repayment of finance leases - (9) (29)
Repayment of borrowings - (94) (119)
New borrowings - finance lease - 36 36
Grants received - 80 125
Finance costs - (87) (200)
---------------------------------------- ------------- ------------- -------------
Net cash used in financing activities - (74) (187)
---------------------------------------- ------------- ------------- -------------
Net (decrease) in cash and cash
equivalents (865) (4,702) (7,482)
Cash and cash equivalents at beginning
of period 1,655 9,496 9,496
Effect of exchange rate changes - 102 41
Cash and cash equivalents at end
of period 790 4,896 2,055
---------------------------------------- ------------- ------------- -------------
Notes to the financial information
1 General information
This interim financial information was authorised for issue on
29 August 2013. The information for the year ended 31 December 2012
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. A copy of the statutory accounts for the
year ended 31 December 2012 has been delivered to the Registrar of
Companies. Although the Auditor's report on those accounts was not
qualified, it drew attention to a matter by way of emphasis
relating to the preparation of those financial statements other
than on a going concern basis and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
A copy of the interim results for the six months ended 30 June
2013 can be found on the Company's website at
www.arktherapeutics.com.
2 Basis of preparation
The annual financial statements of Ark Therapeutics Group plc
were prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The condensed
set of financial statements included in this half-yearly report has
been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting', as adopted by the European
Union.
In line with the last annual report, the interim statement has
been prepared on a basis other than going concern, following the
disposal of the trading subsidiaries in March 2013. However, when
preparing the interim statement for the period ending 30 June 2013,
the Directors have considered the cash needs of the remaining
company, to ensure that it has sufficient resources to continue in
operational existence for the foreseeable future, being a period of
not less than twelve months from the date of the approval of the
interim statement.
Subsequent to the Disposal, there has been an ongoing exercise
to finalise the completion accounts of the Subsidiaries, and due to
timing and resource limitations this exercise is not yet complete.
As such, it has not yet been possible to allocate accurately the
March results of the Subsidiaries to the appropriate period -
before or after the Disposal. Therefore, at this time, we present
the results of Ark Therapeutics Group plc company only for the six
months ended 30 June 2013. We expect to complete the exercise to
finalise the completion accounts, such that by the year end we will
be able to consolidate the formerly owned Subsidiaries up to the
date of the Disposal.
At 30 June 2013, the Company had net assets of GBP1.2m (31
December 2012: GBP2.8m) and cash and cash equivalents of GBP0.8m
(31 December 2012: GBP2.1m).
Following consideration of cash flow forecasts for the Company,
the Directors are satisfied that the Company has sufficient liquid
resources to continue in operational existence for the foreseeable
future. However, they are currently in negotiations with a third
party to complete a transaction within the next 6 months, and
should these negotiations not conclude satisfactorily or a suitable
alternative transaction does not arise in the meantime, it is
likely that the Directors will seek to commence winding up of the
Company within the next 6-9 months. As such, the Company may not
continue in existence for the foreseeable future.
The same accounting policies, presentation and methods of
computation have been followed in the condensed set of financial
statements as applied in the Company's latest annual audited
financial statements for the year ended 31 December 2012. Seasonal
changes to the Company's operations are not material.
3 Business and geographical segments
In accordance with IFRS 8, the Group is required to define its
operating segments based on, inter alia, the internal reports
presented to its chief operating decision maker in order to
allocate resources and assess performance. These reports focus on
the Group's only business activity, being the discovery,
development and commercialisation of products in areas of
specialist medicine, with particular focus on vascular disease and
cancer, and therefore no segmental information has been shown.
The principal sources of revenue for the Group are as
follows:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
Continuing operations
UK
Contract manufacture - 479 1,340
Rest of Europe
Contract manufacture - 293 470
North America
Contract manufacture - 8 8
-------------------------- ------------ ----------- -------------
- 780 1,818
--------------------------------------- ----------- -------------
Discontinuing operations
UK
Contract manufacture - - -
Rest of Europe
Contract manufacturing - - -
North America
Contract manufacturing - - -
Total revenues - - -
Information on major customers
Revenues from transactions with a single customer of contract
manufacturing, represents GBP68,000 (58% of the Group's total
revenues).
An analysis of the Group's geographical non-current assets is
shown below:
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
UK - 5,219 4,363
Finland - 5,365 3,049
Inter-segment eliminations
(being inter-company loans) - (4,582) (4,289)
------------------------------ --------------- -------------- -----------------
- 6,002 3,123
---------------------------------------------- -------------- -----------------
Non-current assets comprise goodwill, property, plant and
equipment, other intangible assets and inter-company loans and are
attributed to the location where they are situated.
4 Disposal of subsidiaries
On 15 March 2013 the Company announced the sale of the entire
issued share capital of each of Ark Therapeutics Limited (including
its wholly owned subsidiary Ark Therapeutics Oy) and Lymphatix Oy
(together, the "Subsidiaries") to WKD Holding Oy, a nominee of
Wölbern Private Equity (the "Disposal"). The principal business of
the Subsidiaries was viral product focused contract development and
manufacturing services with development and GMP manufacturing
operations in Finland. The Company received GBP1.335m in
consideration and recognised a profit of GBP1.146m.
Principal Group investments prior to the Disposal
The Company and the Group had investments in the following
subsidiary undertakings which principally affected the profits or
net assets of the Group. On 15 March 2013 the Group disposed of the
entire issued share capital of Ark Therapeutics Limited, Ark
Therapeutics Oy and Lymphatix Oy.
At 31 December 2012 and as at 30 June 2012
Country of incorporation Holding % Principal activity
Ark Therapeutics Limited* England Ordinary 100 Provision of contract development and
manufacturing services to the pharmaceutical
and biotech
industry
Ark Therapeutics Oy Finland Ordinary 100 Provision of contract development and
manufacturing services to the pharmaceutical
and biotech
industry
Lymphatix Oy* Finland Ordinary 100 Intellectual property holding company
* Held directly by Ark Therapeutics Group plc
The Company controls the operations of the Ark Therapeutics
Family Benefit Trust ("FBT") and, therefore, it has been accounted
for as if it were a subsidiary.
5 Profit/(loss) per share
International Accounting Standards require presentation of
diluted earnings per share when a company could be called upon to
issue shares that would decrease net profit or increase net loss
per share.
The calculation of basic earnings per ordinary share for the
Company is based on the profit of GBP1,397,000 for the six months
ended 30 June 2013 and on 209,276,676 ordinary shares being the
weighted average number of ordinary shares in issue.
The calculation of diluted earnings per ordinary share for the
Company is based on the profit of GBP1,397,000 for the six months
ended 30 June 2013 and on 221,151,248 ordinary shares being the
weighted average number of ordinary shares in issue.
The calculation of basic and diluted loss per ordinary share for
the Group is based on the loss of GBP6,022,000 for the six months
ended 30 June 2012 (year ended 31 December 2012: loss of
GBP12,734,000 and on 209,276,676 ordinary shares (June 2012:
209,276,676) being the weighted average number of ordinary shares
in issue.
6 Related party transactions
Up to the 15 March 2013 the Company provided working capital
loans to subsidiary companies. Interest on these loans was charged
at market related rates. As at the date of the Disposal the loans
were capitalised and therefore forgiven.
The Company also provided loans to the FBT for the purchase of
shares in the Company. No interest was charged on these loans.
Details of interest income for the year and outstanding balances at
year end are shown below:
Amounts due from subsidiaries (before doubtful debts provision)
--------------------------------------------------------------------
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
FBT 1,049 1,049 1,049
Interest income for the period
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
Ark Therapeutics Ltd - 55 109
FBT - - -
------------------------ ------------ ----------- -------------
- 55 109
------------------------------------- ----------- -------------
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
The following transactions with Company Directors took place
during the period at arm's length:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
Consultancy fees earned in period
S Ylä-Herttuala 13 39 75
---------------------------------------- ----------- ----------- -------------
Consultancy fees owed as at period end
S Ylä-Herttuala - 19 20
---------------------------------------- ----------- ----------- -------------
Professor S Ylä-Herttuala is a director and shareholder of the
Finnish registered company FKD Therapies OY ("FKD").
Statement of Directors' responsibilities
We confirm to the best of our knowledge:
(a) the condensed set of financial statements which has been
prepared in accordance with IAS 34 "Interim Financial Reporting"
gives a true and fair view of the assets, liabilities, financial
position and profit/(loss) for the period;
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The Directors of Ark Therapeutics Group plc are listed in the
Ark Therapeutics Group plc annual report for the year ended 31
December 2012.
A list of current Directors is maintained on the Company's
website: www.arktherapeutics.com.
By order of the Board
Dr David Venables
Non-Executive Director
29 August 2013
Independent review report to Ark Therapeutics Group plc
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2013 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed Company and consolidated statements of changes in
equity, condensedconsolidated statement of changes in equity, the
condensed consolidated cash flow statement and related notes 1 to
6. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 2, the annual financial statements of Ark
Therapeutics Group plc are prepared in accordance with IFRSs as
adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting," as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Basis for qualified opinion on interim financial statements
As explained in note 2, the Company's subsidiary undertakings,
Ark Therapeutics Limited, Ark Therapeutics Oy and Lymphatix Oy,
have been excluded from consolidation on the basis that the Company
disposed of its interests in these subsidiary undertakings on 15
March 2013 and is unable to assess the financial performance of the
subsidiary undertakings until to the date of disposal. The results
of the subsidiary undertakings had previously been included in the
consolidated financial statements. In our opinion, these subsidiary
undertakings should be consolidated in the Group accounts as
required by section 399 of the Companies Act 2006 and International
Accounting Standard No. 2, "Consolidated and Separate Financial
Statements". It is not possible to determine with reasonable
certainty the impact of the non-consolidation of the subsidiary
undertakings up to the date of disposal as the Company has not been
able to obtain the financial records for the subsidiary
undertakings. In these circumstances, we are unable therefore, to
quantify the effect of the departure from the accounting
standard.
Emphasis of matter - interim financial statements prepared other
than on a going concern basis
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the financial statements, which explains that the
financial statements have been prepared on a basis other than that
of a going concern.
The Company is currently in negotiations to complete a
transaction within the next 6 months. However the Directors
acknowledge that, in the event that these negotiations are
unsuccessful, they are likely to make the decision to commence the
winding up of the Company. As such, the Company may not continue in
existence for the foreseeable future.
Conclusion
Based on our review, except for the effects of the matter
described in the Basis for qualified opinion paragraph, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 30 June 2013 is not prepared, in all material
respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Cambridge, United Kingdom
29 August 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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