2014 annual report - premier veterinary group...

Premier Veterinary Group plc (formerly known as Ark Therapeutics Group plc)

Company registration number 04313987

Annual Report and Accounts

2014

PREMIER VETERINARY GROUP PLC

ANNUAL REPORT AND ACCOUNTS 2014

Contents STRATEGIC REPORT ................................................................................................................... 1

Highlights .............................................................................................................................. 1

Cautionary statement ............................................................................................................. 1

Chairman's statement ............................................................................................................. 2

Business overview .................................................................................................................. 5

Our strategy .......................................................................................................................... 5

Key performance indicators ..................................................................................................... 6

Risk management and principal risks ........................................................................................ 7

Corporate responsibility .......................................................................................................... 8

Financial review ..................................................................................................................... 8

DIRECTORS' REPORT ................................................................................................................ 11

Board of Directors ................................................................................................................. 11

CORPORATE GOVERNANCE REPORT ............................................................................................ 16

AUDIT COMMITTEE REPORT ....................................................................................................... 23

DIRECTORS' REMUNERATION REPORT ......................................................................................... 26

Annex to Remuneration Report ............................................................................................... 34

DIRECTORS' RESPONSIBILITIES STATEMENT ............................................................................... 36

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREMIER VETERINARY GROUP PLC ............ 37

FINANCIAL STATEMENTS ........................................................................................................... 41

Statement of comprehensive income ....................................................................................... 41

Statement of financial position ................................................................................................ 42

Statement of changes in equity ............................................................................................... 43

Cash flow statement .............................................................................................................. 43

Notes to the financial statements for the year ended 31 December 2014 ...................................... 44

NOTICE OF ANNUAL GENERAL MEETING ...................................................................................... 55

SHAREHOLDER INFORMATION ................................................................................................... 64

GLOSSARY ............................................................................................................................... 65

1

STRATEGIC REPORT

Highlights

• In March 2014: the Company announced it had signed Heads of Terms in connection with the

possible acquisition of a revenue-generating UK-based private company in the healthcare support

services sector.

• In November 2014: the Company announced it had agreed in principle (subject to contract) terms

with the majority shareholders of Premier Veterinary Group Limited (now known as PVG 2007

Limited) ("PVGL") to acquire the entire issued share capital of PVGL (the "Acquisition"). PVGL comprises two distinct but complementary businesses; the operation of veterinary practices and the

provision of products and services to third party practices via its wholly-owned subsidiary Premier

Vet Alliance Limited.

• In December 2014: the shareholders of Ark Therapeutics Group plc agreed in a General Meeting to

all resolutions proposed in relation to the Acquisition including the transfer of listing category on the

Official List from premium (commercial company) to standard.

• The Company had cash and short-term deposits of £0.4m at 31 December 2014 (2013: £0.8m).

• The loss for the year was £0.7m compared to a profit in 2013 of £1.1m.

• Total net assets decreased to £0.2m as at 31 December 2014 (2013: £0.9m).

Post period events

• In January 2015: completion of the transfer of the listing category on the Official List from the

premium segment to the standard segment.

• In February 2015:

• Ark Therapeutics Group plc acquired PVGL by way of a reverse acquisition.

• Admission to the standard listing segment of the Official List of the UK Listing Authority and

admission to trading on London Stock Exchange plc's main market for listed securities.

• Dominic Tonner, Daniel Smith and Raj Uppal appointed as Chief Executive Officer, Chief

Financial Officer and Corporate Development Director, respectively.

• In March 2015:

• Change of name to Premier Veterinary Group plc.

• Graham Dick BVSc MRCVS appointed as Non-Executive Director.

Cautionary statement

Sections of this Annual Report, including but not limited to the Directors’ report, the Strategic report and the Directors’ remuneration report may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial condition, business performance and results of the Company. These have been made by the Directors in good faith using information available up to the date on which they approved this report. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of the Company and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual future financial conditions, business performance, results or developments of the Company to differ materially from the plans, goals and expectations expressed or implied by these

forward-looking statements and forecasts. Nothing in this document should be construed as a profit forecast.

STRATEGIC REPORT (continued)

2

Chairman's statement

Dear Shareholder

2014 was a year of change in which, following the events of 2013, it became clear that Ark

Therapeutics Group plc would need to ‘morph’ into a new business with all options of remaining a viable

biotech company having been exhaustively examined. During 2013 and the early part of 2014 your

Board considered a number of options available, including voluntary administration. However, it was

agreed that the best option for creating future shareholder value would be to find a suitable ‘reverse’

takeover target thereby providing shareholders with the possibility of recouping some long term value,

albeit as minority shareholders.

In March 2014 we were pleased to announce that the Company had signed heads of terms in

connection with the possible acquisition of a revenue-generating UK-based private company in the

healthcare support services sector and that the transaction would constitute a 'reverse takeover' for the

purposes of the Listing Rules. At the same time, in response to a request by the Company, the UK

Listing Authority suspended the listing of the Company’s premium listed shares on the Main Market of

the London Stock Exchange, pending publication of the required shareholder documents. During the

next few months the Company was obliged to hold extensive discussions with its financial and legal

advisers and the UK Listing Authority in order to identify a way in which this complex transaction could

be completed to the benefit of the majority shareholders of both parties.

Finally, in November 2014 we announced that the Company had agreed in principle (subject to

contract) terms with the majority shareholders of Premier Veterinary Group Limited (now known as PVG

2007 Limited) ("PVGL") to acquire the entire issued share capital of PVGL (the "Acquisition"). In order

to facilitate the Acquisition, the Company proposed to transfer its listing category on the Official List

from premium to standard, as more fully explained in the Circular posted to shareholders on 21

November 2014 (the “Circular”). At the general meeting in December 2014 shareholders approved the

transfer and the change took place post period on 15 January 2015. The move to a standard listing will

enable the Company to implement other transactions, which might be in the interests of the Company,

such as acquisitions or disposals, in a shorter timescale and at a lower expense. A standard listing

requires a company to comply with a minimum level of regulatory requirements, but does not require

compliance with the super-equivalent provisions of the Listing Rules, which apply only to companies

with a premium listing. Despite this reduction in governance requirements, the Board has instituted

corporate governance arrangements, which it considers are appropriate and reasonable for a company

of its size and nature.

As part of the Acquisition arrangements, a number of investors, including myself, had conditionally

agreed to subscribe for shares for an aggregate value of £1.2m at an issue price per share of 10.1

pence against a then nominal value per share of 10 pence (the “Subscription”). On 11 December 2014,

in order to facilitate this, the Company’s share capital was reorganised by a special resolution to create

Ordinary Shares with a nominal value of 10 pence each and a Deferred Share with a nominal value of

90 pence.

Post-period, at the end of January 2015 the Company announced that it had entered into a share sale

and purchase agreement with Raj Uppal, Dominic Tonner and Berkeley Burke Trustee Company Limited

(the trustee of Mr Tonner’s pension scheme) to acquire 75.8% of the issued share capital of PVGL. The

sellers invoked the drag-along provisions contained in PVGL's articles of association to enable the

Company to acquire the entire issued share capital of PVGL. The aggregate consideration payable to all

PVGL shareholders was £3,731.18 in cash.

On 5 February 2015 the Company announced that the Acquisition had completed. However, the

Company's shares remained suspended pending publication of a prospectus seeking re-admission of the

Company's shares on the standard segment of the Official List and to trading on the Main Market of the

London Stock Exchange (the “Prospectus”). The Prospectus was published on 26 February 2015 and

the re-admission of the Company’s entire issued Ordinary Share capital to the standard listing segment

of the Official List of the UK Listing Authority and to trading on the main market for listed securities of

London Stock Exchange plc became effective on 27 February 2015 (“Admission”). Simultaneous with


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Admission, the Subscription also took place and the monies will primarily be used as working capital in

the Enlarged Group’s business (the “Enlarged Group” being the Company and its group companies

following completion of the Acquisition). As a result of this investment, the Company’s existing

shareholders owned 15% of the Ordinary Shares at Admission.

Further to the approval of shareholders at the general meeting in December 2014, with effect from

5 March 2015 Ark Therapeutics Group plc changed its name to Premier Veterinary Group plc to reflect

the Company’s new business model and strategy.

Board and Management

During the reporting period Charles Spicer resigned as a Non-Executive Director on 30 June 2014 and

our Company Secretary, Sue Steven, was appointed as a Non-Executive Director on the same date. The

Company had no permanent employees during 2014.

Post-period, on Admission, Dominic Tonner, Daniel Smith and Raj Uppal were appointed as Executive

Directors of the Company in the roles of Chief Executive Officer, Chief Financial Officer and Corporate

Development Director respectively. At the same time, Dr David Venables and Dr Bloxham resigned as

Directors, as did Sue Steven, although Sue continues in her role as Company Secretary.

On 9 February 2015 Graham Dick BVSc, MRCVS was appointed to the Board as a Non-Executive

Director. It is the Company’s intention to appoint a further Non-Executive Director in due course.

I wish to welcome Dominic, Daniel, Raj and Graham to the Board and to express my thanks to the

retiring Directors for their immense contribution to the Company over a number of years, and

particularly during the period whilst we identified and orchestrated the reverse takeover. Without their

support I fear our shareholders would have had little chance of recovering any long term value.

Change of year end and interim results

It is the intention of the Directors to change the year end of Premier Veterinary Group plc from 31

December to 30 September to bring it into line with its subsidiaries. Accordingly, the first results of the

Enlarged Group will, therefore, be the unaudited interim results for the six months ended 31 March

2015 (which it is anticipated will be released on 29 May 2015), followed by an annual financial report to

30 September 2015.

The Company was, immediately prior to the Acquisition, deemed to be a cash shell and as such was not

classified as a business under IFRS 3 Business Combinations and, therefore, the Acquisition is outside

the scope of IFRS 3. As such, in accordance with Listing Rule LR 5.6.4, and by virtue of the relative

size of PVGL when compared to the Company, the accounting acquirer has been determined to be PVGL

and the accounting acquiree, the Company. The results for the six months ended 31 March 2015 and

the year ended 30 September 2015 will, therefore, be prepared on the basis that the Company has

been acquired by PVGL and, notwithstanding that the Acquisition was made on 5 February 2015, those

results will therefore include the full six months to 31 March 2015 and year to 30 September 2015 of

PVGL’s trading activities respectively.

Summary and Outlook

The Company ended the year with cash and short-term deposits of £0.4m compared to £0.8m at the

end of December 2013. Total revenues and other income for the year ended 31 December 2014 were

£0.001m compared with £0.003m last year. Net assets at 31 December 2014 amounted to £0.2m

compared to £0.9m at 31 December 2013. The loss for the year after tax was £0.7m (compared to a

profit of £1.1m in 2013) and largely related to the costs incurred as a result of the progression of the

Acquisition to completion.


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I would like to take this opportunity of thanking shareholders for their continued support throughout the

period since the Disposal and I look forward to updating you on future developments now that the

Company has entered into this exciting new phase.

Iain Ross

Chairman

Premier Veterinary Group plc

28 April 2015


5

Business overview

Since the disposal by the Company of its former trading subsidiaries on 15 March 2013 (the “Disposal”)

and throughout the reporting period the Board had ensured that the Company maintained its London

Stock Exchange listing and had met its financial, fiduciary and reporting obligations. The Board and its

advisers had considered a variety of possible reverse takeover opportunities and on a number of

occasions it had commenced detailed discussions with potential counterparties. The aim of those

discussions had been to identify a reverse takeover opportunity which would provide shareholders with

a meaningful interest in the resulting enlarged group and ensure some possibility of some upside in

shareholder value. As more fully described in the Chairman’s statement on pages 2 and 3 this

culminated post period in the acquisition of the entire issued share capital of PVGL, which due to the

size of PVGL in relation to the Company at that time, constituted a reverse takeover for the purposes of

the Listing Rules.

PVG comprises two distinct but complementary businesses; the operation of veterinary practices and

the provision of products and services to third party practices via its wholly-owned subsidiary Premier

Vet Alliance Limited (“PVA”). PVG also administers a small animal wellness plan, branded “Pet Care

Plan”, both for its own surgeries and for third party surgeries.

Our strategy

Following the Acquisition, the Enlarged Group’s strategy is as follows:

● increase turnover in its veterinary business through a combination of generating organic growth in

its existing practices and establishing a wider footprint;

● leverage the success of PVA; and

● develop other new opportunities for growth.

Increase activity in its veterinary business

The Directors believe that by continuing to focus on the provision of high quality veterinary care serving

the local communities in which it operates and by continuing to invest in its practices it will be able to

continue to increase turnover from existing veterinary practices. However any such increase is likely to

be limited to low single digit compound growth as most of the practices are operating at or near

capacity. In order to achieve more significant growth in turnover and subject to the availability of

additional finance, consideration will be given to:

● acquiring or opening feeder branches that have the ability to support Zetland Veterinary Group and

Thanet Veterinary Group, both of which are wholly-owned subsidiaries of the Enlarged Group;

● acquiring or opening new practices in discrete geographical areas where those new practices have

the ability to generate at least £1m of turnover.

Leverage the success of PVA

PVA has been extremely successful since it was formed in 2010 and, as at 22 April 2015, has

established commercial agreements with 600 practices within the UK and the Netherlands in less than 5

years. PVA will seek to strengthen its relationships with those existing practices and to gain

relationships with additional practices by enhancing and expanding the services that it currently offers.

In order to strengthen further these relationships PVA will, subject to the availability of finance,

consider acquiring equity stakes in third party veterinary practices in circumstances where it is believed

that PVA can enhance the profitability of those practices particularly by the introduction of additional

PVA products and services. PVA will seek to continue to expand its provision of services outside of the

UK.


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Develop other new opportunities for growth

The UK small animal pet care market was estimated to be worth £5.4 billion in 2012 and the Directors

believe that this will grow to £6.7 billion by 2017. Notwithstanding the significant consolidation that has

taken place the market is still fragmented and the Directors believe that by adopting an opportunistic

and entrepreneurial approach the Company will be in a position to identify and exploit new

opportunities for growth.

Key performance indicators

During the reporting period, the Board considered cash to be the Company's sole financial key

performance indicator (“KPI”). This is detailed in the financial review on page 9. Following the

Disposal, the Company had no non-financial key performance indicators.

As a result of the Acquisition, the Company has updated its strategy as more fully described above and

the Company’s performance against this strategy will be monitored by means of KPIs. The most

important of these KPIs at an Enlarged Group level focus on the following areas:

Sales volume and revenue growth

A key element underpinning the Enlarged Group’s strategy is to deliver sales volume growth and

revenue growth in the veterinary practices, Pet Care Plan and the PVA Buying Group business areas.

Sales volume growth is measured by the number of pets covered under the Pet Care Plan and the

number of Buying Group members. The PVA Buying Group offers enhanced discounts to member

practices. These discounts are negotiated by PVA which retains a percentage of the discounts as a

management fee.

Operating profit

Whilst the Enlarged Group aims to take a long-term perspective on shareholder value, it also monitors

the financial performance of each of its businesses in the shorter term. The KPI used in this monitoring

process is operating profit before exceptional items. This measure is used to evaluate the performance

of each business, including pricing, overhead and operating cost control.

Return on capital employed

Return on capital employed (ROCE) represents operating profit before exceptional items as a

percentage of average capital employed. Capital employed is defined as fixed assets plus current assets

less current liabilities, excluding all balances related to interest-bearing assets and liabilities, any

derivative financial instruments, any deferred tax balances, and any pension assets or liabilities. It is a

key indicator of how the Company is making use of its available capital, and is a good reflection of the

performance of the Company in terms of both earnings and cash flow.

Operating cash flow

Operating cash flow is the amount of cash generated by the Enlarged Group through its trading

activities, before investment in capital expenditure. This measure is used to evaluate the performance

of each business and to assist the management of working capital.

Debt

Net debt/earnings before interest, tax, depreciation, and amortisation (EBITDA) measures the liquidity

of the Enlarged Group.

The principal measure used to monitor the strength of the Enlarged Group’s statement of financial

position is the gearing ratio, which expresses the Enlarged Group’s net debt as a percentage of its net

assets.


7

Risk management and principal risks

The principal risks facing the Company during the reporting period concerned:

• capital and liquidity management; and

• the non-completion of the proposed reverse takeover as this would have impacted on the

Company's ability to continue in operational existence.

In the event that the proposed reverse takeover could not for any reason have been put to

shareholders, or shareholders rejected the proposed transaction, the Board had intended to return the

remaining funds to shareholders through a solvent liquidation process as soon as practicable.

Following the Acquisition, the risk factors (which the Directors believe include all known material risks in

relation to the Enlarged Group or its industry) are contained on pages 14 to 19 of the Prospectus which

is available to download at www.arktherapeutics.com and the National Storage Mechanism

(www.morningstar.co.uk/uk/NSM). However, the Directors consider the key risks relating to the

Enlarged Group’s business are as follows:

• If the Enlarged Group does not compete effectively with its existing and potential future

competitors, the Enlarged Group’s business, results of operations or financial condition

could be adversely affected

There are multiple sources of competition which the Enlarged Group will face. The Enlarged Group

may not have the resources to respond adequately to this competition. Further, there can be no

assurance that the Enlarged Group will not face greater competition from new entrants from

abroad. The Enlarged Group seeks to mitigate this risk by continuing to invest in its veterinary

practices, enhancing and developing its product and service offering and monitoring competitors.

• Failure to open or acquire veterinary surgeries or any failure to expand the pet

healthcare services could adversely affect sales growth and profitability, and any failure

by the Enlarged Group to launch new initiatives effectively could have a material adverse

effect on the Enlarged Group’s business, results of operations or financial condition

There can be no guarantee that the Enlarged Group will be able to increase the number of its

veterinary surgeries and increase the number of Pet Care Plans sold. The Enlarged Group seeks to

mitigate this risk by enhancing and developing its product and service offering and by working with

third parties to access new markets.

• Changes to regulations regarding veterinary surgeries may impact the Enlarged Group’s

ability to own and/or operate veterinary surgeries

The Enlarged Group is subject to a number of laws and regulations affecting the operation and

ownership of veterinary surgeries. Changes to such laws or regulations may impact the Enlarged

Group’s ability to own and/or to operate veterinary surgeries and may necessitate the Enlarged

Group restructuring its operations. The Enlarged Group seeks to mitigate this risk by monitoring

changes to such laws and regulations.

• The viability of PVA’s Buying Group may be affected by factors outside of the Enlarged

Group’s control

The discounts currently enjoyed by the PVA Buying Group may not continue at their current levels

or at all. Further, the level of the PVA Buying Group’s spending may vary, affecting the level of fees

received by PVA. Further consolidation amongst the manufacturers of products bought by the PVA

Buying Group will reduce competition in the supply chain and may cause pricing and discounts to be

amended in a fashion which is adverse to the PVA Buying Group. The Enlarged Group seeks to

mitigate this risk by expanding the number of PVA Buying Group members and by increasing the

range of products on which discounts are available.


8

• Pet Care Plan PVA’s status as a Direct Debit originator could be revoked by the sponsor

bank

If sufficient time was not afforded by the sponsor bank upon such revocation, there would be

disruption to the Pet Care Plan business and the obligations to its veterinary members could not be

fulfilled. The Enlarged Group seeks to mitigate this risk by adhering to all rules and regulations

relating to its status as direct debit originator and by maintaining a close relationship with the

sponsor bank.

The Company's risk management objectives and exposure to various risks are as above and detailed in

note 15.

Corporate responsibility

Employees

Prior to the Disposal, when applicable, the Directors were committed to the continuing involvement of

employees on matters affecting both the employees and the Company. Following the Disposal, during

the reporting period, the Company had no permanent employees.

Equality and diversity

As mentioned above, during the reporting period, the Company retained no permanent employees.

However, the Company is a long-standing supporter of diversity in the boardroom and is supportive of

the Financial Reporting Council’s aims to encourage such diversity. During the reporting period, the

Board was made up of four Non-Executive Directors. For the period to 30 June 2014 all the Non-

Executive Directors were male. For the remainder of the reporting period, and until Mrs Steven’s

resignation post-period on 27 February 2015, the Board comprised of one female and three male Non-

Executive Directors. Following her resignation as a Non-Executive Director, Mrs Steven continues to

support the Board as Company Secretary. The Company remains of the opinion that appointments to

the Board should be made relative to a number of different criteria, including diversity of gender,

background and personal attributes, alongside the appropriate skill set, experience and expertise.

Corporate social responsibility, community and human rights

The Board recognises the importance of taking into account its corporate social responsibility in

operating the business, particularly relating to social and ethical issues in its day-to-day operations. The

Board acknowledges its duty to ensure the Company conducts its activities responsibly, with proper

regard for all its stakeholders including employees (when applicable), shareholders, business partners,

suppliers and the local communities. A copy of the Company’s Corporate Social Responsibility Policy

may be found on its website www.arktherapeutics.com.

The Company aims to conduct its business with integrity, respecting the different cultures and the

dignity and rights of individuals. The Company supports the UN Universal Declaration of Human Rights

and recognises the obligation to promote universal respect for and observance of human rights and

fundamental freedoms for all, without distinction as to race, religion, gender, language or disability.

Health, safety and environment

The Directors are committed to ensuring the highest standards of health and safety, both for employees

and for the communities within which the Company operates. The Directors are also committed to

minimising the impact of the Company's operations on the environment. A copy of the Company’s

Environmental Policy may be found on its website www.arktherapeutics.com.

Financial review

The following review should be read in conjunction with the financial statements and related notes on

pages 41 to 54 of this Annual Report.


9

Overview

The loss from operations in 2014 was £0.7m compared to a profit of £1.1m in the previous year which

had resulted from the Disposal during 2013 as more fully described in the 2013 Annual Report and Accounts.

The total proceeds recognised in 2013 from the disposal of the Company’s woundcare business to

Crawford Woundcare Limited in 2011 totalled £0.3m and are included under discontinued operations on the face of the statement of comprehensive income.

The Company’s cash and cash equivalents as at 31 December 2014 totalled £0.4m (2013: £0.8m).

Results of operations for the years ended 31 December 2014 and 2013

Other administrative expenses

Other administrative expenses for the period were £0.7m (2013: £1m). Administrative expenses

consist primarily of remuneration and professional fees and during the reporting period for the most

part related to the costs associated to the progression of discussions with potential reverse takeover

candidates culminating in completion of the Acquisition as detailed in the Chairman’s statement on

pages 2 and 3 and the Strategic report on page 5. Impairment charges

There were no impairment charges in the current year (2013: £nil). Following the Disposal, the carrying

values of the net assets of the former Group’s trading subsidiaries were impaired down to their

recoverable amounts, being their fair value less costs of disposal, determined with reference to the post

year end sale at arm’s length.

Share-based compensation

The share-based compensation charge for the period amounted to £0.03m (2013: £0.06m). The charge

in the year ended 31 December 2013 arose from new share options granted in the year and a

reassessment of the probability of certain performance criteria being achieved on outstanding options

and LTIPs.

Taxation

There was no UK corporation tax charge for the year under review due to a taxable loss being made in the year.

Statement of financial information

Total net assets (defined as total assets less total liabilities) have decreased by £0.7m to £0.2m as at

31 December 2014, principally as a result of the expenses incurred in relation to progressing the

Acquisition to completion.

Cash flow

The net cash outflow from operating activities for the year was £0.4m (2013: £1.6m). The Company’s net cash inflow from investing activities was £0.001m (2013: £0.7m).

The Board operates an Investment Policy governing the investment of the Company's cash resources,

under which the primary objective is to invest in low risk cash or cash equivalent investments to

safeguard the principal, ensuring that these resources remain available to fund the Company's operations.


10

Going concern

Following the Disposal in the prior year the Company ceased its principal activity. During the reporting

period the Company continued in operational existence for the purpose of entering into a reverse

transaction or, if that transaction were to be unsuccessful, to distribute funds back to shareholders. As

required by IAS 1 Presentation of Financial Statements, the Directors had prepared the financial

statements for the prior year on a basis other than that of a going concern given that its principal

activity had ceased during that year. The financial statements did not include any provision for the

future cost of terminating the business of the Company except to the extent that such were committed

at the balance sheet date. No material adjustments arose as a result of ceasing to apply the going concern basis.

During the reporting period the Company operated within its available cash resources. Prior to the year

end, the Company commenced the process by which it would complete a reverse acquisition with PVGL.

Post-period, following successful completion of the reverse acquisition and commencement of trading,

after making enquiries, the Directors have a reasonable expectation that, as indicated by the detailed

financial forecasts of the Enlarged Group (which take into account the risks facing the Enlarged Group),

the Enlarged Group will have adequate resources to continue in operational existence for the

foreseeable future. For this reason, the financial statements have been prepared on a going concern

basis in the current year.

Post-period events

As more fully described in the Chairman’s statement on pages 2 and 3, post-period, at the end of

January 2015 the Company announced that it had entered into a share sale and purchase agreement

with Raj Uppal, Dominic Tonner and Berkeley Burke Trustee Company Limited (the trustee of Mr

Tonner’s pension scheme) to acquire 75.8% of the issued share capital of PVGL.

On 5 February 2015 the Company announced that the Acquisition had completed. However, the

Company's shares remained suspended pending publication of a prospectus seeking re-admission of the

Company's shares on the standard segment of the Official List and to trading on the Main Market of the

London Stock Exchange. The Prospectus was published on 26 February 2015 and the re-admission of

the Company’s entire issued Ordinary Share capital to the standard listing segment of the Official List of

the UK Listing Authority and to trading on the main market for listed securities of London Stock

Exchange plc became effective on 27 February 2015. Simultaneous with Admission, the Subscription

also took place and the monies will primarily be used as working capital in the Enlarged Group’s

business.

Further to the approval of shareholders at the general meeting in December 2014, with effect from

5 March 2015 Ark Therapeutics Group plc changed its name to Premier Veterinary Group plc to reflect

the Company’s new business model and strategy.

The Strategic report, comprising pages 2 to 10, has been approved and is signed by order of the Board

by:

Sue Steven

Company Secretary

28 April 2015

Registered office 11 Staple Inn

London

WC1V 7QH

Registered number 04313987

11

DIRECTORS' REPORT

Board of Directors

The current Board comprises three Executive and two Non-Executive Directors:

Iain Ross Non-Executive Chairman

Iain Ross joined the Company as Executive Chairman on 9 September 2010, following a career with

multi-national companies including Sandoz, Fisons plc, Hoffman La Roche and Celltech Group plc. For

the last 18 years Mr Ross has undertaken a number of company turnarounds and start-ups as a board

member on behalf of private equity groups and banks including Quadrant Healthcare plc, Allergy

Therapeutics Ltd, Eden Biodesign Ltd, Phadia AB, Silence Therapeutics plc and Coms plc. Currently he is

Non-Executive Chairman of Biomer Technology Ltd and Pharminox Ltd. He is also a Non-Executive

Director of Anatara Lifesciences Limited, Benitec Biopharma Limited and Tissue Therapies Ltd, each of

whose shares are traded on the Australian Securities Exchange and of Amarantus Biosciences Inc.

which is listed in the United States. He is a Qualified Chartered Director of the UK Institute of Directors and Vice Chairman of the Council of Royal Holloway, University of London.

Dominic Tonner Chief Executive Officer

Dominic Tonner was appointed as Chief Executive Officer on 27 February 2015. Prior to joining the

Company he had been Chief Executive Officer of Premier Veterinary Group Limited since July

2007. During that time he had taken the revenues from £2 million to £7.5 million per annum,

completed six acquisitions and integrated the activities successfully, launched a new business, Premier

Veterinary Alliance, to become the second biggest buying group in the sector within three years. Mr

Tonner began his career in 1979 at Lex Service Group after graduating from Strathclyde University with

a BA in Politics & Sociology. He then went on to hold a number of posts in marketing within the

transport industry before moving to Wiggin Teape where he was able to gain additional valuable

European marketing experience. Following this he founded his own company within the label and

barcode technology sector which was successfully sold to API Plc. In addition to building new revenue streams, Mr Tonner has been instrumental in raising capital and developing growth strategies.

Daniel Smith - Chief Financial Officer

Daniel Smith was appointed as Chief Financial Officer on 27 February 2015. Prior to joining the

Company he had been Financial Controller of Premier Veterinary Group Limited since September

2013. He is a Chartered Accountant with 8 years’ experience in various roles in practice, leading

various due diligence assignments for a variety of clients, including a number of private equity funded

management buy outs. As well as experience in the preparation of financial models to support funding

applications, private equity investments and monitor business progress, Mr Smith has worked in a number of seconded internal accounting roles.

Raj Uppal - Corporate Development Director

Raj Uppal was appointed as Corporate Development Director on 27 February 2015. Mr Uppal is a

Chartered Accountant with significant commercial and corporate finance experience and has served on

the boards of several publicly quoted and private companies across various business sectors in both

executive and non-executive roles. After qualifying as a Chartered Accountant in 1986 he began his

career in industry in 1989 as the Chief Financial Officer of a fully quoted European printing and

packaging group, Ferry Pickering Group plc. Following the successful disposal of that company Mr

Uppal joined Quadrant Healthcare plc (“Quadrant”) as its Chief Financial Officer and was part of the

team that floated Quadrant on the London Stock Exchange. At the time of Quadrant’s disposal to Elan

Corporation plc (“Elan”) in 2000 Mr Uppal held the position of Finance and Commercial Director and was

subsequently appointed as a Senior Vice President within Elan. Mr Uppal led the management buyout of

various companies within Elan in 2003 and merged these companies with ML Laboratories plc in 2005 to

create a new group, Innovata PLC, where he served as a Non-Executive Director until it was acquired

by Vectura Group plc. Mr Uppal also served as a Non-Executive Director of Oxford BioMedica plc between 2001 and 2006.

12

Since 2006 Mr Uppal has invested on his own account in various private companies and asset categories and during this time acquired the core vet practices that are now owned by PVG.

Graham Dick BVSc MRCVS - Non-Executive Director

Graham Dick BVSc MRCVS was appointed as a Non-Executive Director on 9 March 2015. A Bristol

University graduate, Mr Dick spent 15 years in mixed veterinary practice, first in Somerset then as a

partner in Norfolk, before a change of track led him to the world of animal therapeutics both in the UK

and overseas with Bayer Animal Health. His overseas roles included that of Head of Marketing and

Technical Service for Australia/New Zealand, Global Head of Livestock Business and Head of European

Marketing before returning to the UK as Head of the Animal Health Division of Bayer for the UK and

Ireland, from which he finally retired in 2013, having taken it to the best performing Bayer Animal

Health subsidiary in Europe. He currently provides consultancy services to international veterinary businesses.

Mr Dick served for 10 years on the Board of the National Office of Animal Health (NOAH), of which he

was elected Chairman for a period of three years and is now an honorary life member for services to

the animal health industry. He currently serves on the Board of the Veterinary Benevolent Fund, for

which he takes a special interest in CPD matters, and also on the Board of RCVS Knowledge (Royal College of Veterinary Surgeons).

Directors who served during the year

The Directors of the Company who served during the year were as follows:

Iain Ross Non-Executive Chairman

Dr David Venables Non-Executive Director (resigned post-period on 27 February 2015)

Dr David Bloxham Senior Non-Executive Director (resigned post-period on 27 February

2015)

Charles Spicer Non-Executive Director (resigned on 30 June 2014)

Sue Steven Non-Executive Director (appointed on 30 June 2014 and resigned

post-period on 27 February 2015)

Directors are subject to election by shareholders at the first annual general meeting after their

appointment and to re-election thereafter at intervals of no more than three years. Dominic Tonner,

Daniel Smith and Raj Uppal were each appointed as a Director post-period on 27 February 2015, and

Graham Dick was also appointed as a Director post-period on 9 March 2015. All four of these Directors

will retire at the next annual general meeting of the Company on 26 June 2015 and, being eligible, will

offer themselves for re-election. Sue Steven’s appointment was not put to shareholders as her tenure

as a Non-Executive Director did not span a general meeting.

Directors’ interests

All the Directors have either service agreements or letters of appointment, details of which are set out

in the approved remuneration policy which is available at www.arktherapeutics.com. The Directors'

interests in shares and share options, are given in the Directors' remuneration report on page 29.

13

Directors' and Officers' Liability Insurance

The Company has made qualifying third party indemnity provisions for the benefit of its Directors which

remain in force at the date of this report. In addition the Group has purchased and maintains Directors'

and Officers' liability insurance cover against certain legal liabilities and costs for claims incurred in

respect of any act or omission in the execution of their duties.

Dividends

The Directors are unable to recommend the payment of a dividend (2013: £nil).

Share capital

During the reporting period no ordinary shares of 1 penny each were allotted. However, on 11

December 2014, in order to facilitate the Subscription (as more fully described in the Circular) which

contemplated an issue price per share of 10.1 pence against a then nominal value per share of 10

pence, the Company’s share capital was reorganised by a special resolution to create ordinary shares

with a nominal value of 10 pence each and a deferred share of 90 pence.

As at 31 December 2014, the Company had 457 ordinary shareholders and 2,092,766 Ordinary Shares

of 10 pence each in issue. There were also 2,092,766 Deferred Shares of 90 pence each in issue.

Capital structure

Where not provided elsewhere in this Directors' report, the following provides the additional information

required for shareholders as a result of the implementation of the Takeovers Directive into English law.

The Company has two classes of share capital, Ordinary Shares and Deferred Shares. All the Ordinary

Shares rank pari passu. Details of the Ordinary Share capital can be found in note 10 to the financial

statements. There are no restrictions on transfer of the Ordinary Shares in the Company other than

certain restrictions which may from time to time be imposed by laws and regulations (for example,

insider trading laws); and pursuant to the Listing Rules of the Financial Conduct Authority whereby

certain employees of the Company require the approval of the Company to deal in the Ordinary Shares.

On a show of hands at a general meeting of the Company, every holder of Ordinary Shares present in

person and entitled to vote shall have one vote and on a show of hands every proxy present who has

been duly appointed by one or more members shall have one vote, unless such proxy has been

appointed by more than one member and such proxy has been instructed by, or exercises a discretion

given by, one or more of those members to vote for a resolution and has also been instructed by, or

exercises a discretion given by, one or more other of those members to vote against the

same resolution, in which case on a show of hands such proxy has one vote for and one vote against

such resolution. On a poll, every member present in person or by proxy and entitled to vote shall have

one vote for every Ordinary Share held. The notice of the next annual general meeting will specify

deadlines for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions

to be passed at the meeting. The rules governing the appointment and replacement of Board members

and changes to the articles of association accord with usual English company law provisions.

The Deferred Shares do not entitle holders to receive notice of or attend and vote at any general

meeting of the Company or to receive a dividend or other distribution or to participate in any return on

capital on a winding up other than the nominal amount paid on such shares following a substantial

distribution to the holders of Ordinary Shares in the Company. Accordingly, the Deferred Shares are, for

all practical purposes, valueless and it is the Board’s intention that, at an appropriate time, the

Company may repurchase the Deferred Shares, cancel or seek to surrender the Deferred Shares using

such lawful means as the Board may at such time determine. The Deferred Shares will not be admitted

to trading on any stock exchange.

Subject to the Company's articles of association, any statute or subordinate legislation for the time

being in force concerning companies and affecting the Company, and directions given by special

resolution, the business of the Company shall be managed by the Directors, who may exercise all the

powers of the Company.

14

Major shareholdings

As at 31 December 2014, the following major holdings in the Company’s share capital had been notified

to the Company:

Number of shares Percentage

Hargreaves Lansdown Asset Management 265,386 12.68

J O Hambro Capital Management 206,594 9.87

Barclays Wealth Management (UK) 146,094 6.98

NCL Smith & Williamson Investments 140,000 6.69

TD Direct Investing 120,324 5.75

Miton Group plc 95,280 4.55

A J Bell Securities 88,747 4.24

Halifax Share Dealing 79,717 3.81

As at 23 April 2015, being the last practicable day prior to the publication of this report, the following

major holdings in the Company's share capital had been notified to the Company:

Number of shares Percentage

Raj Uppal 7,035,887 50.43

Dominic Tonner 2,650,837 19.00

Iain Ross 705,809 5.06

Authority to purchase shares

The Company currently does not have authority to purchase its own shares.

Bribery Act 2012

The Company believes that it has robust policies and procedures for combating bribery and corruption.

A copy of the Company's Anti-Corruption and Bribery Policy can be found on the Company’s website

(www.arktherapeutics.com).

Greenhouse gas emissions

In accordance with the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

the Company is required to report on its greenhouse gas emissions. Since the Disposal , the Company

has not retained any office space and, therefore, the Company has no greenhouse gas emissions to

report in the current or prior year.

Corporate Governance Statement

The Directors have provided information on the company’s compliance with the UK Corporate

Governance Code in their Corporate governance report on pages 16 to 22 of this report.

Auditor and annual general meeting

Each of the persons who is a Director at the date of approval of this Annual Report confirms that:

• so far as the Director is aware, there is no relevant audit information of which the Company’s

Auditor is unaware; and

• the Director has taken all the steps that he ought to have taken as a Director in order to make

himself aware of any relevant audit information and to establish that the Company’s Auditor is

aware of that information

15

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the

Companies Act 2006.

Deloitte LLP has acted as Auditor to the Company since 2002. However, the Board intends to

recommend to shareholders for approval at the forthcoming annual general meeting, to be held at the

offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA on 26 June 2015 at 11.30

am, the appointment of Grant Thornton LLP as the Enlarged Group's Auditor for the 52 weeks ending 26

June 2016. The notice of the meeting is set out on pages 55 to 63 with a summary of the business to

be transacted.

The intention to change the Company’s Auditor is as a result of Grant Thornton LLP having been

engaged to audit the accounts of PVGL and its subsidiaries in preparation for the Acquisition. The

appointment will provide continuity in this regard in the next audit of the Enlarged Group’s accounts.

Deloitte LLP will continue in the role as Auditor of the Company until 26 June 2015, having been re-

appointed at the 2014 Annual General Meeting. The Board would like to thank Deloitte LLP, for their

significant contribution and support as the Company's Auditor over many years.

Approved by the Board and signed on its behalf by:

Sue Steven

Company Secretary

28 April 2015

16

CORPORATE GOVERNANCE REPORT

In this Annual Report, the Board is reporting formally on its compliance during the period with the UK

Corporate Governance Code (the “Code”) published in September 2012 by the Financial Reporting

Council (“FRC”). The Board recognises that it is accountable to shareholders for the Company’s

standard of governance and seeks to demonstrate how the principles of good governance practice

advocated by the Code have been applied within the Company during the reporting period.

Post-period, on 15 January 2015, the Company transferred from the premium listing category on the

London Stock Exchange to the standard listing category. The Code does not apply directly to

companies with a standard listing. However, pursuant to paragraph 7.2 of the Disclosure and

Transparency Rules, companies with a standard listing are still required to make a statement in the

directors’ report covering the governance code to which the issuer is subject in relation to the financial

reporting process and certain details of its share capital. The directors of companies with a standard

listing are also required to include a description of the internal control and risk management systems

and the composition of committees. Following the transfer, the Company is defining the appropriate

corporate governance requirements it should comply with as a standard listed company but will,

nevertheless, comply with all such requirements set out in DTR 7.2.

Statement of compliance with the Code

In accordance with the Listing Rules of the Financial Conduct Authority, the Company confirms that

during the reporting period (1 January 2014 to 31 December 2014) it was compliant with the provisions

of, and applied the principles of the Code, save for those provisions relating to board composition and

committees, namely sections B.1.2, B.2.1, C.3.1 and D.2.1. The reasons for non-compliance with these

sections are set out in the relevant paragraphs below.

The following paragraphs, together with the Directors’ remuneration report, also provide details of how

the Company applied the principles and complied with the remaining provisions of the Code during the

reporting period.

Board of Directors

During the reporting period, the Board consisted solely of Non-Executive Directors as a result of the

disposal of the trading subsidiaries of the Company on 15 March 2013 (the "Disposal"). The Non-

Executive Chairman is Iain Ross and, during the reporting period, the Non-Executive Director, Dr David

Venables, acted as Chief Executive Officer in the absence of Executive Directors. Dr Venables resigned

post-period on 27 February 2015. The articles of association of the Company state that the Company

must have a minimum of four Directors and the Company complied with this requirement throughout

the reporting period.

Division of responsibilities between Chairman and Chief Executive Officer

The Chairman, Iain Ross, is responsible for leadership of the Board, ensuring its effectiveness on all

aspects of its role, setting its agenda and ensuring that the Directors receive accurate, timely and clear

information. The Chairman also ensures effective communication with shareholders and facilitates the

effective contribution of Non-Executive Directors. Dr David Venables, was responsible for the running

of the business (in the absence of Executive Directors) and, prior to the Disposal, was responsible for

managing the executive management team, which reported formally to the Board at each Board

meeting. During the period, the position of Senior Independent Director, whose main role is to satisfy

the function outlined in the Code of being available to shareholders where there are concerns which

normal contact has failed to resolve, to lead the process for evaluating the Chairman's performance and

to chair the Nomination Committee when it was considering the succession to the role of Chairman, was

Dr David Bloxham.

By dividing responsibilities in this way no one individual had unfettered powers of decision-making.

The Chairman’s other commitments are described on page 11. During the period Mr Ross was

appointed as Non-Executive Director of Amarantus Biosciences Inc. which is listed in the United States.

Mr Ross’ new appointment does not bring a significant additional time commitment.

17

The role of the Board

The Code requires every company to be headed by an effective board, which is collectively responsible

for the success of the company. Prior to the Disposal, the Company had implemented a policy setting

out which matters were reserved for the decision of the Board. This policy was reviewed and updated

on a regular basis. Other powers were delegated to the various Board committees (the “Committees”)

and senior management. Details of the Committees prior to the Disposal are set out on page 19 of this

Annual Report. Papers for Board (and, historically, Committee meetings) are circulated in advance of

the relevant meeting and where a Director is unable to attend he continues to be provided with a full

copy of the papers and has the opportunity to comment on the matters to be discussed.

The Board considers that its primary role is to provide leadership to the Company, to set the Company's

strategic objectives and to develop robust corporate governance and risk management practices. The

policy of matters reserved to the Board and delegated authorities was reviewed and approved by the

Board. Prior to the Disposal, the matters reserved to the Board included:

• setting the overall direction, strategy and long-term objectives of the former Group and delegating

day-to-day management to the Chief Executive;

• reviewing former Group performance;

• reviewing the arrangements in place relating to risk management, regulatory and industry issues;

• approving items of major capital expenditure, annual and interim reports, accounts and budgets

(including reviewing performance against budget);

• undertaking reviews of Board, committee and individual Director performance at least annually;

• approving changes to the structure, size and composition of the Board (on the recommendation of

the Nomination Committee); and

• determining the remuneration policy for Directors and senior management (on the recommendation

of the Remuneration Committee).

The policy of reserved matters also identified those matters where full delegation to a Committee was

not normally permitted, as a final decision on the matter was required to be taken by the whole Board.

Matters, which the Board considered suitable for delegation, were contained in the terms of reference of

each of its Committees. The authority delegated to senior management provided a practical framework

to executive management, which sought to achieve the dual objectives of maintaining effective financial

and operational controls whilst providing sufficient flexibility to manage the business.

In view of the size and composition of the Board during the reporting period, all the Non-Executive

Directors collectively discharged all corporate governance responsibilities.

The Board considers that it has shown its commitment to leading and controlling the Company by

meeting seven times during the period. The attendance of each Director at Board meetings during the

reporting period is set out in the table below:

Director Number of Board Meetings attended3

Iain Ross 7/7

Dr David Venables 4/7

Dr David Bloxham 6/7

Charles Spicer1 4/4

Sue Steven2 3/3

1 Resigned as a Director on 30 June 2014. 2 Appointed as a Director on 30 June 2014. 3 Attendance is expressed as the number of meetings attended/number eligible to attend.

Board balance and independence of Non-Executive Directors

The Code requires a balance of executive directors and non-executive directors (and, in particular,

independent non-executive directors) such that no individual or small group of individuals can dominate

the Board’s decision taking. Section B.1.2 of the Code states that a smaller company, such as Premier

18

Veterinary Group plc, is required to have at least two independent non-executive directors. The

composition of the Board during the period is summarised in the table below:

The Board determined that during the period under review Dr David Bloxham met the independence

criteria set out in the Code, and that Charles Spicer also met such independence criteria until he

resigned from the Board on 30 June 2014, at which point the Company ceased to comply with Section

B.1.2 of the Code. As reported above, the articles of association of the Company state that the

Company must have a minimum of four Directors and, consequently, Sue Steven, the Company

Secretary, was appointed as a Non-Executive Director on 30 June 2014. Mrs Steven was not deemed

by the Board to be independent, having been an employee of the former Group within the last five

years but, in view of the Company’s status and uncertain future at that time, it would have been

impracticable to seek the appointment of a replacement independent Non-Executive Director.

Post-period on 27 February 2015 Dominic Tonner, Daniel Smith and Raj Uppal were appointed as

Executive Directors of the Company in the roles of Chief Executive Officer, Chief Financial Officer and

Corporate Development Director respectively. At the same time, Dr David Venables and Dr Bloxham

resigned as Directors, as did Sue Steven, although Mrs Steven continues in her role as Company

Secretary.

Also post-period on 9 March 2015 Graham Dick BVSc, MRCVS was appointed to the Board as a Non-

Executive Director. It is the Company’s intention to appoint a further Non-Executive Director in due

course.

The current composition of the Board as at the date of this report is that there are five Board members

including two Non-Executive Directors, one of whom the Board considers to be independent, namely

Graham Dick.

The Non-Executive Directors come from diverse business backgrounds and each has specific and

relevant expertise, which, in the opinion of the Board as a whole, materially enhances the judgment

and overall performance of the Board. The Company believes that good corporate governance depends

principally on high-calibre individuals with deep experience of the Company and industry, who have a

clear understanding of their roles and responsibilities and the tools necessary to discharge those

responsibilities.

Following appointment to the Board, all Directors attend formal induction training.

Appointments to the Board are the responsibility of the full Board, and prior to the Disposal, on the

recommendation of the Nomination Committee. On joining the Board, Non-Executive Directors receive

a formal appointment letter, which identifies the terms and conditions of their appointment and, in

particular, the time commitment expected of them. A potential Director candidate (whether an

Executive Director or Non-Executive Director) is required to disclose all significant outside commitments

prior to their appointment. The terms and conditions of letters of appointment of Non-Executive

Directors are available to shareholders for inspection at the Company's registered office during normal

business hours and at the forthcoming annual general meeting (for 15 minutes prior to the meeting and

during the meeting).

Information and professional development

Prior to the Disposal, the Board received detailed reports from executive management on the

performance of the former Group at Board meetings and other information as necessary, and senior

management regularly made presentations to the Board on their areas of responsibility. Regular

Director Date of appointment if

during the period

Date of resignation if

during the period

Independent

Dr David Bloxham Yes

Charles Spicer 30 June 2014 Yes

Iain Ross No

Dr David Venables No

Sue Steven 30 June 2014 No

19

updates were provided on relevant legal, corporate governance and financial reporting developments

and Directors and senior management were encouraged to attend external seminars on areas of

relevance to their role.

All Directors have access to the advice and services of the Company Secretary. The removal and

appointment of the Company Secretary is a matter reserved for Board approval. The Board also obtains

advice from independent professional advisers as and when required.

Directors’ conflicts of interest

Directors are required to notify the Company Secretary of any potential conflicts of interest when they

are appointed to the Board and, following appointment, as new potential conflicts arise. These

notifications are then considered and authorised by the Board as appropriate. A register of potential

conflicts of interest is maintained. In addition, the Company has put in place a process to review

potential conflicts of interest on a periodic basis, with the last review having been undertaken in March

2015.

The Committees

Prior to the Disposal, the Board had established a Remuneration Committee, a Nomination Committee

and an Audit Committee, whose make-up complied with the requirements of the Code. The terms of

reference of each Committee are available on the Company’s website www.arktherapeutics.com. All

Committees had access to independent expert advice. Appointments to Committees were for three

year terms extendable by no more than two further three year periods.

As mentioned above, following the Disposal, the Board comprised of only four members, consisting

solely of Non-Executive Directors. Consequently, in view of the size and composition of the Board, all

four Non-Executive Directors collectively discharged all corporate governance responsibilities and the

Company did not have separate Remuneration, Nomination and Audit Committees. The Company did

not, therefore, comply with Sections B.2.1, C.3.1 and D.2.1 of the Code during the reporting period

regarding the requirement to have such committees.

During the reporting period the Board as a whole undertook, as appropriate, the following

responsibilities previously undertaken by its Committees:

The Nomination Committee

The Nomination Committee had responsibility for considering and making appropriate recommendations

to the Board on the size, structure and composition of the Board and retirements and appointments of

additional and replacement Directors.

The Nomination Committee evaluated the balance of skills, knowledge and experience of the Board and

was committed to the progressive renewal of the Board through orderly succession. Appropriate

succession plans for senior management were also kept under close review. The Nomination Committee

was conscious of the need for due regard to be given to diversity when considering appointments to the

Board.

The Remuneration Committee

The Remuneration Committee had responsibility for making recommendations to the Board on the

Company’s policy on the performance evaluation and remuneration of Directors, and for determining,

within agreed terms of reference, specific remuneration packages for each of the Executive Directors

and members of senior management, including pension rights, any compensation payments and the

implementation of executive incentive schemes.

The Audit Committee

A report on the duties of the Audit Committee and how it discharged its responsibilities prior to the

Disposal is provided later in the Audit Committee report.

20

Timeliness and quality of Board information

The Board has sought to ensure that Directors are properly briefed on issues arising at Board meetings

by establishing procedures for distributing Board papers in a timely manner in advance of meetings;

considering the adequacy and quality of the information provided before making decisions; and

adjourning meetings or deferring decisions when Directors have concerns about the information

available to them. On joining the Board, Directors take part in a formal induction process, including the

provision of past Board materials to provide background information on the Company and information

on Board processes and governance framework. The induction is tailored to meet each new Director’s

specific needs. Training is provided to all Directors on an ongoing and timely basis.

All Directors have access to the advice and services of the Company Secretary and are entitled to

receive independent professional advice, at the Company’s expense, as required.

Transparency of Board appointments

There are formal, rigorous and transparent procedures for the appointment of new Directors to the

Board. Prior to the Disposal, shortlisted candidates were interviewed by at least one member of the

Nomination Committee and the Chairman of the Board and evaluations of appropriate candidates were

circulated to all members of the Nomination Committee for consideration and approval prior to

candidate recommendation to the Board. The only appointment to the Board during the period was Sue

Steven. For further details of Mrs Steven’s appointment see the paragraph entitled “Board balance and

independence of Non-Executive Directors” above.

Constructive use of the annual general meeting

The Board seeks to use the annual general meeting (together with other forums) to communicate with

investors and encourage their participation by arranging presentations and inviting shareholder

questions. Prior to the Disposal, the Chairman of each of the Committees was, wherever possible,

present at the annual general meeting to answer questions on the report on the relevant Committee’s

activities and matters within the scope of that Committee’s responsibilities. All shareholders were again

encouraged to attend the annual general meeting held on 30 June 2014 and the general meeting held

on 11 December 2014, which provided shareholders with the opportunity to ask questions of the Board.

At both meetings, all resolutions were put to a vote on a show of hands, with the results being

published on the Company’s website, and on the London Stock Exchange news services.

Dialogue with shareholders

The Board remains committed to maintaining good relationships with both institutional and private

shareholders and seeks to build on a mutual understanding of objectives between the Company and its

shareholders. Apart from the annual general meeting, this is undertaken by way of the Annual Report

and regular presentations to shareholders to discuss long-term issues and to obtain shareholder

feedback. Through the presentation of the Annual Report and Accounts, the Interim Report and press

releases (which are emailed automatically to registered users), the Board seeks to present a balanced

and understandable assessment of the Company’s position and prospects. The Annual Report is mailed

to shareholders and, together with all other periodic reports and accounts, is available for download

from the Company’s website (www.arktherapeutics.com) and from the National Storage Mechanism

(www.morningstar.co.uk/uk/NSM). The Company’s website also provides additional information on the

Company and access to press releases and other materials issued by the Company. In accordance with

the requirements of the UK Listing Authority, care is exercised to ensure that any price-sensitive

information is released at the same time to all shareholders.

As mentioned above all shareholders are encouraged to attend the Company’s annual general meetings.

The Chairman and the Chief Executive Officer are available to discuss strategy and governance issues

with shareholders. Following Dr Bloxham’s resignation from the Board on 27 February 2015, the

Company will be appointing a replacement Senior Independent Director once it has appointed a further

Non-Executive Director. As was the case during the reporting period, the replacement Senior

Independent Director will be available to be contacted directly by shareholders if they have concerns

that have not, or cannot, be addressed by the Chairman. In addition, all Directors have developed an

21

understanding of the views of shareholders through corporate broker briefings and review of issued

analyst notes. The Chairman and the Chief Executive Officer seek to meet with major shareholders on

a regular basis.

Re-election and Board performance evaluation

All Directors are subject to election by shareholders at the first annual general meeting following their

appointment by the Board. The Company's articles of association state that at every annual general

meeting any Director who has been a Director at each of the two preceding annual general meetings

and who was not appointed or re-appointed by the Company in a general meeting at, or since, such

meeting, shall retire as Director. A retiring Director shall be eligible for re-appointment. In practice

this means that every Director stands for re-election at intervals of not more than three years.

Accordingly, Dominic Tonner, Daniel Smith and Raj Uppal who were each appointed as a Director post-

period on 27 February 2015, and Graham Dick who was also appointed as a Director post-period on 9

March 2015, will retire at the next annual general meeting of the Company on 26 June 2015 and, being

eligible, will offer themselves for election. Mrs Steven’s appointment was not put to shareholders as

her tenure as a Non-Executive Director did not span a general meeting.

Section B.6 of the Code recommends that a board undertakes a formal and rigorous annual evaluation

of its own performance and that of its committees and individual directors. The Board is mindful that it

needs continually to monitor and identify ways in which it might improve its performance and

recognises that board evaluation is a useful tool for enhancing a board’s effectiveness. In accordance

with the Code, prior to the Disposal the Board undertook a rigorous and formal annual evaluation of its

own performance, balance of skills, experience, independence, diversity (including gender diversity)

and other factors relevant to its effectiveness (and historically also of that of its Committees) and the

performance of its individual Directors which had been formalised in the Board Review and

Development Policy (a copy of which is available on the Company’s website www.arktherapeutics.com)

adopted by the Board. During the period the Company was in negotiations with a variety of third party

'reverse takeover targets' and, as a consequence the Non-Executive Chairman, did not undertake a

formal discussion with each of the Non-Executive Directors regarding the performance of the Board and

their own individual contribution and performance. However, the Non-Executive Chairman solicited the

informal views of other Non-Executive Directors and concluded, in liaison with the Senior Independent

Director, Dr David Bloxham, that under the circumstances each Director contributed effectively and

demonstrated commitment to the role (including the allocation of necessary time for preparation and

attendance at Board meetings and any other duties). The Non-Executive Directors are responsible for

evaluating the performance of the Non-Executive Chairman and, during the period, the remaining three

Non-Executive Directors considered, that under the unique circumstances, the Board and its individual

members performed effectively, and in particular that the Non-Executive Chairman discharged all of his

responsibilities under the Code. Accordingly, the Board believes that during the reporting period the

Company complied with section B.6 of the Code to the extent that it was appropriate, taking into

account the then status of the Company.

Internal control and risk management

The Board has overall responsibility for the Company's internal control systems and for monitoring their

effectiveness. The Board maintains a system of internal controls to safeguard shareholders’ investment

and the Company's assets, and has established a continuous process for identifying, evaluating and

managing the significant risks the Company faces. The Board regularly reviews the process, which has

been in place throughout the period and up to the date of approval of the Annual Report and Accounts

and is consistent with the FRC’s “Guidance on Risk Management, Internal Control and Related Financial

and Business Reporting”.

The Board’s review process was, with the assistance of the Audit Committee prior to the Disposal,

based principally on reviewing regular reports from management to consider whether significant risks

were identified, evaluated, managed and controlled and whether any significant weaknesses were

promptly remedied or indicated a need for more extensive monitoring. The system was designed to

manage rather than eliminate the risk of failure to achieve the Company's objectives, and could only

provide reasonable and not absolute assurance against material misstatement or loss. In assessing

what constituted reasonable assurance, the Board considered the materiality of financial and non-

financial risks and the relationship between the cost of, and benefit from, internal control systems.

22

Lines of responsibility and delegated authorities are clearly defined. Prior to the Disposal, the former

Group's policies and procedures were regularly updated and distributed throughout the former Group.

The Audit Committee received reports on a regular basis on compliance with the former Group's policies

and procedures. In addition, certain controls specifically relating to the production of consolidated

financial information, covering operational procedures, validation and review were operated. Similar

policies, procedures and controls are being put in place for the Enlarged Group.

The Board confirms that it has, during the reporting period, reviewed on an ongoing basis the

effectiveness of the Company's system of internal controls including financial, operational and

compliance controls and risk management systems and has reviewed insurance provisions. No

significant failing or weaknesses have been identified.

The Board monitors the activities of the Company through regular Board meetings (principally, during

the period the management of cash resources). The Board retains responsibility for approving any

significant financial expenditure or commitment of resources.

The Board confirms that the Annual Report and Accounts, taken as a whole, are fair, balanced and

understandable and provide all the necessary information for shareholders to assess the performance,

strategy and business model of the Company.

Approved by the Board and signed on its behalf by:

Sue Steven

Company Secretary

28 April 2015

23

AUDIT COMMITTEE REPORT

Composition of the Audit Committee

As outlined on pages 17 and 18 in the Corporate governance report, the Code recommends that in the

case of a smaller company the Audit Committee should consist of at least two independent Non-

Executive Directors, one of whom has recent and relevant financial experience. As mentioned in the

Corporate governance report, following the Disposal, the Board comprised of only four members,

consisting solely of Non-Executive Directors. Consequently, in view of the then current size and

composition of the Board, all four Non-Executive Directors were collectively discharging all corporate

governance responsibilities, including those formerly attributed to the Audit Committee.

Summary of the role of the Audit Committee

Prior to the Disposal, the Audit Committee focused particularly on compliance with legal requirements,

accounting standards and the Code and on ensuring that an effective system of internal financial

controls was maintained. The ultimate responsibility for reviewing and approving the financial

statements in the Interim and Annual Reports remained with the Board. Written terms of reference

were modelled on the Code provisions and set out the main roles and responsibilities of the Audit

Committee, including the monitoring of whistle-blowing procedures, reviewing financial reporting

arrangements and the effectiveness of internal controls and risk management systems. The Audit

Committee reported to the Board, identifying any need for action or improvement on any of these

terms of reference and makes recommendations as to the steps to be taken. The effectiveness of the

Audit Committee was reviewed by the Board annually.

In accordance with the FRC’s Guidance on Audit Committees, no one other than the Audit Committee

Chairman and members received automatic invitations to a meeting of the Audit Committee. The Audit

Committee met the external Auditor at least once a year without management present and its

Chairman kept in touch on a continuing basis with the key people involved in the Company’s

governance, including the Board Chairman, the Chief Executive Officer and the external audit lead

partner. An induction programme was provided for new Audit Committee members, covering the role

of the Audit Committee, its terms of reference and an overview of the former Group's business,

including the main business and financial dynamics and risks.

The Audit Committee reviewed the financial integrity of the former Group’s financial statements

including relevant corporate governance statements prior to Board submission.

In exercising its responsibilities prior to the Disposal, the Audit Committee:

• continued its review of the internal controls in place in the former Group, having particular regard

to the former Group’s change in strategy;

• reviewed the Company’s Investment Policy in the light of the ongoing global financial instability, the

contract authorisation process and the internal controls in place to guard against fraud, bribery and

corruption; and

• assessed the process for the identification and management of key risks.

Meetings

The Board met on seven occasions during the year. At two of those meetings, at which the majority of

Non-Executive Directors were present, the responsibilities previously undertaken by the Audit

Committee were discharged. These specifically related to the approval of the financial statements for

the year ended 31 December 2013 and the approval of the interim financial statements for the period

ended 30 June 2014. The Auditor was also present at both those meetings.

Significant issues related to the financial statements

The Board has not identified any significant issue relating to the financial statements following review.

Consideration has been given to post-balance sheet events as documented in note 12, and given the

change of circumstances, the financial statements have been prepared on a going concern basis, as

more particularly described in the Strategic report on page 10.

24

External audit

Deloitte LLP, an international audit partnership, was first appointed as Auditor to the former Group in

2002. There are no contractual restrictions on the Company with regard to their appointment. In

accordance with professional standards, the Deloitte LLP partner responsible for the audit is rotated

every five years. The current Deloitte LLP partner was rotated onto the former Group’s audit

engagement in 2010.

The Board reviews the effectiveness of the external Auditor. This process involves the external Auditor

presenting to the Board its proposed audit scope. The external Auditor also presents to the Board the

output of its detailed year-end work and the Board challenges significant judgments (if any). In making

its assessment of external Auditor effectiveness, the Board reviews the audit engagement letters before

signature, reviews the external Auditor’s summary of Company issues, and conducts an overall review

of the effectiveness of the external audit process and the external Auditor.

The Board is satisfied with the performance of the external Auditor during the year and the policies and

procedures they have in place to maintain their objectivity and independence. However, the Board

intends to recommend to shareholders for approval at the forthcoming annual general meeting the

appointment of Grant Thornton LLP as the Enlarged Group's Auditor for the 52 weeks ending 26 June

2016. The intention to change the Company’s Auditor is as a result of Grant Thornton LLP having been

engaged to audit the accounts of PVGL and its subsidiaries in preparation for the Acquisition. The

appointment will provide continuity in this regard in the next audit of the Enlarged Group’s accounts

The Board is required by the Code to present a balanced and understandable assessment of the

Company's position and prospects. In relation to this requirement reference is made to the Directors’

responsibilities statement for preparing the financial statements set out on page 36. The independent

Auditor’s report on pages 37 to 40 includes a statement by the Auditor about its reporting

responsibilities.

The Audit Committee was responsible for making recommendations to the Board on the appointment,

reappointment and removal of the external Auditor and assessed annually the qualification, expertise,

resources, remuneration and independence of the external Auditor. During the reporting period this

role was undertaken by the Board as a whole. The Board also receives a report on the external audit

firm’s own internal quality control procedures. For each annual cycle, the Board ensures that

appropriate plans are in place for the external audit.

As recommended by the FRC’s “Guidance on Audit Committees” and in compliance with its terms of

reference, the Audit Committee had developed and recommended to the Board and the Board has

adopted a policy (the “Auditor’s Independence Policy”) to ensure Auditor independence and objectivity

including in relation to the provision of non-audit services by the Auditor. Under the Auditor’s

Independence Policy the Auditor is permitted to supply the Company with audit and audit-related

services (eg reviews of internal controls and reviewing the Company's interim financial statements).

Certain permitted non-audit services are set out in the policy (eg tax compliance and planning) and

such services required authorisation either by the Non-Executive Director undertaking the role of Chief

Executive Officer in the absence of Executive Directors or, the Board as a whole depending on their

value. In order to ensure continued Auditor’s independence under the policy the Auditor is prohibited

from supplying certain services (including book-keeping and accounting services and actuarial services).

Any non-audit services that are to be provided by the external Auditor are reviewed in order to

safeguard Auditor objectivity and independence. The Board can confirm that during the reporting

period there have been no non-audit services that are considered to have impaired the objectivity and

independence of the external Auditor. A full breakdown of payments made to the external Auditor

during the financial year is disclosed within note 3 on page 47.

Risk management and internal control

The Board has overall responsibility for the Company's internal control systems and for monitoring their

effectiveness. The Board maintains a system of internal controls to safeguard shareholders’ investment

and the Company's assets, and has established a continuous process for identifying, evaluating and

managing the significant risks the Company faces. The Board regularly reviews the process, which has

25

been in place throughout the period and up to the date of approval of the Annual Report and Accounts

and is consistent with the FRC’s “Guidance on Risk Management, Internal Control and Related Financial

and Business Reporting”.

The Board’s internal control and risk management review process (conducted with the assistance of the

Audit Committee prior to the Disposal), is outlined on pages 24 and 25 of the Corporate governance

report.

Internal audit

The Board considers the need for an internal audit function annually and in consultation with the

Auditor has concluded that, given the current size of the Company's operations, it is not necessary at

this time.

Approved on behalf of the Board

Iain Ross

Chairman

28 April 2015

26

DIRECTORS' REMUNERATION REPORT

Dear Shareholder

As the Director nominated by the Board to make this statement, I am pleased to introduce the 2014

Directors’ remuneration report.

In view of the size and composition of the Board during the reporting period, all four Non-Executive

Directors collectively discharged all corporate governance responsibilities, including those duties

formerly delegated to the Remuneration Committee. Following completion of the Acquisition, it is the

intention of the Company to re-establish its Remuneration Committee in due course.

This report covers the remuneration of the Executive and the Non-Executive Directors, as required by

the remuneration reporting regulations, and explains the application of the remuneration policy in 2014

and 2015. For ease of reference, the remuneration policy table, extracted from the remuneration policy

approved by shareholders at the general meeting held on 11 December 2014, and which summarises

the remuneration framework for Executive Directors, is annexed to the report.

The Company believes that its approach to remuneration provides a relatively simple but effective

overall framework, which is designed to attract, motivate and retain senior management of an

appropriate calibre needed to achieve the Company's strategic objectives. The remuneration policy of

the Company underpins the achievement of the Company’s results and the long-term goals of the

Company and is directly linked to strategic objectives.

This Directors’ remuneration report has been prepared in accordance with the requirements of Schedule

8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as

amended). The report also meets the relevant requirements of the Listing Rules of the FCA, and

describes how the Board has complied with the principles and provisions of the Code relating to

remuneration matters. The remuneration tables subject to audit in accordance with the relevant

statutory requirements are contained in the annual report on remuneration.

Remuneration in 2014

As a result of the Disposal, during the reporting period the Company had no permanent employees. The

only remuneration during the period under review, therefore, was in respect of the Non-Executive

Directors’ fees as detailed in the annual report on report on remuneration on page 27.

Changes in remuneration for 2015

The Board remains satisfied that the current remuneration framework, as approved by shareholders at

the general meeting held on 11 December 2014, continues to be appropriate in light of the Company’s

current strategy and regulatory environment. As a result, no changes to the remuneration policy are

proposed at this time.

Conclusion

I hope you find that this report clearly explains the remuneration approach adopted by the Company

and enables you to appreciate how it underpins the business growth and returns strategy, and how it

links to strategic objectives. The Board was pleased that the remuneration policy received the approval

of shareholders at the general meeting held on 11 December 2014 and continues to consider the policy

fair and fully aligned with the interests of shareholders.

Daniel Smith

Chief Financial Officer

28 April 2015

27

ANNUAL REPORT ON REMUNERATION

This annual report on remuneration explains how the remuneration policy has been implemented in the

year ended 31 December 2014 and how it will be implemented for 2015.

The link between remuneration and strategy

As set out in the Strategic report, following the Acquisition, the Company has developed an updated

strategic plan containing near term and longer-term objectives. Such objectives are measurable via the

Enlarged Group’s KPIs as set out on page 6 of the Strategic report, all of which are built into the

Enlarged Group’s incentive schemes. Annual bonus arrangements are linked to the Enlarged Group’s

near term strategy. The Board is, therefore, satisfied that current arrangements clearly support the

business strategy.

Key remuneration decisions during 2014

As stated in the Chief Financial Officer’s letter on page 26, during the reporting period the Company had

no permanent employees. The only remuneration during the reporting period, therefore, was in respect

of the Non-Executive Directors’ fees as detailed in this annual report on remuneration on page 27.

Implementation of remuneration policy for the year ending 31 December 2014

Single total figure of Executive Directors’ remuneration (audited)

The Company had no Executive Directors during the reporting period. However, the following table sets

out the single figure remuneration in respect of the Executive Directors for the preceding reporting

period:

1 Taxable benefits related to private medical insurance. 2 All vested share options were waived during the reporting period. 3 Mr Ross' permanent position of Executive Chairman was made redundant on 31 March 2013. The sum of £155,000 in

respect of payment in lieu of notice and £30,000 compensation for loss of office was paid to Mr Ross, and a pension contribution of £15,000 was made by the Company into his pension plan following redundancy.

4 Dr Venables' permanent position of Chief Executive Officer was made redundant on 31 March 2013. The sum of £170,000 in respect of payment in lieu of notice and £30,000 compensation for loss of office was paid to Dr Venables, and a pension contribution of £30,000 was made by the Company into his pension plan following redundancy.

Non-Executive Directors’ Remuneration (audited)

The following table shows the remuneration for the Non-Executive Directors who served during the

2014 financial year:

Name of Director Base salary

£'000

All taxable

benefits1

£’000

Value of vested share

options2

£’000

Pension

£’000

Total for 2014

£'000

Total for 2013

£'000

Iain Ross - - - - - 3251

Dr David Venables - - - - - 4288

- - - - - 539

Name of Director 9Total fees 2014 £'000

9Total fees 2013 £'000

Iain Ross1,2 11 9

Dr David Venables1,3 11 9

Dr David Bloxham 11 24

Charles Spicer4 6 22

Sue Steven5,6 6 -

David Prince7 - 18

Professor Seppo Ylä-Herttuala8 - 1

45 83

28

1 With effect from 1 April 2013, being the date of transfer from Executive Director to Non-Executive Director status. 2 In addition to the amounts shown above, Mr Ross has earned consultancy fees of £78,175 (2013: £62,475) which were

not in respect of his qualifying services as a Director. 3 In addition to the amounts shown above, Dr Venables has earned consultancy fees of £14,400 (2013: £29,498) which

were not in respect of his qualifying services as a Director. 4 To date of resignation, 30 June 2014. 5 From date of appointment, 30 June 2014. 6 In addition to the amounts shown above, since her appointment as a Director on 30 June 2014, Mrs Steven has earned

consultancy fees of £18,210 (2013: £nil) which were not in respect of her qualifying services as a Director. 7 To date of resignation, 15 March 2013, including the sum of £9,000 in respect of the payment of three months’ fees in

lieu of notice. 8 To date of resignation, 15 March 2013. 9 Constitutes total remuneration, being Non-Executive Director’s fees only.

Following the Disposal, Mr Ross and Dr Venables had been leading discussions with a number of third

parties interested in a possible transaction with the Company, culminating in the Acquisition. As a result

Mr Ross and Dr Venables have been paid ad hoc consultancy fees to reflect the amount of time devoted

to these discussions. The level of fees charged has been at a significant discount to market rates and

the fees have varied depending upon the number of days worked over that expected of a Non-Executive

Director. As the former Chairman of the Remuneration Committee, Dr Bloxham reviewed and approved

all relevant claims. Mrs Steven has also been paid ad hoc consultancy fees in relation to the

performance of her role as Company Secretary.

During the reporting period, Mr Ross, Dr Venables and Dr Bloxham each waived the sum of £1,000 in

respect of one month’s Non-Executive Director’s fees.

Annual bonus payment in respect of 2014

No bonus payments were made during the reporting period.

Share option plans in respect of 2014

During the reporting period:

(a) no share option awards were granted under any of the Company’s share option plans;

(b) both Mr Ross and Dr Venables waived their entitlement to all their outstanding share options;

and

(c) all Mrs Steven’s share options lapsed.

Ark Therapeutics Family Benefit Trust (“FBT”)

No funds were made available to the trustee of the FBT to subscribe for shares during the year. None

of the current Executive and Non-Executive Directors hold sub-funds in the FBT.

Whilst Ordinary Shares are held within the FBT, the voting rights in respect of those shares are

exercisable by the trustee in accordance with its fiduciary duties.

Pensions

No amounts were set aside or accrued by the Company during the reporting period to provide pension,

retirement or similar benefits.

29

Directors’ shareholdings and share interests (audited)

Directors’ beneficial share interests

The interests of the Directors who served during the year in the share capital of the Company at 31

December 2013, 31 December 2014 and at the date of this report/their resignation were as follows:

Director Number of Ordinary Shares of 10p each1 Total number

of share options3,5

Vested but unexercised

share options3,5

31 December 2014

31 December 20132

Date of report/or

resignation

31 December 2014

31 December 2014

Dr David Bloxham 2,739 2,739 2,739 - -

Iain Ross 8,220 8,220 705,809 - -

Charles Spicer4 5,513 5,513 5,513 - -

Dr David Venables - - - - -

Sue Steven 500 500 500 - -

1 There are no performance measures attached to these shares. All shares have been purchased by the Directors. 2 The figures for the comparative period have been adjusted to show the position as if the Consolidation and Sub-Division

had taken effect at that time. 3 During the reporting period, both Mr Ross and Dr Venables waived their entitlement to all their share options. 4 Resigned as a Director on 30 June 2014. 5 During the reporting period, all Mrs Steven’s share options lapsed.

All interests are beneficially held. There is no requirement for Directors to hold shares in the Company.

Directors’ interests in share options

Details of options over Ordinary Shares for Directors who served during the year are set out in the table

below. The figures represent the position prior to the Consolidation and Sub-Division.

Ordinary Shares of 1 penny each

Director

1 January

2014

Granted Options

exercised

during

the

period

Options

waived/

lapsed

during

the

period

31

December

2014

Exercise

price

Pence

Date from

which

exercisable

Expiry/

lapsed/

waived date

Iain Ross 2,000,000

2,000,000

-

-

-

-

2,000,000

2,000,000

-

-

11.55

3.50

09/09/2012

01/04/2013

1,311/08/2014 2,311/08/2014

Dr David

Venables

5,000,000 - - 5,000,000 - 3.50 01/04/2013 2,311/08/2014

Sue Steven 6,000 8,000

2,475

2,334

4,000

250,000

50,000

- -

-

-

-

-

-

- -

-

-

-

-

-

6,000 8,000

2,475

2,334

4,000

250,000

50,000

- -

-

-

-

-

-

96.25 104.00

94.75

94.00

39.25

10.00

3.50

12/03/2008 04/01/2009

03/01/2010

03/01/2011

05/01/2012

15/03/2013

15/03/2013

1,410/03/2014 1,410/03/2014 1,410/03/2014 1,410/03/2014 1,410/03/2014 2,410/03/2014 2,410/03/2014

9,322,809 - - 9,322,809 -

1 Vested in full. 2 Vested in full on redundancy in accordance with the relevant share option plan rules. 3 Board discretion exercised permitting share options to remain exercisable until 31 March 2015. However, all options

were waived during the reporting period. 4 Board discretion exercised permitting share options to remain exercisable until 10 March 2014.

30

Performance graphs (unaudited)

Total shareholder Return (“TSR”)

As required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations

2008 (as amended), the following graph shows the TSR of an Ordinary Share held in PVG over the last

six financial years, compared to the TechMARK Mediscience Index, FTSE Fledgling Index and FTSE 100.

These indices have been selected for this comparison as the Company was a constituent member of

each index during the reporting period.

Source: FactSet

Six-year cumulative TSR performance - Value of £100 invested 1 January 2009

The following graph compares the Company's TSR with the TechMARK Mediscience Index, FTSE

Fledgling Index and FTSE 100 over the period from 1 January 2009 to 31 December 2014 assuming an

initial investment of £100.

Source: FactSet

'09 '10 '11 '12 '13 '140

50

100

150

200

250

300

350 TechMARK Mediscience Index FTSE Fledgling Index FTSE ARK Price

'09 '10 '11 '12 '13 '140

50

100

150

200

250

300

350

100

91.1

36.9

12.68.0

8.20.9 1.4

224.37

1.36

148.08

295.01

FTSE Fledgling vs. PeersIndexed Price Performance Price (Indexed to 100)

FTSE Fledgling Premier Veterinary Group PLC FTSE 100 Index:Client:Techmark_Mediscience_Index.Ofdb

31

On 28 March 2014, in response to a request by the Company, the UK Listing Authority suspended the

listing of the Company’s premium listed shares on the Official List and from trading on the Main Market

of the London Stock Exchange, pending publication of the shareholder documents required to facilitate

the Acquisition. The market price of the 1 penny ordinary shares at the time of the suspension was

0.53 pence. Following the Consolidation and Sub-Division which took effect on 13 December 2014, the

market price of a 10 pence Ordinary Share from that date to 31 December 2014 was 53.30 pence

(whilst still being suspended). As at 27 April 2015, being the last practicable day prior to the publication

of this report, the share price stood at 69.5 pence.

Total CEO remuneration (unaudited)

The table below sets out the total remuneration and the amount vesting under short-term and long-

term incentives (as a percentage of the maximum that could have been achieved) in each year of the

same period as the performance graphs for the Director holding the post of Chief Executive Officer.

During the reporting period the Company had no Executive Directors.

Year Chief Executive

Officer Single figure

of total remuneration

£’000

Annual bonus

paid out

£'000

Vesting rate

against maximum

opportunity under the

LTIP

%

Vesting rate against

maximum opportunity

under the Approved

Executive Plan and/or the

Unapproved Executive Plan

%

Vesting rate against

maximum opportunity

under the FBT

%

2014 - - - - - -

2013 Dr David Venables 1288 - - 7100.00% -

2012 Dr David Venables 2158 - - - -

2012 Martyn Williams 3539 - - 8100.00% 20.00%

2011 Martyn Williams 366 670 - - 23.33%

2010 Martyn Williams 4275 - 55.00% 55.00% -

2010 Nigel Parker 5606 - 55.00% 55.00% 44.58%

2009 Nigel Parker 439 - 50.00% 66.70% -

1 Dr Venables' permanent position of Chief Executive Officer was made redundant on 31 March 2013. This figure included the sum of £170,000 in respect of payment in lieu of notice and £30,000 compensation for loss of office paid to Dr Venables, and a pension contribution of £30,000 made by the Company into his pension plan following redundancy.

2 Dr Venables was appointed as Chief Executive Officer on 1 August 2012. 3 Mr Williams resigned as a Director and Chief Executive Officer on 31 July 2012. This figure included the sum of

£311,750 in respect of pay in lieu of notice and compensation for loss of office paid to Mr Williams, and a pension contribution of £45,000 made by the Company into his pension plan following his departure as Chief Executive Officer. In May 2010 the terms of Mr Williams’ contract were revised by the Board on his appointment as CEO, prior to the arrival of any of the members of the current Board.

4 Mr Williams was appointed as Chief Executive Officer on 5 May 2010. 5 Dr Parker resigned as a Director and Chief Executive Officer on 5 May 2010. This figure included the sum of £390,000 in

respect of pay in lieu of notice and compensation for loss of office. 6 Mr Williams was appointed as Chief Executive Officer on 5 May 2010 and bonus performance objectives relating to his

first 12 months in office were established at that time. A bonus of £30,000 representing one third of the maximum that could have been earned in the year was paid. A further bonus of £40,000 was earned for the period from 5 May 2011 to 31 December 2011 based on achievement of additional cash generative objectives.

7 In accordance with the applicable share option plan rules, all options vested on the permanent position of Chief Executive Officer being made redundant. Dr Venables waived his entitlement to all his share options during the reporting period.

8 Board discretion exercised under the applicable share option rules.

In view of the fact that during the reporting period the Company had no Chief Executive Officer nor any

permanent employees, it is not relevant to include a graph showing the actual expenditure on

remuneration of the Company and the change between the current year and previous years.

Implementation of remuneration policy for the year ending 31 December 2015

There are no changes to the way in which remuneration policy will be implemented in 2015 versus the

remuneration policy approved by shareholders on 11 December 2014.

32

Executive Directors’ base salaries and benefits

The salaries of the Executive Directors with effect from 27 February 2015, being the date of their

appointment, are as follows:

Executive Directors Position 2015 base

salary % increase from 2014

Dominic Tonner Chief Executive Officer £220,000 N/A

Daniel Smith Chief Financial Officer £80,000 N/A

Raj Uppal Corporate Development Director £100,000 N/A

The provision of benefits in 2015 will be operated in line with the approved Directors’ remuneration

policy.

Approach to annual bonus

The annual bonus scheme for the current financial year will run from 1 March 2015 to 30 September

2015 representing a period of seven months. This shortened period arises due to the date of

appointment of the Executive Directors following the Acquisition and the change in year end from 31

December to 30 September. As a result of these factors, it has been agreed by the Board that the

bonuses for the period ended 30 September 2015 will be paid on a discretionary basis, but will not in

any event exceed the maximum opportunity as set out in the approved remuneration policy. The

Company does not currently anticipate that the payment of bonuses would result in earnings before

interest, taxes, depreciation, and amortisation (EBITDA) or net assets becoming negative.

The annual bonus performance measures for the subsequent financial year will be detailed in the annual

report and accounts for the year ending 30 September 2015 and, in accordance with the approved

remuneration policy, will be aimed at rewarding performance against specific near-term goals which are

consistent with the strategic direction of the business. These goals will be measurable and linked to the

financial measures in a way that facilitates the delivery of the financial performance targets.

Approach for Share Options Plans awards

No share option awards were made in 2014. However, in line with the approved remuneration policy a

grant of options over Ordinary Shares was made post-period to eligible employees (including Executive

Directors) equating to approximately 10% of the issued capital of the Company. Full details will be

disclosed in the 2015 annual report on remuneration .

Approach FBT transfers

No conditional transfers of shares will be made to sub-funds within the FBT in 2015.

Pensions

Pension arrangements will be in line with the approved remuneration policy.

Non-Executive Directors’ remuneration

The fees for the Non-Executive Director positions in 2014 and for 2015 are set out below:

Role 2014

£'000 2015 £'000

Chairman 12,000 75,000

Non-Executive Director 12,000 30,000

Non-Executive Directors' fees were reduced from £32,000 to £12,000 per annum with effect from 1 May

2013 and continued at that level throughout 2014 whilst the Company’s future became more certain.

No additional fees are paid to Non-Executive Directors in relation to committee membership.

33

Remuneration of senior management and other below Board employees

In addition to its responsibility for Executive Directors, the Remuneration Committee (once re-

established) will also be involved in the consideration of the remuneration arrangements for the senior

management team. It will do so in the context of the Company’s overall strategy and performance to

align the financial interests of the Executive Directors and other management and employees with

achievement of the Company’s objectives.

Shareholder voting

At the annual general meeting held on 30 June 2014, shareholder proxy voting on the Directors’

remuneration report for the year ended 31 December 2013 was as follows:

Number of votes

cast for Percentage of votes cast for

Number of votes cast against

Percentage of votes cast against

Number of votes withheld1

46,553,8162 99.99 5,415 0.01 85,085

At the general meeting held on 11 December 2014, shareholder proxy voting on the Directors’

remuneration policy was as follows:

Number of votes

cast for Percentage of votes cast for

Number of votes cast against

Percentage of votes cast against

Number of votes withheld1

74,332,4152 93.13 5,486,957 6.87 122,552

1 Includes discretionary votes. 2 A vote withheld is not a vote in law and is not counted in the calculation of votes for and against.

The Company is committed to on-going shareholder dialogue and takes an active interest in voting

outcomes. Should there be a significant level of votes against resolutions relating to Directors’

remuneration, the Company will seek to understand the reasons for this and will set out any actions

taken in response.

Approval

This report was approved by the Board of Directors on 28 April 2015 and signed on its behalf by:

Daniel Smith

Chief Financial Officer

28 April 2015

34

Annex to Remuneration Report The full remuneration policy is contained in the Circular and available at www.arktherapeutics.com

Remuneration of Executive Directors

The following table summarises each element of the Executive Directors’ remuneration package, the

policy for how these are operated and their link to the Company’s strategy.

Element of Pay Purpose and link to Company’s strategy

How operated in practice

Maximum Opportunity

Performance conditions where relevant

Base salary Reflects the value of the

individual and their role. Takes account of experience and personal contribution to Company strategy. Set at a level to facilitate recruitment and retention of suitably experienced executives.

Salaries are reviewed

annually on 1 October. The policy is for salaries to be around those paid by other companies comparable on the basis of size and complexity, but also takes account of other factors including any change in responsibilities or the scope of the role.

There is no

prescribed annual increase. The Committee is guided by the wider workforce increases, but may also need to recognise increases in certain circumstances such as assumed additional responsibility, or an increase in the scope or size of the role.

Takes into account

the performance and personal contribution of the individual and the performance of the Company.

Annual bonus plan

Rewards performance against specific near-term goals which are consistent with the strategic direction of the business.

Assessed by the Committee against the audited results of the Company where relevant.

A bonus of up to 50% of salary may be awarded. In exceptional circumstances the Board has the discretion to award a higher percentage.

No less than

20% of the bonus is based on one or more relevant financial performance conditions such as operating profit.

Up to 50% of the bonus may be based on appropriate non-financial targets.

Any non-financial target will be subject to an appropriate financial underpin.

Share options plan

Aims to reward long-term value creation.

Share options provide a direct and transparent link between executive pay and value creation for shareholders as no gains are possible unless there has been an increase in share price. All share options expire on the tenth anniversary of their grant date.

No option may be granted to a participant if, as a result, the aggregate market value of Ordinary Shares subject to options granted to that participant during a financial year under all employee share arrangements established by the Company would exceed twice his basic salary, although this limit may be exceeded in exceptional

All share options previously granted to the Directors have been waived. Performance criteria where appropriate will include the Company’s share price performance, achievement of financial and commercial milestones and individual job milestones. However, see “Share options” section in the Circular with regard

35

Element of Pay Purpose and link to Company’s strategy

How operated in practice

Maximum Opportunity

Performance conditions where relevant

circumstances. to the grant of share options made with effect from

Admission.

Benefits To remain competitive in the market workplace.

Executive Directors are entitled to private medical insurance and, if considered appropriate, to participate in the Company Car Scheme.

There is no prescribed maximum. The value of the benefit is determined by the cost to the Company.

Not performance related.

Pension contribution/ payment in lieu

To remain competitive in the market workplace and facilitate retirement planning.

A contribution equivalent to 10 per cent. of salary is made by the Company to Executive Directors and paid into either

a pension scheme or paid direct to the individual in lieu.

10 per cent. of base salary.

Not performance related.

Notes to the Policy Table

1. Annual Bonus Plan performance metrics

Performance measures, the weighting between them and stretching targets will be set at the start of each year

by the Committee, based on the Company’s financial KPIs and strategic priorities for the year and taking account of the business plan, budget for the year, and market conditions. At least 20% will be based on relevant financial targets and up to 50% may be attributed to a relevant non-financial target. Together, these targets are intended to incentivise and reward shorter-term performance, consistent with the interests of the shareholders and the overall strategy of the Company.

2. Share Options Plans

The Committee selects performance measures for share options awards that are aimed at incentivising and rewarding performance over the medium term, aligned with the interests of the shareholders and consistent with the Company’s strategy. The Committee will set stretching targets based on the Company’s budget, business plan, and external economic environment at that time.

3. Comparison with employees’ remuneration policy

The key differences between Executive Directors’ remuneration policy and that of employees generally is that, for the Executive Directors, there is significantly more weighting to variable performance-related pay. Variable pay is seen as more relevant for senior executives because of their greater ability to influence the overall performance of the Company.

36

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Annual Report, Directors’ remuneration report and the

financial statements in accordance with applicable laws and regulations.

Company law requires the Directors to prepare such financial statements for each financial year. Under

IAS Regulation the Directors are required to prepare financial statements in accordance with

International Financial Reporting Standards ("IFRSs") as adopted by the European Union (“EU”). Under

company law the Directors must not approve the accounts unless they are satisfied that they give a

true and fair view of the state of affairs of the Company and of the profit or loss of the Company for

that period. In preparing these financial statements, the Directors are required to:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are

insufficient to enable users to understand the impact of particular transactions, other events and

conditions on the entity's financial position and financial performance; and

• make an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the Company’s transactions and disclose with reasonable accuracy at any time the financial

position of the Company and enable them to ensure that the financial statements comply with the

Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the

Group and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial

information included on 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 confirm to the best of their knowledge that:

(a) the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true

and fair view of the assets, liabilities, financial position and profit or loss of the Company;

(b) the Strategic report includes a fair review of the development and performance of the business

and the position of the Company, together with a description of the principal risks and

uncertainties that it faces; and

(c) the Annual Report and financial statements, taken as a whole, are fair, balanced and

understandable and provide the information necessary for shareholders to assess the

company’s performance, business model and strategy.

By order of the Board

Iain Ross Dominic Tonner

Director Director

28 April 2015 28 April 2015

37

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREMIER VETERINARY

GROUP PLC

Opinion on financial statements of Premier Veterinary

Group plc

In our opinion the financial statements:

• give a true and fair view of the state of the Company’s affairs as at

31/12/2014 and of its loss for the year then ended;

• have been properly prepared in accordance with International Financial

Reporting Standards (IFRSs) as adopted by the European Union; and

• have been prepared in accordance with the requirements of the

Companies Act 2006.

The financial statements comprise the Statement of Comprehensive Income,

the Statement of Financial Position, the Cash Flow Statement, the Statement

of Changes in Equity and the related notes 1 to 15. The financial reporting

framework that has been applied in their preparation is applicable law and

IFRSs as adopted by the European Union.

Going concern As required by the Listing Rules we have reviewed the statement contained

within the Strategic Report that the Company is a going concern. We confirm

that

• we have concluded that the Directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate;

and • we have not identified any material uncertainties that may cast

significant doubt on the Company’s ability to continue as a going

concern.

However, because not all future events or conditions can be predicted, this

statement is not a guarantee as to the Company’s ability to continue as a

going concern.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that

had the greatest effect on our audit strategy, the allocation of resources in the

audit and directing the efforts of the engagement team:

Risk How the scope of our audit responded to the risk

Disclosure of post balance sheet events

As outlined in the Strategic Report and note 12

to the financial statements, the Company

entered into a transaction on 5 February 2015

to acquire 100% of the issued share capital of

Premier Veterinary Group Limited (“PVGL”) for

an aggregate consideration of £3,731.18 in

cash. As part of the same transaction, a

number of investors had conditionally agreed

to subscribe for shares in the Company for an

aggregate value of £1.2 million. Following the

completion of the acquisition, the former

shareholders of PVGL then owned 69.43% of

the Company’s issued share capital.

The Company has provided disclosure about

PVGL for the previous year prior to its

acquisition by the Company. There is a

We have reviewed the prospectus associated with the

transaction, as well as the associated sale and

purchase agreement and Company board minutes to

understand the way in which the transaction was

structured and therefore assess whether it falls to be

treated as a reverse acquisition under IFRS 3,

Business Combinations or whether it is outside of the

scope of IFRS 3.

We have reviewed the disclosures provided in the

financial statements in light of the conclusion

reached following consideration of the associated

accounting and agreed the disclosures made about

PVGL back to underlying audited financial

statements.

38

judgement as to the depth of disclosure

provided and a risk that the information might

not be correctly summarised from the financial

statements of PVGL.

This is a significant post balance sheet event

and poses a risk of material misstatement if

not disclosed appropriately.

Preparation of accounts under the going concern basis

As outlined in the Strategic report and note 2

to the financial statements, following the post

year-end reverse acquisition and the

recommencement of trading the Company has

prepared the financial statements under the

going concern basis. This is in contrast to the

previous financial year for which financial

statements were prepared under a basis other

than going concern due to the disposal of its

subsidiaries and hence cessation of trading.

The risk is associated with assessing the going

concern position of the new enlarged group as

the acquired PVGL group has historically been

loss-making.

We have reviewed and challenged the key

judgements and assumptions used in management’s

forecasts supporting the going concern basis of

preparation, including a review of the historical

forecasting accuracy of the PVGL group and a review

of actual performance in the six months to 31 March

2015 versus forecast performance.

We also held discussions with those charged with

governance of the enlarged group, including those

on the board of PVGL, to gain an understanding of

the enlarged group in light of the need to address

the risk associated with the going concern basis of

preparation.

We have considered whether the disclosure provided

around the going concern basis of preparation

appropriately sets out the basis on which the

Directors have concluded the going concern basis of

preparation is appropriate.

Last year our report included one other risk relating to subsidiaries and cessation of trading which is

not included in this report as it is no longer relevant.

The description of risks above should be read in conjunction with the significant issues considered by

the Audit Committee discussed on page 23. Our audit procedures relating to these matters were designed in the context of our audit of the

financial statements as a whole, and not to express an opinion on individual accounts or disclosures.

Our opinion on the financial statements is not modified with respect to any of the risks described

above, and we do not express an opinion on these individual matters.

Our application of materiality

We define materiality as the magnitude of misstatement in the financial

statements that makes it probable that the economic decisions of a

reasonably knowledgeable person would be changed or influenced. We use

materiality both in planning the scope of our audit work and in evaluating the

results of our work. We determined materiality for the Company to be £36,750 (2013: £83,800),

which is approximately 5.0% (2013: 7.5%) of pre-tax loss, and is

approximately 4.0% (2013: 8.5%) of equity.

We agreed with those charged with governance that we would report to them

all audit differences in excess of £515 (2013: £1,600), as well as differences

below that threshold that, in our view, warranted reporting on qualitative

grounds. We also report to those charged with governance on disclosure

matters that we identified when assessing the overall presentation of the

financial statements.

39

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its

environment, including internal control, and assessing the risks of material

misstatement. Audit work to respond to the risks of material misstatement

was performed directly by the audit engagement team.

Whilst we did not need to audit Premier Veterinary Group Limited (“PVGL”)

and its subsidiaries, we did consider the disclosures made about the PVGL in

light of the risk outlined above and ensured all amounts disclosed agreed back

to previously audited and published results.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion: • the part of the Directors’ Remuneration Report to be audited has been

properly prepared in accordance with the Companies Act 2006; and • the information given in the Strategic Report and the Directors’ Report

for the financial year for which the financial statements are prepared is

consistent with the financial statements.

Matters on which we are required to report by exception

Adequacy of

explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our

opinion:

• we have not received all the information and explanations we require

for our audit; or

• adequate accounting records have not been kept, or returns adequate

for our audit have not been received from branches not visited by us;

or

• the financial statements are not in agreement with the accounting

records and returns.

We have nothing to report in respect of these matters.

Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion

certain disclosures of Directors’ remuneration have not been made or the part

of the Directors’ Remuneration Report to be audited is not in agreement with

the accounting records and returns. We have nothing to report arising from

these matters.

Corporate Governance

Statement

Under the Listing Rules we are also required to review the part of the

Corporate Governance Statement relating to the Company’s compliance with

ten provisions of the UK Corporate Governance Code. We have nothing to

report arising from our review.

Our duty to read other information

in the Annual Report

Under International Standards on Auditing (UK and Ireland), we are required

to report to you if, in our opinion, information in the annual report is:

• materially inconsistent with the information in the audited financial

statements; or

• apparently materially incorrect based on, or materially inconsistent

with, our knowledge of the Company acquired in the course of

performing our audit; or

• otherwise misleading.

In particular, we are required to consider whether we have identified any

inconsistencies between our knowledge acquired during the audit and the

Directors’ statement that they consider the annual report is fair, balanced and

understandable and whether the annual report appropriately discloses those

matters that we communicated to the audit committee which we consider

should have been disclosed. We confirm that we have not identified any such

inconsistencies or misleading statements.

40

Respective responsibilities of Directors and

Auditor

As explained more fully in the Directors’ Responsibilities Statement, the

Directors are responsible for the preparation of the financial statements and

for being satisfied that they give a true and fair view. Our responsibility is to

audit and express an opinion on the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland).

Those standards require us to comply with the Auditing Practices Board’s

Ethical Standards for Auditors. We also comply with International Standard on

Quality Control 1 (UK and Ireland). Our audit methodology and tools aim to

ensure that our quality control procedures are effective, understood and

applied. Our quality controls and systems include our dedicated professional

standards review team and independent partner reviews. This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit

work has been undertaken so that we might state to the Company’s members

those matters we are required to state to them in an auditor’s 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 and the Company’s

members as a body, for our audit work, for this report, or for the opinions we

have formed.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the

financial statements sufficient to give reasonable assurance that the financial

statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are

appropriate to the Company’s circumstances and have been consistently

applied and adequately disclosed; the reasonableness of significant accounting

estimates made by the Directors; and the overall presentation of the financial

statements. In addition, we read all the financial and non-financial

information in the annual report to identify material inconsistencies with the

audited financial statements and to identify any information that is apparently

materially incorrect based on, or materially inconsistent with, the knowledge

acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the

implications for our report.

Stuart Henderson (Senior Statutory Auditor)

for and on behalf of Deloitte LLP

Chartered Accountants and Statutory Auditor

Cambridge, United Kingdom

28 April 2015


41

FINANCIAL STATEMENTS

Statement of comprehensive income for the year ended 31 December 2014

Year ended 31 December

2014


2013

Note £'000 £'000

Other administrative expenses (735) (1,031)

Share-based compensation - (64)

Administrative expenses (735) (1,095)

Operating loss (735) (1,095) Investment income 1 3

Loss on ordinary activities before taxation 3 (734) (1,092) Taxation 5 - -

Loss on ordinary activities after taxation (734) (1,092) Discontinued operations Profit from discontinued operations after taxation - 2,193

(Loss)/profit on ordinary activities after taxation, being retained (loss)/profit for the year and total comprehensive (expense)/income

(734)

1,101

(Loss)/profit per share (basic and diluted) 6

Basic (35p) 53p

Diluted (35p) 53p


42

Statement of financial position as at 31 December 2014

Note

31 December 2014 £'000

31 December 2013 £'000

Non-current assets Investments in subsidiaries 7 - -

- -

Current assets Trade and other receivables 8 119 225 Cash and cash equivalents 382 758

501 983

TOTAL ASSETS 501 983

Current liabilities Trade and other payables 9 316 64

TOTAL LIABILITIES 316 64

Equity Share capital 10 2,092 2,092 Share premium 118,937 118,937 Merger reserve 1,521 1,521 Retained loss (122,365) (121,631)

TOTAL EQUITY 185 919

TOTAL LIABILITIES AND EQUITY 501 983

The financial statements of Premier Veterinary Group plc (formerly Ark Therapeutics Group plc), registered number 04313987, were approved by the Board of Directors and authorised for issue on 28 April 2015. They were signed on its behalf by:

Dominic Tonner Iain Ross

Director Director

28 April 2015 28 April 2015


43

Statement of changes in equity for the year ended 31 December 2014

Share

capital

£'000

Share premium

£'000

Merger reserve

£’000

Retained loss

£'000

Total

£'000

Balance as at 31 December 2012 2,092 118,937 1,521 (122,796) (246)

Profit for the year - - - 1,101 1,101

Total comprehensive expense 2,092 118,937 1,521 (121,695) 855 Credit to equity for share based payments - - - 64 64

Balance as at 31 December 2013 2,092 118,937 1,521 (121,631) 919

Loss for the year - - - (734) (734)

Total comprehensive income 2,092 118,937 1,521 (122,365) 185 Credit to equity for share based payments - - - - -

Balance as at 31 December 2014 2,092 118,937 1,521 (122,365) 185

Cash flow statement

for the year ended 31 December 2014 Year ended

31 December 2014 £'000


2013 £'000

Operating loss (735) (1,095) Adjustments for non-cash items Share-based compensation - 64 Changes in working capital Decrease/(increase) in receivables 106 (176) Increase/(decrease) in payables 252 (383)

Net cash used in operating activities (377) (1,590)

Investing activities Interest received 1 3 Proceeds on sale of subsidiaries (net of disposal costs) - 1,385 Funding of subsidiary companies - (695)

Net cash from investing activities 1 693

Net decrease in cash and cash equivalents (376) (897) Cash and cash equivalents at beginning of year 758 1,655

Cash and cash equivalents at end of year 382 758


Notes to the financial statements for the year ended 31 December 2014

44



1 General information

Premier Veterinary Group plc (formerly Ark Therapeutics Group plc) is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 67. The nature of the Company's operations and its principal activities are set out in the Chairman's statement on pages 2 to 4. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group operates.

Adoption of new and revised standards

In the current financial year, the Company has adopted the following standards and amendments. These did not have a material impact on the financial statements: IFRS 10 Consolidated financial statements IFRS 11 Joint Arrangements IFRS 12 Disclosure of interest in other entities IFRS 13 Fair Value Measurement IFRS 7 (amended) Amendment related to the offsetting of assets and liabilities IAS 19 (amended) Amended standard resulting from the post-employment benefits and termination benefits projects IAS 27 (amended) Separate financial statements

IAS 28 (amended) Investments in associates and joint ventures IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine Improvements to IFRSs (May 2012) At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective, and in some instances not yet endorsed by the EU: IFRS 9 Financial Instruments IFRS 14 Regulatory Deferral Accounts IFRS 15 Revenue from Contracts with Customers IAS 16 (amended) Amendments regarding the clarification of acceptable methods of depreciation and amortisation IAS 16 (amended) Amendments bringing bearer plants into the scope of IAS 16 IAS 19 (amended) Amended to clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service IAS 27 (amended) Amendments for investment entities IAS 28 (amended) Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture IAS 32 (amended 2011) Offsetting of Assets and Liabilities



45

IAS 36 (amended) Amendments arising from Recoverable Amount Disclosures for Non-Financial Assets IAS 38 (amended) Amendments regarding the clarification of acceptable methods of depreciation and amortisation IAS 39 (amended) Amendments for novations of derivatives IAS 41 (amended) Amendments bringing bearer plants into the scope of IAS 16 IFRS 10 (amended) Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture IFRS 11 (amended) Amendments regarding the accounting for acquisitions of an interest in a joint operation IFRIC 21 Levies The Directors anticipate that the adoption of these Standards and Interpretations in future periods will not have a material impact on these financial statements, except for additional disclosures, when the relevant standards come into effect.

2 Significant accounting policies

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and therefore the Company financial statements comply with Article 4 of the EU IAS Regulation. The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below. Basis of preparation IAS 27 (2008) requires the Company to prepare consolidated financial statements. However, as a result of the disposal of the Company’s trading subsidiaries (“the Subsidiaries”) on 15 March 2013 (“the Disposal”), the Company had no subsidiaries at current or prior year-end. In accordance with the Companies Act 2006, the Company is not, therefore required to consolidate the formerly owned Subsidiaries up to the date of the Disposal. Accordingly we present in this annual report and accounts the company only financial statements of Premier Veterinary Group plc (formerly Ark Therapeutics Group plc) for the 12 months ended 31 December 2014. Certain comparatives have been reclassified to be consistent with the current year’s changes in presentation.

Going concern Following the Disposal in the prior year the Company ceased its principal activity. During the reporting period the Company continued in operational existence for the purpose of entering into a reverse transaction or, if that transaction were to be unsuccessful, to distribute funds back to shareholders. As required by IAS 1 Presentation of Financial Statements, the Directors had prepared the financial statements for the prior year on a basis other than that of a going concern given that its principal activity had ceased during that year. The financial statements did not include any provision for the future cost of terminating the business of the Company except to the extent that such were committed at the balance sheet date. No material adjustments arose as a result of ceasing to apply the going concern basis. During the reporting period the Company operated within its available cash resources. Prior to the year end, the Company commenced the process by which it would complete a reverse acquisition with PVGL. Post-period, following successful completion of the reverse acquisition and commencement of trading, after making enquiries, the Directors have a reasonable expectation that, as indicated by the detailed financial forecasts of the Enlarged Group (which take into account the risks facing the Enlarged Group), the Enlarged Group will have adequate resources to continue in operational existence for the foreseeable future. For this reason, the financial statements have been prepared on a going concern basis.



46

Taxation

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax laws and rates that are enacted or substantively enacted at the balance sheet date. Post-retirement benefits

Prior to the disposal of the Company’s trading subsidiaries on 15 March 2014, the Company made contributions to employees' personal pension plans which were defined contribution schemes. The amount charged to the income statement in respect of pension costs is the contribution payable in the year. Differences between contributions payable in the year and contributions actually paid are shown either as accruals or prepayments in the balance sheet.

Employee Benefit Trust The Company operates an employee benefit trust (the Ark Therapeutics Family Benefit Trust (“FBT”)) as part of its incentive plans for employees. All assets and liabilities within the Trust are recorded in the balance sheet as assets and liabilities of Premier Veterinary Group plc (formerly Ark Therapeutics Group plc) until such time as the assets are awarded to the beneficiaries. All income and expenditure of the Trust is similarly brought into the results of the Company.

Financial instruments

Financial assets and financial liabilities are recognised in the Company‘s balance sheet when the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognises financial liabilities when the Company’s obligations are discharged, cancelled or they expire. Financial assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as receivables. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Allowances are recognised in the income statement when there is objective evidence that the asset is impaired.

Cash and cash equivalents comprise current accounts held by the Company with immediate access and short-term bank deposits with a maturity period of three months or less.

Financial liabilities Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments throughout the expected life of the financial liability or where appropriate, a shorter period. Trade payables are not interest bearing and are stated at their nominal value. Loans are measured at amortised cost.



47

Share-based payments

The Company operates a number of executive and employee share schemes. For all grants of share options, LTIPs and shares allocated to the FBT, the fair value as at the date of grant is calculated using an option pricing model and the resulting cost is recognised over the respective vesting period, being the period in which the services are received. The cost is adjusted to reflect expected and actual levels of awards vesting, except where the failure to vest is as a result of not meeting a market condition.

The Company has applied the requirements of the transitional provisions of IFRS 2 in respect of equity-settled awards and has applied IFRS 2 only to equity-settled awards granted after 7 November 2002. Investments in subsidiaries Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment. Critical accounting judgments and key sources of estimation uncertainty In the preparation of the financial statements, management is required to make estimates and assumptions, in accordance with IFRS, that affect the amounts reported as assets and liabilities, disclosure of contingent assets and liabilities as at the balance sheet date and the reported amounts of revenues and expenditure during the year. In the preparation of the financial statements, estimates and assumptions have been made by management concerning the fair value of share options, accruals and provisions required, and other similar evaluations. Actual amounts that result could differ from those estimates. The judgment on the Company’s ability to continue as a going concern is included on page 10 within the Strategic report.

3 Loss on ordinary activities before taxation

Loss on ordinary activities before taxation is after charging:


2014 £'000

Year ended31 December

2013£'000

Gain on disposal of subsidiaries - 2,193Staff costs (note 4) 80 607 The analysis of Auditor remuneration is as follows:

Total audit fees 40 43

Other assurance services 14 16 Other tax services 7 1 Tax compliance 4 - Corporate finance services 10 12

Total non-audit fees 35 29

4 Staff costs

The average monthly number of people employed by the Company within finance and administration was none (2013:4).

The aggregate remuneration comprised:


2014 £'000


2013 £'000

Wages and salaries 75 112 Social security costs 5 56 Pension contributions - 45 Termination payments - 394

80 607



48

In addition to the wages and salaries analysis above are the effects of the share-based compensation charge for the year of £nil (2013: £64,000).

5 Tax Year ended

31 December 2014 £'000


2013 £'000

Current taxation: Domestic - -

The charge for the year can be reconciled to the loss in the income statement as follows: Year ended

31 December 2014 £'000


2013 £'000

Loss before tax on continuing operations (734) (1,092)

Tax on Company loss on ordinary activities at a blended standard UK corporate rate (2014: 21.5%; 2013: 23.5%) (158) (262) Other permanent differences: Expenses not deductible for tax purposes

-

15

Tax effect of accumulated tax losses not recognised in deferred tax

158

247

Tax expense for the year - -

The Finance Act 2014, which provides for a reduction in the main rate of corporation tax from 21% to 20% with effect from 1 April 2015, was substantively enacted on 17 July 2014. This rate reduction has been reflected in the calculation of deferred tax at the balance sheet date. The effect of the tax rate reduction on the deferred tax balance will be accounted for in the period in which the tax rate reduction is substantively enacted.

6 (Loss)/profit per share

From continuing and discontinued operations

The calculation of the basic and diluted earnings per share is based on the following data: Earnings

2014 £’000

2013 £’000

Earnings for the basis of basic and diluted earnings per share (734) 1,101

Number of shares

2014

2013

Weighted average number of ordinary shares for the purposes of basic earnings per share

2,092,766

2,092,766

Effect of dilutive potential ordinary shares from share options - -

Weighted average number of ordinary shares for the purposes of diluted earnings per share

2,092,766

2,092,766

The weighted average number of ordinary shares for the purposes of basic earnings per share has been altered in the comparative period to take into account the share restructuring which took place on 11 December 2014, so as to present an appropriate comparative earnings per share.



49

2,000,000 share options were outstanding as at 31 December 2014 (2013: 11,422,808). During the period 1 January 2013 – 31 December 2014, the average market price of ordinary shares did not exceed the exercise price of these options and therefore they are not considered dilutive, in line with IAS 33.

7 Subsidiaries

2014 £'000

2013 £'000

Shares in Group undertakings at cost and net book value - -

As at 1 January - 74 Subsidiaries sold during the year - (74)

As at 31 December - -

8 Trade and other receivables The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

2014 £'000

2013 £'000

Non-current Amounts due from the Family Benefit Trust (“FBT”) 1,041 1,049 Less provision for doubtful debts (impairment) (1,041) (1,049)

- -

Current Prepayments 72 82 Other debtors 47 143

Total 119 225

In 2013 and 2014, the provision for doubtful debts relates to monies owed by the Family Benefit Trust. This is a fair value impairment. Cash and cash equivalents comprise current accounts held by the Company with immediate access and short-term bank deposits with a maturity value of three months or less.

9 Trade and other payables

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit taken for trade purchases is 20 days (2013:31 days). 2014

£'000 2013 £'000

Trade creditors and accruals 316 64

The Directors consider that the carrying amount of trade payables approximates their fair value.

10 Share capital

2014 £'000

2013 £'000

Authorised 25,000,000 (2013: 250,000,000) ordinary shares of 10 pence (2013: 1 pence) each

2,500 2,500

Issued and fully paid 2,092,766 (2013: 209,276,676) ordinary shares of 10 pence (2013: 1

pence) each

209 2,092

2,092,766 (2013: nil) deferred shares of 90 pence each 1,883 -

2,092 2,092



50

As more fully described in the Directors’ report on page 13, on 11 December 2014, the Company’s share capital was reorganised by a special resolution to create ordinary shares with a nominal value of 10 pence each and a deferred share of 90 pence.

Between 1 January 2013 and 31 December 2014, no shares were issued to the Ark Therapeutics Family Benefit Trust (“FBT”). Share options Details of share options in existence at 31 December 2014 are as follows: Number Weighted

average exercise price

Period in which exercisable in

normal circumstances

Approved Executive Plan 530,504 £0.05 until 2022 Unapproved Executive Plan 1,469,496 £0.05 until 2022

2,000,000

11 Share-based payments - equity-settled share option schemes, LTIPs

Options over ordinary shares have been granted to date under nine share option plans: • the Ark Therapeutics Limited Enterprise Management Incentive Share Option Plan (the"2001 EMI

Plan"); • the Ark Therapeutics Group Limited 2003 Enterprise Management Incentive Share Option Plan (the

"2003 EMI Plan", together with the 2001 EMI Plan, the "EMI Plans"); • the Ark Therapeutics Limited Scavidin Stand-alone Plan (the "Scavidin Plan"); • the Ark Therapeutics Limited Share Option Plan (the "Old Executive Plan"); • the Ark Therapeutics Group Unapproved Share Option Plan (the "Unapproved Executive Plan"); • the Ark Therapeutics Group Approved Executive Plan (the "Approved Executive Plan"); • the Non-Executive Director Share Participation Plan (the "Non-Executive Director Plan"); • the Ark Therapeutics Group Consultancy Share Option Plan (the "Consultants Plan"); • the Ark Therapeutics Group 2005 Long Term Incentive Plan ("LTIP"). No further grants will be made under any of these plans. Grants under share options and LTIPs are normally exercisable between three and ten years from the date of grant. Options under the share option schemes are granted at the average market price for three days before the grant or on the closing day before the grant. LTIPs are granted at an exercise price of £nil. No LTIP options were granted during 2014 or in the preceding year. No options were granted during 2014 or in the preceding year.



51

Options Outstanding

Share-option Schemes LTIPs

Number of options

Weighted average exercise

price

Weighted average

fair value

Number of options


price

Weightedaverage

fair value

At 01/01/2013 12,308,722 £0.12 £0.00 89,250 £0.00 £0.00 Options granted - - - - £0.00 £0.00 Options exercised - - - - £0.00 £0.00 Options expired (885,914) £0.83 £0.00 (89,250) £0.00 £0.00

At 31/12/2013 11,422,808 £0.07 £0.00 - £0.00 £0.00 Options granted - - - - £0.00 £0.00 Options exercised - - - - £0.00 £0.00 Options expired (9,422,808) £10.00 £0.00 - £0.00 £0.00

At 31/12/2014 2,000,000 £0.07 £0.00 - £0.00 £0.00

Range of exercisable prices

£10.00 £0.00

Weighted average remaining contractual life

2 months nil years

Options exercisable Share-option Schemes LTIPs

Number of options


price

Latest exercise

date

Number of options


price

Latest exercise date

At 31/12/2014 2,000,000 £2.00 28/02/2015 - £0.00 -

At 31/12/2013 11,422,808 £0.07 31/03/2015 - £0.00 -

Shares held in the FBT

The fair value of shares held in the FBT for the benefit of employees is determined using the Black-Scholes model which takes into account the terms and conditions upon which the shares were awarded. There were

no shares held in the FBT conditionally appointed to employees’ sub-funds in either 2013 or 2014. As at 31 December 2014 a total of 428,195 (2013: 4,281,952) shares had been unconditionally appointed to employees’ sub-funds: The aggregate fair value of the shares unconditionally appointed to the employees' sub-funds is £416,000 (2013: £416,000). The Company recognised a charge of £Nil relating to equity-settled share-based payment transactions (2013: £64,000).

12 Events after balance sheet date

The Company acquired the entire issued share capital of PVG 200) Limited on 5 February 2015 for a total cash consideration of £3,731.18. This is currently its only direct subsidiary. PVG 2007 Limited operates primarily in the UK small animal veterinary services sector but certain of its operations cross over into the wider UK small animal pet care market. The Company was, immediately prior to the Acquisition, deemed to be a cash shell and as such was not classified as a business under IFRS 3 Business Combinations and, therefore, the Acquisition is outside the scope of IFRS 3. As such, in accordance with Listing Rule LR 5.6.4, and by virtue of the relative size of PVGL when compared to the Company, the accounting acquirer has been determined to be PVGL and the accounting acquiree, the Company.



52

As at 31-Mar 2014 £'000

Financial assets 2,198

Inventory 122

Property Plant and Equipment 619

Identifiable intangible assets 71

Financial liabilities (5,199)

Goodwill 1,454

Total Identifiable assets (735)

No fair value exercise has been performed on opening balance sheet on date of the reverse acquisition.

13 Related party transactions During the prior year the Company provided working capital loans to subsidiary companies. Interest on these loans was charged at market related rates. During the prior year Ark Therapeutics Ltd was sold and the loan of £881,000 associated therewith was consequently 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) 2014

£'000 2013 £'000

FBT 1,041 1,049

The following transactions took place during the year at arm’s length: Details of consultancy fees earned by Directors during the year and fees paid to third parties for Directors’ consultancy services are included within the Directors’ remuneration report. As at 31 December 2014 consultancy fees owed to the Directors were as follows: 2014

£'000 2013 £'000

Iain Ross 2 11

Charles Spicer 3 -

David Venables - 4

Total 5 15

14 Remuneration of key management personnel The remuneration of the Directors and senior management, who are the key management personnel of the Company, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the audited parts of the Directors' remuneration report on pages 27 to 29. Year ended

31 December 2014 £'000


2013 £'000

Short-term employee benefits 80 166Pension contributions - 60Termination payments - 394Share-based payment – options - 64

80 684



53

15 Financial instruments

Categories of financial instruments Under IFRS7, and for the purposes of risk management, the following classes of financial assets and their carrying values have been identified: 2014

£'000 2013 £'000

Cash and cash equivalents 382 758

Loans and receivables (including cash and cash equivalents) 429 900

Investment income consists of interest on money-market investments and cash and cash equivalents. Investment income earned on financial assets is categorised under IFRS7 as loans and receivables (including cash and cash equivalents). Under IFRS7, and for the purposes of risk management, the following classes of financial liabilities and their carrying value (at amortised cost) have been identified: 2014

£'000 2013 £'000

Trade creditors and accruals 316 64

Amortised cost 316 64

Financial risk management objectives

The Company’s management of financial and market risk is the same as that of the Company as disclosed in pages 7 and 8 of the Strategic report.

Market Risk

Foreign currency risk management

Exchange rate exposures are managed within approved policy parameters, and may utilise spot purchases of foreign currencies, options or forward contracts. There were no options of forward contracts during the year.

Interest rate risk management

The Company has no external borrowings. Loans and receivables (including cash and cash equivalents) earned £nil of investment income during 2014 (2013: £nil). If interest rates had been 0.5% higher/lower and all other variables were held constant, the Company’s profit for the year ended 31 December 2014 would increase/decrease by £nil (2013: £nil).

Liquidity risk management

Responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching profiles of financial assets and liabilities.

Credit risk

The Company's credit risk is attributed to its cash and cash equivalents, money market investments, related party balances and related party guarantees. For cash and cash equivalents and money market investments the Company only transacts with counterparties with high credit ratings assigned by international credit rating agencies and that tend to be wholly or partially owned by the UK Government. At 31 December 2014, the Company had no money market investments (2013: £nil). In accordance with the Company's Investment policy, money is only placed with institutions that hold at least "A-", "A3" or "A1" ratings with S&P, Moody's and Fitch respectively. Further, the policy limits the maximum exposure of money market investments with any one institution. Receivables from related parties are repayable in line with agreed terms or on demand. There is not considered to be any risk of impairment of these receivables



54

unless the financial assets of the entity holding the corresponding liability are impaired. Other than the impairment described in note 8, the receivables from related parties are considered to be fully recoverable.

Capital risk management

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximising the return to stakeholders. The capital structure of the Company consists of cash and cash equivalents and equity (comprising issued capital (note 10), reserves and retained earnings as disclosed in the Company statement of changes in equity).

The Company is not subject to externally imposed capital requirements.

55

PREMIER VETERINARY GROUP PLC

(incorporated and registered in England and Wales under number 04313987)

NOTICE OF ANNUAL GENERAL MEETING

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to what action you should take, you should consult your stockbroker, solicitor, accountant or other independent professional adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom, or another appropriately authorised independent adviser if you are in a territory outside the United Kingdom. If you have sold or transferred all your shares in Premier Veterinary Group plc, please pass this document and the accompanying proxy form to the stockbroker or other agent through whom you made the sale or transfer, for transmission to the purchaser or transferee.

Notice is hereby given that the 2015 Annual General Meeting of Premier Veterinary Group plc (the

“Company”) will be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A

2HA on 26 June 2015 at 11.30 am, to consider and, if thought fit, to pass the following resolutions:

Ordinary business

1 To receive the financial statements and the reports of the Directors and the Auditor for the year

ended 31 December 2014. (Resolution 1)

2 To approve the annual report on remuneration (excluding the Directors’ Remuneration Policy) in

the form set out on pages 26 to 33 in the Company’s Annual Report and Accounts for the year

ended 31 December 2014. (Resolution 2)

3 To appoint Dominic Tonner who is submitting himself for re-appointment as a Director.

(Resolution 3)

4 To appoint Daniel Smith who is submitting himself for re-appointment as a Director. (Resolution 4)

5 To appoint Raj Uppal who is submitting himself for re-appointment as a Director. (Resolution 5)

6 To appoint Graham Dick who is submitting himself for re-appointment as a Director. (Resolution 6)

7 To appoint Grant Thornton LLP as Auditor of the Company to hold office until the end of the next

general meeting of the Company at which the Annual Report and Accounts are presented.

(Resolution 7)

8 To authorise the Directors to set the remuneration of the Auditor. (Resolution 8)

Special business

To consider and, if thought fit, to pass the following resolutions, of which resolution 9 will be proposed

as an ordinary resolution, and resolutions 10 and 11 will be proposed as special resolutions:

9 That the Directors be and are hereby generally and unconditionally authorised for the purposes of

section 551 of the Companies Act 2006 (the “Act”), to exercise all the powers of the Company to

allot shares and grant rights to subscribe for, or convert any security into, shares:

56

(a) up to an aggregate nominal amount of £464,594.04 (being 33.3% of the Company's

issued share capital as at close of business on 27 April 2015∗) such amount to be reduced

by the nominal amount allotted or granted under (b) below in excess of such sum; and

(b) comprising equity securities (as defined in section 560(1) of the Act) up to an aggregate

nominal amount of £930,583.26 (being 66.7% of the Company's issued share capital as

at close of business on 27 April 2015∗), such amount to be reduced by any allotments or

grants made under (a) above, in connection with or pursuant to an offer by way of a

rights issue in favour of holders of Ordinary Shares in proportion (as nearly as

practicable) to the respective number of Ordinary Shares held by them on the record date

for such allotment (and holders of any other class of equity securities entitled to

participate therein or if the Directors consider it necessary, as permitted by the rights of

those securities), but subject to such exclusions or other arrangements as the Directors

may consider necessary or appropriate to deal with fractional entitlements, record dates

or legal, regulatory or practical difficulties which may arise under the laws of, or the

requirements of any regulatory body or stock exchange in any territory or any other

matter whatsoever,

these authorities to expire at the conclusion of the Annual General Meeting of the Company in

2016 (save that the Company may before such expiry make any offer or agreement which would

or might require shares to be allotted or rights to be granted, after such expiry and the Directors

may allot shares, or grant rights to subscribe for or to convert any security into shares, in

pursuance of any such offer or agreement as if the authorisations conferred hereby had not

expired). (Resolution 9)

10 That, subject to the passing of resolution 9 above, the Directors be and are hereby empowered

pursuant to section 570(1) of the Companies Act 2006 (the “Act”) to allot equity securities (as

defined in section 560(1) of the Act) of the Company for cash pursuant to the authorisation

conferred by that resolution as if section 561 of the Act did not apply to any such allotment

provided that this power shall be limited to the allotment of equity securities for cash:

(i) in connection with or pursuant to an offer of or invitation to acquire equity securities (but

in the case of the authorisation granted under resolution 9(b), by way of a rights issue

only) in favour of holders of Ordinary Shares in proportion (as nearly as practicable) to

the respective number of Ordinary Shares held by them on the record date for such

allotment (and holders of any other class of equity securities entitled to participate therein

or if the Directors consider it necessary, as permitted by the rights of those securities) but

subject to such exclusions or other arrangements as the Directors may consider necessary

or appropriate to deal with fractional entitlements, record dates or legal regulatory or

practical difficulties which may arise under the laws of or the requirements of any

regulatory body or stock exchange in any territory or any other matter whatsoever; and

(ii) in the case of the authorisation granted under resolution 9(a) above, and otherwise than

pursuant to paragraph (i) of this resolution, up to an aggregate nominal amount of

£139,517.73 (being 10% of the Company’s issued share capital as at close of business on

27 April 2015∗),

and this power shall expire at the conclusion of the Annual General Meeting of the Company to be

held in 2016 (save that the Company may, at any time before the expiry of such power, make

any offer or enter into any agreement which would or might require equity securities to be

allotted after the expiry of such power and the Directors may allot equity securities in pursuance

of any such offer or agreement as if such power conferred hereby had not expired). (Resolution 10)

11 That a general meeting of the Company (other than an Annual General Meeting) may be called on

not less than 14 clear days’ notice. (Resolution 11)

∗ Note: this does not take into account the aggregate nominal value of the Company’s Deferred Shares.

57

Your Board believes that the resolutions to be proposed as ordinary and special business at the Annual

General Meeting are in the best interests of the Company and its shareholders as a whole. Accordingly

your Directors unanimously recommend that shareholders vote in favour of the resolutions, as they

intend to do in respect of their own beneficial holdings of shares in the Company.

By order of the Board

Sue Steven

Company Secretary

27 April 2015

Registered Office: 11 Staple Inn, London WC1V 7QH

Registered in England and Wales No 04313987

58

Notice of Annual General Meeting – Procedural and Explanatory Notes

Proxies

1.

(a) As a member of the Company you are entitled to appoint a proxy to exercise all or any of your

rights to attend, speak and vote at the Annual General Meeting of the Company. You can only

appoint a proxy using the procedures set out in these notes.

(b) Appointment of a proxy does not preclude you from attending the meeting and voting in person.

If you have appointed a proxy and attend the meeting in person, your proxy appointment will

automatically be terminated.

(c) A proxy does not need to be a member of the Company but must attend the meeting to represent

you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full

name in the box on your proxy form. If you sign and return your proxy form with no name

inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you

appoint as your proxy someone other than the Chairman, you are responsible for ensuring that

they attend the meeting and are aware of your voting intentions. If you wish your proxy to make

any comments on your behalf, you will need to appoint someone other than the Chairman and

give them the relevant instructions directly.

(d) You may appoint more than one proxy provided each proxy is appointed to exercise the rights

attached to a different share or shares held by you. You may not appoint more than one proxy to

exercise rights attached to any one share.

(e) If the proxy is being appointed in relation to less than your full voting entitlement, please enter in

the box provided the number of shares in relation to which they are authorised to act as your

proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting

entitlement (or if this proxy form has been issued in respect of a designated account for a

shareholder, the full voting entitlement for that designated account). In the event of a conflict

between a blank proxy form and a proxy form which states the number of shares to which it

applies, the specific proxy form shall be counted first, regardless of whether it was sent or

received before or after the blank proxy form, and any remaining shares in respect of which you

are the registered holder will be apportioned to the blank proxy form. If you submit more than

one completed valid proxy, the proxy received last before the latest time for receipt of proxies will

take precedence.

(f) To appoint more than one proxy, you may photocopy the proxy form. Please indicate in the box

on the form the number of shares in relation to which they are authorised to act as your proxy.

Please also indicate with an "X" in the place provided on the proxy form if the proxy instruction is

one of multiple instructions being given. All forms must be signed and should be returned

together in the same envelope.

(g) To direct your proxy how to vote on the resolutions mark the appropriate box on your proxy form

with an ‘X’. To abstain from voting on a resolution, select the relevant ‘‘Vote withheld’’ box. A

vote withheld is not a vote in law, which means that the vote will not be counted in the

calculation of votes for or against the resolution. If you mark with an "X" "discretion", or if no

voting indication is given, your proxy will vote or abstain from voting as he or she sees fit.

(h) To appoint a proxy using this form, your proxy form must be:

• completed and signed by the appointor or their duly authorised attorney;

• sent or delivered to the Company's Registrars, Capita Asset Services, at: PXS, 34 Beckenham

Road, Beckenham BR3 4TU; and

• received by post or by hand by Capita Asset Services no later than 11.30 am on 24 June 2015

(together with any power of attorney or other authority under which it is signed or a notarially

certified copy of such power or a copy certified in accordance with the Power of Attorney Act

1971 or in some other manner approved by the Directors).

Completed proxy forms should NOT be sent to the Company's registered office.

(i) In the case of a member which is a company, your proxy form must be executed under its

common seal or signed on its behalf by a duly authorised officer of the company or an attorney

for the company stating their capacity (eg director, secretary).

(j) Any power of attorney or any other authority under which your proxy form is signed (or a duly

certified copy of such power or authority) must be included with your proxy form.

(k) CREST members who wish to appoint a proxy or proxies by using the CREST electronic

appointment service may do so by using the procedures described in the CREST Manual (available

via www.euroclear.com/CREST) subject to the provisions of the Company's articles of association.

CREST personal members or other CREST sponsored members, and those CREST members who

59

have appointed a voting service provider(s), should refer to their CREST sponsor or voting service

provider(s), who will be able to take the appropriate action on their behalf. To be valid, the

appropriate CREST message, regardless of whether it constitutes the appointment of a proxy or

an amendment to the instructions given to a previously appointed proxy, must be transmitted so

as to be received by our agent Capita Asset Services, whose CREST participant ID is RA10, by

11.30 am on 24 June 2015.

(l) In the case of joint holders, where more than one of the joint holders purports to appoint a proxy,

only the appointment submitted by the most senior holder will be accepted. Seniority is

determined by the order in which the names of the joint holders appear in the Company’s register

of members in respect of the joint holding (the first named being the most senior).

(m) If you submit more than one valid proxy appointment, the appointment received last before the

latest time for the receipt of proxies will take precedence.

(n) Save through CREST, we do not have a facility to receive proxy forms electronically. Therefore,

you may not use any electronic address referred to in the proxy form or any related document to

submit your proxy form.

(o) Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company

specifies that only those members entered on the register of members of the Company at 6.00

pm on 24 June 2015 or, in the event that this meeting is adjourned, on the register of members

as at 6.00 pm on the day two days before the date of any adjourned meeting shall be entitled to

attend and vote at the meeting in respect of the number of Ordinary Shares registered in their

names at that time. Changes to the entries on the register of members after 6.00 pm on 24 June

2015, or in the event that this meeting is adjourned, in the register of members after 6.00 pm on

the day two days before the date of the adjourned meeting shall be disregarded in determining

the rights of any person to attend or vote at the meeting.

Documents on display

2. Copies of service agreements under which Executive Directors of the Company are employed,

copies of the terms and conditions of appointment of Non-Executive Directors (including the

terms of the qualifying third party indemnity provisions made by the Company for the benefit of

its Directors) and a copy of the articles of association of the Company are available for inspection

during normal business hours at the Company's registered office (and copies of the articles of

association, as above, will also be available at the offices of Ashurst LLP, Broadwalk House, 5

Appold Street, London EC2A 2HA) during normal business hours from the date of this Notice until

the date of the Annual General Meeting and will be available for inspection at the place of the

Annual General Meeting for at least 15 minutes prior to and during the meeting.

Nominated persons

3. If you are a person who has been nominated under section 146 of the Companies Act 2006 to

enjoy information rights (a "Nominated Person"):

• you may have a right under an agreement between you and the member of the Company who

has nominated you to have information rights ("Relevant Member") to be appointed or to

have someone else appointed as a proxy for the meeting;

• if you either do not have such a right or if you have such a right but do not wish to exercise

it, you may have a right under an agreement between you and the Relevant Member to give

instructions to the Relevant Member as to the exercise of voting rights;

• your main point of contact in terms of your investment in the Company remains the Relevant

Member (or, perhaps, your custodian or broker) and you should continue to contact them

(and not the Company) regarding any changes or queries relating to your personal details and

your interest in the Company (including any administrative matters). The only exception to

this is where the Company expressly requests a response from you; and

• the statement of the rights of shareholders in relation to the appointment of proxies in

paragraph 1 above does not apply to Nominated Persons. The rights described in paragraph 1

can only be exercised by members of the Company.

60

Issued shares and total voting rights

4. As at close of business on 27 April 2015, being the last practicable day prior to the publication of

this Notice, the Company's issued share capital comprised 13,951,773 Ordinary Shares of 10

pence each. Each Ordinary Share carries the right to one vote at a general meeting of the

Company and, therefore, the total number of voting rights in the Company as at the date of this

notice is 13,951,773.

Corporate representatives

5. Any corporation which is a member can appoint one or more corporate representatives who may

exercise on its behalf all of its powers as a member provided that they do not do so in relation to

the same shares.

Website publication of audit concerns

6. Shareholders should note that it is possible that, pursuant to requests made by shareholders

under section 527 of the Companies Act 2006, the Company may be required to publish on a

website a statement setting out any matter relating to (i) the audit of the Company's accounts

(including the auditor's report and the conduct of the audit) that are to be laid before the Annual

General Meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to

hold office since the previous meeting at which Annual Accounts and Reports were laid in

accordance with section 437 of the Companies Act 2006 (in each case) that the members propose

to raise at the Annual General Meeting. The Company may not require the shareholders

requesting any such website publication to pay its expenses in complying with sections 527 or

528 of the Companies Act 2006. Where the Company is required to place a statement on a

website under section 527 of the Companies Act 2006, it must forward the statement to the

Company's auditor not later than the time when it makes the statement available on the website.

The business which may be dealt with at the Annual General Meeting includes any statement that

the Company has been required under section 527 of the Companies Act 2006 to publish on a

website.

Questions

7. Any member attending the Annual General Meeting has the right to ask questions. The Company

must cause to be answered any such question relating to the business being dealt with at the

meeting but no such answer need be given if (a) to do so would interfere unduly with the

preparation for the meeting or involve the disclosure of confidential information, (b) the answer

has already been given on a website in the form of an answer to a question, or (c) it is

undesirable in the interests of the Company or the good order of the meeting that the question

be answered.

Notice available on Website

8. A copy of this Notice, and other information required by section 311A of the Act, can be found at

www.arktherapeutics.com.

Communications

9. You may not use any electronic address (within the meaning of section 333(4) of the Companies

Act 2006) provided in this Notice of Meeting (or in any related documents including the proxy

form) to communicate with the Company for any purposes other than those expressly stated.

Members’ power to require circulation of resolutions for Annual General Meetings

10. Under section 338 and section 338A of the Companies Act 2006, members meeting the threshold

requirements in those sections have the right to require the Company (i) to give, to members of

the Company entitled to receive notice of the Annual General Meeting, notice of a resolution

which may properly be moved and is intended to be moved at the meeting and/or (ii) to include

in the business to be dealt with at the meeting any matter (other than a proposed resolution)

61

which may be properly included in the business. A resolution may properly be moved or a matter

may properly be included in the business unless (a) (in the case of a resolution only) it would, if

passed, be ineffective (whether by reason of inconsistency with any enactment or the company’s

constitution or otherwise), (b) it is defamatory of any person, or (c) it is frivolous or vexatious.

Such a request may be in hard copy form or in electronic form, must identify the resolution of

which notice is to be given or the matter to be included in the business, must be authorised by

the person or persons making it, must be received by the Company not later than the date 6

clear weeks before the meeting, and (in the case of a matter to be included in the business only)

must be accompanied by a statement setting out the grounds for the request.

Explanatory notes to the Resolutions

11. Resolution 1. For each financial year the Directors are required to present the Directors’ report,

the audited accounts and the Auditor’s report to shareholders at a general meeting. The financial

statements and reports laid before the 2015 Annual General Meeting are for the financial year

ending 31 December 2014, and in accordance with the 2012 UK Corporate Governance Code, the

Company proposes a resolution on its financial statements and reports.

12. Resolution 2. In accordance with section 439 of the Companies Act 2006, this resolution seeks

shareholder approval for the annual report on remuneration (the “Report”) which gives details of

as to the link between our remuneration policy and practice, and the Company’s strategy and

performance. The Report provides information on the payments made to Directors during the

year ended 31 December 2014, and can be found on pages 27 and 28 of the Annual Report. The

Report is prepared annually and is subject to an advisory shareholder vote, and the Directors’

entitlement to remuneration is not conditional on this resolution being passed. The approved

remuneration policy which sets out the Company’s policy on Directors’ remuneration, including

the setting of Directors’ pay and the granting of share option awards can be found on pages 38 to

45 of the Circular and at www.arktherapeutics.com in the Investor Relations section. The

Company presented the remuneration policy to shareholders for approval, by a vote which was

binding on the Company, at the general meeting held on 11 December 2014. Over 93% of the

votes cast on the resolution were in favour of the remuneration policy and that approval remains

effective for a period of three years from the date of that meeting. The Company is only able to

make payments within the limits the approved remuneration policy allows, until such time that an

amended remuneration policy is approved by shareholders. The Company’s Auditor, Deloitte LLP,

have audited those parts of the Report required to be audited and their report may be found on

pages 37 to 40 of the Annual Report.

13. Resolutions 3, 4, 5 and 6.

All Directors are subject to election by shareholders at the first Annual General Meeting following

their appointment by the Board. Accordingly, Dominic Tonner, Daniel Smith and Raj Uppal who

were each appointed as a Director post-period on 27 February 2015, and Graham Dick who was

also appointed as a Director post-period on 9 March 2015 will retire at the Annual General

Meeting of the Company on 26 June 2015 and, being eligible, will offer themselves for re-

appointment.

Dominic Tonner was appointed as Chief Executive Officer on 27 February 2015. Prior to joining

the Company he had been Chief Executive Officer of Premier Veterinary Group Limited since July

2007. During that time he had taken the revenues from £2 million to £7.5 million per annum,

completed six acquisitions and integrated the activities successfully, launched a new business,

Premier Veterinary Alliance, to become the second biggest buying group in the sector within three

years. Mr Tonner began his career in 1979 at Lex Service Group after graduating from

Strathclyde University with a BA in Politics & Sociology. He then went on to hold a number of

posts in marketing within the transport industry before moving to Wiggin Teape where he was

able to gain additional valuable European marketing experience. Following this he founded his

own company within the label and barcode technology sector which was successfully sold to API

Plc. In addition to building new revenue streams, Mr Tonner has been instrumental in raising

capital and developing growth strategies.

Daniel Smith was appointed as Chief Financial Officer on 27 February 2015. Prior to joining the

Company he had been Financial Controller of Premier Veterinary Group Limited since September

62

2013. He is a Chartered Accountant with 8 years’ experience in various roles in practice, leading

various due diligence assignments for a variety of clients, including a number of private equity

funded management buy outs. As well as experience in the preparation of financial models to

support funding applications, private equity investments and monitor business progress, Mr Smith

has worked in a number of seconded internal accounting roles.

Raj Uppal was appointed as Corporate Development Director on 27 February 2015. Mr Uppal is

a Chartered Accountant with significant commercial and corporate finance experience and has

served on the boards of several publicly quoted and private companies across various business

sectors in both executive and non-executive roles. After qualifying as a Chartered Accountant in

1986 he began his career in industry in 1989 as the Chief Financial Officer of a fully quoted

European printing and packaging group, Ferry Pickering Group plc. Following the successful

disposal of that company Mr Uppal joined Quadrant Healthcare plc (“Quadrant”) as its Chief

Financial Officer and was part of the team that floated Quadrant on the London Stock Exchange.

At the time of Quadrant’s disposal to Elan Corporation plc (“Elan”) in 2000 Mr Uppal held the

position of Finance and Commercial Director and was subsequently appointed as a Senior Vice

President within Elan. Mr Uppal led the management buyout of various companies within Elan in

2003 and merged these companies with ML Laboratories plc in 2005 to create a new group,

Innovata PLC, where he served as a Non-Executive Director until it was acquired by Vectura

Group plc. Mr Uppal also served as a Non-Executive Director of Oxford BioMedica plc between

2001 and 2006.

Since 2006 Mr Uppal has invested on his own account in various private companies and asset

categories and during this time acquired the core vet practices that are now owned by PVG.

Graham Dick BVSc MRCVS was appointed as a Non-Executive Director on 9 March 2015. A

Bristol University graduate, Mr Dick spent 15 years in mixed veterinary practice, first in Somerset

then as a partner in Norfolk, before a change of track led him to the world of animal therapeutics

both in the UK and overseas with Bayer Animal Health. His overseas roles included that of Head

of Marketing and Technical Service for Australia/New Zealand, Global Head of Livestock Business

and Head of European Marketing before returning to the UK as Head of the Animal Health Division

of Bayer for the UK and Ireland, from which he finally retired in 2013, having taken it to the best

performing Bayer Animal Health subsidiary in Europe. He currently provides consultancy services

to international veterinary business.

Mr Dick served for 10 years on the Board of the National Office of Animal Health (NOAH), of

which he was elected Chairman for a period of three years and is now an honorary life member

for services to the animal health industry. He currently serves on the Board of the Veterinary

Benevolent Fund, for which he takes a special interest in CPD matters, and also on the Board of RCVS Knowledge (Royal College of Veterinary Surgeons).

14. Resolution 9. Your Directors may only allot shares or grant rights over shares if authorised to do

so by shareholders. The authorities granted on 30 June 2014 and 11 December 2014 are due to

expire at the Company's Annual General Meeting in 2015 and therefore the authority requires

renewal. This resolution, if passed, will continue to give the Directors flexibility to act in the best

interests of shareholders, when the opportunity arises, by issuing new shares. Accordingly,

resolution 9 will be proposed as an ordinary resolution to grant new authorities to allot shares

and grant rights to subscribe for, or convert any security into, shares (a) up to an aggregate

nominal amount of £464,594.04 and (b) in connection with a rights issue up to an aggregate

nominal amount (reduced by allotments under part (a) of the resolution) of £930,583.26.

These amounts represent approximately 33.3% and approximately 66.7% respectively of the

total issued Ordinary Share capital of the Company as at close of business on 27 April 2015,

being the last practicable day prior to the publication of this Notice. If given, these authorities

will expire at the conclusion of the Annual General Meeting in 2016.

Your Directors have no present intention of issuing shares pursuant to this authority.

As at the date of this Notice the Company holds no treasury shares.

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15. Resolution 10. Your Directors also require additional authority from shareholders to allot equity

securities for cash and otherwise than to existing shareholders pro rata to their holdings. The

authorities granted on 30 June 2014 and 11 December 2014 are due to expire at the conclusion

of the Company's Annual General Meeting in 2015 and therefore the authority requires renewal.

Accordingly, resolution 10 will be proposed as a special resolution to grant such an authority.

Apart from offers or invitations in proportion to the respective number of shares held, the

authority will be limited to the allotment of equity securities for cash up to an aggregate nominal

value of £139,517.73 (being 10% of the Company's issued Ordinary Share capital as at close of

business on 27 April 2015, being the last practicable day prior to the publication of this Notice).

If given, this authority will expire at the conclusion of the Annual General Meeting in 2016.

16. Resolution 11. Changes made to the Companies Act 2006 by the Companies (Shareholders’

Rights) Regulations 2009 increase the notice period required for general meetings of the

Company to at least 21 clear days unless shareholders approve a shorter notice period, which

cannot however be less than 14 clear days. (Annual General Meetings will continue to be held on

at least 21 clear days’ notice.)

Until the coming into force of the Companies (shareholders’ Rights) Regulations 2009 on 3 August

2009, the Company was able to call general meetings other than an Annual General Meeting on at

least 14 clear days’ notice without obtaining such shareholder approval. In order to preserve this

ability, resolution 9 seeks the necessary shareholder approval. The shorter notice period would

not be used as a matter of routine for such meetings, but only when flexibility is merited by the

business of the meeting and is thought to be to the advantage of shareholders as a whole. The

approval will be effective until the Company’s next Annual General MSeeting, when it is intended

that a similar resolution will be proposed.

The changes to the Companies Act 2006 mean that, in order to be able to call a general meeting

on less than 21 clear days’ notice, the Company must make a means of electronic voting available

to all shareholders for that meeting.

64

SHAREHOLDER INFORMATION

Registered Office 11 Staple Inn

London

London

WC1V 7QH

Directors Iain Ross

Dominic Tonner

Daniel Smith

Raj Uppal

Graham Dick

Company Secretary Sue Steven

Company Registration Number 04313987

ADVISERS

Auditor

Deloitte LLP

City House

126-130 Hills Road

Cambridge

CB2 1RY

Principal Bankers

Barclays Bank plc

Mortlock House

Vision Park

Histon

Cambridge

BX3 2BB

Financial Advisers

WG Partners LLP

One Carey Lane

London

EC2V 8AE

Corporate Brokers

Charles Stanley & Co Ltd

25 Luke Street

London

EC2A 4AR

Legal Advisers

Ashurst LLP

Broadwalk House

5 Appold Street

London

EC2A 2HA

Registrars

Capita Asset Services

34 Beckenham Road

Beckenham

Kent

BR3 4TU

65

GLOSSARY

The following definitions apply throughout this document, unless the context requires otherwise:

“Acquisition” the acquisition of the entire issued share capital of PVGL by the Company

which completed on 5 February 2015

“Admission” the admission of the New Ordinary Shares and the Existing Ordinary Shares

(i) to the Official List and (ii) to trading on the London Stock Exchange’s

main market for listed securities becoming effective in accordance with the

Listing Rules and the Admission and Disclosure Standards which became

effective on 27 February 2015

“Ark Therapeutics Group plc”

the Company prior its change of name on 5 March 2015

“Circular” the Circular posted to shareholders on 21 November 2014

“Consolidation” and “Sub-Division”

the share capital reorganisation effected on 13 December 2014 by the

consolidation of every 100 the Existing Ordinary Shares into 1 share of 100

pence and the subdivision of those shares into 1 New Ordinary Share and 1

Deferred Share

the “Code” the UK Corporate Governance Code published in September 2012 by the

FRC

“Deferred Share” a deferred share of 90 pence

“Disposal” the Disposal by Ark Therapeutics Group plc of its interests in and its former

trading subsidiaries, Ark Therapeutics Limited, Ark Therapeutics Oy and

Lymphatix Oy on 15 March 2013

“Enlarged Group” the Company and its group companies following completion of the

Acquisition

“former Group” Ark Therapeutics Group plc and its former trading subsidiaries prior to the

Disposal

“FRC” Financial Reporting Council

“Ordinary Share” ordinary shares of 10 pence each in the capital of the Company

“PVA” Premier Veterinary Alliance Limited

“PVG” or the “Company”

Premier Veterinary Group plc (formerly Ark Therapeutics Group plc)

“PVGL” or “PVG 2007 Limited”

PVG 2007- Limited formerly known as Premier Veterinary Group Limited

“shareholders” holders of Ordinary Shares

“Subscription” the Subscription for Ordinary Shares on Admission

“Subscription Price” 10.1 pence per Ordinary Share on Admission