Annual Report
For the Financial Year ended
31st December 2023
Ovoca Bio
Annual Report Contents
1.
2.
3.
4.
Chairman & Chief Executive Officer (CEO)’s Statement
Directors and Corporate Information
Directors’ Report
Directors’ Responsibilities Statement
Independent Auditor’s Report to the Members of Ovoca Bio Plc.
Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income/(loss)
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
5.
Notes to the Financial Statements
1
8
10
21
22
29
30
31
32
33
34
35
36
37
1.
Chairman and Chief
Executive Officer (CEO)’s
Statement
Dear shareholders of Ovoca Bio Plc,
We are pleased to publish the 2023 Full Year Annual report.
At the beginning of the reporting period – 2023 – the
main efforts of the Company were focused on the
active development of Orenetide. It is not surprising
that the events which occurred at the beginning of
the 3rd quarter 2023 – the results of a Clinical Trial
conducted in Australia and New Zealand – turned
out to be critically important for the Company.
It should be noted that the entire strategy of the
Company was based on the expectation of success
with the Australian and NZL Study, therefore, all
management efforts with partners and contractors were
aimed to allow fast progression after receiving the expected
positive results of the Study, and the financial strategy of the
Company had been framed to ensure a sufficient margin of
liquidity at that time.
However, receiving negative Study results was a turning point
in the Company’s endeavour to pursue previous strategic
goals in the biopharma sector. We have made a lot of efforts to
comprehensively, thoroughly and deeply analyse the root causes
of the Study failure and understand whether there are prospects
for further development of Orenetide.
Continued...
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1. CHAIRMAN & CHIEF EXECUTIVE OFFICER (CEO)’S STATEMENT (CONTINUED)
Unfortunately, we have to admit that further investments
in this asset do not make sense in the current situation
and with the Study results. This is immediately reflected in
the re-valuation of the Company’s Intangible Assets, as
presented in this report. However, significant efforts have
been made to maintain current financial stability, taking
into account the Company’s contracts and obligations.
Such tactical stability will allow for a reassessment of the
Company’s strategic prospects, focusing on minimizing
losses for shareholders and finding a potentially profitable
new path. We do not intend to frantically maintain the
status quo simply to avoid difficult decisions.
Significant work has been done to improve the
Company’s corporate structure and this is ongoing. We
have deep analysis to execute on the planned disposal of
the Company’s assets historically located in complicated
jurisdictions, and the settlement of litigation that was
inherited from the Company’s previous line of business.
All this together is a rather long and difficult process, not
helped by the ongoing turbulence in the World and the
ever-tightening mutual sanctions pressure between
the jurisdictions of the Company’s assets. However, we
expect that this work will bear fruit in the current year and
make the Company more transparent and attractive in
terms of the potential strategic business opportunities.
Thus, the current efforts of management and Directors
are focused on investigating strategic business
opportunities, where current internal skillsets and
competencies can be best used to benefit the Company.
In concluding my statement, I would like to take this
opportunity to thank the management of the Company
and the members of the Board of Directors for their
perseverance, hard work despite all difficulties and
invaluable contribution to the further development of
Ovoca.
Sincerely,
Kirill Golovanov,
CEO and Chairman, Ovoca Bio Plc
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Company information and
overview
Introduction
Ovoca Bio is a European-based biopharmaceutical
company with a focus on women’s health. The
Company’s lead product, Orenetide, a novel synthetic
peptide administered through a nasal spray, that had
demonstrated statistically significant improvement in
a number of symptoms associated with HSDD in the
previous clinical trials, recently has failed to demonstrate
treatment benefit over control group in the Phase II study
conducted in Australia and New Zealand.
Following these Study results, the Company has
suspended further R&D plans for Orenetide and is
investigating potential strategic opportunities for the
business.
Performance highlights
During the reporting period, Ovoca Bio Plc’s key efforts
focused on the assessment of clinical trials data and
results after the completion earlier in the year of patients
recruitment and treatment in the Phase II dose ranging
study assessing Orenetide. The study was conducted
in Australia and New Zealand. Upon receiving negative
study results in July 2023, it has been determined that
to continue with further R&D activities with Orenetide
may not result in potential benefits for the Company.
Consequently, Management agreed not to pursue
immediate development plans for Orenetide.
Since the publication of the Orenetide study results, the
Board’s focus was on investigating potential strategic
opportunities, as well as monitoring the budgeted
expenditure and revenue forecasts to ensure sufficient
funding to cover immediate administrative, advisory etc.
fees and allow itself sufficient runway in exploring further
investment opportunities.
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COMPANY INFORMATION AND OVERVIEW (CONTINUED)
Operational highlights
During 2023, the Ovoca management team focused on
the following key areas:
Australia and New Zealand Clinical trial – after completion
in late 2022 of treatment of the participants and study
data collection activities in our ongoing Phase II dose
ranging study, the study data analysis and reporting of the
results were underway for the first half of 2023, with the
results published in July 2023.
The Phase II study was conducted in Australia and
New Zealand with a goal to investigate Orenetide, a
novel treatment for premenopausal women with HSDD,
administered daily at a range of doses, evaluating across
13 clinical sites the effect of the drug on a lack or loss of
sexual desire experienced by female participants.
This double-blind placebo-controlled study enrolled 453
participants. The objectives of the study were to evaluate
the effect of three different doses of Orenetide (BP-101)
versus a placebo on a number of clinically relevant and
validated endpoints which were assessed between a
four-week baseline period and after four weeks of daily
dosing, and then again after a further eight weeks of
no-treatment follow-up. All study participants are female
and have a diagnosis of acquired, generalised HSDD. The
drug supplied for this study has been sourced from well-
established manufacturers in Switzerland and the UK.
The study delivered negative results, demonstrating good
safety of Orenetide, however no treatment benefit over
control group. Following receipt of the study report, the
data obtained (in the study) was again analysed in depth
in order to understand the reasons for the ineffectiveness
of the treatment, which was contrary to the results
obtained in previous clinical studies. However, after a
thorough analysis it was determined that continuation
and further development and R&D activities with
Orenetide may not result in potential benefits for the
Company. Further management efforts were aimed at
evaluating current contracts and obligations related to
the Orenetide and minimizing further costs and possible
losses associated with contemplating extension of the
R&D plans.
The ongoing tightening of the international sanctions
imposed on the Russian economy and financial system,
and unfriendly legislative changes in Russia in relation
to Western companies, required significant amount of
work to be done to assess, analyse and plan actions to
freeze and prepare further disposal of the Group’s assets
historically located in Russia. However, further disposal
of the Russia-related assets would be required to ensure
further transparency and attractiveness of the Company,
as well as avoid exposure to regulatory risks and the EU
sanctions regime.
It was critically important for the Company to continue
to manage its resources carefully throughout 2023. The
management and the Board have made an effort to lower
costs, mainly related to R&D activities being suspended
and ensure the Company has sufficient funding to cover
its expenditure as required.
As a result, the total comprehensive loss of the Group for
the full year in 2023 was €’000 5,134/US$’000 5,439
(2022: €’000 5,809/US$’000 7,073), which resulted in
a final position of cash and liquid investments at fair value
as at 31 December 2023 of €’000 3,337/US$’000 3,683
(2022: €’000 3,703/US$’000 3,953).
4 | ovocabio.com
Our product
Orenetide (Bp-101/ ‘Desirix’)
Ovoca Bio’s first product, Orenetide (ex. BP-101), is an
investigational drug comprising a novel synthetic peptide,
that is being developed for the treatment of one of the
major forms of female sexual dysfunction – hypoactive
sexual desire disorder (“HSDD”), for which there is a high
unmet medical need with a lack of safe and effective
treatment options. HSDD is a distressing condition of
lack or loss of sexual desire in women, which affects a
significant number of adult females in the US and Europe.
HSDD is estimated to affect a significant proportion
of the female population in the US and the EU. In a
research paper published by Shifren J.L. et al, nearly 10%
of premenopausal women in a large US survey reported
distressing low desire for sexual activity. According to
the Women’s International Study of Health and Sexuality
(Nappi R.E. et al, 2010), the prevalence of HSDD ranged
from 6–13 per cent. in Europe, and the proportion of
women with low desire associated with distress was
significantly higher in younger women in comparison with
older women.
Data from previous trials of Orenetide showed that the
drug demonstrated a strong efficacy profile in patients
with HSDD. Patients reported a significant increase in
the number of satisfying sexual events when compared
to a placebo-controlled group, as well as a significant
improvement in sexual desire and reduction of distress
associated with low sexual desire.
However, the Phase II clinical trial of Orenetide,
conducted by the Company in Australia and New
Zealand, and aimed to evaluate its efficacy as a treatment
for premenopausal women with HSDD through a
double-blind, placebo-controlled study involving 453
participants across 13 sites, that completed recently did
not yield promising results. Despite showing good safety,
Orenetide demonstrated no treatment benefit over the
placebo. This unexpected outcome led to an in-depth
analysis of the data, which ultimately indicated that further
development of Orenetide was unlikely to be beneficial.
Consequently, management focused on evaluating and
minimizing costs related to ongoing R&D activities for
the drug.
ovocabio.com | 5
COMPANY INFORMATION AND OVERVIEW (CONTINUED)
Intellectual property
Obtained patents:
Brazil
India
• Patent No BR1120140238880, priority year 2012, “Method
• Patent No 349465, priority year 2013, “Method for
for Producing a Recombinant Peptide and Resultant
Peptide”;
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 531188, priority year 2016, “New group of
• Patent No BRPI1011071B1, priority year 2009, “Stimulator of
peptides for treatment of Female Sexual Dysfunction”.
Genital, Sexual and Reproductive Function”.
Israel
Canada
• Patent No 234753, priority year 2012, “Method for
• Patent No 2868820, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”.
Producing a Recombinant Peptide and Resultant Peptide”;
Japan
• Patent No 3,042,013 priority year 2016, “Pharmaceutical
composition and method of treatment of Female Sexual
Dysfunctions”;
• Patent No 2764351, priority year 2009, “Stimulator of
Genital, Sexual and Reproductive Function”.
China
• Patent No ZL201380028491.4, priority year 2012,
“Method for Producing a Recombinant Peptide and
Resultant Peptide”;
• Patent No 102481335B, priority year 2009, “Stimulator of
Genital, Sexual and Reproductive Function”;
• Patent No ZL 201780079846.0, priority year 2016,
“Pharmaceutical composition and method of treatment of
Female Sexual Dysfunctions”;
• Patent No ZL 201780080059.8, priority year 2016,
“New group of peptides for treatment of Female Sexual
Dysfunction”.
European Union
• Patent No 2876113, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 3650457, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 6552960, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 6858227, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 5643816, priority year 2009, “Stimulator of
Genital, Sexual and Reproductive Function”;
• Patent No 7046936, priority year 2016, “New group of
peptides for treatment of Female Sexual Dysfunction”;
• Patent No 7155116, priority year 2016, “Pharmaceutical
composition and method of treatment of Female Sexual
Dysfunctions”.
Russia
• Patent No 2404793, priority year 2009, “Stimulator of
Genital, Sexual and Reproductive Function”.
South Korea
• Patent No 10-2093096, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 10-2494794, priority year 2016,
“Pharmaceutical composition and method of treatment of
Female Sexual Dysfunctions”;
• Patent No 10-2499473, priority year 2016, “New group of
peptides for treatment of Female Sexual Dysfunction”.
• Patent No EP2465521B1, priority year 2009, “Stimulator of
Genital, Sexual and Reproductive Function”;
USA
• Patent No 3530279, priority year 2016, “Pharmaceutical
composition and method of treatment of Female Sexual
Dysfunctions”.
• Patent No US9409947B2, priority year 2012, “Method for
Producing a Recombinant Peptide and Resultant Peptide”;
• Patent No 10836794, priority year 2016, “New group of
peptides for treatment of Female Sexual Dysfunction”;
• Patent No 883741, priority year 2009 “Stimulator of
Genital, Sexual and Reproductive Function”.
6 | ovocabio.com
Applications of PCT titled New Group of Peptides for Treatment of Female Sexual Dysfunction, PCT/RU2017/050099 is
prosecuted in the following countries:
Country
Brazil
Canada
EU
Israel
Filed*
Serial No.
02.10.2017
BR1120200083138
02.10.2017
02.10.2017
02.10.2017
3041456
17 866053.6
266167
Applications of PCT titled Pharmaceutical Composition and Method of Treatment of Female Sexual Dysfunctions, PCT/
RU2017/050112 is prosecuted in the following countries:
Country
Brazil
India
Israel
*Dates are in DD.MM.YYYY format.
Filed*
Serial No.
23.10.2017
BR112019008311
23.10.2017
23.10.2017
201917017497
266163
The Company plans to maintain the patents and PCT applications while investigating opportunities to further
commercialize the Intellectual Property related to Orenetide (e.g., through sale or other options to monetise these
assets).
Future Development of Orenetide Asset
All Orenetide development activities have been suspended following untoward results of the Phase II study conducted by
the Company in Australia and New Zealand.
ovocabio.com | 7
2.
Directors &
Corporate
Information
8 | ovocabio.com
Directors and corporate information
Directors
Kirill Golovanov
Interim chairman & CEO
(Executive Director)
Timothy McCutcheon
Non-Executive Director
Anastasia Levashova
Non-Executive Director
Kristina Zakurdaeva
Non-Executive Director
Registered Office
17 Pembroke Street Upper
Dublin 2
D02 AT22
Business Address
17 Pembroke Street Upper
Dublin 2
D02 AT22
Other Business
Information
Dmitriy Nikitashenko
Vice President - Finance
Reneta Nikolova
Corporate Secretary
Registration number:
105274
Incorporated:
15 January 1985
Web site
www.ovocabio.com
Principal banker
Barclays Bank Plc
Leicester
Leicestershire
United Kingdom
LE87 2BB
Auditors
Grant Thornton
Chartered Accountants &
Statutory Audit Firm
13 – 18 City Quay
Dublin 2
D02 ED70
Ireland
Solicitors
OBH Partners
17 Pembroke Street Upper
Dublin 2
D02 AT22
Stockbrokers &
Nominated adviser
Davy
Davy House
49 Dawson Street
Dublin 2
Ireland
Registrars
Computershare Investor
Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin D24 AK82
Ireland
ovocabio.com | 9
3.
Directors’
Report
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Directors’ Report
The Directors present their annual report and audited financial statements for the financial year ended 31
December 2023 of Ovoca Bio Plc (“the Company”), a company registered and domiciled in the Republic of Ireland, and
its subsidiaries (collectively “the Group”).
Principal Activities, Business Review and Future Developments
The Group’s activity is that of a biotechnology company while the Company’s primary activity is that of a holding
company. The Directors have reviewed the financial position of the Group and are satisfied that the Group will continue to
operate for the foreseeable future.
A detailed business review is included in the Company information and overview, and in going concern section of this
Directors’ report.
Key Performance Indicators
At this stage of the Group’s business activities the Directors think it is appropriate to limit the Key Performance Indicators
(KPIs) used to monitor progress in the delivery of the Group’s strategic objectives, to assess actual performance against
targets and to aid management of the business.
The Board monitors relevant KPIs, which it considers appropriate for managing the activities inherent to its operations.
The KPIs for the Group are as follows:
Financial KPIs
• Shareholder return – the performance of the share price; and
• Gross burn rate – the rate at which available funding is used.
Non-financial KPIs
• Market research insights – gathering of qualitative data; and
• Development and commercialisation partnerships formed with third parties.
Results and Dividends
The results of the Group are disclosed on page 26 of the financial statements. The directors did not recommend the
payment of a dividend (2022: €NIL/US$ NIL). Meanwhile, the Company resulted to a net loss of €’0004,702/US$’000
5,086 in 2023 (2022: net loss of €’0005,612/US$’000 5,916).
Principal Risks and Uncertainties
The Group’s operating activities are global, with primary operations in Ireland. Accordingly, the principal risks and
uncertainties are identified below. The Group seeks to minimise the effects of these risks through careful monitoring of
the risks on an ongoing basis.
• Political Risk: As a consequence of investigating strategic opportunities in different parts of the world, the Group may
be subject to political, economic and other uncertainties, including but not limited to terrorism, war or unrest, changes
in national laws and energy policies and exposure to different legal systems. Risks related to Russia-Ukraine military
conflict are outlined in a separate section below.
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3. DIRECTORS’ REPORT (CONTINUED)
• Legal Risk: As a consequence of the Group business portfolio of pharmaceutical interests, the Group may have
numerous legal risks, particularly in the areas of product liability, competition, and patent disputes.
• Pre-clinical studies and clinical trials: Clinical trials are expensive, time consuming and difficult to design and implement
and involve uncertain outcomes. Furthermore, results of earlier pre-clinical studies and clinical trials may not be
predictive of results of future pre-clinical studies or clinical trials. Due to the clinical study formally closing in 2024, the
Group continuously monitors the costs of ongoing clinical trials.
• Regulatory risks: Compliance with laws, AML regulation, sanctions and stock exchange requirements.
• The tragic events in Ukraine and subsequent international sanctions imposed on the Russian economy and financial
system, have completely changed paradigm of the Company’s operations in Russia. In February 2022, the company
has received Russian Marketing Authorisation and commercial sales authorisation for Orenetide under the trade name
of “Desirix”, for the treatment of hypoactive sexual desire disorder in premenopausal women. However, the Company
found itself unable to finance any activities related to the manufacturing, marketing and sale of Orenetide in Russia
due to the disruption of financial transactions between EU and Russia.
To realise the value of the Orenetide Marketing Authorisation, the Board decided to dispose of the licence and wind
up its Russian based subsidiary. The sale generated proceeds of €000 986/US$’000 1,052.
• Despite the difficulties that have arisen, these events have not affected Ovoca’s global operations with a truly
international team and presence in Ireland, UK, Australia, as well as Russia. The subsidiaries in Russia accounted for less
than 1% of the Group’s cashflows in 2023, and their activity was suspended through 2023. No member of the Board,
management or any of the Company’s significant shareholders are on the list of sanctioned individuals.
• Supply and partner risks: The Board took action to mitigate all such risk by disposing where profitable of intellectual
property and licences necessary to reduce the exposure to the Russian market to a minimum. Per the Board’s
assessment, there’s no material supply and partner risk in 2023.
• Balance sheet & financial risks: The management of the Group actively monitors the Group’s liquidity position,
financial and non-financial health, and equity levels on a regular and continuous basis both at the group and daughter
companies’ levels. The Group has sufficient liquidity to satisfy our obligations in the foreseeable future.
• Cross-border financial operations with Russian subsidiaries risks: Due to the already introduced sanctions, possible
sanctions and related restrictions, during the period of its validity, it is impossible to properly finance Russian
operational and commercial activities.
• Political risks of operating in Russia for the Group’s subsidiaries: Ireland is stated as “unfriendly” jurisdiction by Russian
government. This may result in a number of restrictions to financial and operational activity of subsidiaries of
Irish-based (as well as other “unfriendly” jurisdictions-based) companies in Russia.
• Foreign Exchange Risk: Exchange rate fluctuations may affect the cost that the Group incurs with its operations. Any
fluctuations of the US Dollar, Russian Rouble and Sterling Pounds against the Euro may have a significant impact on
the Company’s financial position and results in future. The carrying amount of the Group’s foreign currency
denominated monetary assets and monetary liabilities at the end of the reporting date are as follows:
Financial Assets Financial Liabilities
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
United States Dollar 369 957 296 123
Russian Rouble 1 1,235 466 1,335
Sterling Pounds 1,773 1,995 – –
Australian Dollar 1,145 581 5 1
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The following table details the Group’s sensitivity to a 10% increase and decrease in the Euro against United States
Dollar and Russian Rouble. 10% is the sensitivity rate used which represents management’s assessment of the
reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign
currency denominated monetary items and adjusts their translation at the year-end for a 10% change in foreign
currency rates, it assumes that all other variables, in particular bank interest rates, remain constant and ignores the
impact of forecast sales and purchases:
United States Dollar Impact Russian Rouble Impact
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
Profit or loss 34 87 (39) (9)
Sterling Pounds Impact Australian Dollar Impact
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
Profit or loss 161 181 104 53
• Credit Risk: this refers to the risk that a counter party will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
significant collateral, where appropriate, as a means of mitigating the risk of financial loss from defaulters. The table
below analyses the maximum exposure of the Group’s financial assets which are subject to credit risk:
Group Group Group Group
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 US$’000 US$’000
Other debtors (Note 21) 106 1,218 117 1,300
Cash and cash equivalents (Note 22) 3,337 3,703 3,683 3,953
Total 3,443 4,921 3,800 5,253
The Group continuously monitors defaults of customers and other counterparty, identified either individually or by the
Group, and incorporates this information into its credit risk controls. In relation to the credit risk for cash and cash
equivalents, the risk is considered to be negligible, since the counterparties are reputable banks with high quality
external credit ratings. The Group’s management considers that all of the above financial assets are of good credit
quality, as the Group’s policy is to deal only with creditworthy customers.
• Liquidity Risk: is the risk that the Group will not have the sufficient funds to meet its liabilities. The Group holds its cash
in currencies in which it expects to incur expenditure, including Euros, US Dollar and Russian Roubles. The Group’s
reporting currency is the Euro. The most meaningful information relates to the Group’s current liquidity – since it is not
generating any income.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the earliest date on
which the Group can be required to pay. The amounts disclosed in the table are the contractual undiscounted cash
flows. Balances due within 1 year equal to their carrying values, as the impact of the discounting is not significant.
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Group €’000 €’000 US$’000 US$’000
Balances due within 1 year
Trade and other payables and provisions (Note 26) 528 1,556 582 1,663
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Company €’000 €’000 US$’000 US$’000
Balances due within 1 year
Trade and other payables and provisions (Note 26) 9,309 9,179 10,273 9,799
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its
cash resources. The Group’s current cash resources (Note 22), trade and other receivables (Note 21) significantly
exceed the current cash outflow requirements.
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3. DIRECTORS’ REPORT (CONTINUED)
Directors, Secretary and Their Interests
In accordance with Section 329 of the Companies Act 2014, the interests (all of which are beneficial) of the Directors and
Secretary who held office at the date of approval of the annual report and at 31 December 2023 and their families in the
share capital of the Company were:
Ordinary shares of 12.5 cents each Options over Ordinary shares
Director 31/05/2021 31/12/2021 01/01/2021 31/05/2021 31/12/2021 01/01/2021
Kirill Golovanov 19,506,203 19,506,203 19,506,203 2,200,000 2,200,000 –
Timothy McCutcheon – – – 200,000 200,000 –
Further details of the above share options issued to the directors are as follows:
Number of
Director Date Granted options Exercise Price Vesting period
Kirill Golovanov 27 March 2020 2,200,000 £0.125 3 years
Timothy McCutcheon 27 March 2020 200,000 £0.125 3 years
Share Price
The Company’s shares are primarily traded on the Euronext Growth Dublin (XESM) of the Irish Stock Exchange, and the
Alternative Investment Market (AIM) of the London Stock Exchange. The Company’s shares are also traded on the
Frankfurt, Berlin, Munich and Stuttgart exchanges.
The market price of the Company’s shares on XESM (OVXA.IR) at 31 December 2023 was €0.01 (2022: €0.06). During
the financial year ended 31 December 2023, the market price of the Company’s shares ranged from €0.01 to €0.06
(2022: €0.06 to €0.16).
The market price of the Company’s share on AIM (OVB.LSE) at 31 December 2023 was £0.0009 (2022: £0.04875).
During the financial year ended 31 December 2023, the market price of the Company’s shares ranged from £0.0009 to
£0.0472 (2022: £0.145 to £0.04875).
Significant Shareholders
So far as the Directors are aware, the names of the persons other than the Directors who, directly or indirectly, are
interested in 3 percent or more of the issued share capital of the Company as at 27 May 2024 are as follows:
Ordinary shares of €1.25c each % of issued share capital
Euroclear Nominees Limited 54,065,193 61.12
Pickco Trading Co Limited 7,928,531 8.96
Group Undertakings
Details of the Company’s subsidiary undertakings are set out in Note 18 to the financial statements.
Directors’ Interest in Contracts
None of the Directors had a beneficial interest in any contract to which the Company or Group was a party during the
financial year except as detailed in Note 27.
Political Donations
The Group made no political donations during the financial year (2022: €NIL/US$ NIL).
Research and Development Activities
The Group’s research and development activities are discussed in the Company Information Overview section of the
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Annual Report. Research and development costs was recognised as administrative expenses in 2023 amounted to
€’000 423/US$’000 457 (2022: €’000 2,456/US$’000 2,588) refer to Note 5. During the financial year, the Group’s
capitalised research and development costs amounting to €NIL/US$ NIL (2022: €’000 22/US$’000 24) refer to Note
16. Following the unfavourable study results all R&D activities have been suspended.
Going Concern
As at 31 December 2023, the Company incurred a loss of €’000 2,716/US$’000 2,939 (2022: loss of €’000
20,717/US$’000 21,832), had net current liabilities of €’000 8,834/US$’000 9,749 (2022: €’000 8,198/US$’000
8,752) and is in net liability position of €’000 7,040/US$’000 7,769 (2022: net liability position of €’000
4,324/US$’000 4,617). At the same date, the Group incurred a loss of €’000 5,134/US$’000 5,439 (2022: loss of
€’000 5,809/US$’000 7,073), had net assets position of €’000 2,501/US$’000 2,762 (2022: €’000 7,635/US$’000
8,201), and had significant liquid resources in the form of cash and cash equivalent of €’000 3,337/US$’000 3,683
(2022: €’000 3,703/US$’000 3,953).
The Directors note that majority of the Company’s current liabilities at financial year-end relates to a debt with a group
Company which has been a feature for the Group where the debt structure is fluid and is driven by current business
objectives of the Group. The Directors regularly review the Group structure and involve advisors to optimise and
complete future operational and business objectives. Furthermore, the Company’s subsidiary undertaking, Silver Star
Ltd., will show forbearance, if required, in demanding repayment of the amounts due to it until such time that the
Company has sufficient funds to repay it.
The Board is reviewing the Group and Company financial and strategic position in light of unfavourable study results for
Orenetide, as well as the current economic and political climate and assessing the potential of the Company in its current
state to realise value for its shareholders. The Board re-evaluated the Company’s current ability to continue R&D activities
and the potential benefits the Company can derive from these. Consequently, Management has agreed not to pursue
immediate development plans for Orenetide as the future economic benefits to the Company remain unclear.
The Board is investigating potential strategic opportunities that fit with the skillset and competences of the Company’s
Management. A number of options are under consideration and reviews and discussions are ongoing.
The Board’s focus is on investigating potential strategic opportunities, as well as monitoring the budgeted expenditure
and revenue forecasts. The Board notes the low expenditure requirements for 2024 due to the R&D activities being
suspended. In these circumstances the Board believes the Company has sufficient funding to cover administrative and
advisory fees expenditure as required. Based on the 24-month cash flow forecast prepared by Management, the Board is
satisfied that there are sufficient levels of funding within the Group and Company to enable operations for the
foreseeable future, and to explore further investment opportunities.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability
to continue as a going concern and therefore the entity might be unable to realise its assets and discharge its liabilities in
the normal course of business.
The Group continues to avail of the generous R&D refund relief available in Australia (at a rate of 43.5%), and the
expected refund for 2023 is AU$’000 300. This translates to €’000 185/US$’000 205 during the year.
The Group and Company continue to operate safely and are fully focused on ensuring continuity and long-term viability,
as well as explore options to protect, and if suitable opportunities arise realise value for its shareholders, adjust asset
ownership structure and address the current economic challenges as they arise.
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3. DIRECTORS’ REPORT (CONTINUED)
The Directors consider that in preparing the financial statements they have taken into account all information that could
reasonably be expected to be available. On this basis, they consider that it is appropriate to prepare the financial
statements on a going concern basis.
Details of Executive Directors
Kirill Golovanov, Interim Chairman & CEO
Mr. Golovanov joined Ovoca as a corporate advisor in 2007 and was appointed Chief Executive Officer of Ovoca in May
2012. He has extensive experience in the development of venture businesses. Mr. Golovanov holds a Juris Doctor degree
from the Moscow State Law Academy, Moscow, Russia and an MBA from Duke University’s Fuqua School of Business,
NC, USA.
Details of Non-Executive Directors
Timothy McCutcheon, Non-Executive Director
Mr. McCutcheon joined the Board of Ovoca as a Non-Executive Director in January 2009 and moved into the CEO
position in December 2009. Prior to Ovoca, Mr. McCutcheon was a partner at DBM Capital Partners, an investment
manager and corporate finance boutique specialising in the mining sector of Russia and the former Soviet Union. He also
worked at several investment banks such as Bear Stearns, Aton Capital and Pioneer Investments as an award-winning
metals and mining sector analyst and as an investment banker. He was one of the first analysts in Russia to write about its
gold mining sector and he has advised numerous international gold mining companies on M&A, business development,
and Russian business practices.
BA, cum laude, Columbia College, New York, NY. MBA, Finance, Columbia Business School. Fluent in English and
Russian.
Anastasia Levashova, Non-Executive Director
Ms. Levashova has 20+ years of experience of long-term investing in Europe, Middle East and Africa and Latin America
and has served on a number of company boards of directors across the UK and Russia. Currently at Blackfriars Asset
Management in London, Anastasia oversees several portfolios investing in global equities and high yield securities. Prior
roles include leading BNP Paribas EMEA equity sales business, managing research sales and capital transactions at
Citibank, and establishing Bank of America Merrill Lynch’s equity sales/trading and research teams in Russia. Anastasia
holds a PhD from Moscow Lomonosov State University and a Masters from Columbia University, NYC. She does regular
interviews on investments for Bloomberg and is a member of EM Power – global charity supporting disadvantaged youth
in emerging countries.
Kristina Zakurdaeva, Non-Executive Director
Ms. Zakurdaeva has 10+ years of experience in the international pharma industry and biotech projects development in US,
Russia and globally. Kristina now serves as CEO of Incuron, a New York-based drug development company in the
oncology sector. Before Incuron, she served as Chief Medical Officer at Gero (Singapore/Russia), a drug discovery
company focused on aging and aging-related diseases, where she developed clinical strategy for the company’s pipeline.
Prior to that Kristina worked as a Scientific Advisor at Bristol-Myers Squibb and later headed oncology and immunology
R&D projects in the Skolkovo Foundation (Moscow) where she successfully launched the Cancer Center of Excellence.
Ms. Zakurdaeva is a Founder and Chair of the Board of the Foundation for Cancer Research Support (RakFond, Russia)
and has authored numerous, recent, peer-reviewed publications and co-authored a scientific discovery in genetics. He
holds a MD degree in internal medicine and haematology, as well as a PhD in genetics of acute leukaemia.
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Corporate Governance Statement
The Board of Directors (“the Board”) are committed to maintaining the highest standards of corporate governance
commensurate with the size, stage of development and financial status of the Group.
Board
The Board currently has four directors, comprising one Executive Director and three Non-Executive Directors. The Board
met formally on 10 occasions during 2022. An agenda and supporting documentation were circulated in advance of each
meeting. All the Directors bring independent judgment to bear on issues affecting the Group and all have full and timely
access to information necessary to enable them to discharge their duties. The Directors have a wide and varying array of
experiences in the industry, Non-Executive Directors are not appointed for specific terms. Each Non-Executive Director
comes up for re-election every three years and each new Director is subject to election at the next Annual General
Meeting following the date of appointment.
The following committees deal with the specific aspects of the Group affairs:
Audit Committee: This Committee comprises two Non-Executive Directors. The external auditors have the opportunity
to meet with members of the Audit Committee without executive management present at least once a year. The duties
of the Committee include the review of the accounting principles, policies and practices adopted in preparing the
financial statements, external compliance matters and the review of the Group’s financial results.
Nominations Committee: Given the current size of the Group, a Nominations Committee is not considered necessary.
The Board reserves to itself the process by which a new Director is appointed.
Remuneration Committee: This Committee comprises one Non-Executive Director and one Executive Director. This
Committee determines the contract terms, remuneration and other benefits of the Executive Directors, Chairman and
Non-Executive Directors. Further details of the Group’s policies on remuneration, service contracts and compensation
payments are given in the Remuneration Committee Report below.
Communications: The Group maintains regular contact with shareholders through publications such as the annual and
half-year report and via press releases on the Group’s website, www.ovocabio.com. The Directors are responsive to
shareholder enquiries throughout the year. The Board regards the Annual General Meeting as a particularly important
opportunity for shareholders, Directors and management to meet and exchange views.
The QCA Corporate Governance Code 2018
The QCA Code sets out 10 broad principles and requires the Company to consider how each should be applied. This
Report is a summary of the position with the Company’s Corporate Governance processes and practices or otherwise
“signposts” where other disclosures are made in this document or on the Company’s website www.ovocabio.com,
particularly the Company’s Corporate Governance Statement: https://ovocabio.com/corporate-governance/.
The Broad address the ten principles underpinning the QCA case as follow:
1. Establish a strategy and business model which promote long-term value for shareholders;
2. Seek to understand and meet shareholder needs and expectations;
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success;
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation;
5. Maintain the board as a well- functioning, balanced team led by the chair;
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities;
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
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3. DIRECTORS’ REPORT (CONTINUED)
8. Promote a corporate culture that is based on ethical values and behaviors;
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the
board;
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and
other relevant stakeholders.
Internal Control
The Directors have overall responsibility for the Group’s system of internal control and have delegated responsibility for
the implementation of this system to executive management. This system includes financial controls that enable the
Board to meet its responsibilities for the integrity and accuracy of the Group’s accounting records. The Group’s system of
internal financial control provides reasonable, though not absolute assurance that assets are safeguarded, transactions
authorised and recorded properly, and that material errors or irregularities are either prevented or detected within a timely
period. Having made appropriate enquiries, the Directors consider that the system of internal financial, operational and
compliance controls and risk management operated effectively during the period covered by the financial statements
and up to the date on which the financial statements were signed. The internal control system includes the following key
features, which have been designed to provide internal financial control appropriate to the Group’s businesses:
• budgets are prepared for approval by the Board;
•
•
expenditure and income are compared to previously approved budgets;
a detailed investment approval process which requires the Board’s approval of all major capital projects and regular
review of the physical performance and expenditure on these projects.
Remuneration Committee Report
The Group’s policy on senior executive remuneration is designed to attract and retain people of the highest calibre who
can bring their experienced and independent views to the policy, strategic decisions and governance of the Group. In
setting remuneration levels, the Remuneration Committee takes into consideration the remuneration practices of other
companies of similar size and scope. A key philosophy is that staff must be properly rewarded and motivated to perform
in the best interests of the shareholders.
Accounting Records
The Directors believe that they have complied with the requirement of section 281 to 285 of the Companies Act, 2014,
with regard to the keeping of accounting records by employing persons with appropriate expertise and by providing
adequate resources to the financial function. The accounting records are held at the Group and Company’s business
address at 17 Pembroke Street Upper, Dublin 2, Ireland.
Compliance Statement
The directors of the Company acknowledge that they are responsible for securing the Company’s compliance with its
relevant obligations (as defined in the Companies Act 2014 (the “2014 Act”)) and, as required by section 225 of the 2014
Act, the directors confirm that:
• A compliance policy statement setting out the Company’s policies with regard to complying with the relevant
obligations under the 2014 Act has been prepared;
• Arrangements and structures have been put in place that they consider sufficient to secure material compliance with
the Company’s relevant obligations; and
• A review of the arrangements and structures has been conducted during the financial year.
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Each of the persons who are directors at the time when this Directors’ report is approved has confirmed that:
•
•
so far as that director is aware, there is no relevant audit information of which the Company’s auditors are unaware, and
that director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant
audit information and to establish that the Company’s auditors are aware of that information.
Events after Reporting Period
Taymura litigation
In 2014, the Company entered into a loan agreement with a third party. In return for a US$’000 6,300 loan, the Company
(formerly Ovoca Gold plc) received an exclusive period to complete due diligence on JSC Evenkiya Fuel and Energy
Company (ETEK) and LLC Taymura. The loan was secured by certain receivables of LLC Taymura, non-encumbrance of
the assets for the exclusive period, and personal guarantees. In the event that acquisition terms could not be agreed, the
loan was to be returned with interest to the Company. The loan subsequently went into default for non-repayment.
After extensive legal proceeding, the Company recovered an amount of US$’000 1,000 during the financial year ended
31 December 2016 and the Company continues to try to recover the remaining amount through the courts. However, in
May 2019 we became aware that an arbitration court in Russia issued a decision for the Company to repay the received
US$’000 1,000.
In December 2019, Alliance LLC (a legal successor of Taymura), filed a petition to the court for changing the method of
enforcing the decision under which the court granted to repay the received US$`000 1,000, should change the manner
and the method of court order enforcement and provide for the seizure of the share held by the debtor, Ovoca Bio Plc in
the share capital of Comtrans LLC with the nominal value of 32,400,400 Rubles.
A subsequent ruling made by the Court in April 2022, granted the claim of Alliance LLC and directing for the share capital
of Comtrans LLC to be seized and the share representing 59,94% of the share capital of IVIX LLC (subsidiary of Silver
Star Ltd.) to be seized in order to fully recover the amount recovered in 2016.
Ovoca Bio Plc rigorously contested this decision, but as noted the current volatile political situation was not in favour of
Ovoca Bio Plc and a ruling was made directing Ovoca to repay the amounts recovered in 2016. In 2021, Ovoca Bio Plc
had cautiously considered the latest developments in the courts and obtained extensive legal advice on the matter. In
previous year, the Board believes, it is prudent to make a provision of in relation to the possible outflow of resources
connected with the Alliance LLC claim.
The court decision was enforced in July 2022. In September 2022 the claim of Alliance LLC was discharged and Ovoca
made the payments in cash through one of its subsidiaries for the amount of the claim that had been provided for in the
prior year.
Alliance LLC appealed to the court for the recovery of interest for the use of funds, as well as reimbursement of court
costs for a total amount of 12.4 Million Russian Roubles (approximately €’000 159 at the exchange rate by the time of
release of this report). Ovoca contested this requirement on appeal, but the court left the decision unchanged. Ovoca
Bio Plc is currently taking steps to appeal this last ruling.
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3. DIRECTORS’ REPORT (CONTINUED)
On March 11, 2024, Ovoca Bio Plc filed a cassation appeal, On May 15th the Arbitration Court terminated the Cassation
appeal. A meeting of the Arbitration Court regarding the case of procedural succession is rescheduled for August 15th.
Auditors
The auditors, Grant Thornton Chartered Accountants & Statutory Audit Firm, continue in office in accordance with
section 383(2) of the Companies Act 2014.
This report was approved by the board on 20 June 2024 and signed on its behalf.
Timothy McCutcheon Kirill Golovanov
Director Director
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Directors’ Responsibilities Statement
The Directors are responsible for preparing the annual report and financial statements, in accordance with applicable Irish
law and regulations.
Irish company law requires the Directors to prepare financial statements for each financial year giving a true and fair view
of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The Directors
have elected to prepare the Group financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union (EU IFRS) and have elected to prepare the Company financial statements in
accordance with EU IFRS, as applied in accordance with Irish law and regulations.
The Group and Company financial statements are required by law to present fairly their financial position and
performance for each financial year.
In preparing each of the Group and Company financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether the financial statements have been prepared in accordance with applicable accounting standards,
identify those standards, and note the effect and the reasons for any material departure from those standards; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for ensuring that the Group and Company keeps or causes to be kept adequate accounting
records which correctly explain and record the transactions of the Group and Company, enable at any time the assets,
liabilities, financial position and profit or loss of the Group to be determined with reasonable accuracy, enable them to
ensure that the financial statements and Directors’ report comply with the Companies Act 2014 and enable the financial
statements to be audited. They are also responsible for safeguarding the assets of the Group and Company 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
Group and Company’s website. Legislation in Ireland governing the preparation and dissemination of financial statements
and other information included in Directors’ report may differ from legislation in other jurisdictions.
Approved on behalf of the Board on 20 June 2024
Timothy McCutcheon Kirill Golovanov
Director Director
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4.
Independent
Auditor’s Report
to the Members of
Ovoca Bio Plc
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Independent Auditor’s Report to the Members of Ovoca Bio Plc
Opinion
We have audited the Consolidated financial statements of Ovoca Bio Plc (the “Company”) and its subsidiaries (together
referred to as “the Group”), which comprise the consolidated statement of profit or loss and other comprehensive
income, Consolidated statement of other comprehensive income/(loss), Consolidated statement of changes in equity,
Company statement of changes in equity, Consolidated statement of financial position, Company statement of financial
position, Consolidated statement of cash flows and Company statement of cash flows for the financial year ended
31 December 2023, and the related notes to the financial statements, including the summary of material accounting
policies.
The financial reporting framework that has been applied in the preparation of the financial statements is Irish law and
International Financial Reporting Standards (IFRS) as adopted by the European Union.
In our opinion, Ovoca Bio Plc’s financial statements:
• give a true and fair view in accordance with IFRS as adopted by European Union, of the assets, liabilities and financial
position of the Group at 31 December 2023 and of the Group’s financial performance and cash flows for the financial
year then ended;
• gives a true and fair view, in accordance with IFRS as adopted by European Union, of the assets, liabilities and financial
position of the Company as at 31 December 2023 and of its cash flows for the financial year then ended; and
have been properly prepared and in accordance with the requirements of the Companies Act 2014.
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (‘ISAs (Ireland)’) and applicable
law. Our responsibilities under those standards are further described in the ‘Responsibilities of the auditor for the audit of
the financial statements’ section of our report. We are independent of the Group and Company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standards for
Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority (IAASA) and the ethical
pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the
circumstances for the Group and Company. We have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty relating to going concern
In forming our opinion, which is not modified, we draw attention to the disclosures made in the Directors’ report and Note
3 in the financial statements concerning the Group’s and Company’s ability to continue as a going concern. The
Company incurred a comprehensive loss of €’000 2,716/US$’000 2,939 (2022: loss of €’000 20,717/US$’000 21,832),
had net current liabilities of €’000 8,834/US$’000 9,749 (2022: net current liabilities of €’000 8,198/US$’000 8,752)
and is in net liability position of €’000 7,040/US$’000 7,769 (2022: net liability of €’000 4,324/US$’000 4,617). As at
the same date, The Group incurred a comprehensive loss of €’000 5,134/US$’000 5,441 (2022: loss of €’000
5,809/US$’000 7,073), was in a net assets position of €’000 2,501/US$’000 2,762 (2022: net assets of €’000
7,635/US$’000 8,201). As disclosed in Note 3 the clinical study of Orenetide has return into to unfavourable results.
Management has ceased the trials and further R&D studies in this area. As of the reporting date, the Group and
Company has no current active projects. However, the Board is investigating potential strategic opportunities that fit with
the skillset and competences of the Company’s Management. Several options are under consideration and reviews and
discussions are ongoing. These conditions, along with other matters as set forth in Note 3, indicate the existence of a
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4. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF OVOCA BIO PLC (CONTINUED)
material uncertainty which may cast significant doubt on the Group and Company’s ability to continue as a going
concern.
In auditing the financial statements, we have concluded that the directors’ use of going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors assessment of the Group and
Company’s ability to continue to adopt the going concern basis of accounting included:
• Evaluated management investigations for potential strategic opportunities that fit with the skillset and competences
of the Company’s Management by understanding their plans and actions undertaken to-date through inquiries with
the Management and Board of Directors and assessment of available documentation and written communication.
Several options are under consideration and reviews and discussions are ongoing.
• Reviewed of management’s 24-month cash flow forecast and its planned source of funding to enable them to trade
for the foreseeable future by evaluating management’s future cash flow forecasts, understanding the process by
which they were prepared, and assessed the calculations are mathematically accurate and challenging the underlying
key assumptions such as expected significant cash inflows, outflows, and other operating expenses.
• For Company only, assessed the forbearance of the related parties to demand payments on the amounts owed to
subsidiary undertakings.
• Assessing the completeness and appropriateness of management’s going concern disclosures in the financial
statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset
amounts and classifications of liabilities that might be necessary should the Company be unable to continue in existence.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit, and the directing of efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
therefore we do not provide a separate opinion on these matters.
Overall audit strategy
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made substantive judgements. We also addressed the risk of
management override of internal controls, including evaluating whether there was any evidence of potential bias that
could result in a risk of material misstatement due to fraud.
How we tailored the audit scope
The Group has three business segments: pharmaceutical and Bio-pharmaceutical activities are primarily operated in
Australia, and minimal activity in the Russian Federation, whereas the investments activities are operated from Bermuda,
and administrative activities in the Republic of Ireland.
We tailored the scope of our audit taking into account the areas where the risk of misstatement was considered material
to the Group. We performed an audit of the complete financial information of two components and specified audit
procedures at a further three components that were determined by the Group audit team in response to specific risk
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factors. The components where we performed either audit or specified audit procedures accounted for 99% of the
Group’s total assets. Components’ represent business units across the Group considered for audit scoping purposes. We
performed an audit of the complete financial information of the Company.
In establishing the overall approach to our audit, we assessed the risk of material misstatement at a Group level, taking
into account the nature, likelihood and potential magnitude of any misstatement. As part of our risk assessment, we
considered the control environment in place at Ovoca Bio Plc.
Materiality and audit approach
The scope of our audit is influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, such as our understanding of the Group and Company and their
environment, the history of misstatements, the complexity of the Group and Company and the reliability of the control
environment, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the Group as 1% of total assets for the financial year
ended 31 December 2023. We determined materiality for the Company based on a weighted allocation which is 13.47% of
the Group materiality.
We have applied the total assets benchmark as the Company and the Group primarily held assets for the purposes of
investment during the financial year.
We have set Performance materiality for the Group and Company at 65% of materiality, having considered our prior year
experience of the risk of misstatements, business risks and fraud risks associated with the entity and it’s the control
environment. This is to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements in the financial statements exceeds materiality for the financial statements as a whole.
We agreed with the board of directors that we would report to them misstatements identified during our audit above 5%
of materiality as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Significant matters identified
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and
effort, are set out below as significant matters together with an explanation of how we tailored our audit to address these
specific areas in order to provide an opinion on the financial statements as a whole. This is not a complete list of all risks
identified by our audit.
Other than the matter described in “Material uncertainty related to going concern”, we did not determine key audit
matters to be communicated in our report.
Other information
Other information comprises information included in the Annual Report, other than the financial statements and our
Auditor’s Report thereon, including the Chairman and Chief Executive Officer’s Statement and Directors’ Report. The
directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial
statements, we are required to determine whether there is a material misstatement in the financial statements or a
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4. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF OVOCA BIO PLC (CONTINUED)
material misstatement of the other information. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information; we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by the Companies Act 2014
• We have obtained all the information and explanations, which we consider necessary for the purposes of our audit.
•
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily
and properly audited.
• The financial statements are in agreement with the accounting records.
•
In our opinion, the information given in the Directors’ Report is consistent with the financial statements. Based solely
on the work undertaken in the course of our audit, in our opinion, the Directors’ report has been prepared in
accordance with the requirements of the Companies Act 2014.
Matters on which we are required to report by exception
Based on our knowledge and understanding of the Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the Directors Report.
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’
remuneration and transactions specified by section 305 to 312 of the Act have not been made. We have no exceptions to
report arising from this responsibility.
Responsibilities of management and those charged with governance for
the financial statements
As explained more fully in the Directors’ responsibilities statement, management is responsible for the preparation of the
financial statements which give a true and fair view in accordance with IFRS as adopted by the European Union, and for
such internal control as directors determine necessary to enable the preparation of financial statements are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group and Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group and Company or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group and Company’s financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
The objectives of an auditor are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs
(Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Irish Auditing and
Accounting Supervisory Authority’s website at: http://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-
a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf. This description forms part of our auditor’s report.
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Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial
statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs
(Ireland). The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to compliance with Irish Stock Exchange Euronext Growth Dublin (XESM) and London Stock
Exchange’s Alternative Investment Market (AIM) Rules and we considered the extent to which non-compliance might
have a material effect on the financial statements. We also considered those laws and regulations that have a direct
impact on the preparation of the financial statements such as the Companies Act 2014 and Irish tax legislation. The Audit
engagement partner considered the experience and expertise of the engagement team to ensure that the team had
appropriate competence and capabilities to identify or recognise non-compliance with the laws and regulation. We
evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including
the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal
entries to manipulate financial performance and management bias through judgements and assumptions in significant
accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional
scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or
incomplete/inaccurate disclosures in the financial statement.
In response to these principal risks, our audit procedures included but were not limited to:
•
•
enquiries of management including the Board, risk and compliance and legal functions on the policies and procedures
in place regarding compliance with laws and regulations, including consideration of known or suspected instances of
non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
inspection of the Group’s regulatory and legal correspondence and review of minutes of board meetings during the
year to corroborate inquiries made;
• gaining an understanding of the Group’s current activities, the scope of authorisation and the effectiveness of its
control environment to mitigate risks related to fraud;
• discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of
fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of
financial statements throughout the audit;
identifying and testing journal entries to address the risk of inappropriate journals and management override of
controls;
•
•
•
• designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
challenging assumptions and judgements made by management in their significant accounting estimates, as
•
disclosed in Note 2 of the financial statements;
review of the financial statement disclosures to underlying supporting documentation and inquiries of management;
the engagement partner have assessed that the engagement team collectively had the appropriate competence and
capabilities to identify or recognise non-compliance with the laws and regulation;
involvement of experienced engagements team, which includes the engagement of internal expert, with sufficient;
and knowledge of the industry and had the competence to challenge and test the relevant controls and assumptions
relating to the valuation of Goodwill and other intangible assets.
•
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with
governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
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4. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF OVOCA BIO PLC (CONTINUED)
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with section 391 of the Companies Act
2014. 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.
Michael Shelley
For and on behalf of
Grant Thornton
Chartered Accountants & Statutory Audit Firm
13 – 18 City Quay
Dublin 2
Ireland
Date: 21 June 2024
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Consolidated Income Statement
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Administration expenses 5 (1,866) (5,423) (2,019) (5,716)
Other losses 7 (3,233) (154) (3,498) (163)
Operating loss (5,099) (5,577) (5,517) (5,879)
Finance income 8 – 4 – 4
Finance costs 8 (5) (39) (5) (41)
Loss for the financial year before tax (5,104) (5,612) (5,522) (5,916)
Income tax 13 – – – –
Loss for the financial year from continuing operations (5,104) (5,612) (5,522) (5,916)
Gain for the financial year from discontinued operations 30 402 – 436 –
Loss for the financial year (4,702) (5,612) (5,086) (5,916)
Loss for the financial year attributable to:
Owners of the parent (4,702) (5,612) (5,086) (5,916)
(4,702) (5,612) (5,086) (5,916)
Basic loss per share:
From continuing operations (cents) 14 (€6.26) (€6.88) (US$6.77) (US$7.25)
From continuing and discontinued operations (cents) 14 (€5.76) (€6.88) (US$6.24) (US$7.25)
Fully diluted loss per share:
From continuing operations (cents) 14 (€6.26) (€6.88) (US$6.77) (US$7.25)
From continuing and discontinued operations (cents) 14 (€5.76) (€6.88) (US$6.24) (US$7.25)
The accompanying notes on pages 37 to 72 form an integral part of these consolidated financial statements.
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Consolidated Statement of other Comprehensive Loss
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Loss for the financial year (4,702) (5,612) (5,086) (5,916)
Other comprehensive income/(loss):
Items that will not be reclassified
subsequently to profit or loss
Fair value movement on equity securities
designated at fair value through other
comprehensive income (FVOCI) 25 – (2,006) – (2,114)
Exchange movement on equity securities
designated at FVOCI 25 – 124 – 277
Net other comprehensive loss that will not be
reclassified subsequently to profit or loss – (1,882) – (1,837)
Items that will be reclassified subsequently
to profit or loss
Foreign exchange (loss)/gain/arising from
translating foreign operations (432) 1,685 (353) 680
Net other comprehensive (loss)/income that will be
reclassified subsequently to profit or loss (432) 1,685 (353) 680
Other comprehensive loss for the financial year (432) (197) (353) (1,157)
Total comprehensive loss for the financial year (5,134) (5,809) (5,439) (7,073)
Total comprehensive loss attributable to:
Owners of the parent (5,134) (5,809) (5,439) (7,073)
(5,134) (5,809) (5,441) (7,073)
The accompanying notes on pages 37 to 72 form an integral part of these consolidated financial statements.
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Consolidated Statement of Changes in Equity
Foreign Total
Treasury currency Share based attributable
Share share translation payment Other Accumulated to owners
capital reserve reserve reserve reserves losses of parent
Notes €’000 €’000 €’000 €’000 €’000 €’000 €’000
At 1 January 2023 11,057 (547) 5,525 46 1,288 (9,734) 7,635
Comprehensive loss:
Loss for the financial year – – – – (4,702) (4,656)
Other comprehensive (loss)/income:
Fair value movement on equity securities
designated at FVOCI – – – – – – –
Exchange movement on equity securities
designated at FVOCI – – – –
Transfer to accumulated losses as a result
of sale of equity securities designated
at FVOCI – – – – – – –
Foreign exchange gain arising from
translation of financial statements of
a foreign operations – – (432) – – – (432)
Total comprehensive loss (432) – – (4,702) (5,134)
Transactions with owners of the Company
Share based payments 10, 11 & 29 – – – – – – –
Total transactions with owners of
the Company – – – – – – –
Changes in ownership interest – – –
Disposal of a subsidiary
(retained earnings written off) – – – – – – –
Total changes in ownership interests – – – – – – –
Balance at 31 December 2023 11,057 (547) 5,093 46 1,288 (14,436) 2,501
At 1 January 2022 11,057 (547) 3,840 42 1,478 (2,440) 13,430
Comprehensive loss:
Loss for the financial year – – – – – (5,612) (5,612)
Other comprehensive (loss)/income:
Fair value movement on equity securities
designated at FVOCI – – – – (2,006) – (2,006)
Exchange movement on equity securities
designated at FVOCI – – – – 124 – 124
Transfer to retained earnings as a result
of sale of equity securities designated
at FVOCI – – – – 1,692 (1,692) –
Foreign exchange gain arising from
translation of financial statements of
a foreign operations – – 1,685 - – – 1,685
Total comprehensive (loss)/income 1,685 - (190) (7,304) (5,809)
Transactions with owners of the Company
Share based payments 10, 11 & 29 – – – 4 – – 4
Total transactions with owners of
the Company – – – 4 – – 4
Changes in ownership interest
Purchase of additional interest in a
subsidiary with NCI – – – – – 10 10
Total changes in ownership interests – – – – – 10 10
Balance at 31 December 2022 11,057 (547) 5,525 46 1,288 (9,734) 7,635
The accompanying notes on pages 37 to 72 form an integral part of these consolidated financial statements.
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Company Statement of Changes in Equity
Ordinary Share based
Share Other payments Accumulated
capital reserves reserve losses
€’000 €’000 €’000 €’000
Total
(attributable
to owners of
the parent)
€’000
At 1 January 2023 11,057 1,305 46 (16,732) (4,324)
Comprehensive loss
Loss for the financial year – – – (2,716)
Total comprehensive loss – – – (2,716)
Transactions with owners of the Company
Share based payments (Note 10, 11 & 29) – – – –
Total transactions with owners of the Company – – – –
At 31 December 2023 11,057 1,305 46 (19,448)
At 1 January 2022 11,057 1,305 42 3,985
Comprehensive loss
Loss for the financial year – – – (20,717)
Total comprehensive loss – – – (20,717)
Transactions with owners of the Company
Share based payments (Note 10, 11 & 29) – – 4 –
Total transactions with owners of the Company – – 4 –
(2,716)
(2,716)
–
–
(7,040)
16,389
(20,717)
(20,717)
4
4
At 31 December 2022 11,057 1,305 46 (16,732)
(4,324)
The accompanying notes on pages 37 to 72 form an integral part of these financial statements.
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Consolidated Statement of Financial Position
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Assets
Non-current assets
Goodwill 15 – 4,237 –
Other intangible assets 16 – 189 –
Property, plant, and equipment 17 – – –
Equity securities designated at FVOCI 19 – – –
Total non-current assets – 4,426 –
Current assets
Inventories 20 – 43 –
Trade and other receivables 21 121 1,233 134
Cash and cash equivalents 22 3,337 3,703 3,683
Total current assets 3,458 4,979 3,817
Assets held for sale 30 10 – 11
Total assets 3,468 9,405 3,828
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 23 11,057 11,057 15,586
Treasury share reserve 23 (547) (547) (607)
Other reserves 25 1,288 1,288 1,774
Foreign currency translation reserve 25 5,093 5,525 279
Share based payment reserve 25 46 46 52
Accumulated losses 24 (14,436) (9,734) (14,322)
Equity attributable to owners of the parent 2,501 7,635 2,762
Total equity 2,501 7,635 2,762
Current liabilities
Trade and other payables 26 369 1,388 407
Provisions 33 159 168 175
Total current liabilities 528 1,556 582
Liabilities included in the disposal group classified
as held for sale 30 439 214 484
Total equity and liabilities 3,468 9,405 3,828
The accompanying notes on pages 37 to 72 form an integral part of these consolidated financial statements.
Approved on behalf of the Board of Directors on 20 June 2024
4,575
202
–
–
4,777
46
1,316
3,953
5,315
–
10,092
15,586
(607)
1,774
632
52
(9,236)
8,201
8,201
1,484
179
1,663
228
10,092
Timothy McCutcheon Kirill Golovanov
Director Director
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Company Statement of Financial Position
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Assets
Non-current assets
Financial assets 18 1,794 3,874 1,980
Total non-current assets 1,794 3,874 1,980
Current assets
Trade and other receivables 21 120 66 132
Cash and cash equivalents 22 355 915 392
Total current assets 475 981 524
Total assets 2,269 4,855 2,504
Equity and Liabilities
Equity
Ordinary shares 23 11,057 11,057 15,586
Accumulated losses 24 (19,448) (16,732) (15,975)
Other reserves 25 1,305 1,305 1,780
Share based payment reserve 25 46 46 52
Foreign currency translation reserve 25 – – (9,212)
Total equity (7,040) (4,324) (7,769)
Current liabilities
Trade and other payables 26 9,150 9,020 10,098
Provisions 33 159 159 175
Total current liabilities 9,309 9,179 10,273
Total equity and liabilities 2,269 4,855 2,504
4,135
4,135
70
977
1,047
5,182
15,586
(13,036)
1,780
52
(8,999)
(4,617)
9,629
170
9,799
5,182
The Company has taken advantage of the exemption permitted by Section 304 (1)(b) of the Companies Act 2014 not to
present an income statement for the financial year. The Company’s loss for the financial year was €’000 2,716/US$’000
2,939 (2022: loss €’000 20,717/US$’000 21,832).
The accompanying notes on pages 37 to 72 form an integral part of these financial statements.
Approved on behalf of the Board of Directors on 20 June 2024
Timothy McCutcheon Kirill Golovanov
Director Director
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Consolidated Statement of Cash Flows
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Cash flows from operating activities
Continuing operations
Loss for the financial year before tax (4,702) (5,612) (5,086)
Adjustments for:
Loss on disposal of investments 7, 18 & 19 – 19 –
Share based payment 25 – 4 –
Depreciation and amortisation 16 & 17 300 531 325
Loss on disposal of assets 7 – 313 –
Impairment of assets 8 4,296 – 4,649
Changes in:
Decrease in inventories 43 51 47
Decrease/(increase) in trade and other receivables 1,102 (899) 1,216
Increase in trade and other payables and provision 76 429 112
Net cash generated from/(used in) operating activities 1,115 (5,164) 1,263
Cash flows from financing activities
Proceeds from loan/borrowings 26 40 900 44
Payments of loan/borrowings 26 (919) - (981)
Net cash (used in)/generated from financing activities (879) 900 (937)
Cash flows from investing activities
Additions of research and development costs
internally developed 16 – (22) –
Additions of patents acquired 16 (49) (20) (53)
Proceeds from disposal of assets – 1,201 –
Proceeds from disposal of equity securities at FVOCI 19 – 347 –
Net cash (used in)/generated from investing activities (49) 1,506 (53)
Effects of foreign exchange (553) (133) (543)
Net decrease in cash and cash equivalents (366) (2,891) (270)
Cash and cash equivalents at the beginning of financial year 22 3,703 6,594 3,953
Cash and cash equivalents at the end of financial year 22 3,337 3,703 3,683
Cash and cash equivalents included in the disposal group 30 – – –
Cash and cash equivalents for continuing operation 22 3,337 3,703 3,683
The accompanying notes on pages 37 to 72 form an integral part of these consolidated financial statements.
(5,916)
20
4
560
330
–
54
(960)
373
(5,535)
961
-
961
(24)
(22)
1,287
366
1,607
(548)
(3,515)
7,468
3,953
–
3,953
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Company Statement of Cash Flows
2023 2022 2023
Notes €’000 €’000 US$’000
2022
US$’000
Cash flows from operating activities
Loss for the financial year before tax 24 (2,716) (20,717) (2,939)
Adjustments for
Share based payment reserve movement 25 – 4 –
Additions of impairment of investment in a subsidiary 18 2,080 20,813 2,155
Loss on financial asset written off 18 – 10 –
Foreign currency exchange gain – – 96
Changes in
Increase in trade and other receivables (54) (36) (60)
(Decrease)/increase in trade and other
payables and provisions 130 (102) 143
Net cash used in operating activities (560) (28) (605)
Effects of foreign exchange – – 20
Net decrease in cash and cash equivalents (560) (28) (585)
Cash and cash equivalents at the beginning of year 915 943 977
Cash and cash equivalents at the end of year 22 355 915 392
The accompanying notes on pages 37 to 72 form an integral part of these financial statements.
(21,832)
4
23,837
11
(1,904)
(38)
(109)
(31)
(60)
(91)
1,068
977
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5.
Notes to the
Financial Statements
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Notes to the Financial Statements
1
General Information
Ovoca Bio Plc (“the Company”) is a public limited company incorporated in Ireland on 15 January 1985. The address of its
registered office and principal place of business is 17 Pembroke Street Upper Dublin 2, Ireland.
These consolidated financial statements for the financial year ended 31 December 2023 consolidate the individual
financial statements of the Company and its subsidiaries (together referred to as ‘the Group’). Information on the
Company’s subsidiaries is provided in Note 18.
The Group’s activity is that of a biotechnology company while the Company’s primary activity is that of a holding
company. The Directors have reviewed the financial position of the Group and are satisfied that the Group will continue to
operate for the foreseeable future.
On 21 April 1987, the Company’s shares were admitted to trading on the Irish Stock Exchange Euronext Growth Dublin
(XESM) and on 30 June 2005 to the London Stock Exchange’s Alternative Investment Market (AIM).
On 30 September 2018, the Group obtained control of IVIX LLC by acquiring 50.02% of their ordinary share capital and
therefore has been consolidated into these financial statements in accordance with IFRS 3 Business Combinations. On
28 June 2019 and 24 March 2020, the Group further acquired 9.92% and 40.06 interest in IVIX LLC, respectively (see
Note 34). Consequently, IVIX LLC became a wholly owned subsidiary of the Group.
In 2023, as a result of the unfavourable outcome of the clinical trial, the Management of the Group had decided to
dispose of IVIX LLC and eventually cease operations in Russia.
2
Statement of Material Accounting Policies
The following material accounting policies have been applied consistently in dealing with items, which are considered
material in relation to the Group and Company’s financial statements.
Statement of compliance
The consolidated and Company financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and their interpretations issued and approved by the International Accounting Standards
Board (IASB) and IFRS Interpretations Committee (IFRS IC) as adopted by the European Union (EU) and those parts of
the Companies Act 2014 applicable to companies reporting under IFRS.
The Company has availed of the exemption in Section 304(2) of the Companies Act, 2014 not to present its individual
Income Statement and related notes that form part of the approved Company financial statements.
The Company has also availed of the exemption from filing its individual Income statement with the Registrar of
Companies as permitted by Section 304(2)(c) of the Companies Act, 2014.
The IFRSs adopted by the EU as applied by the Company and the Group in the preparation of these financial statements
are those that were effective for the financial year ended 31 December 2023.
Basis of preparation
The Group and Company financial statements are prepared on an accrual basis and under the historical cost convention
except for certain financial assets measured at fair value and assets and liabilities held for sale measured at fair value less
costs to sell. The accounting policies have been applied consistently by Group entities.
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Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the
financial year ended 31 December 2023.
Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement(s) with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Subsidiaries are fully consolidated from the date that control
commences until the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the financial year are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group. Intra-group balances and any unrealised
gains or losses or income or expenses arising from intra-group transactions are eliminated in preparing the Group
financial statements.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-
controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within
equity attributable to owners of the Group.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
Business combinations and goodwill
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured as
the aggregate of the fair value, at the date of exchange, of the assets given, equity instruments issued, and liabilities
incurred or assumed. The acquiree’s identifiable assets and liabilities that meet the conditions for recognition under
IFRS 3 Business Combinations are recognised at their fair values at the acquisition date. Acquisition-related costs are
recognised in the consolidated income statement as incurred.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the
business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group’s interest in the acquisition-date net fair value of the acquiree’s
identifiable assets and liabilities exceeds the cost of the business combination, the excess is recognised immediately in
the consolidated income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative
values of the disposed operation and the portion of the cash-generating unit retained.
The non-controlling interest in the acquiree is initially measured at the Non-Controlling Interests (NCIs) fair value as
determined by an independent valuation.
Functional and presentation currency
The Group and Company’s financial statements are presented in Euro, which is also the Group and Company’s functional
currency, and rounded in Euro Thousand (€’000) unless otherwise stated. The US$ Thousand (US$’000) equivalent is
shown for information purposes only. Each entity in the Group determines its own functional currency and items included
in the financial statements of each entity are measured using that functional currency.
Foreign currencies
Monetary assets and liabilities denominated in a foreign currency are translated into Euro at the exchange rate ruling at
the statement of financial position date. Revenues, costs and non-monetary assets are translated at the exchange rates
ruling at the dates of the transactions. Exchange differences are dealt with through the consolidated income statement.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange
rates at the transaction date), except for non-monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
On consolidation, the assets and liabilities of overseas subsidiary companies are translated into Euro at the rates of
exchange prevailing at the statement of financial position date. The operating results of overseas subsidiary companies
are translated into Euro at the average rates applicable during the financial year. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as
appropriate).
On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign
operation, recognised in other comprehensive income and accumulated in the separate component of equity, shall be
reclassified from equity to the income statement when the gain or loss on disposal is recognised.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of
assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at
the spot rate of exchange at the reporting date.
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Expenses
Operating expenses are recognised in income statement upon utilisation of the service or as incurred. Short-term
employee benefits are measured on an undiscounted basis and are expensed as the related service is provided.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount.
Borrowing costs
Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs.
Taxation
Taxation on the profit or loss for the period comprises current and deferred tax. Taxation is recognised in the income
statement except to the extent that it relates to items recognised directly in equity, in which case the related tax is
recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the period, using tax rates and laws that have been
enacted or substantially enacted at the statement of financial position date, and any adjustment to tax payable in respect
of previous periods.
Deferred tax is provided on the basis of the liability method on temporary differences at the statement of financial
position date. Temporary differences are defined as the difference between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. However, deferred tax is not accounted for, if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, or where, in respect of taxable temporary differences associated with
investments in subsidiaries, joint ventures and associates, the timing and reversal of the temporary differences is subject
to control by the Group and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets and
liabilities are not subject to discounting and are measured at the tax rates that are anticipated to apply in the period in
which the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted or substantively
enacted at the statement of financial position date. The carrying amounts of deferred tax assets are subject to review at
each year end date and are reduced to the extent that future taxable profits are considered to be inadequate to allow all
or part of any deferred tax asset to be utilised.
Leases
The Group applies the short-term lease recognition exemption to its short-term leases and recognised as expense on a
straight-line basis over the lease term.
Operating lease rentals are charged to the income statement.
Intangibles
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding
capitalised development costs, are not capitalised and the related expenditure is reflected in consolidated income
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
statement in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either
finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite lives is recognised in the consolidated income statement in the
expense category that is consistent with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or
at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the
indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
consolidated income statement.
Research and development costs
Expenditure on the research phase of projects to develop new pharmaceutical products is recognised as an expense as
incurred.
Costs that are directly attributable to a project’s development phase are recognised as intangible assets, provided they
meet the following recognition requirements:
•
•
•
•
•
the development costs can be measured reliably
the project is technically and commercially feasible
the Company intends to and has sufficient resources to complete the project
the Company has the ability to use or sell the software
the software will generate probable future economic benefits.
Development costs not meeting these criteria for capitalisation are expensed as incurred.
Directly attributable costs include employee costs incurred on product development along with an appropriate portion of
relevant overheads.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete, and
the asset is available for use. It is amortised over the period of expected future benefit. During the period of
development, the asset is tested for impairment annually.
Research and development refund
The clinical studies Ovoca Bio Plc is conducting in Australia qualify for the generous Research and Development (R&D)
relief offered by the Australian Government The credit is calculated at 43.5% of the R&D work performed in a 12-month
period.
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These R&D incentives in Australia are only ‘refundable’ in cash to the extent that the current income tax liability is
insufficient to utilise the R&D incentive. Ovoca Bio Plc’s Australian subsidiary is purely an R&D vehicle and as such does
not have any local tax liabilities, thus the cash refund allows the company to reduce the net R&D costs year-on-year,
increase its cash flows and reinvest the cash back into the business to foster growth.
The R&D refund acts as a compensation for expenditure incurred and is not associated with future costs. OVB Australia
complies with all requirements attaching to R&D relief in Australia and as such the cash is recognized in the period in which
it is received and is reported as other income in the Income Statement.
Patents and licences
The Group have patents acquired through business combination and have been granted for a period reflected but not
more than 20 years. Licences for the use of intellectual property are granted for periods ranging between nine and ten
years depending on the specific licences.
A summary of policies applied to the Group’s intangible assets is, as follows:
Goodwill Patents and licences Development costs
Useful lives Indefinite Finite (ranging from 9 to 17 years) Finite
Amortisation method used and rates No amortisation but subject Amortised on a straight-line basis over No amortisation yet as not yet
to impairment the period of the patent complete but subject to
impairment testing
Internally generated or acquired Acquired Acquired Internally generated
Property, plant and equipment and depreciation
Property, plant & equipment are stated at cost, less accumulated depreciation and accumulated impairment, if any. No
depreciation is provided on land. Depreciation is provided at rates calculated to write off the cost less residual value of
each asset over its expected useful life, which are reviewed each financial year, as follows:
Office furniture and equipment – 10% Straight line
Buildings – 2% Straight line
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate,
or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the carrying amount with the proceeds, if any, and are
recognised in the consolidated income statement.
Investments in subsidiaries
Investments in subsidiaries in the Company statement of financial position are measured at cost less accumulated
impairment. When necessary, the entire carrying amount of the investment is tested for impairment by comparing its
recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss
recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised to the
extent that the recoverable amount of the investment subsequently increases.
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use, recoverable
amount is estimated at each reporting date.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that is expected to generate cash flows that
largely are independent from other assets and groups. Impairment losses are recognised in the consolidated income
statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit
(group of units) on a pro rata basis. The recoverable amount of an asset or cash generating unit is the greater of its value
in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risk specific to the asset. With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset’s or cash-
generating unit’s recoverable amount exceeds its carrying amount.
Inventories
Inventories are carried at the lower of cost or net realisable value. Costs are assigned to individual items of inventory on
the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the sale.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group and the Company becomes a party to the
contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when
the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
All financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets
Financial assets, other than those designated and effective as hedging instruments, are classified into the following
categories:
•
•
•
amortised cost
fair value through profit or loss (FVTPL)
fair value through other comprehensive income (FVOCI) with recycling of cumulative gains and losses (debt
instruments) or with no recycling of cumulative gains and losses upon derecognition (equity instruments).
The classification is determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within
administration expenses.
In the periods presented, the corporation does not have any financial assets categorised as FVTPL.
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Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as
FVTPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash
flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on
the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial.
The Group’s and Company’s cash and cash equivalents and other debtors under trade and other receivables fall into this
category of financial instruments.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group elected to classify irrevocably its equity investments which are not held for trading as
equity instruments designated at fair value through OCI in accordance with IFRS 9 Financial Instruments. The
classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income
in the consolidated income statement when the right of payment has been established, except when the Group benefits
from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI.
Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to
classify irrevocably its equity securities under this category. The entire portfolio was sold in 2022.
Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the
‘expected credit loss (ECL) model’. Instruments included loans measured at amortised cost, trade receivables and loan
commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or
loss.
Recognition of credit losses is no longer dependent on the Group and Company first identifying a credit loss event.
Instead, the Group and Company considers a broader range of information when assessing credit risk and measuring
expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
•
•
•
financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low
credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is
not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the
expected life of the financial instrument.
Trade and other receivables
The Group and Company makes use of a simplified approach in accounting for trade and other receivables and records
the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows,
considering the potential for default at any point during the life of the financial instrument. In calculating, the Group and
Company uses its historical experience, external indicators and forward-looking information to calculate the expected
credit losses using a provision matrix.
The Group and Company assess impairment of trade and other receivables on a collective basis as they possess shared
credit risk characteristics they have been grouped based on the days past due.
Classification and measurement of financial liabilities
Financial liabilities are initially measured at fair value and, where applicable, adjusted for transaction costs unless the
Company designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging
instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
The Group’s trade and other payables and provisions fall into this category of financial instruments while the Company’s
trade and other payables and provisions fall into this category of financial instruments.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the
income statement.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the company statement of financial
position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle
on a net basis, to realise the assets and settle the liabilities simultaneously. The Company reported its amounts owed to
group undertakings net of the amounts owed by group undertakings as these balances relate to the same subsidiaries.
The right to settle on net basis was approved by the Board of Directors of the Group. There are no financial assets and
financial liabilities that were offset in the consolidated statement of financial position.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability; or
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•
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three
levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities
• Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly
• Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair
value are not based on observable market data.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group
determines when transfers are deemed to have occurred between levels in the hierarchy at the end of each reporting
date.
Equity securities were designated at FVOCI are measured at Level 1. There were no transfers between Levels as there are
no longer any equity securities in 2023 and 2022. All equity securities designated at FVOCI have already been disposed
of in 2022.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits, including bank deposits of less than three
months maturity that are readily convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value.
Equity and reserves
Ordinary shares represent the nominal (par) value of shares that have been issued. Share premium includes any premiums
received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share
premium. Treasury shares are recognised at cost and deducted from equity.
Other reserves comprise of the fair value gains and losses including any transfers relating expired share-based payments
and its related foreign exchange movement.
Foreign currency translation reserve comprises translation differences arising from the translation of the financial
statements of the Group’s foreign entities into Euro (€).
Retained earnings include all current and prior period retained profits and losses. All transactions with owners of the
parent are recorded separately within equity.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Share-based payments
Employees (including Directors) of the Group may be entitled to remuneration in the form of share-based payment
transactions, whereby employees render service in exchange for shares or rights over shares. Details of the Group’s share
option scheme are set out in Note 29 of the consolidated financial statements. For any share options granted, the fair
value of the option is recognised as an expense in the income statement with a corresponding increase in equity. The fair
value is measured at grant date excluding the impact of non-market conditions and spread over the period during which
the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to
reflect the actual number of share options that are expected to vest where vesting conditions are non-market conditions.
When the options are exercised, the proceeds received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium.
Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the income or loss attributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the income or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares, which comprise convertible notes and share options granted to directors and employees.
Provisions and contingencies
Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of
economic resources from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be
uncertain. A present obligation arises from the presence of legal or constructive commitment that has resulted from past
events.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most
reliable evidence available at the reporting date, including the risks and uncertainties associated with the present
obligation. Provisions are discounted to their present values, where the time value of money is material. All provisions are
reviewed at each statement of financial position date and are adjusted to reflect the current best estimate. No liability is
recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources is remote.
Non-current assets and liabilities classified as held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amounts
immediately prior to their classification as held for sale and fair value less costs to sell. Costs to sell are the incremental
costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
Once classified as held for sale, the assets are not subject to depreciation or amortisation.
Any profit or loss arising from the sale of a discontinued operation or its remeasurement to fair value less costs to sell is
presented as part of a single line item, profit or loss from discontinued operations.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or
disposal group is available for immediate sale in its present condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn.
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Management must be committed to the plan to sell the asset and the sale expected to be completed within one year
from the date of the classification.
Assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of
financial position.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is
classified as held for sale, and:
• Represents a separate major line of business or geographical area of operations
•
•
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;
or
Is a subsidiary acquired exclusively with a view to resale.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale.
A discontinued operation represents a separate major line of the business. Profit or loss from discontinued operations
comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised on the
measurement to fair value less costs to sell or on the disposal groups constituting the discontinued operation.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the consolidated income statement.
Additional disclosures are provided in Note 30. All other notes to the financial statements include amounts for continuing
operations, unless indicated otherwise.
Events after reporting period
The Group identifies events after the end of each reporting period as those events, both favourable and unfavourable,
that occur between the end of the reporting period and the date when the financial statements are authorised for issue.
The consolidated financial statements of the Group are adjusted to reflect those events that provide evidence of
conditions that existed at the end of the reporting period. Non-adjusting events after the end of the reporting period are
disclosed in the notes to the consolidated financial statements when material.
Significant management judgment in applying accounting policies and estimation uncertainty
The preparation of the financial statements requires management to make judgments, estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes. The judgments, estimates and
assumptions used in the financial statements are based upon management’s evaluation of the relevant facts and
circumstances as of the date of the financial statements. Actual results could differ from these estimates, and the effect
of any change in estimates will be adjusted in the financial statements when they become reasonably determinable.
Judgments, estimates and assumptions are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under these circumstances.
Judgments
In the process of applying the Company’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements:
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Assets held for sale
On 4 July 2018, the Board of Directors announced its decision to dispose the exploration segment of the Group located
in Russia consisting of CJSC Bulun, Magsel, LLC and Comtrans, LLC, all are wholly owned subsidiaries of the Company,
that are classified as assets held for disposal during the financial year. On 7 February 2019, the shareholders approved the
plan to sell.
On 21 February 2023, the Board of Directors approved the disposal of the intangible assets (MA and patents) for the
Orenetide (Desirix) held by IVIX LLC in Russia to a third-party investor (Desirix LLC) and subsequent cease of Russian
operations. Consequently, on 4 October 2023, the Board of Directors approved the proposed strategy for leveraging the
Orenetide patents and termination of the alienation agreement regarding exclusive rights to the inventions between OVB
(Ireland) Ltd. and lVIX LLC. At the end of 2023, to follow through the plane to cease operations in Russia, the Board of
Directors approved the decision to dispose of the Russian-based subsidiary.
The Board considered the subsidiaries to meet the criteria to be classified as held for sale for the following reasons:
• The subsidiaries are available for immediate sale and can be sold to the buyer in its current condition
• The actions required to complete the sale were initiated and negotiations with potential buyers have been identified
and monitored
• Sale of material portions of significant assets have already taken place with plans already in place to sell the remainder
• The Group remains committed to its plan to sell the disposal group
For more details on the discontinued operation, refer to Note 30.
Determining the Group’s functional currency
The determination of Group’s functional currency often requires significant judgement where the primary economic
environment on which it operates may not be clear. Based on the economic substance of the underlying circumstances
relevant to the Group, the functional currency of the Group has been determined to be the Euro. The Euro is the
currency of the primary economic environment in which the Group operates.
Going concern
The Directors note that although the Company is in net liability position, majority of the Company’s current liabilities at
financial year-end relates to a debt with a group Company which has been a feature for the Group where the debt
structure is fluid and is driven by current business objectives of the Group. The Directors regularly review the Group
structure and involve advisors to optimise and complete future operational and business objectives. Furthermore, the
Company’s subsidiary undertaking, Silver Star Ltd., will show forbearance, if required, in demanding repayment of the
amounts due to it until such time that the Company has sufficient funds to repay it.
The Board’s focus is on investigating potential strategic opportunities, as well as monitoring the budgeted. Based on the
24-month cash flow forecast prepared by Management, they expect low expenditure requirements for 2024 due to the
R&D activities being suspended. Hence, the Board is satisfied that there are sufficient levels of funding within the Group
and Company to cover administrative and advisory fees expenditure as required for the foreseeable future while they
explore further investment opportunities.
Capitalisation of internally developed software
Distinguishing the research and development phases of the Group’s project and determining whether the recognition
requirements for the capitalisation of development costs are met requires judgement. After capitalisation, management
monitors whether the recognition requirements continue to be met and whether there are any indicators that capitalised
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costs may be impaired. There were no capitalised research and development costs in 2023 (capitalised in 2022: €’000
22/US$’000 24). All of the Group’s research and developments costs which amounted to €’000 423/US$’000 457 in
2023 (portion of research and development costs expensed in 2022: €’000 2,456/US$’000 2,588) was recognised as
administrative expenses. Refer to Note 16.
Utilisation of tax losses
The Directors have not deemed it appropriate to recognise deferred tax assets resulting from significant losses being
carried forward from previous years on the basis that it is not certain these losses will be utilised in future periods.
Estimation uncertainty
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the end
of each reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
Estimating provisions and contingencies
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment
of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events
(see Note 32).
Estimating impairment of goodwill
Determining whether goodwill is impaired requires estimation of the value of cash-generating units to which goodwill has
been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise
from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future
cash flows are less than expected, a material impairment loss may arise. Goodwill has been fully impaired at the end of
2023 amounting to €’000 4,237/US$’000 4,585 (2022: no impairment loss €NIL/US$ NIL). Refer to Note 15 for the
carrying value of goodwill.
Estimating impairment of non-financial assets
Determining whether non-financial assets are impaired requires an estimation of the value in use of the cash generating
units to which the assets have been allocated. The value in use calculation requires the directors to estimate the future
cash flows to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where
the actual cash flows are less than expected, a material impairment may arise. Impairment loss of €’000 59/US$’000 64
is recognised in other intangible assets in 2023 (2022: €NIL/US$NIL). Refer to Note 16 and Note 17 for the carrying value
of other intangible assets and property, plant and equipment, respectively.
Useful lives of depreciable assets
The annual depreciation charge depends primarily on the estimated lives of each type of asset and, in certain
circumstances, estimates of fair values and residual values. The directors annually review these asset lives and adjust them
as necessary to reflect current thinking on remaining lives in light of technological change, prospective economic
utilisation and physical condition of the assets concerned. Changes in asset lives can have significant impact on
depreciation charges for the period. It is not practical to quantify the impact of changes in asset lives on an overall basis,
as asset lives are individually determined, and there are a significant number of asset lives in use. The impact of any
change would vary significantly depending on the individual changes in assets and the classes of assets impacted. No
change in useful lives of depreciable assets in both years. Refer to Note 17 for the carrying value of property, plant and
equipment.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Estimating allowance for impairment on inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at
each reporting date. The future realisation of these inventories may be affected by future technology or other market-
driven changes that may reduce future selling prices. In 2023, all remaining inventory not utilised in research and
development were sold as by-product at an amount higher than the cost (Note 7). Refer to Note 20 for the carrying
value of inventories.
Estimating measurement of Expected Credit Losses (ECL) allowance for trade and other receivables
In measuring the expected credit losses, the trade and other receivables have been assessed on a collective basis as they
possess shared credit risk characteristics. Refer to Note 21 for the carrying value of trade and other receivables and
Note 28 for details of credit risk. Impairment loss was recognised, in respect of amounts due from subsidiary
undertakings, in 2023 amounting to €’000 1/US$’000 2 (2022: €’000 118/US$’000 124). Refer to Note 27 for the
disclosure on related party transactions.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes
are not available) and non-financial assets and liabilities. This involves developing estimates and assumptions consistent
with how market participants would price the instrument. Management bases its assumptions on observable data as far as
possible, but this is not always available. In that case management uses the best information available. Estimated fair
values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.
New Standards adopted as at 1 January 2023
The Group applied for the first time certain standards, which are effective for annual periods beginning on or after
1 January 2023. The nature and the impact of each amendment is described below:
IFRS 17 ‘Insurance Contracts’
•
• Amendments to IFRS 17 ‘Insurance Contracts’ (Amendments to IFRS 17 and IFRS 4)
• Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
• Definition of Accounting Estimates (Amendments to IAS 8)
•
International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)
These amendments do not have a significant impact on the consolidated financial statements of the Group.
New or revised Standards, amendments and Interpretations to existing Standards that are not yet
effective and have not been adopted early by the Group
Other Standards and amendments that are not yet effective and have not been adopted early by the Group include:
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
• Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
• Non-current Liabilities with Covenants (Amendments to IAS 1)
• Lack of Exchangeability (Amendments to IAS 21)
These amendments are not expected to have a significant impact on the consolidated financial statements of the Group
in the period of initial application and therefore no disclosures have been made.
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At the date of authorisation of these consolidated financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been published by the IASB or IFRIC. None of these
Standards or amendments to existing Standards have been adopted early by the Group and no Interpretations have been
issued that are applicable and need to be taken into consideration by the Group at either reporting date.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year
have not been disclosed as they are not expected to have a material impact on the Group’s consolidated financial
statements.
3
Going concern
As at 31 December 2023, the Company incurred a loss of €’000 2,716/US$’000 2,939 (2022: loss
of €’000 20,717/US$’000 21,832), had net current liabilities of €’000 8,834/US$’000 9,749 (2022:
€’000 8,198/US$’000 8,752) and is in net liability position of €’000 7,040/US$’000 7,769 (2022: net liability position of
€’000 4,324/US$’000 4,617). At the same date, the Group incurred a loss of €’000 5,134/US$’000 5,439 (2022: loss
of €’000 5,809/US$’000 7,073), had net assets position of €’000 2,501/US$’000 2,762 (2022:
€’000 7,635/US$’000 8,201), and had significant liquid resources in the form of cash and cash equivalent of
€’000 3,337/US$’000 3,683 (2022: €’000 3,703/US$’000 3,953).
The Directors note that majority of the Company’s current liabilities at financial year-end relates to a debt with a group
Company which has been a feature for the Group where the debt structure is fluid and is driven by current business
objectives of the Group. The Directors regularly review the Group structure and involve advisors to optimise and
complete future operational and business objectives. Furthermore, the Company’s subsidiary undertaking, Silver Star
Limited, will show forbearance, if required, in demanding repayment of the amounts due to it until such time that the
Company has sufficient funds to repay it.
The Board is reviewing the Group and Company financial and strategic position in light of unfavourable study results for
Orenetide, as well as the current economic and political climate and assessing the potential of the Company in its current
state to realise value for its shareholders. The Board re-evaluated the Company’s current ability to continue R&D activities
and the potential benefits the Company can derive from these. Consequently, Management has agreed not to pursue
immediate development plans for Orenetide as the future economic benefits to the Company remain unclear.
The Board is investigating potential strategic opportunities that fit with the skillset and competences of the Company’s
Management. A number of options are under consideration and reviews and discussions are ongoing.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability
to continue as a going concern and therefore the entity might be unable to realise its assets and discharge its liabilities in
the normal course of business.
The Board’s focus is on investigating potential strategic opportunities, as well as monitoring the budgeted expenditure
and revenue forecasts. The Board notes the low expenditure requirements for 2024 due to the R&D activities being
suspended. In these circumstances the Board believes the Company has sufficient funding to cover administrative and
advisory fees expenditure as required. Based on the 24-month cash flow forecast prepared by Management, the Board is
satisfied that there are sufficient levels of funding within the Group and Company to enable operations for the
foreseeable future, and to explore further investment opportunities.
The Group continues to avail of the generous R&D refund relief available in Australia (at a rate of 43.5%), and the
expected refund for 2023 is AU$’000 300. This translates to €’000 185/US$’000 205 during the year.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
The Group and Company continue to operate safely and are fully focused on ensuring continuity and long-term viability,
as well as explore options to protect, and if suitable opportunities arise realise value for its shareholders, adjust asset
ownership structure and address the current economic challenges as they arise.
The Directors consider that in preparing the financial statements they have taken into account all information that could
reasonably be expected to be available. On this basis, they consider that it is appropriate to prepare the financial
statements on a going concern basis.
4
Segmental reporting
Information regarding the Group’s operating segments is set out below in accordance with IFRS 8 Operating Segments.
IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the
Group’s chief operating decision maker and used to allocate resources to the segments and to assess their performance.
(a)
Primary reporting format – business segments
At 31 December 2023, the Group had three business segments. Bio-pharmaceutical activities are carried out by OVB
(Australia) Pty, while investing activities are carried out by the subsidiary, Silver Star Limited, a company located in
Bermuda. The investments held were sold in 2022 as discussed in Note 19. Administrative activities represent group
administration costs, primarily incurred in Ireland.
(b)
Segment revenues and results
Segment results represent operating profit earned or operating losses incurred from continuing operations by each
segment. This is the measure reported to the Group’s Board of Directors (“Board of Directors”) for the purposes of
resource allocation and assessment of segment performance.
(c)
Segment assets and liabilities
For the purposes of monitoring segment performance and allocating resources between segments, the Board of
Directors monitors the total assets and liabilities attributable to each segment. Goodwill is allocated based on separately
identifiable CGUs as further disclosed in Note 15.
The Bio-pharma segment is composed of a company in Australia and a company in Russia. The Russian Federation entity
is presented as being discontinued, hence, the Bio-pharma segment below presents only the Australian company.
CONTINUING OPERATIONS – 31 December 2023
Bio-pharma Investment Admin Total Bio-pharma Investment Admin
Total
€’000 €’000 €’000 €’000 US$’000 US$’000 US$’000 US$’000
(320)
Depreciation and amortisation – – (296) (296) – – (320)
(1,699)
Other administration expenses (445) (318) (807) (1,570) (482) (344) (873)
(3,498)
Other gains/(losses) 1,017 746 (4,996) (3,233) 1,101 857 (5,406)
Operating loss 572 428 (6,099) (5,099) 619 463 (6,599)
(5,517)
Finance costs – (1) (4) (5) – (1) (4)
Finance income – – – – – – –
(5)
–
Loss before tax 572 427 (6,103) (5,104) 619 462 (6,603)
(5,522)
Income tax – – – – – – –
–
Loss after tax 572 427 (6,103) (5,104) 619 462 (6,603)
(5,522)
Segment assets 1,144 1,838 476 3,458 1,263 2,028 526
Segment liabilities (5) (296) (227) (528) (6) (327) (249)
Net assets 1,139 1,542 249 2,930 1,257 1,701 277
3,817
(582)
3,235
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Included in the other gains/(losses) is a loss on impairment of goodwill and other intangible assets amounting to
€’000 4,237/US$’000 4,585 and €’000 59/US$’000 64.
CONTINUING OPERATIONS – 31 December 2022
Bio-pharma Investment Admin Total Bio-pharma Investment Admin
Total
€’000 €’000 €’000 €’000 US$’000 US$’000 US$’000 US$’000
Depreciation and amortisation (243) – (288) (531) (256) – (304)
Other administration expenses (3,481) (234) (1,177) (4,892) (3,668) (248) (1,240)
Other gains/(losses) 1,444 (1,875) 277 (154) 1,521 (1,976) 292
(560)
(5,156)
(163)
Operating loss (2,280) (2,109) (1,188) (5,577) (2,403) (2,224) (1,252)
(5,879)
Finance costs (22) (1) (16) (39) (23) (2) (16)
Finance income 4 – – 4 4 0 0
(41)
4
Loss before tax (2,298) (2,110) (1,204) (5,612) (2,422) (2,226) (1,268)
(5,916)
Income tax – – – – – – –
Loss after tax (2,298) (2,110) (1,204) (5,612) (2,422) (2,226) (1,268)
Segment assets 1,883 2,137 5,385 9,405 2,063 2,281 5,748
Segment liabilities (1,336) (123) (97) (1,556) (1,427) (131) (105)
Net assets 547 2,014 5,288 7,849 636 2,150 5,643
–
(5,916)
10,092
(1,663)
8,429
At 31 December 2023, intangibles assets of €’000 59/US$’000 64 (2022: €’000 20/US$’000 21) were held in Russia
but were fully impaired at the end of the year (2022: no impairment), while the property, plant and equipment held in
Russia were fully depreciated in 2023 (2022: €NIL/US$NIL). At 31 December 2023, intangible assets held in Ireland are
fully amortised (2022: €’000 169/US$’000 181) while the property, plant and equipment held in Ireland have been fully
depreciated since 2020.
Administration expenses
5
Continuing Discontinued Continuing Discontinued
31/12/2023 31/12/2023 31/12/2023 31/12/2023
€’000 €’000 US$’000 US$’000
Administration expenses
Employee expense (97) (95) (107) (103)
Directors remuneration (Note 11) (214) – (231) –
Employment costs (Note 10) (311) (95) (337) (103)
Depreciation and amortisation (Notes 16 and 17) (296) (4) (321) (4)
Services provided by the Group’s auditors (Note 6) (103) (19) (113) (19)
Operating lease rentals – property – – – –
Research and development (Note 16) (419) (4) (453) (4)
Other administration expenses (737) (191) (795) (208)
Total administration expenses (1,866) (313) (2,019) (338)
Continuing Discontinued Continuing Discontinued
31/12/2022 31/12/2022 31/12/2022 31/12/2022
€’000 €’000 US$’000 US$’000
Administration expenses
Employee expense (194) – (204) –
Directors remuneration (Note 11) (174) – (184) –
Employment costs (Note 10) (368) - (388) –
Depreciation and amortisation (Notes 16 and 17) (531) – (562) –
Services provided by the Group’s auditors (Note 6) (150) – (158) –
Operating lease rentals – property (15) – (16) –
Research and development (Note 16) (2,456) – (2,588) –
Other administration expenses (1,903) – (2,004) –
Total administration expenses (5,423) – (5,716) –
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Services provided by the Group’s auditors
6
Continuing Discontinued Continuing Discontinued
31/12/2023 31/12/2023 31/12/2023 31/12/2023
€’000 €’000 US$’000 US$’000
Audit services – group audit 55 – 60 –
Audit services – statutory entities – 1 – 1
Tax advisory services 48 – 52 –
Other services – 18 – 19
Total auditors remuneration 103 19 112 20
Continuing Discontinued Continuing Discontinued
31/12/2022 31/12/2022 31/12/2022 31/12/2022
€’000 €’000 US$’000 US$’000
Audit services – group audit 63 – 66 –
Audit services – statutory entities 3 – 3 –
Tax advisory services 36 – 38 –
Other services 48 – 51 –
Total auditors remuneration 150 – 158 –
Other (losses)/gain
7
Continuing Discontinued Continuing Discontinued
31/12/2023 31/12/2023 31/12/2023 31/12/2023
€’000 €’000 US$’000 US$’000
Other income 1,017 12 1,101 13
Impairment loss on assets (4,296) – (4,649) –
Foreign exchange gain 46 720 50 779
Total other (losses)/gain (3,233) 732 (3,498) 792
Impairment loss on assets is comprised of €’000 4,237/US$’000 4,585 (Note 15) and €’000 59/US$’000 64 (Note 16)
provisions for impairment of goodwill and other intangible assets following the unfavourable outcome of the clinical trials
in relation to the development of the Orenetide drug.
Continuing Discontinued Continuing Discontinued
31/12/2022 31/12/2022 31/12/2022 31/12/2022
€’000 €’000 US$’000 US$’000
Other income 1,456 – 1,534 –
Loss on disposal of assets (313) – (330) –
Loss on sale of investments (19) – (20) –
Foreign exchange loss (1,278) – (1,347) –
Total other losses (154) – (163) –
Other income is composed of R&D relief refund of €’000 1,017/US$’000 1,101 (2022: €’000 1,412/US$’000 1,488) and
proceeds from by-products sold amounting to €’000 12/US$’000 13 (2022: €’000 44/US$’000 46).
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Finance income and finance costs
8
Continuing Discontinued Continuing Discontinued
31/12/2023 31/12/2023 31/12/2023 31/12/2023
€’000 €’000 US$’000 US$’000
Finance income
Bank interest income – – – –
Total finance income – – – –
Finance costs
Bank interest and charges (5) (17) (5) (18)
Total finance costs (5) (17) (5) (18)
Net finance costs (5) (17) (5) (18)
Continuing Discontinued Continuing Discontinued
31/12/2022 31/12/2022 31/12/2022 31/12/2022
€’000 €’000 US$’000 US$’000
Finance income
Bank interest income 4 – 4 –
Total finance income 4 – 4 –
Finance costs
Bank interest and charges (39) – (41) –
Total finance costs (39) – (41) –
Net finance cost (35) – (37) –
9
Number of employees
The average monthly number of employees of the Group during the financial year was (excluding directors):
31/12/2023 31/12/2022
Number Number
Administration and operational staff 5 5
Employment costs
10
Continuing Discontinued Continuing Discontinued
31/12/2023 31/12/2023 31/12/2023 31/12/2023
€’000 €’000 US$’000 US$’000
Staff costs (inclusive of directors) during the financial year were as follows:
Wages and salaries 311 85 337 92
Social insurance costs – 10 – 11
Share-based payments (Note 11 & 29) – – – –
Total employment costs 311 95 337 103
Continuing Discontinued Continuing Discontinued
31/12/2022 31/12/2022 31/12/2022 31/12/2022
€’000 €’000 US$’000 US$’000
Staff costs (inclusive of directors) in the prior financial year were as follows:
Wages and salaries 335 – 353 –
Social insurance costs 29 – 31 –
Share-based payments (Note 11 & 29) 4 – 4 –
Total employment costs 368 – 388 –
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11
Directors’ remuneration
Short-term benefits
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 US$’000 US$’000
Kirill Golovanov 185 146 200 154
Kristina Zakurdaeva 12 11 13 12
Timothy McCutcheon 17 17 18 18
Nikolay Myasodev – – – –
Directors remuneration 214 174 231 184
Share-based payments
2023 2022 2023 2022 2023
Number of options €’000 €’000 US$’000
2022
US$’000
Kirill Golovanov 2,200,000 2,200,000 – 2 –
Kristina Zakurdaeva – – – – –
Timothy McCutcheon 200,000 200,000 – 1 –
Nikolay Myasodev 200,000 200,000 – 1 –
Directors remuneration 2,600,000 2,600,000 – 4 –
2
–
1
1
4
The share-based benefits relate to the number of exercisable share options held by directors at the year end. Please refer
to Note 29 for further details on share options granted, exercised, forfeited and expired in the financial year and the
expense recognised.
12
Retirement benefit costs
The Group does not operate a pension scheme (2022: €NIL/US$ NIL).
Income tax costs
13
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Analysis of income tax charge for the financial year €’000 €’000 US$’000 US$’000
Income tax – – – –
Factors affecting tax charge for the financial year
The tax for the financial year is higher than (2022 – higher than) the standard rate of corporation tax in Ireland of 12.5%
(2022: 12.5%). The differences are explained below:
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 US$’000 US$’000
Loss for the financial year (4,702) (5,612) (5,086) (5,916)
Loss on ordinary activities before tax multiplied by
standard rate of corporation tax at in Ireland of
12.5% (2022: 12.5%) (638) (702) (690) (739)
Effects of
Ineligible costs and losses carried forward to future periods 638 702 690 739
Total income tax – – – –
Due to the history of past losses, the Group has not recognised any deferred tax asset in respect of tax losses to be
carried forward and items on other comprehensive income/(loss) that will not be reclassified subsequently to profit or
loss.
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14
Loss per share and dividends
Loss per share
Basic loss per share is calculated by dividing the loss after taxation for the financial year attributable to the equity holders
of the parent by the weighted average number of ordinary shares outstanding during the financial year.
Diluted loss per share is calculated by dividing the loss after taxation for the financial year attributable to the equity
holders of the parent by adjusting the weighted average number of share in issue to assume conversion of all potential
ordinary shares. For the purpose of calculating diluted loss per share for both 2023 and 2022, the potentially exercisable
instruments in issue would have the effect of being antidilutive and, as such, the diluted loss per share is the same as the
basic loss per share for both years.
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Basic and diluted loss per share €’000 €’000 US$’000 US$’000
Loss for the financial year attributable to the equity holders of the parent:
Continuing operations (5,104) (5,612) (5,522) (5,916)
Discontinued operations 402 – 436 –
Loss for the financial year attributable to the equity holders of the parent (4,702) (5,612) (5,086) (5,916)
Weighted average number of ordinary shares (thousands) 81,564 81,564 81,564 81,564
Basic and diluted loss per share from continuing operations (cents) (€6.26) (€6.88) (US$6.77) (US$7.25)
Basic and diluted loss per share from discontinued operations (cents) (€0.49) – (US$0.53) –
Basic and diluted loss per share from continuing and discontinued
operations (cents) (€6.75) (€6.88) (US$6.24) (US$7.25)
On 27 March 2019, the Company approved a number of share options incentive schemes for Directors and employees.
As at 31 December 2023 the total number of share options is 2,600,000 (2022: 2,600,000). Refer further to Note 29
for details on movement on share options exercised, forfeited and expired in the financial year and the expense
recognised.
Dividends
The directors did not recommend the payment of a dividend (2022: € NIL/US$ NIL).
15 Goodwill
The movements in the net carrying amount of goodwill are as follows:
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Gross carrying amount
Balance 1 January 4,237 3,994 4,575 4,575
Net exchange difference – 243 – –
Balance at 31 December – 4,237 - 4,575
Accumulated impairment
Balance 1 January – – – –
Impairment charged during the year 4,228 – 4,575 –
Net exchange difference 9 – – –
Balance at 31 December 4,237 – 4,575 –
Carrying amount at 31 December – 4,237 - 4,575
Impairment testing
For the purpose of annual impairment testing, goodwill is allocated to the operating segments expected to benefit from
the synergies of the business combinations in which the goodwill arises as set out below and is compared to its
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
recoverable value. The recoverable value is based on fair value of the Group’s bio-pharmaceutical segment at year-end.
A report was performed by an independent valuer not related to the Group for 2022. The assumptions have been
reviewed and the 2022 valuation was performed by an internal expert of the Group.
However, in 2023, due to the unfavourable results of the clinical trials, the Management and Directors have fully impaired
the value of goodwill.
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Recoverable amount of bio-pharmaceutical segment – 4,731 – 5,109
Goodwill allocated to bio-pharmaceutical segment – 4,237 – 4,575
Excess of recoverable amount over carrying amount of goodwill – 494 – 534
In 2022, the market value of the goodwill was estimated based on the results of the income approach using the Relief
from Royalty method. The cash flows backed by reasonable and acceptable assumptions that reflect the management’s
most accurate estimate of economic conditions prevailing throughout the product lifecycle and that can be verified by
external information sources were factored. The market value analysis was carried out based on the information available
as of the date of analysis. This means that the cash flows should reflect the “as-is” state of the project.
16 Other intangible assets
Other intangible assets of the Group are as follows:
Capitalised Capitalised
Patents and development Patents and development
licences costs Total licences costs
€’000 €’000 €’000 US$’000 US$’000
Total
US$’000
Cost
At 1 January 2022 1,168 750 1,918 1,354 851
Additions 20 22 42 22 24
Disposal (1,105) (854) (1,959) (1,179) (912)
Exchange difference 94 82 176 50 37
At 31 December 2022 177 – 177 247 –
Additions 49 – 49 53 –
Exchange difference 47 – 47 54 –
At 31 December 2023 273 – 273 354 –
Amortisation
At 1 January 2022 (135) - (135) (186) -
Amortisation (344) (181) (525) (363) (193)
Disposal 538 181 719 574 193
Exchange difference (47) – (47) (70) –
At 31 December 2022 12 – 12 (45) –
Amortisation (300) – (300) (325) –
Impairment (59) – (59) (64) –
Exchange difference 74 – 74 80 –
At 31 December 2023 (273) – (273) (354) –
Net book value
At 31 December 2023 – – – – –
At 31 December 2022 189 – 189 202 –
2,205
46
(2,091)
87
247
53
54
354
(186)
(556)
767
(70)
(45)
(325)
(64)
80
(354)
–
202
All intangible assets are attributable to the bio-pharmaceutical segment of the Group. All intangible assets from the bio-
pharmaceutical segment of the Group are included in the disposal group.
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Research and development costs of €’000 423/US$’000 457 (2022: €’000 2,456/US$’000 2,588) was recognised as
administrative expenses, refer to Note 5.
No staff costs were capitalised during the financial year (2022: €’000 22/US$’000 24).
Amortisation of intangible assets amounting to €’000 300/US$’000 325 was included in the administration expenses
during the financial year (2022: €’000 525/US$’000 556).
There are no other material contractual commitments at 31 December 2023 (2022: None).
17
Property, plant and equipment
Property, plant and equipment of the Group are as follows:
Continuing Discontinued Continuing Discontinued
Office furniture Land and Office furniture Land and
& equipment buildings & equipment buildings
€’000 €’000 US$’000 US$’000
Cost
At 1 January 2022 76 – 86 –
Disposal (27) – (28) –
Effect of movements in exchange rates 2 – (4) –
At 31 December 2022 51 – 54 –
Additions – – – –
At 31 December 2023 51 – 54 –
Depreciation
At 1 January 2022 (58) – (66) –
Charge for financial year (6) – (6) –
Disposal 14 – 15 –
Effect of movements in exchange rates (1) – 3 –
At 31 December 2022 (51) – (54) –
Charge for financial year – – – –
At 31 December 2023 (51) – (54) –
Net book values
At 31 December 2023 – – – –
At 31 December 2022 – – – –
The residual values and useful lives of property, plant and equipment are reviewed at each financial year end. The useful
lives have been reviewed and deemed to be appropriate.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Investments in subsidiaries – Company
18
Movement Movement
during the during the
01/01/2023 financial year 31/12/2023 01/01/2023 financial year
€’000 €’000 €’000 US$’000 US$’000
Silver Star Limited 3,874 (2,080) 1,794 4,135 (2,155)
Ovoca Mining Limited – – – – –
Investment in subsidiaries at cost 3,874 (2,080) 1,794 4,135 (2,155)
Movement Movement
during the during the
01/01/2022 financial year 31/12/2022 01/01/2022 financial year
€’000 €’000 €’000 US$’000 US$’000
Silver Star Limited 24,687 (20,813) 3,874 27,961 (23,826)
Ovoca Mining Limited 10 (10) – 11 (11)
Investment in subsidiaries at cost 24,697 (20,823) 3,874 27,972 (23,837)
31/12/2023
US$’000
1,980
–
1,980
31/12/2022
US$’000
4,135
–
4,135
At 31 December 2023 and 2022, the Company had the following direct and indirect subsidiary undertakings:
Proportion holding
Name Registered office & country of incorporation Principal Activity 2023 2022
Comtrans LLC 13 A Koltcevaya street, Magadan 685000,
Russian Federation Support Company 100% 100%
Ovoca Mining Ltd. 36 Vyronos Avenue, Nicosia Tower Center,
8th Floor, Flat 801 1506 Nicosia, Cyprus Written-off – –
Silver Star Limited 27 Reid Street, 1st Floor, Hamilton HM11, Bermuda Investment 100% 100%
OVB (Ireland) Limited 17 Pembroke Street Upper, Dublin 2, Ireland Support company 100% 100%
OVB (Australia) Pty Sydney, New South Wales, 2000 Biopharmaceutical 100% 100%
IVIX LLC Stoloviy Lane 6, office 102, Moscow,
121069, Russian Federation Biopharmaceutical 100% 100%
All shares are directly held in subsidiaries, with the exception of IVIX LLC, which are held through Silver Star Limited, and
comprise of ordinary shares held in the Company.
Impairment during the financial year
The Company performed its annual impairment review of its investment in subsidiaries. During the financial year, the
Company has impaired its shareholding in Silver Star Limited by €’000 2,080/US$’000 2,251 (2022: €’000
20,813/US$’000 23,826) due to decrease in the enterprise value of the investment in IVIX LLC which are held by Silver
Star Limited which has caused its recoverable amount to fall below its carrying amount. The determined fair value of the
investment falls within level 3 of the hierarchy as the subsidiary is not a listed company. The Management had
approximated the fair value based on the net assets of subsidiary at year-end after elimination of related party balances
within the Group. The Management deems the remaining assets to be realisable and the liabilities repayable at their
carrying amount.
The recoverable amount of the investment in subsidiary is determined based on the current standing of the subsidiary.
The financial statements do not include any potential adjustment(s) that may be required arising out of the alternative
outcomes of any potential strategic business opportunities the Group may undertake after year-end based on the future
investments being investigated by the Board of Directors.
Write-off of Ovoca Mining Ltd.
In the year of 31 December 2022, the Group disposed of its 100% equity interest amounting to €’000 10/US’000 11 in its
dormant subsidiary Ovoca Mining Ltd. The subsidiary was part of the group of mining companies dormant since the
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previous years. The disposal was in line with the subsidiary’s inactivity and lack of probability to be sold as its balances are
also €NIL/US$NIL.
19
Equity securities designated at FVOCI
In 2022, all 125,000 shares of the Group’s equity investments were sold for €’000 347/US$’000 366. As result of the
sale, the Group realised a total loss of €’000 1,692/US$’000 1,783, including a loss on sale of €’000 9/US$’000 9, and
the remaining which had already been included in OCI. This loss had been transferred to Accumulated losses (see
Note 24). The Group did not receive any dividends from these equity securities (see Note 8). As a result, there were no
transfers between Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring and
non-recurring basis of the Group.
20 Inventories
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Finished goods – 43 – 47
- 43 – 47
The Group has not recognised an inventory write down during the financial year (2022: €NIL/US$NIL).
In the opinion of the directors the replacement cost of the stock did not differ significantly from the figure shown (2022:
€NIL/US$NIL). Inventory recognised as expense during the financial year amounted to €’000 43/US$’000 47 (2022:
€’000 51/US$’000 60).
Trade and other receivables
21
Group Company
2023 2022 2023 2022 2023 2022 2023
2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
Tax refundable 15 15 17 16 15 15 16
Other debtors 106 1,218 117 1,300 105 51 116
121 1,233 134 1,316 120 66 132
Trade and other receivables classified as
held for resale (Note 30) 10 – 11 – – – –
131 1,233 145 1,316 120 66 133
16
54
70
–
70
All amounts are short term. The net carrying value of trade and other receivables is considered a reasonable
approximation of fair value.
22 Cash and cash equivalents
Group Company
2023 2022 2023 2022 2023 2022 2023
2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
Cash at bank 3,337 3,605 3,683 3,847 356 915 392
Short term deposits – 98 – 106 – – –
3,337 3,703 3,683 3,953 356 915 392
Cash classified as held for resale (Note 30) – – – – – – –
3,337 3,703 3,683 3,953 356 915 392
977
–
977
–
977
Cash and cash equivalents are held by the Group on a short-term basis with all having an original maturity of three
months or less.
The carrying amount approximates their fair value. Short-term deposits are obtained at prevailing market rate conditions.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Share capital
23
2023 2022 2023 2022
Group and company € € US$ US$
Authorised equity
120,000,000 Ordinary shares of 12.5 cent each 15,000,000 15,000,000 21,000,000 21,000,000
15,000,000 15,000,000 21,000,000 21,000,000
Number of
ordinary Share capital Share capital
shares €’000 US$’000
Group and company
Issued, called up and fully paid
At 1 January 2022 and 31 December 2022 88,458,806 11,057 15,586
At 1 January 2023 and 31 December 2023 88,458,806 11,057 15,586
Ordinary shares
Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at
general meetings of the Company. All rights attached to the Company’s shares held by the Group are suspended until
those shares are reissued.
Treasury shares
The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the Group.
On 28 April 2015, Ovoca Bio Plc purchased 5,800,000 ordinary shares of nominal value €0.125 each of the issued share
capital of the Company at a price of GBP 6.8p. Ovoca Bio Plc intends to hold these shares as treasury stock.
As at 31 December 2023 and 2022, the Company has a total of 81,563,806 Ordinary Shares in issue excluding treasury
shares of 6,895,000 which have a cumulative cost of €’000 547/US$’000 607. The purchase was made pursuant to the
authority granted by shareholders at an Extraordinary General Meeting of the Company held on 17 October 2014. To
date, Ovoca has acquired 7.8% (2022: 7.8%) of its own share capital under this approved share buyback programme.
24 Accumulated losses
Group Company
2023 2022 2023 2022 2023 2022 2023
2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
(Accumulated losses)/retained
8,796
earnings at 1 January (9,734) (2,440) (9,236) (1,548) (16,732) 3,985 (13,036)
–
Transfers to accumulated losses – (1,692) – (1,783) – – –
–
Written-off from dormant subsidiary – 10 – 11 – – –
Share of loss for the financial year (4,702) (5,612) (5,086) (5,916) (2,716) (20,717) (2,939)
(21,832)
Accumulated losses at 31 December (14,436) (9,734) (14,322) (9,236) (19,448) (16,732) (15,975) (13,036)
In 2022, Ovoca Mining Ltd.’s retained earnings balance was written off due to inactivity of the company for several years
(refer to Note 18).
In accordance with the provisions of the Companies Act 2014, Section 304(2), the Company has not presented an
income statement. A loss for the financial year of €’000 2,716/US$’000 2,939 (2022: loss of €’000 20,717/US$’000
21,832) has been recognised in the income statement of the Company. Included in this amount is an impairment provision
on investment in subsidiaries of €’000 2,080/US$’000 2,155 (2022: €’000 20,813/US$’000 23,826), respectively, per
Note 18.
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25 Other reserves
Details and movements in other reserves of the Group are as follows:
Foreign Share Foreign Share
currency based currency based
Other translation payment Other translation payment
reserves reserve reserve Total reserves reserve reserve Total
€’000 €’000 €’000 €’000 US$000 US$000 US$000 US$000
At 1 January 2023 1,288 5,525 46 6,859 1,774 632 52 2,458
Other comprehensive income/(loss):
Fair value movement on equity securities
designated at FVOCI – – – – – - – –
Exchange movement on equity securities
designated at FVOCI – – – – – – – –
Foreign exchange gain arising from
translation of financial statements
of foreign operations – (432) – (432) – (353) – (353)
Transfer to accumulated losses as a result of
sale of equity securities designated at FVOCI – – – – – – – –
Transactions with owners of the Company
Share based payments – – – – – – - –
Balance at 31 December 2023 1,288 5,093 46 6,427 1,774 279 52 2,105
At 1 January 2022 1,478 3,840 42 5,360 1,828 (46) 48 1,830
Other comprehensive income/(loss):
Fair value movement on equity securities
designated at FVOCI (2,006) – – (2.006) (2,114) - – (2,114)
Exchange movement on equity securities
designated at FVOCI 124 – – 124 277 – – 277
Foreign exchange gain arising from
translation of financial statements
of foreign operations – 1,685 – 1,685 – 678 – 678
Transfer to accumulated losses as a result of
sale of equity securities designated at FVOCI 1,692 – – 1,692 1,783 – – 1,783
Transactions with owners of the Company
Share based payments – – 4 4 – – 4 4
Balance at 31 December 2022 1,288 5,525 46 6,859 1,774 632 52 2,458
Details and movements of other reserves of the Company are as follows:
Share Foreign Share
based currency based
Other payment Other translation payment
reserves reserve Total reserves reserve reserve Total
€’000 €’000 €’000 US$000 US$000 US$000 US$000
At 1 January 2023 1,305 46 1,351 1,780 (8,999) 52 (7,167)
Other comprehensive income:
Exchange movement on translation from functional currency – – – – (213) – (213)
Transactions with owners of the Company
Share based payments – – – – – – –
Balance at 31 December 2023 1,305 46 1,351 1,780 (9,212) 52 (7,380)
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Share Foreign Share
based currency based
Other payment Other translation payment
reserves reserve Total reserves reserve reserve Total
€’000 €’000 €’000 US$000 US$000 US$000 US$000
At 1 January 2022 1,305 42 1,347 1,780 (7,647) 48 (5,819)
Other comprehensive income:
Exchange movement on translation from functional currency – – – – (1,352) – (1,352)
Transactions with owners of the Company
Share based payments – 4 4 – – 4 4
Balance at 31 December 2022 1,305 46 1,351 1,780 (8,999) 52 (7,167)
Trade and other payables
26
Group Company
2023 2022 2023 2022 2023 2022 2023
2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
Trade payables 301 1,173 332 1,253 – 34 –
Amounts owed to group undertakings
(Note 27) – – – – 9,082 8,924 10,023
Provisions (Note 32) 159 168 175 179 159 159 175
Other taxes – 113 – 121 – – –
Accruals 68 102 75 110 68 62 75
528 1,556 582 1,663 9,309 9,179 10,273
Liabilities classified as held for resale (Note 30) 439 214 484 228 – – –
36
9,526
170
–
67
9,799
–
967 1,770 1,066 1,891 9,309 9,179 10,273
9,799
Amounts owed to group undertakings are unsecured, interest free and are repayable on demand. All other amounts are
short term and non-interest bearing. The net carrying value of trade payables is considered a reasonable approximation
of fair value.
In 2023, included in the liabilities classified as held for resale are unsecured short-term loans totalling to
€’000 27/US$’000 30 with interest rates of 10% and 11% repayable in 2024.
During the year, proceeds from the loans amounted to €’000 40/US$’000 44 (2022: €’000 900/US$’000 961) and
repayments made totalling to €’000 919/US$’000 981 (2022: €NIL/US$ NIL).
27 Related party transactions
Details of subsidiary undertakings are shown in Note 18.
In accordance with International Accounting Standard 24 – Related Party Disclosures, transactions between group entities
that have been eliminated on consolidation are not disclosed.
Key management personnel are the Board of Directors of the Group and the Chief executive officer of IVIX LLC.
Details of the remuneration of Directors are disclosed in Note 11.
Group
Transaction and balances with the key management personnel in IVIX LLC:
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Salaries and wages, including capitalised cost 31 94 34 101
Unpaid salaries and wages – – – –
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Transaction and balances with Hemastasyx Limited, a company controlled by key management personnel of the Group:
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Consultancy fees – 7 – 8
Transaction and balances with Lev Global Limited, a company controlled by key management personnel of the Group:
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Consultancy fees 40 40 43 43
Company
Included in amounts owed to group undertaking is shown below:
Company
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Silver Star Limited (9,082) (8,924) (10,023) (9,526)
Amounts owed to group undertakings (9,082) (8,924) (10,023) (9,526)
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given
or received. Outstanding balances are usually settled in cash.
At 31 December 2023, the Company had receivable of €’000 4,261/US$’000 4,702 (2022: €’000 4,132/US$’000
4,411) from its subsidiaries offset with payable of €’000 13,343/US$’000 14,725 (2022: €’000 13,056/US$’000 13,937)
to the same subsidiaries. Total provision in respect of amounts due from subsidiary undertakings in 2023 amounted to
€’000 1/US$’000 2 (2022: €’000 118/US$’000 124).
Refer to Note 28 for further details under credit risk section.
28
Financial instruments
The Group and the Company monitors relevant aspects of financial instrument risk on an ongoing basis. Financial
instrument risks primarily relate to market risk such as foreign exchange risk and price risk, interest risk, credit risk and
liquidity risk. The following table shows the carrying amount of financial assets and financial liabilities in each category as
follows:
Group Company
2023 2022 2023 2022 2023 2022 2023 2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
Financial assets not measured at fair value
Investments (Note 18) – – – – 1,794 3,874 1,884 4,135
Cash and cash equivalents (Note 22) 3,337 3,703 3,683 3,953 356 915 393 977
Other debtors (Note 21) 106 1,218 117 1,300 105 51 116 54
3,443 4,921 3,800 5,253 2,255 4,840 2,393 5,166
Financial liabilities not measured at fair value
Trade and other payables (Note 26) 528 1,443 582 1,542 9,309 9,179 10,273 9,799
528 1,443 582 1,542 9,309 9,179 10,273 9,799
Foreign Exchange Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Group has no established policy in managing foreign exchange rate risk. Any favourable or
unfavourable movements of foreign currency exchange rates are absorbed by the Group. Exchange rate fluctuations may
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
affect the cost that the Group incurs with its operations. Any fluctuations of the US Dollar, Russian Rouble and Sterling
Pounds against the Euro may have a significant impact on the Group’s financial position and results in future. The carrying
amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the
reporting date are as follows:
Financial Assets Financial Liabilities
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
United States Dollar 369 957 296 123
Russian Rouble 1 1,235 426 1,335
Sterling Pounds 1,773 1,995 – –
Australian Dollar 1,145 581 5 1
The carrying amount of the Company’s foreign currency denominated monetary assets and monetary liabilities at the
end of the reporting date are as follows:
Financial Assets Financial Liabilities
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
United States Dollar 288 807 – –
Sterling Pounds 16 6 – –
Russian Rouble – – 159 159
The following table details the Group and Company’s sensitivity to a 10% increase and decrease in the Euro against
United States Dollar, Russian Roubles and Sterling Pounds. 10% is the sensitivity rate used which represents
management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 10%
change in foreign currency rates, it assumes that all other variables, in particular bank interest rates, remain constant and
ignores the impact of forecast sales and purchases:
United States Dollar Impact Russian Roubles Impact
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
Group profit or loss 34 87 (39) (9)
Company profit or loss 26 73 (14) (14)
Sterling Pounds Impact Australian Dollar
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 €’000 €’000
Group profit or loss 161 181 104 53
Company profit or loss 1 1 – –
Interest Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s does not have exposure to the risk of changes in market interest rates as
the Group does not have long-term debt obligations nor liabilities with floating interest rates.
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Credit Risk
This refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining significant collateral,
where appropriate, as a means of mitigating the risk of financial loss from defaulters. The table below analyses the
maximum exposure of the Group’s financial assets which are subject to credit risk:
Group Company
2023 2022 2023 2022 2023 2022 2023 2022
€’000 €’000 US$’000 US$’000 €’000 €’000 US$’000 US$’000
Other debtors (Note 21) 106 1,218 117 1,300 105 51 116 54
Cash and cash equivalents (Note 22) 3,337 3,703 3,683 3,953 356 915 393 977
Total 3,443 4,921 3,800 5,253 461 966 509 1,031
The Group and the Company continuously monitors other counterparties, identified either individually, by the Company
or by the Group, and incorporates this information into its credit risk controls. In relation to the credit risk for cash and cash
equivalents, the risk is considered to be negligible, since the counterparties are reputable banks with high quality external
credit ratings. The Group’s and Company’s management considers that all of the above financial assets are of good
credit quality, as the Group’s and Company’s policy is to deal only with creditworthy counterparties.
Liquidity Risk
This refers to the risk that the Group will not have the sufficient funds to meet its liabilities. The Group holds its cash in
currencies in which it expects to incur expenditure, including Euros, US Dollar and Russian Roubles. The Group’s reporting
currency is the Euro. The most meaningful information relates to the Group’s current liquidity since it is not generating any
income from its operations. The table below analyses the Group’s financial liabilities into relevant maturity groupings
based on the earliest date on which the Group can be required to pay. The amounts disclosed in the table are the
contractual undiscounted cash flows. Balances due within 1 year equal to their carrying values, as the impact of the
discounting is not significant.
Group
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Balances due within 1 year €’000 €’000 US$’000 US$’000
Trade and other payables and provisions (Note 26) 528 1,556 582 1,663
Company
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Balances due within 1 year €’000 €’000 US$’000 US$’000
Trade and other payables and provisions (Note 26) 9,309 9,179 10,273 9,799
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its
cash resources. The Group’s current cash resources (Note 22) includes balances with a Russian bank which is unrestricted
and will be used to settle existing liabilities and administrative expenses in Russia, and trade and other receivables (Note
21) significantly exceed the current cash outflow requirements.
Market Risk – price risk
Factors beyond the control of the Group may affect the marketability of its securities. Prices are subject to fluctuation
and are affected by factors beyond the control of the Group. The effect of these factors on the Group’s operations
cannot be accurately predicted. The Group seek to minimise this risk by closely monitoring stock market movements on
an ongoing basis.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Capital management
The Group considers total equity as capital. Its primary objective in capital management is to maintain a strong credit
rating in order to support its business and maximise shareholder value. The Group manages its capital structure and
makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Company may issue new shares or other financial instruments in relation to
ensure the liquidity and the necessary level of the working capital. The amounts managed as capital by the Group for the
reporting periods are as summarised as follows:
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 US$’000 US$’000
Total Equity – Group 2,501 7,635 2,762 8,201
Total Equity – Company (7,040) (4,324) (7,865) (4,617)
29
Share-based payments – Group and Company
Under the share option scheme employees of the Group can receive conditional awards of share options depending on
their performance, seniority and length of service. All options issued to date vest once granted. IFRS 2 requires that a
recognised valuation methodology be employed to determine the fair value of share options granted. The valuation
model used by the Company in years where options are granted, or vesting is the Bi-nominal model. Fair value is
determined under the equity settled share based remuneration schemes operated by the Group.
The volatility assumption, measured at the standard deviation of expected share price returns, is based on a statistical
analysis of daily share prices over the last three years. The market vesting condition was factored into the valuation of the
phantom options by applying an appropriate discount to the fair value of equivalent share appreciation rights without the
specified vesting conditions. The Group did not enter into any share-based payment transactions with parties other than
employees during the current or previous period.
In 2023, there were no expense incurred for arising from equity settled share-based payment transactions included in
employee expenses (2022: €’000 4/US$’000 4). See Note 5 and 11 for more details. In 2023, no granted options were
forfeited due to resignation of grantees (2022: 700,000).
2023 2022
Weighted Weighted
average average
Number of exercise price Number of exercise price
options (€cent per share) options (€cent per share)
Outstanding at 1 January 2,600,000 12.5 3,300,000 12.5
Forfeited – – (700,000) –
Expired during the financial year – – – –
Outstanding at 31 December 2,600,000 12.5 2,600,000 12.5
Of which:
Exercisable at 31 December 2,600,000 12.5 2,600,000 12.5
30 Disposal group classified as held for sale and discontinued operations
Management of the Group has commenced the plan and currently looking for interested parties with respect to the sale
of its subsidiary, Comtrans LLC and IVIX LLC, which are involved in the exploration of mining and Bio-pharmaceutical
activities, respectively, in the Russian Federation. The disposal is consistent with the Group’s on-going strategy to cease
its activities related to Russia and the Group’s long-term policy to focus on exploring further investment and business
opportunities for the Group’s development. On 2020 and 2023, respectively, the shareholders approved the plan to
dispose and sell.
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The sale process had encountered some difficulties and delays due to the current geo-political situation. However,
Management is working to find alternatives to dispose of these subsidiaries and fully focus on other opportunities and
new business ventures aligned with the expertise of the directors.
Consequently, assets and liabilities allocated the Russian Federation segments of the Group were classified as a disposal
group. Revenues and expenses, gains and losses relating to the discontinuation of these segments have been eliminated
from profit or loss from the Group’s continuing activities and are shown as a single line item on the face of the
consolidated income statement. The combined results of the discontinued operations included in the loss for the
financial period are set out below.
31/12/2023 31/12/2022 31/12/2023 31/12/2022
€’000 €’000 US$’000 US$’000
Administration expenses (Note 5) (313) – (338) –
Other gains (Note 7) 732 – 792 –
Operating gain 419 – 454 –
Finance costs (17) – (18) –
Finance income – – – –
Gain before tax 402 – 436 –
Income tax – – – –
Gain after tax for the financial year from discontinued operations 402 – 436 –
The carrying amount of assets and liabilities in this disposal group are summarised as follows:
Group
2023 2022 2023 2022
€’000 €’000 US$’000 US$’000
Current assets:
Other receivables (Note 21) 10 – 11 –
Assets classified as held for resale 10 – 11 –
Liabilities classified as held for resale:
Current liabilities (Note 26): 439 214 484 228
Liabilities classified as held for resale 439 214 484 228
Disposal of Comtrans LLC
As of 31 December 2022, the only remaining liability under disposal Group relates to Comtrans LLC. The disposal process
had encountered some difficulties and delays due to the current geo-political situation. However, Management is
working to find alternatives to dispose of this subsidiary and fully refocus on new projects.
Disposal of IVIX LLC
On 21 February 2023, the Board of Directors approved the disposal of the intangible held by IVIX LLC in Russia to a third-
party investor (Desirix LLC) and the cessation of Russian operations. At the end of 2023, the Board of Directors
expressed their decision to dispose of the Russian-based subsidiary.
31
Subsequent events
Taymura litigation
On 30 January 2024, the Company held an amount in escrow with its solicitors, OBH Partners, to cover the debt owed to
Alliance provisioned in the Company’s liabilities, in relation to the preliminary court hearing. Please refer further to Note 32
for the updates subsequent to year-end regarding the Company’s court proceedings.
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5. NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
32 Provision for legal costs
In 2014, the Company entered into a loan agreement with a third party. In return for a US$’000 6,300 loans, the Company
(formerly Ovoca Gold plc) received an exclusive period to complete due diligence on JSC Evenkiya Fuel and Energy
Company (ETEK) and LLC Taymura. The loan was secured by certain receivables of LLC Taymura, non-encumbrance of
the assets for the exclusive period, and personal guarantees. In the event that acquisition terms could not be agreed, the
loan was to be returned with interest to the Company. The loan subsequently went into default for non-repayment.
After extensive legal proceeding, the Company recovered an amount of US$’000 1,000 during the financial year ended
31 December 2016 and the Company continues to try to recover the remaining amount through the courts. However, in
May 2019 we became aware that an arbitration court in Russia issued a decision for the Company to repay the received
US$’000 1,000.
In December 2019, Alliance LLC (a legal successor of Taymura), filed a petition to the court for changing the method of
enforcing the decision under which the court granted to repay the received US$`000 1,000, should change the manner
and the method of court order enforcement and provide for the seizure of the share held by the debtor, Ovoca Bio Plc in
the share capital of Comtrans LLC with the nominal value of 32 400 400 Rubles.
A subsequent ruling made by the Court in April 2022, granted the claim of Alliance LLC and directing for the share capital
of Comtrans LLC to be seized and the share representing 59,94% of the share capital of IVIX LLC (subsidiary of Silver
Star Ltd.) to be seized in order to fully recover the amount recovered in 2016.
Ovoca Bio Plc rigorously contested this decision, but as noted the current volatile political situation was not in favour of
Ovoca Bio Plc and a ruling was made directing Ovoca to repay the amounts recovered in 2016. In 2021, Ovoca Bio Plc
had cautiously considered the latest developments in the courts and obtained extensive legal advice on the matter. In
previous year, the Board believes, it is prudent to make a provision of in relation to the possible outflow of resources
connected with the Alliance LLC claim. See Note 26.
The court decision was enforced in July 2022. On 11 August 2022, the claim of Alliance LLC was partially discharged while
the remainder was made in 14 September 2022 and Ovoca made the payments in cash through one of its subsidiaries for
the amount of the claim that had been provided for in the prior year (Note 26).
Alliance LLC appealed to the court for the recovery of interest for the use of funds, as well as reimbursement of court
costs for a total amount of 12.4M Rubles (approximately €’000 159). Ovoca contested this requirement on appeal, but
the court left the decision unchanged. Ovoca Bio Plc is currently taking steps to appeal this last ruling.
On March 11, 2024, Ovoca Bio Plc filed a cassation appeal. On May 15th the Arbitration Court terminated the Cassation
appeal. A meeting of the Arbitration Court regarding the case of procedural succession has been rescheduled for
August 15th.
33 Non-controlling interest
On 28 June 2019, the Group, through its wholly owned subsidiary, Silver Star Ltd., acquired additional interest equivalent
to 9.92% from IVIX LLC for a cash consideration paid amounting to €’000 1,809/US$’000 2,040.
On 24 March 2020, the Company’s subsidiary, Silver Star Ltd., acquired the remaining shareholding interest in IVIX LLC
for a total cash consideration of €’000 4,091/US$’000 4,416. Consequently, IVIX LLC became a wholly owned
subsidiary of the Group.
34 Approval of the financial statements
These financial statements were approved by the Board of Directors 20 June 2024.
72 ovocabio.com
Ovoca Bio
Annual Report Contents
1.
2.
3.
4.
Chairman & Chief Executive Officer (CEO)’s Statement
Directors and Corporate Information
Directors’ Report
Directors’ Responsibilities Statement
Independent Auditor’s Report to the Members of Ovoca Bio Plc.
Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income/(loss)
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
5.
Notes to the Financial Statements
1
8
10
21
22
29
30
31
32
33
34
35
36
37
Annual Report
For the Financial Year ended
31st December 2023