Oxford Instruments plc
Annual Report and Accounts 2008

The Business of Science®

Innovative Science for Global
Commercial Applications

Contents
Group Financial Summary

2-3

Oxford Instruments plc Group Structure

4-5

Senior Management Team

6

Chairman’s Statement

8

Chief Executive’s Statement

10-15

Financial Review

16-19

Directors’ Biographies

20

Directors and Advisers

21

Reports and Financial Statements

22-51

Notes to the Financial Statements

52-88

Parent Company Financial Statements

89-96

Notes of 2008 Annual General Meetingand Explanatory Notes

97-101

Historical Financial Summary under
UK GAAP

102

Historical Financial Summary under IFRS

103

Shareholder Information

104

Worldwide Directory

105

1

Microanalysis systems used by Formula 1 teams to support thedevelopment of advanced materials

About Us
Oxford Instruments is a worldwide business,
supplying high technology tools and systems into
diverse markets which include industrial analysis,
research, education, space, energy and the life
sciences.
Our ability to observe and manipulate matterat the smallest scale allows us to exploit the
emerging potential to be found in bioscienceand nanotechnology. Our products support
those customers who address the global issues ofprotecting the environment, conserving energy,
security and health.

Plasma etch processes are used in the manufacture of energy
efficient High Brightness Light Emitting Diodes (HBLEDs)

Innovation has been at the heart of Oxford
Instruments since it was founded and it is thedriving force behind our growth and success.
The Group now employs over 1,500 people
worldwide, and has been listed on the London
Stock Exchange since 1983.

Exploration of new frontiers supported by
Oxford Instruments’ detector technology andmicroanalysis systems

The Business of Science®

Group Financial Summary 2008
2

Group Orders
2008
2008
2008
2008
2007
2007
2008
2007
2007

£180.2m£180.2m£180.2m£180.2m£163.0 m£180.2m£163.0m£163.0m£163.0m

2007£163.0 m+11%

Revenue
2008
2008
2008
2008
2007
2007
2008
2007
2007

£176.5m£176.5m£176.5m£176.5m£161.6m£176.5m£161.6m£161.6m£161.6m

2007£161.6m+9%

Adjusted Profit Before Tax
2008
2008
2008
2008
2007
2007
2008
2007
2007

£9.5m
£9.5m
£9.5m
£9.5m
£7.5m
£9.5m
£7.5m
£7.5m
£7.5m

2007

£7.5m

+27%

Adjusted EPS
2008
2008
2008
2008
2007
2007
2008
2007
2007

11.7 p11.7 p11.7
11.7 p
p
9.6 p
11.7
9.6 p
9.6
9.6 p
p

2007

9.6 p

6.0%
Trading Profit. Return on Sales (%)
2008
6.0%
2008
6.0%
2008
6.0%
2008
2007
5.1%
6.0%
2007
5.1%
2008
2007
5.1%
2007
5.1%
2007

Oxford Instruments plc

5.1%

+2.1p
+90

basis points

3Group Results
Year ended 31 March

2008
£m

£m

Orders

180.2

163.0

Revenue

176.5

161.6

Trading profit

10.6

8.3

Adjusted profit before tax (note 1)

9.5

7.5

Net (borrowings)/cash (note 25)(17.8)

1.8

Equity

62.5

55.8

2008

2007

pence pershare

pence pershare

Total basic earnings

5.6

(3.2)

Adjusted earnings

11.7

9.6

Proposed dividends

2007

8.4

8.4

Net assets

126.5

115.8

Employees at year end *

1,545

1,426

* Previously the Group has excluded temporary employees in this figure. These employees have now been
included and the prior year figure has been restated accordingly.

Oxford Instruments plc

Oxford Instruments plc Group Structure
4

Analytical
NanoAnalysis
An industry-leading range of accurate, fast and easy-to-use tools
for materials analysis on an electron microscope.
Markets include science research and materials analysis, failure
analysis, and Quality Control/Analysis. Industrial sectors include
petrochemical, scientific Quality Control/Analysis, pharmaceutical,
semiconductor and automotive.

Industrial Analysis
Materials identification and/or thickness gauging analysis
instrumentation to industrial customers with diverse needs.
Markets include environmental monitoring, metal analysis,
coating thickness measurement and Quality Control/Analysis.

X-ray Technology
World-class manufacturer of high efficiency, small form factor
X-ray tubes for use in a range of measurement equipment.
Key markets include the analysis industry, research anddevelopment, healthcare and aerospace.

Plasma Technology
Market leading high performance, flexible tools for customers
involved in research and development, and batch production.
Markets includes academic and corporate research into
semiconductor materials and process, High Brightness LEDs,
failure analysis and photovoltaics.

Oxford Instruments plc

Superconductivity

5

NanoScience
High performance environments for low temperature and highmagnetic field applications in physical science research andprocess development down to the atomic scale.
Key markets include physical science research, industrial Quality
Control and quantum computing.

Superconducting Technology
World-leading superconducting wire for use in medical andscientific applications.
Service and support for MRI customers in USA and Japan.
Markets include research, energy and healthcare.

Austin Scientific
Robust, high quality cryogenic vacuum pumps, helium
compressors and cold heads for customers in the semiconductor,
medical and research sectors.
High quality support, refurbishment and maintenance services for
all cryogenic system users.

Molecular Biotools
Innovative tools and systems based on magnetic resonancetechnology to advance the understanding of bio-molecular
structure and function.
Markets include life science research and development,
pharmaceuticals, and industrial Quality Control and Analysis.

Oxford Instruments plc

6Business Unit Managing Directors

left to right
Jiro Kitaura, Brad Boyer, Frank Trundle, Scott Reiman, Jim Hutchins, David Scott, Andy Matthews

Skilled and motivatedworkforce
Over 1500 staff worldwide support our drivefor excellenceInnovation drives the Company
Annual Chairman’s Awards for Innovation- 2008 finalists and judges

Oxford Instruments plc

We will listen to our customers and develop
commercially successful and technically excellent
products. We will support our customers withresponsive, highly skilled professionalism and courtesy
The Business of Science®

Oxford Instruments plc

7

Chairman’s Statement
8

The Group performed strongly throughout the year,with order intake up 10.6% to £180.2 million. Revenues
grew 9.2% to £176.5 million. Adjusted profit before tax
increased by £2.0 million to £9.5 million. This strong
performance was delivered despite movements in foreignexchange rates which adversely impacted trading profit
by £2.5 million.
Our objective is to generate shareholder value by
becoming a leading provider of tools and systems for use
by customers who need to observe and manipulate matterat the smallest scale. Our products deliver increased
efficiency and productivity to our customers and as such
have proven particularly attractive as industries seek toimprove their competitiveness. Environmental and safetyissues continue to be a major growth driver and demandfor products serving these markets has been especiallystrong. Our other core market of instruments for quality
control, small scale production and R&D is also proving
resilient in the current uncertain economic climate.

“We have enjoyed ayear that has combinedstrong organic growthwith successfulacquisitions which are
already contributing toearnings and have given
us access to important
new technologies.”

The year 2007/08 represents the second full year of
our growth plan to double the size of the businessand to improve margins significantly. We have shown
continuous organic growth throughout the courseof the plan through an effective programme of new
product introductions and a stronger commercial focus
supported by continued investment in R&D.
This year, we have added two important acquisitions,
Worldwide Analytical Systems AG (WAS) and VeriCold
Technologies GmbH (VeriCold), to the business. Thesebusinesses offer important technological and market
synergies and are already contributing to earnings. Since
the year end we have made two further acquisitions,Technology Devices International Inc (TDI) and LINK
Analytical AB (LINK), which further support our growthplan. We have financed all our acquisitions to datethrough borrowing. At the end of the year net debt
was £17.8 million. In July 2007 we negotiated a five
year committed revolving credit facility of £50 million to
support our acquisition programme.
We are recommending that the full year dividend be
maintained at the current rate of 8.4 pence.
During the year the employees of Oxford Instruments
have responded with vigour and enthusiasm to thechallenges posed as we implement our growth strategy.
I would like to thank them for their hard work andcommitment.
While it is still early in the year, trading to date has
been in line with the Board’s expectations. Despite thechallenging economic environment, our end markets
remain resilient.
These factors make us confident in our ability to deliver
long term profitable growth.
Nigel Keen Chairman
10 June 2008

Oxford Instruments plc

Our ability to observe andmanipulate matter at the smallest
scale unlocks the potential inemerging nanotechnology markets
Nanotechnology

Oxford Instruments plc

9Chief Executive’s Statement
10“The Company remains
well positioned,
enjoying a broad
spread of customers,
applications andgeographical markets.”

Operational Review
Our target is to double the turnover of Oxford
Instruments over five years, starting from 2006/07, byorganic growth and acquisitions. We plan to achieve
this by becoming a more customer focused business,increasingly concentrating on new products andmarkets, such as nanotechnology. Our products more
and more consist of complete systems sold direct toend-users.
Two years into our five year plan, revenues fromcontinuing businesses have shown compound annual
growth of 14.8% in line with the plan. In the same
period, trading profit margins have improved from
3.0% to 6.0% despite adverse currency movements.
On a constant currency basis our compound annual
growth over the last two years would have been
18.4% and the trading profit margin would havebeen 9.0%. Due to the currency hedges we have inplace, we anticipate the net effect of currency to be
marginally positive in the current year.
We operate in a range of end markets, and so far in
the current year, total worldwide demand for our
products has generally remained robust, albeit withsome geographical variation. Strong demand inEurope and Asia is balancing some softening in theUSA.
Our acquisitions strategy is to purchase companies
with products or intellectual property which arecomplementary to Oxford Instruments’ existing
technologies. These products are then distributedand supported through existing Oxford Instruments
sales channels. This serves to improve the operational
efficiency of the business as well as growing revenues.
The WAS and VeriCold acquisitions made this year fit
into this model and have delivered to plan.

Oxford Instruments plc

Chief Executive’s Statement

11

Industrial NMR instruments are used for the
analysis of rock cores in oil exploration

Analytical Businesses
Orders and revenue for the year were £115.8 million(2007: £106.7 million) and £115.7 million (2007: £100.7
million) respectively. Trading profit was £11.0 million(2007: £10.1million).
Our Analytical Businesses provide measurement
and fabrication instruments for industrial andresearch customers. The business units are: Industrial
Analysis, X-Ray Technology, NanoAnalysis and Plasma
Technology.
Our Industrial Analysis business, which produces
tools that enable our industrial customers to analysematerials, performed well and continues to do so despite
the challenging economic environment. Further new
product introductions will provide some protection in
the event that we experience any future weakening
in industrial demand. These new products include
the X-MET5000, an update of our best selling X-MET

Environmental health concerns, for example, lead in toys
are addressed with hand-held metal analysers

range, which provides hand held X-ray fluorescenceanalysers for a broad range of applications including
quality control, environmental monitoring and positive
material identification. Concern during the year overlead contamination in toys provided an example of
how environmental issues continue to act as drivers
in this growing market. More recently, we have seen
increased demand for X-Strata, our benchtop X-ray
fluorescence analyser, following concerns over leadcontamination in dental appliances.
In August 2007, we acquired WAS, giving us access to
optical emission technology. This complements well
our existing capability in X-ray fluorescence analysis
and enables Oxford Instruments to offer a broad
spectrum of analytical instrumentation to industrial
and environmental markets such as metals recycling.
WAS has been successfully integrated into theindustrial analysis infrastructure and its performance is
exceeding our acquisition plan targets.

Developing varieties of algae for environmentallyfriendly bio fuels with industrial NMR

Oxford Instruments plc

11

Chief Executive’s Statement

12

Our X-Ray Technology business based in California
produces small X-ray sources for the analytical
instrumentation market. Sales here have reduced fromthe record high levels reached last year, due to theanticipated decline in sales relating to the Restrictionof Hazardous Substances (RoHS) legislation. However,long term prospects for this business remain strong.
Our NanoAnalysis business is the market-leading
provider of a range of detectors for users of electron
microscopes who need to understand chemical andstructural properties of materials. This business
continued to perform well in the year. For example,
Formula 1 motor racing teams are using our INCA
microanalysis tools to support materials development
and testing on the next generation of racing cars. A
new segment of the electron microscopy market whichis growing rapidly is the demand for low cost scanningelectron microscopes which are small enough to siton the benchtop. We are collaborating with leading
suppliers on the production of their benchtop scanningelectron microscopes which incorporate an Oxford
Instruments detector system based on our silicon drift
detector technology.
Plasma Technology provides a range of products forthe manufacture of high performance semiconductors
for specialist applications. Investment in the first halfof the year has started to pay dividends as margins
improved and the order book reached record levels.
Diversification away from our traditional semiconductor
markets continues with the introduction of a tool
for research into third generation photovoltaic
technologies. These technologies would be used, forexample, in high efficiency solar panels.
Post year end we acquired TDI, based in Maryland,USA. TDI has unique technology for Hydride Vapour
Phase Epitaxy (HVPE) which offers opportunities toProcess tools from Plasma Technology are being used in thedevelopment of third generation photovoltaics (used in solar panels)

12

Oxford Instruments plc

manufacture High Brightness Light Emitting Diodes(HBLED) more cheaply than is currently possible. With
the drive to more energy efficient lighting systems, themarket for HBLED is expected to show strong growth.
We are investing in producing a commercial HVPE
manufacturing tool. Following the completion of thisdevelopment programme TDI is expected to contributeprofit in financial year 2009/10.
Superconductivity Businesses
Orders and revenue for the year were £64.4 million(2007: £56.3 million) and £60.8 million (2007: £60.9
million) respectively. Trading profit was £2.0 million(2007: £1.6 million).
Our Superconductivity Businesses provide materials,
tools and systems for industrial and government
customers working at the frontiers of science. The
businesses in Superconductivity are: NanoScience,Superconducting Wire, MRI Service, Austin Scientificand Molecular Biotools.
Our NanoScience business provides superconducting
magnets and cryogenic systems for research andacademic customers. This business contains highlevels of intellectual property but has displayed
disappointing trading results in recent years.
Following the introduction of a new management
team and rationalisation of the product portfolio, thebusiness has shown significant improvement this year.
Our on-time delivery to customers has dramatically
improved and the introduction of new products has
proved successful. A number of new applications
have emerged, including tools for the fabrication ofquantum dots. Quantum dots are nanoscale particles
that can be tailored for use in security and anticounterfeiting applications or life-science research into
cellular imaging and diagnostics. Oxford Instruments’tools are used in their growth and analysis.

Microanalysis systems are used to analyse and provide data on precious
artefacts to aid conservation - for example, The Book of the Dead

Chief Executive’s Statement
In August 2007 we acquired VeriCold, in Germany,
which brings unique Pulse Tube cooler technology to
the Group. When combined with existing capabilities
within our NanoScience division, this enables us
to produce products which can offer very low
temperatures without the use of liquid helium. This
provides a significant advantage in the eyes of ourcustomers, as demonstrated by the encouraging levelof orders for VeriCold equipment which is above ouracquisition assumptions. The migration of productionof Pulse Tube coolers into our Tubney Woods site in
Oxford, UK, is underway. Our German site will continue
as a centre of excellence for Pulse Tube technology.
Our Superconducting Wire business is a market-leading
producer of wire for MRI (Magnetic Resonance Imaging)and other industries. This business has previously been
vulnerable to movements in the price of copper, a key
component in the manufacture of superconducting
wire. Following negotiation, the majority of future
variations in the price of copper will now be carried byour customers. The previously reported effects of the
Deficit Reduction Act in the US had reduced orders for
MRI units. These effects are now abating with demand
beginning to recover. Our superconducting wire hasreceived qualification for use in ITER, the international
collaboration project seeking to develop a new sourceof carbon free energy. Initial sample orders have been
received from the US, EU and China.
Our MRI Service business maintains MRI scanners
throughout the United States and in Japan. Thisbusiness continues to benefit from long term contracts
with existing large customers as well as attracting a
range of new customers with smaller numbers of
installed scanners.

Our cryogenic systems are used in research into quantum dots - nano scale
marker devices used in security and anti-counterfeiting applications

Our Austin Scientific business produces, refurbishes andmaintains high technology pumps and refrigerators forindustrial and research customers. New OEM customers
have been won and the recent strong sales growth has
continued.

13

Molecular Biotools supplies novel magnetic resonancebased analytical instrumentation to the life sciences
and pharmaceutical communities. To complement its
existing Dynamic Nuclear Polarisation instruments
being used in life sciences research, the business will
launch a new Magnetic Resonance Imaging (MRI) based
instrument this year that will significantly enhance drug
formulation studies and delivery mechanisms. Using
the same technology base, the business is the global
leader in the supply of Nuclear Magnetic Resonance(NMR) based instruments used for the analysis of rockcores in oil exploration. Industrial benchtop NMR tools
are used across a wide range of quality assurance/
quality control applications and the business has solda number of instruments currently being used in the
research and development of oil seeds and algae forenvironmentally friendly biofuels.
Emerging Markets
Emerging markets offer opportunities for Oxford
Instruments as they develop their technologicalinfrastructure and build up new industries. Currently
we are seeing continued growth in China withrevenues up 32.4% year on year. Other technology
oriented Asian countries are showing similar growth.
We have seen a significant upturn in demand in Russia
and Eastern Europe for products from NanoAnalysis
and Plasma Technology. We are beginning to see moreenquiries from the Middle East and India.

Environmental health concerns addressed with XRF analysers– for example, measuring lead in dental implants

Oxford Instruments plc

13

Chief Executive’s Statement

14

On 4 February 2008, Oxford Instruments was named‘Exporter of the Year’ in China, as part of the KPMG
2008 UK Business Awards. This reflects our ongoinginvestment in China. In addition to sales andmanufacturing organisations, we now have eight
members of staff in China writing software for us.
This has proved a highly effective method of rapidly
developing software improvements for our products.
Property
In July we announced the completion of the sale of ourvacant properties at Abingdon and Eynsham in the UK.
These properties had become surplus to the operating
requirements following our earlier restructuring of
the business. The net proceeds from the sale were
£7.7million compared to a book value of £7.0 million.
Work is underway on the facility for our new Plasma
Technology site. This will be built at Weston-superMare, approximately ten miles from our existing
business unit site at Yatton. A large proportion of
the funding for the development will come from thealready contracted sale of our current property at
Yatton.
Risks to be managed
Oxford Instruments provides high technology
equipment and systems. There is necessarily sometechnical risk associated with developing advanced
technologies. This risk has reduced in recent years as
the business has moved away from large scale single
customer development programmes towards morecommercially orientated products.
Our business plan requires the introduction of new
products to gain market share to support our growth.
The product introductions made so far have beensuccessful. However there is the risk that future
product introductions may not yield the sales forecast,especially when new markets are accessed.
Global financial market conditions may potentiallyhave some impact on demand but the Company
remains well positioned, enjoying a broad spread ofcustomers, applications and geographical markets. So
far we have seen no material change in levels of orderintake.

14

Oxford Instruments plc

A significant proportion of Oxford Instruments’ profit
is made in foreign currencies and we will therefore
continue to have exposure to exchange fluctuations
going forward. We aim to mitigate this risk bynatural hedges where possible and the use of forward
contracts. We also rely on the purchase of a numberof commodity materials and, when prices rise, wecannot always pass this cost directly onto customers.
Steps have been taken in the current year to introduce
hedging on key commodity purchases.
Finally, our calculated pension deficit is sensitive tochanges in the actuarial assumptions that may have anappreciable effect on the reported pension deficit.
Progress and material events since year end
Since the year end we have acquired the TDI business
which we have described above. We also acquired
LINK Analytical, the Scandinavian distributor of ouranalytical equipment, for a consideration of £0.6
million, and disposed of our 23% shareholding in
Oxford Diffraction to Varian Inc for a consideration of£3.5 million with an additional amount of up to £1.1
million conditional on the performance of Oxford
Diffraction.
Current trading and outlook
Trading in the period 1 April 2008 to date has beenin line with the Board’s expectations. Following a yearof strong organic and acquisitive growth, we expect
to continue to make progress against our five year
plan to double the size of the business and improve
Earnings Before Interest and Taxation (EBIT) margins
by 10 percentage points. Our programme of ongoing
operational improvements and valuable new productintroductions underpins this growth plan.
We are confident in the Group’s future prospects andour ability to generate increasing and sustainable
shareholder value.
Jonathan Flint Chief Executive
10 June 2008

We focus our science andtechnology on providing
industry with the tools it
needs to be market leaders

15

Industry

Oxford Instruments plc

15

Financial Review
16

Trading profit increased by £2.3 million to £10.6 million(2007: £8.3 million). On a constant currency basis,trading profit was £13.1 million. Adjusted profit before
tax (note 1) was £9.5 million (2007: £7.5 million).
Other Operating Income
As reported in our Half Year Financial Statements, theGroup disposed of two properties in the year whichwere surplus to requirements. This resulted in a profitof £0.7 million and a cash inflow of £7.7 million.
Amortisation of acquired intangibles
Amortisation of acquired intangibles increased by £1.8
million due to the acquisitions made in the year.
Financial income and expenditureWithin financial income and expenditure total net
interest payable increased to £1.4 million (2007: £0.1
million) as the Group increased borrowing to fundacquisitions. The expected return on pension scheme
assets exceeded the interest charge on pension scheme
liabilities by £0.3 million (2007: - £0.7 million).

“Trading profit increasedby £2.3 million to£10.6 million (2007:£8.3 million). Adjusted
profit before tax was£9.5 million (2007: £7.5
million).”Trading Performance
Revenues for the year grew by 9.2% to £176.5 million(2007: £161.6 million) helped by acquisitions which
contributed £6.9 million in the year. As in the previous
year, fluctuations in exchange rates adversely affected
revenues, this time by £3.9 million (2007: £7.4 million).
On a constant currency basis, revenues grew by 11.6%.
Total operating expenses increased by £3.8 million to£62.1 million (2007: £58.3 million). Operating expenses
benefited by approximately £0.8 million from thetranslation of our overseas operations’ expenses at
weaker exchange rates, but suffered a movement of £0.9
million due to the effects of foreign exchange hedging
in the two years. Of the total underlying increase of £3.7
million, approximately £2.5 million came from the two
acquisitions in the year leaving a like for like increase of£1.2 million or 2.1%. This low level of increase was inpart due to the benefits arising from the renegotiationof the Group’s UK defined benefit pension scheme which
took effect from September 2007.

Oxford Instruments plc

Mark to market gains and losses
The Group uses derivative products to hedge its
exposure to fluctuations in foreign exchange rates andthe price of copper. In common with a number of othercompanies, we have decided that the additional costsof meeting the extensive documentation requirementsof IAS39 to apply hedge accounting cannot be justified.
Accordingly the Group does not use hedge accounting
for these derivatives. Net movements on marking tomarket such derivatives at the balance sheet date aredisclosed in the income statement in Financial Income(note 11) and excluded in our calculation of adjusted
profit.
Taxation
The underlying tax rate on the profit before tax for thecontinuing businesses before other operating income,
restructuring and non-recurring costs, amortisationof acquired intangibles and marking to market ofhedging derivatives was 39% (2007: 38%). The key
factors influencing the rate of tax are high tax rates
in overseas jurisdictions such as the USA, Germany andJapan coupled with the inability to offset losses arisingin one jurisdiction against profits arising in another. The
tax rate rose in the year due to a change in the mix oftaxable profits in the jurisdictions in which we pay tax
and the exhaustion of brought forward tax losses in our
subsidiary in Finland.
The Group has significant tax losses in the UK available
to set off against future taxable profits from certain
business streams. A deferred tax asset of £9.6 million(2007: £11.6 million) has been recognised against timing
differences and unused capital allowances, of this £5.9
million (2007: £9.4 million) relates to the deficit in
the pension schemes. No deferred tax asset has beenrecognised against past UK tax losses. A deferred tax
liability of £5.7 million has been recognised in respectFinancial Reviewof the intangible asset arising on the acquisitionof Worldwide Analytical Systems AG and VeriCold
Technologies GmbH. This liability will unwind as theintangibles are amortised.
Earnings
After a total tax charge of £2.3 million (2007: £2.8
million) the net profit for the financial year was £2.7
million (2007: loss £1.5 million).
With a weighted average number of shares of 48.7
million (2007: 48.2 million), the basic earnings per share
was 5.6 pence (2007: loss 3.2 pence). After adjustingfor other operating income, amortisation of acquired
intangibles and marking to market of hedging
derivatives the earnings per share of the underlying
business was 11.7 pence (2007: 9.6 pence).

Dividends
The Group’s proposed final dividend of 6.0p per share(2007: 6.0p), payable on 23 October 2008, gives a total
dividend for the year of 8.4p per share (2007: 8.4p).
Dividend cover for the underlying business before
other operating income, non-recurring, amortisationof acquired intangibles and marking to market ofhedging derivatives was 1.4 times.

17

Investment in research and development (R&D)
The total cash spent on research and development in
the year was £16.2 million, in line with the prior year.
This was made up as follows:

2008

2007

£ million£ million

Total cash spent on research and development during the year

16.2

16.2

Less: amount capitalised

(6.6)

(5.6)

Add: amortisation of amounts previously capitalised

1.9

1.5

Research and development charged to the income statement

11.5

12.1

The net book value of capitalised R&D at the end of the financial year was £14.4 million (2007: £9.4 million).
Balance sheet
Net operating assets (segment assets, see note 2), excluding acquired intangibles, increased by £10.1 million to£68.8 million. Following an increase of £0.1 million in the prior year, net working capital increased by £7.9 million
due to the inclusion of the acquisitions, a particularly strong fourth quarter resulting in a high level of year end
debtors and the building of buffer stock to facilitate new product introductions.
Intangible assets rose by £25.9 million primarily as a result of the R&D capitalisation outlined above and intangible
assets resulting from the two acquisitions. A reconciliation is given below:

Development
costs£ million

Technology
and customer
relatedacquiredintangibles£ million

Goodwill£ million

Total£ million

9.4

0.5

8.2

18.1

VeriCold

6.4

0.3

6.7

WAS

12.3

0.7

13.0

Brought forward

HKL

0.4

Capitalised Development Costs

6.6

0.4
6.6

Amortisation charge for the year

(1.9)

(2.9)

Effect of movement in foreign currency

0.3

2.9

0.8

(4.8)
4.0

Carried forward

14.4

19.2

10.4

44.0

Oxford Instruments plc

17

Financial Review

18

Assets held for sale in the prior year represented
two properties in Oxfordshire which were surplus
to requirements and were disposed of in the year
generating the ‘Other Operating Income’ discussed
above.
Pensions
The Group has two defined benefit pension schemes,
one in the UK and a smaller one in the US. Both havebeen closed to new entrants since 2001. The total
deficit, before tax, under IAS19 on these pension
schemes decreased by £9.6 million to £21.2 million.
Assets of the schemes at 31 March 2008 were £139.8
million. The reduction in deficit is primarily due toan increase in the discount rate applied to liabilities,
which is based on corporate bond yields.
The latest triennial actuarial valuation of the UK
scheme was carried out as at 31 March 2006 andresulted in an actuarial deficit of £17.7 million. A longterm plan for recovering the deficit over 10 years was
agreed between the Company and the Pension Trustee,which involves annual payments of £2.1 million for thefive years to March 2011, rising to £3.2 million for thesubsequent five years.
In September the Group negotiated an increase inpension contributions from employees and a reductionof the level of benefit offered on future accrual.
Cash
Earnings before interest, tax, depreciation andamortisation (EBITDA) increased by £3.4 million to£16.6 million. The significant changes from the prioryear comprised an increase in working capital of £11.2

million (2007: £2.0 million), interest payments on theincreased level of debt of £1.7 million (2007: £0.3
million), £12.7 million spent on acquisitions (2007: £0.3
million) and a non-recurring inflow from the sale ofproperty of £7.7 million compared with an outflow of£2.9 million due to restructuring in the prior year.
Net debt at the year end was £17.8 million. In July 2007
we negotiated new banking facilities, putting in placea committed 5 year £50 million revolving credit facility
to fund the expansion of the Group.
Employees
The number of employees at 31 March 2008 was 1,545,
an increase of 119 over the prior year. Of this increase
84 were new employees who joined the Group as aresult of the acquisitions made in the year.
Currency hedging
As mentioned above, the Group seeks to hedge its
foreign currency risk. It is Group policy to have in placeat the beginning of the year hedging instruments tocover 80% of its forecast transactional exposure forthat period.
Share price
The closing mid-market price of the ordinary shares atthe end of the financial year was £1.85, compared with
£2.47 at the beginning of the year. The highest andlowest prices recorded in the financial year were £3.09
and £1.66 respectively.
Key Performance Indicators
The following key performance indicators show how
we have progressed against our priorities:
2008

2007

As reported

+9.2%

+9.6%

At constant currencies, continuing businesses+11.6%+26.1%

6.0%

5.1%

9.2%

10.0%

Revenue growth

Return on sales
Trading profit as a percentage of revenue
R&D
R&D cash spend as a percentage of revenue

Going concern
The Financial Statements have been prepared on agoing concern basis, based on the Directors’ opinion,
after making reasonable enquiries, that the Group
has adequate resources to continue in operational
existence for the foreseeable future.

18

Oxford Instruments plc

Save as described in this statement, there has beenno significant change in the financial position of theGroup since year end.
Kevin Boyd Group Finance Director
10 June 2008

We specialise in turning innovative
science into successful, commercial
tools and systems for research
programmes world-wide

19

Research

Image courtesy of Diamond Light Source Ltd

Oxford Instruments plc

19

Directors’ Biographies
20

ChairmanNigel Keen, 61, Non-Executive Chairman, joined theBoard in 1999. He is Chairman of The Laird Group
PLC, Axis-Shield plc and Deltex Medical Group plc.
He is also a Non-Executive Director of Bioquell PLC
and of ISIS Innovation Ltd. (Oxford Instruments andOxford University maintain a close relationship andthe Group’s Directors are strongly represented on the
Board of Isis Innovation, the University’s intellectual
property company).

Non-Executive Directors
Professor Sir Michael Brady, 63, Deputy Chairman
and Independent Non-Executive Director, joined theBoard in 1995 and is BP Professor of Information
Engineering at Oxford University. He is also a Fellow of
the Royal Society and a Fellow of the Royal Academyof Engineering. He is a founding Director of Guidance
Ltd and Mirada Solutions Ltd, now part of Siemens AG,
Chairman of Dexela Ltd, a Director of ISIS Innovation
Ltd and Senior Independent Director of IXICO Ltd.

Executive Directors
Jonathan Flint, 47, became Chief Executive in April
2005. He has a BSc in Physics from Imperial College andan MBA from Southampton University. He has held
senior management positions within Vislink plc, BAE
Systems, GEC Marconi and Matra Space Systems.

Professor Michael Hughes, 63, Senior Independent
Non-Executive Director, joined the Board in November
2004. He is Chairman of EA Technology Ltd, and NonExecutive Director of South Staffordshire Group plc.

Kevin Boyd, 43, joined Oxford Instruments in August
2006 as Group Finance Director. He has a BEng inElectronic and Information Engineering from Queen’s
University Belfast and is a Chartered Engineer andChartered Accountant, having qualified with Arthur
Andersen. Prior to joining Oxford Instruments he wasGroup Finance Director of Radstone Technology plc,
Finance Director of Siroyan Ltd and held senior financepositions in the TI Group (now Smiths Group plc).
Charles Holroyd, 52, was appointed to the Board asGroup Business Development Director in November
2005, having joined Oxford Instruments in 1999. He
has a BSc in Electrical and Electronics Engineering from
Bristol University and an MBA from INSEAD. Previously
he held senior management positions within United
Industries plc, B Elliott plc, Bowthorpe plc and Chloride
Group plc.
Steven Parker, 57, was appointed to the Board asGroup Commercial Director in November 2005, having
joined Oxford Instruments in July 2002. He has an MBAfrom Wake Forest University and BA in Economics
from Randolph-Macon College. Previously he was with
Compagnie de Saint-Gobain and AlliedSignal Inc (nowHoneywell Inc).

Oxford Instruments plc

Peter Morgan, 72, Independent Non-Executive Director,
joined the Board in 1999. He is Chairman of Technetix
Group Ltd, Strategic Thought Group plc and IXICOLtd, and a Director of Hyder Consulting plc. He is amember of the Council of Lloyd’s and a Director of the
Association of Lloyd’s Members. He is a UK delegate
to the European Economic and Social Committee inBrussels.
Bernard Taylor, 51, Independent Non-Executive
Director, joined the Board in 2002 and is Vice-Chairmanof Evercore Partners. He is a member of The Councilof the University of Oxford and is Chairman of the
University’s Audit Committee. He is Chairman of ISIS
Innovation Limited and a Royal Commissioner on the1851 Commission. He is also a Fellow of the Royal
Society of Chemistry.

Directors and Advisers
21

Directors
The following Directors served throughout the year except as noted:
N J Keen, Non-Executive Chairman
J M Brady, Deputy Chairman and Independent Non-Executive Director
D J Flint, Chief Executive
K J Boyd, Group Finance Director
C J A Holroyd, Executive Director
S M Parker, Executive Director
M A Hughes, Senior Independent Non-Executive Director
P W L Morgan, Independent Non-Executive Director
B J Taylor, Independent Non-Executive Director
Board Committees
Audit: PWL Morgan, Chairman; JM Brady; MA Hughes; BJ Taylor
Remuneration: NJ Keen, Chairman; JM Brady; MA Hughes; PWL Morgan; BJ Taylor (from July 2007)
Nomination: NJ Keen, Chairman; JM Brady; MA Hughes; PWL Morgan; BJ Taylor
Administration: Any two Directors
Honorary President
Sir Martin Wood OBE FRS Hon FREng DL
Company Secretary
Susan Johnson-Brett
Advisers
Auditors: KPMG Audit Plc
Principal Bankers: Fortis Bank S.A./N.V.; HSBC Bank plc; The Royal Bank of Scotland plc
Financial Advisers: JPMorgan Cazenove Limited
Stockbrokers: JPMorgan Cazenove Limited
UK Solicitors: Laytons
USA Counsel: Holland & Knight

Left to right:
Kevin Boyd, Steven Parker, Peter Morgan, Bernard Taylor, Michael Brady,
Nigel Keen, Jonathan Flint, Michael Hughes, Charles Holroyd

Oxford Instruments plc

Report of the Directors
22

The Directors present their Report and the Financial Statements of Oxford Instruments plc for the year ended 31
March 2008.
Principal activity and business reviews
The Company is the ultimate holding company of a group of subsidiary undertakings (‘the Group’) engaged in
the research, development, manufacture and sale of high technology instruments. The Company is required to
set out in this report a fair view of the business of the Group during the financial year ended 31 March 2008, theposition of the Group at the end of the financial year and a description of the principal risks and uncertainties
facing the Group. The information which fulfils these requirements includes a business and financial review on
pages 8 to 19, risk and uncertainties on page 14 and corporate and social responsibilities on pages 24 to 25,
which are incorporated in this report by reference. The business, the strategy, the research and development
activities and likely future prospects are reviewed in the Chairman’s Statement on page 8, the Chief Executive’sStatement on page 10, and the Financial Review on pages 16 to 18.
Results and dividends
The results for the year are shown in the Group Income Statement on page 48. The Directors recommend a final
dividend of 6p per ordinary share, which together with the interim dividend of 2.4p per ordinary share makes atotal of 8.4p per ordinary share for the year (2007: 8.4p). Subject to shareholder approval, the final dividend will
be paid on 23 October 2008 to shareholders registered at close of business on 26 September 2008.
Directors
Profiles of all the Directors at the date of this report, including the Non-Executive Directors, appear on page 20.
All the Directors served on the Board for the whole year under review.
On 3 July 2007, Professor Mike Hughes was appointed the Senior Independent Director in place of Professor
Mike Brady, who remains Deputy Chairman of the Board, and Bernard Taylor was appointed a member of theRemuneration Committee.
Directors’ interests
The beneficial interests of the Directors in the Company’s share capital, all in fully paid up shares at 31 March
2008, are shown below. Details of share options are shown in the Directors’ Remuneration Report on pages 32
to 39.
2008

2007

SharesSharesKevin Boyd

5,249

-

Mike Brady

2,500

2,500

Jonathan Flint--

Charles Holroyd

35,47735,477

Mike Hughes

12,216

12,216

Nigel Keen

126,580

116,580

Peter Morgan

20,00010,000

Steve Parker

10,000-

Bernard Taylor

190

190

No Director was beneficially interested in the shares of any subsidiary company at any time during the year. In
the year to 31 March 2008 no Director had a material interest in any contract of significance with the Company
or any of its subsidiaries other than the contract between Imperialise Limited and the Company for the servicesof Nigel Keen, as described in the Directors’ Remuneration Report on page 38.
To the extent permitted by UK law, the Group indemnifies its Directors and Officers.
Insurance cover
For some years the Group has purchased insurance to cover its Directors and Officers against their costs indefending themselves in civil legal proceedings taken against them in that capacity and in respect of damages
resulting from the unsuccessful defence of any proceedings.

Oxford Instruments plc

Report of the Directors
Neither the insurance nor the indemnity provided cover situations where the Director has acted fraudulently or
dishonestly.

23

Share capital
During the year 179,340 new shares were issued (2007: 459,304). Details are set out in note 28 to the Financial
Statements.
The Company only has one class of share capital formed of ordinary shares. All shares forming part of theordinary share capital have the same rights and carry one vote. There are no unusual restrictions on the transfer
of a share. The full rights and obligations attaching to the Company’s ordinary shares, as well as the powersof the Directors, are set out in the Company’s Articles of Association, copies of which can be obtained from
Companies House or by writing to the Company Secretary.
At this year’s Annual General Meeting, the Directors propose to renew the authority granted to them at last year’s
AGM to: (a) (Resolution 6) allot ordinary shares up to an aggregate nominal value of £431,138; (b) (Resolution 7)
allot up to 2,468,861 ordinary shares without first offering them to existing shareholders; and (c) (Resolution 8)
to buy back up to 10% of the Company’s issued share capital.
Substantial shareholdings
The following are beneficial interests of 3% or more of which the Directors have been notified in accordancewith Chapter 5 of the Disclosure and Transparency Rules, of the Company’s issued ordinary share capital, the onlyclass of voting capital, at 10 June 2008:
Shares
000

% of
Total

Schroders Investment Management Limited

6,104

12.4

Hermes Pension Management Limited

4,162

8.4

Sir Martin and Lady Audrey Wood

3,622

7.3

Threadneedle Asset Management Limited

3,486

7.1

GAM London Ltd

3,022

6.1

Howson Tattersall Investment Counsel

2,379

4.8

Aviva plc

2,227

4.5

Legal & General Group Plc

2,093

4.2

Payment of Suppliers
The Group does not follow a standard payment practice but agrees terms and conditions for its business
transactions with each of its suppliers. Payment is then made to these terms, subject to the terms and conditions
being met by the supplier. Trade creditors of the Company and the Group’s UK subsidiaries at 31 March 2008
were equivalent to 36 days’ (2007: 31) and 56 days’ (2007: 61) purchases respectively, based on the amounts
invoiced by suppliers during the year and the amounts owed to trade creditors at the end of the year.
Charitable Donations
During the year, the Group contributed charitable donations of £500.
Disclosure of Information to Auditors
Pursuant to Section 234ZA(2) Companies Act 1985 the Directors who held office at the date of approval of thisDirectors’ Report confirm that, so far as they are each aware, there is no relevant audit information of which theCompany’s Auditors are unaware; and each Director has taken all the steps that he might reasonably have been
expected to have taken as a Director to make himself aware of any relevant audit information and to establishthat the Company’s Auditors are aware of that information.
Annual General Meeting
The Notice of the Annual General Meeting to be held on 23 September 2008 is set out on pages 97 to 101
together with explanatory notes relating to the resolutions.
A resolution to re-appoint KPMG Audit Plc as Auditor will be proposed at the Annual General Meeting.
By Order of the Board
Susan Johnson-Brett, Company Secretary
10 June 2008

Oxford Instruments plc

23

Corporate and Social Responsibility
24

The Group is committed to enhancing shareholder
value in an ethical and socially responsible manner byconsidering the interests of all of its wide communityof stakeholders including investors, employees,
customers, suppliers and local communities.
The Group’s products and services provide solutions
which address the global issues of environmental
control, energy conservation, healthcare and security
through the development of high technology,
innovative instruments and systems. Many of
Oxford Instruments’ systems are used to protect theenvironment, including the screening and detectionof hazardous substances in soils, electronic goods
and petroleum. The Group is part of a global project
to research into alternative clean, sustainable energy
sources, and its superconducting wire could be a
key enabling factor in such programmes. The Groupis continuously looking for new applications for its
existing technologies to produce instruments andsystems that will support the growing need to protect
the world and the people who live in it.
Ethical Operations
There are formal codes of behaviour in place for theGroup, which promote a commitment to maintaining
the highest standard of ethics and integrity in the
conduct of its business.
These codes include requirements for the personal
conduct of all employees, including recognising anddealing with conflict of interests, business gifts, andbribery and corruption. Contributions to politicalparties or organisations are not made. A code of ethics
and a business malpractice policy is in place and details
are given to all new employees. The formal code of
ethics is updated regularly and is available on thecorporate website or from the Company on request.
A fair and open culture is fostered throughout thebusiness in which everyone’s views and contributions
are encouraged and respected. New employees are
introduced to the Company’s culture and style which
actively support corporate strategy. Business managers
are provided with practical guidance explaining theGroup’s policies and standards of conduct to ensurethat these are maintained. The business malpractice
policy provides employees with the opportunity toreport unethical or illegal corporate conduct. The
independent position of the Group’s Senior NonExecutive Director provides an alternative channel ofcommunications for those employees who require it.
The Board believes that operating in this way is an
important part of efficient and profitable business
management, but recognises its success depends on
the involvement and commitment of everyone in theorganisation.
Health and Safety
Oxford Instruments is committed to ensuring thehealth and safety of its employees and to the continual
improvement of its health and safety performance.

Oxford Instruments plc

Responsibility for Health and Safety (H&S) lies with
the Board. Steve Parker, an Executive Director, is
responsible for formulating the Group’s H&S strategy
and objectives, reviewing performance against theseobjectives and for ensuring that key H&S issues are
effectively identified and managed.
The Board also reviews the health and safety
performance of all the Group’s operations. All Groupbusiness divisions report progress on health and safetyissues either monthly for large sites, or quarterly
for smaller sites, to the Group Health, Safety andEnvironment Manager who is responsible for keeping
the Board informed of serious issues. Further tothe monthly reports, the Group Health, Safety andEnvironment Manager is responsible for auditing eachsite on a scheduled basis.
Employees are kept informed of current health andsafety issues through their local H&S Committee orforum which include staff from all areas of the Group.
This is supplemented by information published on theGroup Intranet, notice boards, monthly cascades andquarterly business reports. Employees are actively
encouraged to suggest improvements that can bemade in working conditions and practices.
Environment
The Board is committed to pursuing high standardsof environmental performance, including themaintenance of safe and healthy working
environments.
The Group looks to improve efficiency and tominimise the effect of its operational processes on
the environment. During 2007, Oxford Instruments
NanoScience installed new compressors for recycling
liquid helium, an expensive and limited natural
resource, and a cardboard compactor which allows
bales of waste cardboard to be sold direct to the paper
mills, reducing the need to landfill and meeting thePre-treatment of Waste Regulations.
In 2006, the Group introduced a policy requiring all
new product introductions to take environmental
issues into account. This includes energy use, resourceuse, compliance to Waste Electrical and Electronic
Equipment (WEEE) and Restriction of Hazardous
Substances (RoHS), and the ability for products tobe recycled at the end of their useful lives. Oxford
Instruments NanoScience and Oxford Instruments
Nanoanalysis have both introduced a new range ofcryogen free products, which are both safer to use andmore environmentally friendly.
The Group looks not only to improve the environmental
performance of its own operations but also
manufactures equipment that supports customers who
have to comply with current regulations. For example,
the X-MET range of hand-held analysers and the
X-Strata range of benchtop analysers check complianceto the RoHS directive and the WEEE directive and isCorporate and Social Responsibility
also used in the remediation of contaminated land. For
example, the X-MET3000 is currently being used on the2012 Olympics site near London.
Employees are encouraged to recycle paper andpackaging, including bottles and cans, and there
are recycling initiatives at site level throughout theGroup.
All corporate literature is now printed on
environmentally friendly paper, using Forestry Security
Council (FSC) accredited printers. This, together withthe vegetable oils used to coat the paper, means thatthese documents are bio-degradable and recyclable.
Employees
The Board recognises that the Group’s employees are
the Group’s most important asset and critical to theoverall delivery of its business strategy. All employees
are kept informed of progress against strategy andinvolved in any changes to the business through half
yearly Chief Executive presentations, monthly teammeetings, the Company intranet and newsletter.
Relations with employees are based on respect. The
Group is committed to a working environment where
there is mutual trust and where everyone is accountable
for their own actions and share responsibility for the
performance and reputation of the Group.
The Group aims to recruit, employ and promote
employees on the sole basis of their ability andis committed to developing and enhancing each
employee’s skills and capabilities. Policies are designed
to provide employees with safe and healthy working
conditions and practices.
The Group’s aim is to ensure there are equal
opportunities for all employees with no discriminationon account of race, age, gender, sexual orientation,
disability, and political or religious beliefs. In return,
employees are expected to act with integrity andmaintain high ethical standards.
Ability and contribution are the determining factors
in the selection, training, career development andpromotion of all employees. The Group is committed
to continuing professional development, managing
individual and team performance and developing andvaluing core skills. Having the right skills-mix ensuresthat the business grows through producing innovative
products that meet or exceed customer requirements.
It is the Group’s policy to provide competitive
remuneration referenced against external market
data. Business and individual performance determine
actual remuneration and salaries are reviewed on anannual basis. Financial participation in the Group is
encouraged through the Share Incentive Plan in the
UK, Executive Share Options granted to management,
and through bonus schemes based on financial
performance.

Customers
The Group believes that integrity in dealing withcustomers is a prerequisite for a successful and sustained
business relationship. This principle governs all aspectsof the business. The Group values its customers and thetrust that they place in the Group, and will safeguard
the information provided by customers in accordancewith relevant laws and contractual commitments.

25

The Group’s ‘Voice of the Customer’ work ensuresthat the interests of all customers are at the core of
the business. Oxford Instruments’ customers expect
and receive high quality, reliable goods and services.
Innovative and commercially successful products aredeveloped to meet current and future requirements.
These products are offered at competitive prices, andare backed by a global network of skilled support
teams.
Business Partners
All companies in the Group work hard to establish
mutual trust, respect and mutually beneficial relations
with its business partners, including suppliers, banks
and collaborative associates.
A full audit process, which covers good business,
corporate and social practice, is carried out when
considering a new business partner.
Communities
The well-being of the communities in which the Group
operates is important to its long term development
and success. The Group offers worthwhile and valuable
employment in a safe and well cared for working
environment, and encourages a healthy work/lifebalance.
Business groups and employees are supported in any
activities that promote good relations with the local
communities by contributing to, and supporting,
local charities and community activities. The focus ison supporting science in business, and encouraging
innovation and the promotion of science in schools
and universities.
Employees are encouraged to contribute to local
charities using the Give-As-You-Earn scheme, and thisyear were awarded a Bronze Award for Payroll Giving
by The Institute of Fundraising. Local social clubs run
annual fundraising activities for a chosen charity and
the Group supports these efforts with an additional
donation.
The Group also sponsors a number of international andnational awards and events including the prestigious
Sir Martin Wood Prize through the Millennium Science
Forum in Japan.
Jonathan Flint Chief Executive
10 June 2008

Oxford Instruments plc

25

Corporate Governance
26

Introduction
The Board is committed to ensuring that high standardsof corporate governance are maintained by the Group.
The Board endorses the main and supporting principles
and the provisions set out in the Combined Code on
Corporate Governance which is appended to the
Listing Rules of the Financial Services Authority (“theCode”), except as detailed below.
The Board’s policies and procedures are documented
in the Board Reference File that sets out the roles anddelegated authorities applying to the Directors, theBoard and the Board Committees.
Compliance
The Board considers that, throughout the period underreview, the Group has complied with the provisions
recommended in Section 1 of the Code, other than inrespect of the appointment of Nigel Keen as Chairmanof the Remuneration Committee as disclosed below.
Board of Directors and management structure
Board of Directors
The Board comprises the Chairman, four Non-Executive
Directors and four Executive Directors. The Directors’
biographies and details of length of service are shownon page 20. All the Directors have written letters of
appointment that have been approved by the Board.
The division of responsibilities between the role of
Chairman and the Chief Executive has been set out inwriting and agreed by the Board.
Management Team
General Committee
The Board delegates management of the business to
the Chief Executive. To assist in this, the Chief Executive
has created a General Committee that consists of,in addition to the Executive Directors, the GroupOperations Director, the Group Technical Director and
the Group Human Resources Director.
Executive Committee
The General Committee is supported by an Executive
Committee that comprises the members of the General
Committee with the addition of the Strategic Marketing
Director and the Managing Directors of each of theindividual businesses.

which can be taken by management in the areas ofgovernance, strategic and financial management
and reporting, capital structure, corporate actions,mergers and acquisitions, major contracts and othercommitments, litigation and regulatory proceedings,
remuneration and share incentive plans.
Where the Board delegates authority to management
it is on a structured basis, which requires that proper
management oversight exists at the appropriate level.
The General Committee meets at least twice a month
either physically or by video or telephone conference
and focus on groupwide performance and risk
management.
The Board meets on a regular basis, at least nine times
a year, and otherwise as required. Of the nine regularmeetings, typically eight are held at Group locations,and the remaining one is held by telephone conference.
During the year, one additional Main Board Meeting
was scheduled bringing the total number of Board
meetings held during the year to ten.
Board meetings involve reviews of financial andbusiness performance against the plan approved by
the Board and of risk management, both at Grouplevel and also for each of the business units. On arotating basis, the Board receives presentations fromthe business units and key functional areas enabling
it to explore specific issues in more detail. Any matter
requiring a decision by the Board will be supported bya pre-circulated paper analysing all relevant aspects ofthe proposal.
Board papers are distributed in advance of the relevant
meeting in sufficient time to allow the Directors to
prepare for meetings. Minutes of Committee meetings
are circulated to the relevant Directors. In the very
few instances when a Director has not been able toattend Board or Committee meetings, his commentson the papers to be considered at the meeting arecommunicated in advance to the relevant Chairman.
The Non-Executive Directors meet without the Executive
Directors at least annually, with the Chairman leadingthese meetings. The Non-Executive Directors also meet
annually without the Chairman in attendance. The
Deputy Chairman chairs these meetings.

Operation of the Board
The Board is responsible to shareholders for delivering
sustainable incremental shareholder value throughentrepreneurial leadership within a framework ofcontrols for managing risk. The Board sets the Group’s
strategy, maintains the policy and decision making
framework in which this strategy is implemented,
verifies that the necessary financial and humanresources are in place to meet strategic aims, monitors
performance against key financial and non-financial
indicators, oversees the system of risk management
and sets values and standards in governance matters.
The details of the way the Board operates, including aschedule of matters reserved to the Board for decision,
are set out in a board reference file.

The Company Secretary and the Company Secretary’s
Office are responsible for implementing Board
procedures and for advising the Board on corporate
governance matters.

The Board retains control over strategy, investments
and capital expenditure, and limits the decisions

The Chairman, Nigel Keen, who fulfilled the
independence criteria at the time of his appointment

Oxford Instruments plc

Board balance and independence
The Code requires the Board should be of sufficient
size that the balance of skills and experience isappropriate for the requirements of the business andthat there is a balance of Executive and Non-Executive
Directors such that no individual or small group ofindividuals can dominate the Board’s decision making.
The composition of the Board and the combinationof diverse backgrounds and expertise of the NonExecutive Directors meet these principles.

Corporate Governanceas set out in the Code, is currently Chairman of
the Nomination and Remuneration Committee as
the Board considers that for a small company the
Chairman’s prime roles are: to procure an excellent
strategy for the business; to recruit and retain the best
available management team to execute this strategy:
to put in place a Board of independent directors
whose experience can add value to the work of the
management; and to ensure that the business maintains
the highest standard of corporate governance. In
order to fulfil these obligations the Board believes
that it is appropriate and necessary for the Chairmanof the Board to also be Chairman of the Nomination
Committee and the Remuneration Committee. Nigel
Keen also serves as Chairman of Oxford Instruments
Pension Trustee Limited, which is the Trustee of the UK
defined benefit pension scheme.
Mike Brady, Deputy Chairman, has been a memberof the Board since June 1995. He is BP Professor ofInformation Engineering at Oxford University and is
one of the UK’s leading engineers. He brings a depth oftechnical expertise to Board discussions. The breadth of
his professional and business interests unrelated to theGroup or other members of the Board, his continual
constructive probing of the technical aspect of proposals
being considered by the Board, the composition of
the Board generally and the fact that he qualifies as
independent in all other criteria referred to in the
Combined Code, leads the Board to conclude that it
is appropriate that he continue in office and that heshould properly be considered as independent despite
the fact that he has been a Director for more than 9
years. To take account of his length of service on the
Board, Mike Brady stood down as Senior Independent
Non-Executive Director in July 2007.
Mike Hughes, Senior Independent Non-Executive
Director (appointed in July 2007), has been a memberof the Board since November 2001. He spent 25 years at
GEC in Technical Director and Managing Director roles.
He is currently the Chairman of EA Technology Ltd anda Non-Executive director of the South Staffordshire
Group plc.
Peter Morgan, Chairman of the Audit Committee, joined
the Board in April 1999. He had a 30 year career withIBM UK and IBM Europe and in 1989 became Director
General of the Institute of Directors in London. He ispresently Chairman of Strategic Thought Group plc andof Technetix Group Limited. He is also a Non-Executive
Director of Hyder Consulting plc. He is an underwriting
member of Lloyd’s and was elected a member of the
Lloyd’s governing Council in 2000. Peter Morgan has
indicated his intention to retire as Chairman of the
Audit Committee at the end of 2008 and the Board
is currently in the final stage of appointing a new
non-executive director to replace him and to become
Chairman of the Audit Committee.
Bernard Taylor was appointed to the Board as a NonExecutive director in 2002. He has worked at various
City institutions, including Robert Fleming & Co. Ltd
where he was Deputy Chairman and Chief Executive
and at J.P. Morgan plc where he was Vice-Chairman(Investment Banking). He is Vice Chairman of Evercore
Partners and Chief Executive of its European business.

He is also a fellow of the Royal Society of Chemistry,
Chairman of ISIS Innovation Ltd and a member of The
Council of the University of Oxford.

27

In the opinion of the Board each of the Non-Executive
Directors is currently independent under the guidelines
set out in the Combined Code. This opinion is basedon current participation and performance on both theBoard and Board Committees including considerationof the length of service at Oxford Instruments plc.
Term of appointment of Non-Executive Directors
Each Non-Executive Director is appointed for an
initial term of three years. The requirement to submit
Directors for reappointment at regular intervals is met
by applying the Company’s Articles of Association.
These require that at each Annual General Meeting:(1) not less than one-third of the Directors who aresubject to retirement by rotation must retire; (2) any
Director has to retire who was not appointed at eitherof the two previous Annual General Meetings and who
has served as a Director for more than two years since
appointment or last reappointment; and (3) any NonExecutive Director who has been in office for morethan 9 years should offer themselves for re-election
each year.
In addition, Directors who have been appointed since
the previous Annual General Meeting have to resubmit
themselves for election at the first Annual General
Meeting following their appointment.
Board development and evaluation
Board development
On appointment, Directors undertake an induction
process which is designed to develop knowledge andunderstanding of the Group’s businesses through visits
to various Group operating sites, discussion of relevant
technology, as well as product demonstrations,briefings from management and familiarisation withinvestor perceptions of the Group.
The operating business units’ senior management
teams present to the Board on a regular basis.
Non-Executive Directors are encouraged to meet
individual members of the senior management teamand have done so during the year under review.
Throughout the year, Non-Executive Directors attend
Oxford Instruments’ events, exhibitions and award
presentations.
The Company Secretary and her office act as advisers
to the Board on matters concerning governance andensure compliance with Board procedures. All Directors
have access to this advice and a procedure also exists
for Directors to take independent professional advice
at the Group’s expense. No such advice was sought
during the year. The appointment and removal of
the Company Secretary are matters for the Board asa whole.
Board evaluation
In the year ended 31 March 2008 the Board completed
its annual effectiveness evaluation exercise, including
a specific review of the effectiveness of its principal
committees and members. This was an internal
exercise under the control of the Chairman using a

Oxford Instruments plc

27

Corporate Governance28

Director took part in an evaluation process involving
completion of an assessment questionnaire by himself
and at least two other Directors. The results of theseevaluations were reviewed by the Chairman and the
Director concerned. The following table explains
the Board assessment process and highlights which
Board members completed another’s assessment
questionnaire:detailed questionnaire completed by all Directors in
relation to the key areas of Board accountability andthe arrangements in place to enable effective focus on
these areas. Topics covered included Group strategy,
performance, delegation and accountability, success,development and reward, Board and Committee
composition, Board induction and training, internal
control and risk management. In addition, each

Questionnaires completed byRole being reviewed

Self

Other (1)Other (2)ChairmanYes

Deputy Chariman

Chief Executive

Non-Executive Directors

Yes

Chairman

Chief Executive

Chief Executive

Yes

Chairman

Deputy Chairman

Group Finance Director

Yes

Chairman

Chief Executive

Executive Directors

Yes

Chairman

Chief Executive

Attendance at meetings
No one other than the Committee Chairman and members is entitled to be present at a meeting of the Nomination,
Audit or Remuneration Committee, but others may attend by invitation of the Committee. No Director votes onmatters where he has a conflict of interest. Further details of the individual Committees’ activities are described
below.
The following table sets out the frequency of, and attendance at, Board and principal Board Committee meetings
for the year to 31 March 2008:
Main
Board

Audit
Committee ¹

Remuneration
Committee

Nomination
Committee

10

6

3

2

Number of meetings held
Nigel Keen

10

-

3

2

Jonathan Flint

10

-

-

-

Kevin Boyd

9

-

-

-

Charles Holroyd

10

-

-

-

Steve Parker

10

-

-

-

Mike Brady

9

3

2

2

Mike Hughes

8

4

3

2

Peter Morgan

10

6

3

2

Bernard Taylor

9

6

12

1

Note:
¹ Board Directors attend the Audit Committee by invitation
2
Appointed to Remuneration Committee 3rd July 2007

Board Committees
The Board has formed the following Committees:
Nomination, Remuneration, Audit and Administration.
Membership of the Board Committees is set out on page
21. Membership of Board Committees is determined by
the Board and is reviewed regularly. The written termsof reference of the Board Committees are available
from the Company on request and will be on display at
the Annual General Meeting.
Nomination Committee
The Nomination Committee comprises all the
independent Non-Executive Directors, under thechairmanship of the Chairman of the Board. The
Nomination Committee is responsible for assisting28

Oxford Instruments plc

the Board in the formal selection and appointment
of Directors and considers succession planning for
the Board. It also considers potential candidates andrecommends appointments of new Directors to theBoard. The appointments are based on merit andagainst objective criteria including the time available
and the commitment that will be required of thepotential Director.
There is a formal, rigorous and transparent procedure
for the appointment of new Non-Executive Directors
to the Board, the prime responsibility for which
is delegated to the Nomination Committee. Eachappointment process begins with an evaluation of
the balance of skills, knowledge and experienceCorporate Governanceexisting on the Board that is effected through a seriesof one-on-one meetings between the Committee
Chairman and Directors. The Nomination Committee
takes external advice when considered appropriate.
A description of the role and capabilities required isprepared using the information gathered. Candidates
meet with the Chairman and the Deputy Chairman anda final selection of potential appointees meets several
Directors individually. Following these meetings, theNomination Committee considers each Director’s
feedback and makes a final recommendation to theBoard concerning any appointment.
On joining the Board, new Non-Executive Directors
are given an induction programme including site visits
and meetings with senior management. This induction
is supported by briefing papers prepared by theCompany Secretary. Major shareholders are provided
with an opportunity to meet any new Non-Executive
Directors.
The Nomination Committee recommends to the Board
whether a Non-Executive Director’s appointment
should be renewed for a further three years at theend of each three year term, taking into account theperformance of the individual.
The Nomination Committee also annually reviews theperformance of the Chief Executive and succession
planning within the business.
Remuneration Committee
The Remuneration Committee comprises all the NonExecutive Directors. The Chairman of the Board, Nigel
Keen, who fulfilled the independence criteria at thetime of his appointment as set out in the Code, is
Chairman of the Remuneration Committee because
as set out on page 27 above, the Board considers it
essential that the Chairman be involved in setting
remuneration policy. The members of the Committee
are appointed by the Board.
The Remuneration Committee is responsible forrecommending to the Board the remuneration
packages for Executive Directors and the bonus
and share option strategy for the Group’s executive
management. Independent professional advice issought when considered necessary. Under its terms ofreference the Chairman of the Board may be Chairmanof the Committee. The Board as a whole is responsible
for fixing the remuneration of the Non-Executive
Directors, including the Chairman.
The Chief Executive is invited to attend Remuneration
Committee meetings as deemed appropriate, forexample when consideration is being given to theperformance of other Executive Directors and on
significant group-wide changes in salary structure
and terms and conditions affecting other employees
at senior executive level. Further details of theRemuneration Committee are included in the Directors’
Remuneration Report set out on pages 32 to 39.

Audit Committee
The Audit Committee comprises all the independent
Non-Executive Directors and is chaired by Peter
Morgan. The Chairman of the Board and members ofsenior management such as the Chief Executive andGroup Finance Director are invited to attend all orpart of any meetings or to present such reports as are
required for the Committee to discharge its duties. The
external auditors are invited to attend meetings of theCommittee on a regular basis, including once at theplanning stage before the audit and once after theaudit at the reporting stage. At least once a year theCommittee meets with the external auditors without
the Executive Directors present.

29

The primary objective of the Audit Committee is to assist
the Board of Directors in fulfilling its responsibilities
relating to external financial reporting and associatedannouncements, oversight of the external audit processincluding consideration of the independence of theGroup’s external auditors, the resourcing and plansof the Internal Audit function and the adequacy andeffectiveness of the financial control environment.
The Audit Committee’s terms of reference include all
matters indicated by the Combined Code. The termsof reference are considered annually by the Audit
Committee and are then referred to the Board forapproval. The Audit Committee structure requires theinclusion of one member with relevant recent financial
experience, currently the Committee Chairman, andexpects all Audit Committee members to be financiallyliterate.
The Audit Committee Chairman reports the outcomeof meetings to the Board and the Board receives
minutes of all Audit Committee meetings. The Audit
Committee has unrestricted access to Group documents
and information, as well as to employees of the Groupand the external auditor.
The Committee reviews the interim and annual financial
statements, together with the related Stock Exchangeannouncements, having received information on theaccounting principles, policies and practices adopted
in the Group’s accounts, changes proposed to thoseprinciples, policies and practices, significant accounting
issues, litigation and contingent liabilities affecting theGroup, potential tax contingencies and the Group’s
compliance with statutory tax obligations.
The Audit Committee is responsible for thedevelopment, implementation and monitoring of theGroup’s policy on external audit. The Audit Committee
reserves oversight responsibility for monitoring
the independence and objectivity of the external
auditors.
A review takes place annually of the performance ofthe external auditors following the completion of theannual audit.

Oxford Instruments plc

29

Corporate Governance30

To assess the effectiveness of the external auditors, theAudit Committee reviews:• The external auditors’ fulfilment of the agreed audit
plan and variations from the plan
• The robustness and perceptiveness of the auditors
in their handling of key accounting and audit
judgements• The external auditors’ comments in respect offinancial controls
To fulfil its responsibility regarding the independenceof the external auditors, the Audit Committee reviews
the changes in key external audit staff in the external
auditor’s plan for the current year, the arrangements
for day-to-day management of the audit relationship,a report from the external auditors describing theirarrangements to identify, report and manage any
conflicts of interest and the overall extent of non-audit
services provided by the external auditors. In addition
the Committee reviews the provision of non-audit
services by the external auditors case by case.
Details of the audit fees, together with fees for nonaudit services for the year, are set out in note 3 (page55) to the Financial Statements.
The Audit Committee is required to assist the Group
Board to fulfil its responsibilities relating to theadequacy and effectiveness of the financial control
environment. This includes consideration of theadequacy of both the resourcing and the plans of theInternal Audit function.
To fulfil these duties the Committee reviews:• The Group’s risk framework and risk policies• The external auditors’ annual internal control
report• The Internal Audit function’s terms of reference,
reporting lines and access to the Audit Committee
and all members of the Board, and its plans andachievement of the planned activity• Internal Audit reports on key audit areas andsignificant control environment deficiencies• Reports on the systems of financial controls andfinancial risk management
The Group’s Business Malpractice Policy comprises aninternal process that has been communicated directly to
all employees by which employees can raise a concern,
including concerns relating to fraud, damage to theenvironment, criminal activity or danger to health andsafety,in the knowledge that it will be taken seriously,
treated as confidential and that no action will be taken
against them. The Policy is reviewed annually by theCommittee. During the year, no such concerns havebeen raised.
Administration Committee
The Administration Committee consists of a minimumof two Directors and deals with items of a routine and30

Oxford Instruments plc

administrative nature. The Board receives copies of the
Minutes of the Administration Committee.
Investor relations
The Group places considerable importance on regularcommunications with its shareholders with whom it
has an ongoing programme of dialogue. All investors
are encouraged to participate in the Annual General
Meeting at which the Chairman and Chief Executive
present an overview of the Group’s business andreview the results and make comments on strategy
and current business activity.
The Non-Executive Directors meet informally withshareholders both before and after the Annual General
Meeting and respond to shareholder queries andrequests. The Chairman and the Senior Independent
Director make themselves available to meet any
shareholders, as required.
All Group announcements are posted on the Groupwebsite, www.oxford-instruments.com, as soon as
they are released. The Investor Relations section of thewebsite provides financial and other information on
the Group.
Annual General Meeting (AGM)
The Annual General Meeting is an opportunity for the
Board to meet shareholders. At its AGM, the Group
complies with the provisions of the Combined Coderelating to the disclosure of proxy votes, the separationof resolutions and the attendance of Committee
Chairmen. The Group arranges for the Annual Reportand Accounts and related papers to be posted toshareholders so as to allow at least 20 working days
for consideration prior to the AGM. The next AGM will
be held on 23 September 2008.
Risk management
Within the Group there is an ongoing embedded
process for identifying, evaluating and managing
the significant risks faced by the Group. Day-to-day
management of this process has been delegated by
the Board to the Executive Directors.
A standard process is in place throughout the Group
that requires the senior management of each businessto identify significant business risks and to classify
them both as to probability and potential impact.
Once identified, mitigating action, where possible, isformulated and responsibility within the management
team assigned. On a regular basis each business reviews
and updates its risk summary which is then reported
to the Chief Executive. If a material risk changes orarises, the Managing Director of the business reports
this in writing to the Chief Executive at which time
there is a discussion on the adequacy of the mitigating
actions taken. Details of all major risks identified andthe mitigating actions in place are reported to andreviewed by the Board.

Corporate GovernanceIn addition, the Board considers risks to the Group’s
strategic objectives which are not addressed within theGroup’s businesses and develops appropriate actions
to manage and mitigate these risks.
Internal control
The Board is ultimately responsible for the Group’ssystem of internal control and for reviewing its
effectiveness. However, such a system is designed to
manage rather than eliminate the risk of failure toachieve business objectives, and can provide only
reasonable and not absolute assurance against material
mis-statement or loss. Day-to-day responsibility for
maintaining adequate systems of internal control isdelegated to the Executive Directors.
During the year the Directors have reviewed theeffectiveness of the Group’s system of internal controls.
These internal control procedures have been in place
for the year under review and up to the date of
approval of the report. These controls include financial,
operational, compliance and risk management.
The key components designed to provide effective
internal control within the Group are as follows:• there is a formal schedule of matters reserved to
the Board for decision; other than these matters,
the Board delegates to the Chief Executive andreviews the delegation of authorities throughout
the management structure;• the Group’s management structure comprises theGeneral Committee whose members have Groupwide financial responsibilities and to whom dayto-day responsibility for the management of theGroup is delegated. The responsibility is basedon the identification of separate businesses foreach of the Group’s activities, the heads of thesebusinesses together with the Chief Executive, theGroup Finance Director and certain other membersof the senior management team form the Group’s
Executive Committee. There are clearly definedlines of management responsibilities at all levels up
to and including the Group Board and the Group’s
accounting and reporting functions reflect thisorganisation;• financial executives within Group businesses reportto their own operational head but there is also a wellestablished and acknowledged functional reporting
relationship through to the Group Finance Director;• the Board reviews strategic issues and options
formally once a year during the annual strategicplanning process and during the year as appropriate.
In addition the Executive Directors maintain a threeyear planning model of the Group and its individual
businesses;• annual budgets are prepared for each of the Group’sbusinesses which include monthly figures forturnover, profit, capital expenditure, cash flow andborrowings. The budgets are reviewed through theGroup management structure and result in a Groupfinancial budget which is considered and approvedby the Board;• the businesses prepare monthly management
accounts which compare the actual operating
result with both the budget and the prior year.
The businesses also prepare rolling reforecasts fororders, turnover, operating profit and cash. Both arereviewed by the Board monthly;• the Board approves all acquisition and divestment
proposals and there are established procedures forthe planning, approval and monitoring of capital
expenditure;• for all major investments the performance of at least
the first twelve months against the original proposal
is reviewed by the Board;• each Group site, except for representative sales
offices, is required to submit a self assessment
internal control questionnaire on a regular basis;• internal audit is carried out through a system ofregular reviews of the internal controls at each siteby accountants from other parts of the Group andin Japan and China, due to language differences, by
the local external auditors;• work performed is based on a standardised Group
format but involves random testing, together with areview of the internal control questionnaire;• where required, action plans are drawn up by thebusinesses in conjunction with the Group FinanceDirector to remedy any significant control weaknesses
that are identified from completion of the internal
control questionnaire or as a result of the internal
audit. The results of audit reviews are reported to
local management, the Group Finance Director andthe Audit Committee and checks on the progress of
the action items arising are made;• the Board receives regular updates on treasury, tax,
property, insurance, human resources and healthand safety matters;• authorisation limits are set at appropriate levels
throughout the Group; compliance with these limits
is monitored by the Group Finance Director andinternal audit;• all requests to quote for substantial fixed pricecontracts are reviewed by a multi-disciplinary teamto assess both technical and financial risk and to fix
an appropriate balance between risk and reward.
However, no procedure can guarantee the avoidanceof losses on fixed price contracts of a technicalnature; and• with respect to the UK pension scheme the Grouphas its own trustee representatives, involves its
own independent actuary with whom actuarial
assumptions are reviewed, agrees the investment
policy with trustees, ensures there is an independentactuarial valuation every three years, reviews
members benefits and contributions regularly andaudits the annual changes in pensionable salaries.

31

Susan Johnson-Brett, Company Secretary
10 June 2008

Oxford Instruments plc

31

Directors’ Remuneration Report
32

Remuneration Committee
Details of the composition of the Remuneration
Committee are set out on page 29. The principal functionof the Committee is to define and communicate to
the Executive Directors the Company’s policy on the
remuneration, benefits and terms of employment foreach Executive Director. As part of this process, theCommittee aims to provide a formal and transparent
framework for the development of remuneration
policy for the Executive Directors and for fixing the
remuneration packages of individual Directors. The
Committee takes into account a number of factors
in doing this including Group strategy and corporate
governance.
The Board, as a whole, is responsible for fixing the
remuneration of the Non-Executive Directors, including
the Chairman.
No Director isremuneration.

involvedin

deciding

hisown

The Committee also reviews and approves newlong term incentive schemes and changes toexisting schemes, together with awards under theseschemes, and general increases in salaries and bonus
arrangements for staff, with input as required fromthe Chief Executive. The remuneration policy andpractice for employees are taken into account whensetting rewards for Executive Directors. The Chairman
maintains contact with principal shareholders regarding
remuneration policy as appropriate.
Over the past year the Committee continued
to use Hewitt New Bridge Street to provide
independent external advice on the Executive
Directors’ remuneration.
They also provided
market benchmarking regarding the Chairman’s
remuneration.
Remuneration policy
The Remuneration Committee has established a policyon the remuneration of Executive Directors and theBoard has established a policy for the remuneration of
the Chairman and the Non-Executive Directors.
Executive Directors
The Company has an incentive-driven Executive Director
remuneration policy that promotes the delivery of theGroup strategy, seeks to align the interests of Directors
and shareholders and reflects the performance ofeach Director. The Remuneration Committee considers
carefully the motivational effects of the incentive
structure in order to ensure that it is effective anddoes not have any unintentionally negative impact onmatters such as governance and environmental andsocial issues. A significant proportion of total potential
rewards are provided through performance-based
schemes. Overall the remuneration package aims to beappropriate to attract, motivate and retain high calibre
executives. The Remuneration Committee’s policy on
early termination is to provide compensation whichreflects the Company’s contracted obligations, whilst
recognising the principle of mitigation of losses.

Oxford Instruments plc

Service contracts
Each of the Executive Directors has a service contract.
Company policy is to enter into service contracts with
Executive Directors that have a notice period notexceeding one year, and no Executive Director has an
employment contract containing a notice period of
more than one year.
The Non-Executive Directors do not have service
contracts but their appointments are subject to review
every three years and the rotation provisions of theCompany’s Articles of Association.
Non-Executive Directors
The Company’s policy is to appoint Non-Executive
Directors to the Board with a breadth of international
skills and experience that is relevant to Oxford
Instruments’ global business. Appointments are madeby the Board upon the recommendations and advice
from the Nomination Committee.
Executive Directors’ remuneration
Executive Directors receive base salary, annual
performance awards, pensions and other benefits, andlong term performance awards. Base salaries, benefits
and performance awards of the Executive Directors arereviewed annually by the Remuneration Committee.
Compensation is determined with reference to an
appropriate comparator group of companies, which isreviewed annually. Consideration is also given to the
Director’s experience, performance and responsibilities.
Benefits comprise provision of a car or car allowance,life and health insurance, participation in a bonus
scheme and contributions towards a pension.
For UK based Executive Directors employed prior to
April 2001, a contributory pension of up to two thirdsof pensionable salary is provided on retirement related
to the length of service, together with a dependant’s
pension on death. UK Executive Directors joining sinceApril 2001 are entitled to Company contributions
into the Company’s group stakeholder scheme orinto a defined contribution scheme of their choice inaccordance with contractually agreed contribution
rates.
Steve Parker, who is based in the USA, is a member of
the Oxford Instruments Holdings Inc Defined Benefit
Pension Plan. This Plan is non-contributory on the partof the participant and requires five 1,000 hour years of
employment before the participant realises any vested
interest in the plan. Upon Normal Retirement Date (age65), Steve Parker is then entitled to a monthly pension
benefit based on an actuarial calculation taking into
account his years of service, age, and the salary earned
over the last five years of employment. He is also amember of the Oxford Instruments Holdings Inc 401k
Savings Plan, in which the Company matches at half
the employee’s contribution rate up to the first 6%
of salary. Employees over the age of 50 can make an
additional US$5,000 contribution, which the employer
also matches at half that rate. Employer’s contributions
fully vest after three years of service.

Directors’ Remuneration Report
Emoluments of the current Executive Directors showing the breakdown between basic and performance related
remuneration:
Performance
Total remuneration excluding
relatedpension contributions
SalaryBenefits
remuneration
2008
2007
£000
£000
£000
£000
£000
Jonathan Flint

1

272

13

190

1

475

Kevin Boyd

186

13

102

301

175

Steve Parker

142

4

55

201

192

Charles Holroyd

161

10

72

243

233

Total

761

40

419

1,220

1,009

33

409

Appointed August 2006

Since September 2007, UK employees have been able
to elect to cease making personal contributions into
the relevant pension schemes. Their salaries have been
reduced by the amount of their pension contributions
and the Company commenced paying the sameamount directly to the pension schemes. Accordingly,
the annual salaries of Jonathan Flint, Kevin Boyd andCharles Holroyd were reduced to £248,000, £171,000
and £146,000 respectively. For reasons of clarity, thesalaries shown in the table above for these Directors
are the amount they would have been paid had they
not given up these salary entitlements.
Annual Performance Incentive Bonus
Bonuses are earned primarily on the achievement offinancial targets, with further elements payable on
meeting specific objectives. Bonuses are paid after thecompletion of the statutory annual audit.
The Executive Directors’ bonus scheme for the year
ended 31 March 2008 set performance targets which
would pay bonuses for on-target performance at therate of 50% of base salary for Jonathan Flint, 35%of base salary for Kevin Boyd, Charles Holroyd, Steve
Parker. The bonus potential has a maximum of 100%of salary for Jonathan Flint and 75% of salary for theother Executive Directors. The level of award forthe year ended 31 March 2008 took account of thecontinuing improvement in financial performancereflected in achievement against specific financial
targets in relation to orders, profit and cash generation
and a measurable progress in meeting defined strategic
objectives for the Group.
For the financial year to 31 March 2009, the structureof Executive Directors’ bonuses will be similar to thatfor the year to 31 March 2008.
Pension Plans
Oxford Instruments Pension Scheme
All employees, including the Company’s UK based
Executive Directors, who were engaged before
April 2001 were entitled to become members of the
Oxford Instruments defined benefit Pension Scheme.
This is a contracted-out contributory pension scheme
which provides benefits based on earnings at or nearretirement and is funded through a separate trust.
Charles Holroyd is the only current Executive Director

who is a member of the defined benefit scheme. His
pensionable pay is capped at £117,600.
From 1 April 2007 to 31 August 2007 the Company
contributed to the scheme at the rate of 9% of
pensionable salary for service going forward and5.5% as a contribution to deficit reduction. Employees
could choose to contribute at rates of 6%, 7%, 9.5%
or 10.5% of pensionable salary with the higher rates
earning benefits of the faster accrual rate at 1/50th ofservice instead of 1/60th. The additional 1% paid bythose contributing 7% and 10.5% entitles the member
to take benefits at the lower age of 60.
With effect from 1 September 2007 the Company
contributed to the scheme at a rate of 12.7% of
pensionable salary and £2.1m (equivalent to c.17% of
pensionable salary) as a contribution towards deficit
reduction. Employees can choose to contribute at rates
of 9.0% or 17.2% of pensionable salary for a 1/60th
accrual or at the rate of 16.3% or 26.3% for a 1/50th
accrual. The additional percentages paid by thosecontributing 17.2% and 26.3% entitle the member totake all benefits at the lower age of 60.
Early retirement is possible on a reduced pension fromage 50 with the consent of the Company. Pensions
in payment are guaranteed to increase by a level ofinflation up to a maximum of 3% per year on pension
earned before 1 April 1997 and a maximum of 5% peryear thereafter, subject to any applicable statutory
requirements.
In the case of death before retirement from active
service a spouse’s pension of one half of the member’s
prospective pension is payable plus a capital sum of
three times the member’s pensionable salary anda refund of the member’s contributions. For death
after retirement a spouse’s pension of one half of themember’s pension is payable plus, if applicable, thebalance of a five-year guarantee. In the event of death
after leaving service but before commencement ofpension a spouse’s pension of one half of the accrued
preserved pension revalued to the date of death ispayable plus a refund of the member’s contributions.
In all circumstances children’s allowances are also
payable if applicable.

Oxford Instruments plc

33

Directors’ Remuneration Report

34

Following the closure of the Company’s defined benefit
scheme to new members in April 2001, Executive
Directors appointed now are offered membership of
the Oxford Instruments Stakeholder Plan, a defined
contribution scheme or the Executive Director can electthat contributions be made into a defined contribution
plan of his or her choice. Under this arrangement
only base salary is pensionable. Such contributions
are treated as a non-salary benefit as they are paid
directly to the pension plan and are not included in thecalculation of bonus entitlements and share awards.
Oxford Instruments Holdings Inc
Defined Benefit Pension Plan (USA)All employees of Oxford Instruments Superconducting
Technology and Austin Scientific engaged before 1
February 2006 were entitled to become members of
the Oxford Instruments Holdings Inc defined benefit
Pension Scheme. The scheme provides a benefit toeligible participants with effect from the date that theemployee has completed one thousand (1,000) hours ofservice in any one year. Employees remain participants
until the entire amount of benefit is distributed (if any)
to the employee or to a beneficiary in the event of thedeath of the participant.
Employees do not contribute to this scheme.
The benefit terms are complex but in summary the plan
provides accrued benefit equal to 1.6% of averageannual base salary multiplied by the number of yearsof credited service (not to exceed 35 years).
Vesting, or the opportunity to have a monetaryinterest in the plan, is based on the participant having
five years each with one thousand hours of service
at the termination of employment or after having
reached normal retirement date, in order to receive
any retirement benefit from the plan.
The Oxford Instruments Holdings Inc Savings &Investment Plan 401K (USA)This is a savings plan open to all USA employees ofOxford Instruments. It is viewed by the US government
as a pension plan that supplements the US Social
Security system. Therefore, all monies contributed tothe plan on a calendar year basis are tax deferred until
the monies are withdrawn by the participant.

34

Oxford Instruments plc

A committee consisting of two company Trustees andthree Plan Administrators administers the plan. This
committee uses an elected outside 401K administration
firm that provides fiduciary advice and counsel tothe committee as well as advising on a selection of
investment vehicles to the participants.
Provided the employee does not exceed the maximum
dollar value for contributions that the US government
allows, the employer matches at half the employee’s
contribution up to the first 6% of base salary. The
employee may contribute more than 6% of basesalary on a non-matched basis, unless over the ageof 50 where an extra US$5,000 contribution from theemployee is allowable, also matched at half this rateby the company.
Vesting is as follows:
2 Years of Service = 25% vested in the employer’s
contributions
3 Years of Service = 100% vested in the employer’s
contributions
Executive Director pension arrangements
Under the terms of their service contracts Jonathan
Flint and Kevin Boyd can ask the Company to contributeto a pension plan of their own choice. The Company
contributes a maximum of 14% of base salary ifmatched by a contribution of 10% by the director. Cashbonuses are excluded from contribution calculations.
During the year the Company contributed £38,062(2007: £36,313) into a personal defined contribution
plan in respect of Jonathan Flint and £26,250 (2007:£16,343) into the UK Oxford Instruments Stakeholder
pension plan in respect of Kevin Boyd.
Charles Holroyd is a member of the UK Oxford
Instruments Pension Scheme. With respect to the
UK Pension Scheme the following table shows thecompulsory member’s contributions, the increasein accrued entitlement during the year in excess of
inflation and the accrued entitlement at the end of thereporting period, together with the transfer value ofthe accrued pensions:Directors’ Remuneration Report

35

Charles Holroyd

Additional
annual pension
earned during
the year inexcess of
inflation

Accruedannualpensionentitlement
at year end£000 pa£000 pa

Age as at
31 March
2008

Accruedyears ofservice

Member’s
contributions
during the
year

Years

Years

£000

£000 pa

52

8

15

3

Transfer value of accrued pension

Charles Holroyd

Additional
annualpensionearnedduring the
year

2

19

Change in transfer value over

2008

2007

year less member contributions

£000

£000

£000

230

152

63

Steve Parker is a member of the Oxford Instruments
Holdings Inc Pension Scheme and Oxford Instruments
Holdings Inc Savings and Investment Plan (401K).
The Company contributed an estimated US$26,000(2007: US$23,000) to the Oxford Instruments Holdings
Inc Pension Scheme in respect of Steve Parker. No
entitlement to benefits arises under this scheme until
the individual has worked for the Group for five years.
Steve Parker is fully vested in this scheme. The Company
also contributed US$10,687 (2007: US$10,000) to adefined contribution (USA 401K) plan on behalf ofSteve Parker.
Share Incentive Schemes
The Company has a number of share option schemes
for the incentivisation of Executive Directors andemployees of the Group:• the Executive Share Option Scheme (ESO);• the Senior Executive Long Term Incentive Scheme(SELTIS);• Individual Options (Individual); and• Save-As-You-Earn Scheme (SAYE).
The ESO scheme is the principal vehicle used toincentivise the Executive Directors and senior
management. The SELTIS and Individual schemes areused at the discretion of the Remuneration Committee.
The SAYE scheme was open to all UK permanent
staff employed for at least six months on the date ofinvitation to join the scheme. Since the year end, theSAYE scheme has been replaced by a Share Incentive
Plan (SIP) which is now open to all UK permanent staff
employed for at least six months.
ESO schemes (1995 and 2001)
These shareholder and Inland Revenue approved
schemes grant options over new shares to be issued
at the time of exercise and also over existing shares.
Options granted to an individual in excess of £30,000
are classified as unapproved options.

All future awards of ESO share options will be madeunder the 2001 ESO scheme. The aggregate market
value of shares over which options under the 2001 ESO
scheme may be granted to an individual participant
in any financial year may not normally exceed twicebase salary. However, in exceptional circumstances
the limit is three times base salary, provided that tothe extent an individual is granted options in excessof the standard limit, there will be a corresponding
reduction in the number of shares under options
granted in the following two years. For the purpose of
calculating these limits, the Company’s share price will
be averaged over the three months before the options
are granted.
Options are granted at the middle market price on thelast dealing day prior to grant and are exercisable after
three years but not more than ten years from the dateof grant.
Performance conditions
1995 ESOOver a period of three consecutive years the growth inearnings per share (EPS) of the Company expressed asa percentage is to exceed the growth in the Retail Price
Index (RPI) expressed as a percentage plus a further
2% per year over the same period.
2001 ESO
The performance conditions are based equally on the
Company’s total shareholder return (TSR) performanceand on its EPS performance (adjusted to exclude nonrecurring items, amortisation of acquired intangible
assets and the effects of financial instruments).
The Committee considers that the combination of
TSR and EPS performance conditions will encourage
shareholder value creation and improved financial
performance. In selecting appropriate targets theCommittee takes into account both the recent
performance of the Company and its projections for
future growth.

Oxford Instruments plc

35

Directors’ Remuneration Report

36

When the 2001 ESO scheme was established theRemuneration Committee set the initial conditions forthe full vesting of options at 30% per year growth in
EPS and TSR. This was considered consistent with therecovery phase of the business. It was intended thatover time the performance conditions would revert toa lower target, more appropriate to the business going
forward. For 2002 and 2003 full exercise of options
requires 25% and 20% per year growth respectively
in EPS and TSR. For 2004 onwards 15% growth in EPS
and TSR is required. TSR is measured by comparing
its average net return over the three month period
preceding the beginning of each performance periodwith its average net return (calculated in the same

Only 50% of the options granted in September 2001
are exercisable, as the TSR performance test failed,none of the options granted in 2002 are exercisable
due to failure of both tests, 50% of the options
granted in December 2002, July 2003 and July 2004 are
exercisable as for each grant the EPS performance test
failed. The options granted in July 2005 will become
exercisable proportionately by reference to the level ofboth TSR and EPS target growth performance. Details
are set out in the table below.

EPS / TSR performance

Proportion of options exercisable against each criteria

Average of 15% or more pa

50%

Average of 7.5% - 14.99 pa

Pro-rata between 12.25% and 50%

Average of 7.5% pa

12.25%

Less than an average of 7.5% pa

Nil

The performance conditions for options under the
2001 ESO scheme are measured over a single threeyear period. No extension of the performance period
is permitted although once performances conditions
have been met participants have the remainder of theten year period of the option in which to exercise theoption.
Retention conditions
Options granted under the scheme prior to September
2007 may be exercised according to the following
schedule: one third of the original grant being
exercisable from the third anniversary of grant; afurther third on the fourth anniversary; and the final
third on the fifth anniversary of the grant. Changes
approved by the shareholders at last year’s Annual
General Meeting mean that the options granted in
September 2007 have no retention conditions. As
part of this change, the Executive Directors have eachagreed to build up a shareholding equivalent in value to100% of basic salary by retaining or purchasing sharesequivalent in value to 50% of gains (after deductions)from options granted in or after 2007 under the ESO
or SELTIS schemes.
Share appreciation rights
At the Annual General Meeting in 2005, shareholders
gave their approval to the granting of Share
Appreciation Rights (SAR) and to the satisfaction of36

manner) over the same period at the end of eachperformance period.

Oxford Instruments plc

outstanding options with share appreciation rights
under unapproved options of the scheme. Under SAR,in effect, an option is settled by only issuing shares tothe value of the gain and these shares are issued at no
consideration. This means that the number of shares towhich an option holder may become entitled depends
on the Company’s share price at the time of exercise.
The Company has not granted any SAR or satisfied
options with SAR during the year.
SELTISThe SELTIS scheme is similar to the ESO schemes, withthe exception that options are exercisable at no cost to
the option holder.
The value of shares over which options may be granted
under the SELTIS scheme to any one participant
in a financial year may not exceed 50% of annual
remuneration (excluding benefits in kind). For the
purpose of calculating this limit, the market value
is the closing middle market price of the Company’s
shares on the day before the date of grant.
SELTIS options granted since the establishment of the2001 ESO scheme
The performance conditions are the same as those
applying to awards under the 2001 ESO scheme in thesame financial year as detailed above.

Directors’ Remuneration Report
Retention conditions
SELTIS options granted under the scheme prior to
July 2007 are subject to a retention condition, to theeffect that on exercise the option holder must retain
ownership of shares equivalent to half of the market
value of the shares (after tax) until the sixth anniversaryof the date of grant. As part of the change on retention
conditions going forward, the Executive Directors haveagreed to build up a shareholding equivalent in value
to 100% of basic salary by retaining or purchasing
shares equivalent to the value of 50% of gains (after
deductions) from options granted in and after 2007
under the ESO or SELTIS schemes.

Individual options
Individual options are granted at the discretion of
the Remuneration Committee. There are currently
no individual options which are outstanding and thelast outstanding individual option lapsed on 8 August
2007.

37

SAYE options
The SAYE scheme is administered in accordance with
Inland Revenue guidelines. There are no performance
conditions.

As at the 31 March 2008 the outstanding options for Jonathan Flint, Kevin Boyd, Charles Holroyd and Steve
Parker under the 1995 and 2001 ESO schemes, the SELTIS scheme, Individual options and SAYE were as follows:

Name
Jonathan Flint

Kevin BoydCharles Holroyd

Steve Parker

SchemeESO
ESO
ESO
SELTISSELTISSELTISESOESOSELTISSELTIS
SAYE
SAYE
SAYE
ESO
ESO
ESO
ESO
ESO
SELTISSELTISSELTIS
ESO
ESO
ESO
ESO
ESO
ESO
SELTISSELTISSELTIS

March
2008
100,000
100,000
200,000
50,00050,00050,00040,00066,667
12,50012,500
1,032
699
649
40,00025,00040,00025,00025,00012,50012,50020,00040,00025,00040,00030,00035,00030,00012,50012,50020,000Movements during the year
GrantedExercised*Lapsed
100,000

50,00040,00012,50040,000(25,000)
12,50040,000(30,000)

12,500March
2007
100,000
200,000
50,00050,00066,667
12,500
1,032
699
649
25,00040,00050,00025,00012,50020,00025,00040,00060,00035,00030,00012,50020,000Exercise
price
£2.32
£2.10
£2.19
Nil
Nil
Nil
£2.32
£2.0375
Nil
Nil
£1.83
£2.14
£1.75
£2.32
£2.10
£2.19
£2.18
£1.875
Nil
Nil
Nil
£2.32
£2.10
£2.19
£2.18
£1.875
£1.48
Nil
Nil
Nil

Date forearliest
exercise
28/09/10
15/07/09
15/07/08
26/07/10
15/07/09
15/07/08
28/09/10
04/09/09
26/07/10
04/09/09
01/02/10
01/02/09
01/02/08
28/09/10
15/07/09
15/07/08
15/07/07
15/07/06
26/07/10
15/07/09
15/12/08
28/09/10
15/07/09
15/07/08
15/07/07
15/07/06
13/12/05
26/07/10
15/07/09
15/12/08

Date for
LatestExercise
27/09/17
14/07/16
14/07/15
25/07/14
14/07/13
14/07/12
27/09/17
03/09/16
25/07/14
03/09/13
31/07/10
31/07/09
31/07/08
27/09/17
14/07/16
14/07/15
14/07/14
14/07/13
25/04/14
14/07/13
14/12/12
27/09/17
14/07/16
14/07/15
14/07/14
14/07/13
12/12/12
25/07/14
14/07/13
14/12/12* Lapsed as performance conditions were not met.

During the year, no director exercised options under any of the above schemes. As at 31 March 2008, Charles
Holroyd and Steve Parker have cumulatively 50,649 and 95,000 options respectively under various schemes
capable of exercise.

Oxford Instruments plc

37

Directors’ Remuneration Report38

Outside appointments
The Board allows Executive Directors to accept
appropriate outside commercial non-executive
appointments provided the aggregate commitment
is compatible with their duties as Executive Directors.
The Executive Director concerned may retain fees paid
for these services, which will be subject to approval by
the Board.
At 31 March 2008, the Executive Directors currently
hold no such outside appointments.
Independent Non-Executive Directors
ChairmanUnder an arrangement between the Company andImperialise Limited, Nigel Keen is retained to act as
Chairman of the Company. Nigel Keen’s fees wereincreased to £100,000 per annum with effect from 25
February 2008, this being the first increase applied forthree years. With effect from the same date, it has been
agreed that fees of £20,000 per annum for his services
as Chairman to the Trustee of the Oxford Instruments
Pension Scheme be also paid. Accordingly Nigel Keen’s
fees as Chairman were £81,954 (2007: £80,000) and as
Chairman to the Trustee were £1,954 (2007: £0) for
his services for which he must account to Imperialise
Limited. In addition, Imperialise Limited has been paid
a sum equivalent to the national insurance on thesefees of £10,074. Imperialise Limited is responsible forthe cost of national insurance on payments to Nigel
Keen, whereas national insurance contributions in
respect of the other Non-Executive Directors are madedirectly to the UK Inland Revenue and therefore notincluded in the table below.

Nigel Keen’s initial period of appointment as a NonExecutive Director was for three years commencing
25 February 1999, subject to retirement by rotation.
His term of appointment was extended by the Oxford
Instruments Board for a further three years commencing
in February 2002, February 2005 and again in February
2008 subject to retirement by rotation. The appointment
may be terminated by either party giving not lessthan six months’ notice. The Nomination Committee
under the Chairmanship of the Deputy Chairman, andwithout the presence of Nigel Keen, reviewed therenewal of Nigel Keen’s arrangement and put forward
its recommendation that the appointment be renewed
for a further three years in February 2008. The Board
approved this recommendation. This appointment is
now subject to annual approval by shareholders as
Nigel Keen has now been a director of the Company
for more than 9 years.
Non-Executive Directors
Non-Executive Directors are appointed for an initialperiod of three years with subsequent reviews. They
do not have a contract of employment and their
appointment can be terminated without notice.
Non-Executive Directors receive fixed fees agreed
by the full Board after reference to similar roles in
an appropriate comparator group of companies andreimbursement of expenses incurred in attending
Board and other meetings. It is the Board’s policy for
the Non-Executive Directors to be paid a level of feethat reflects the time commitment and responsibilitiesof the role and is sufficient to attract individuals
with appropriate knowledge and experience. The
Chairman and Non-Executive Directors receive noother benefits.

Remuneration of the Chairman and Non-Executive Directors:

38

2008

2007

£000

£000

Nigel Keen, Chairman

9290Mike Brady30

30

Mike Hughes

28

25

Peter Morgan

30

30

Bernard Taylor

25

25

Total

205

200

Oxford Instruments plc

Directors’ Remuneration Report
Performance graph
The graph below shows for the five years ended 31
March 2008 the Total Shareholder Return (TSR) on a
holding of the Company’s ordinary shares comparedwith a hypothetical holding of shares made up of sharesof the same kind and number as those by reference
to which the FTSE Techmark and FTSE Electronic andElectrical Equipment indices are calculated. These
indices have been chosen as they are considered tobe the most appropriate comparator groups for theCompany. TSR has been calculated by reference tothe relevant share price for each constituent company
assuming dividends are reinvested.

In accordance with the Directors’ Remuneration Report
Regulations, the four tables setting out the Executive
and Non-Executive Directors’ remuneration, pensions
and share options contained within the report havebeen audited; all other information including thestatements of policy have not been audited.

39

This report was adopted by the Remuneration
Committee at a meeting on 4 June 2008 and has been
approved subsequently by the Board for submission
to shareholders at the Annual General Meeting to beheld on 23 September 2008.
Nigel Keen Chairman of the Remuneration Committee
10 June 2008

350
Oxford Instruments

FTSE Techmark

FTSE E&EE

FTSE Small Cap

300

250

200

150

100

50

Source: Thomson Financial Datastream
April 1 2003

March 31 2008

Oxford Instruments plc

39

Directors’ Responsibilities in relation to the Annual Report and Financial Statements
40

The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each financial
year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as
adopted by the EU and applicable law and have elected to prepare the Parent Company financial statements inaccordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
The Group financial statements are required by law and IFRSs as adopted by the EU to present fairly the financial
position and the performance of the Group; the Companies Act 1985 provides in relation to such financial
statements that references in the relevant part of that Act to financial statements giving a true and fair view arereferences to their achieving a fair presentation.
The Parent Company financial statements are required by law to give a true and fair view of the state of affairsof the Parent Company.
In preparing each of the Group and Parent Company financial statements, the Directors are required to:• select suitable accounting policies and then apply them consistently;• make judgments and estimates that are reasonable and prudent;• for the Group financial statements, state whether they have been prepared in accordance with IFRSs as
adopted by the EU;• for the Parent Company financial statements, state whether applicable UK Accounting Standards havebeen followed, subject to any material departures disclosed and explained in the Parent Company financial
statements; and• prepare the financial statements on the going concern basis unless it is inappropriate to presume that theGroup and the Parent Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at
any time the financial position of the Parent Company and enable them to ensure that its financial statementscomply with the Companies Act 1985. They have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report,
Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and thoseregulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the UK governing the preparation and dissemination offinancial statements may differ from legislation in other jurisdictions.

Oxford Instruments plc

Report of the Independent Auditors to the members of Oxford Instruments plc
We have audited the Group and Parent Company
financial statements (the ‘’financial statements’’) of
Oxford Instruments plc for the year ended 31 March
2008 which comprise the Group Income Statement,
the Group and Parent Company Balance Sheets, theGroup Cash Flow Statement, the Group Statement of
Recognised Income and Expense and the related notes.
These financial statements have been prepared under
the accounting policies set out therein. We have also
audited the information in the Directors’ Remuneration
Report that is described as having been audited.
This report is made solely to the Company’s members,
as a body, in accordance with section 235 of theCompanies Act 1985. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state tothem 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 thanthe company and the company’s members as a body,for our audit work, for this report, or for the opinions
we have formed.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing theAnnual Report and the Group financial statementsin accordance with applicable law and International
Financial Reporting Standards (IFRSs) as adopted by theEU, and for preparing the Parent Company financial
statements and the Directors’ Remuneration Reportin accordance with applicable law and UK AccountingStandards (UK Generally Accepted Accounting
Practice) are set out in the Statement of Directors’
Responsibilities on page 40.
Our responsibility is to audit the financial statements
and the part of the Directors’ Remuneration Report
to be audited in accordance with relevant legal andregulatory requirements and International Standards
on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial
statements give a true and fair view and whether thefinancial statements and the part of the Directors’
Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985
and, as regards the Group financial statements, Article
4 of the IAS Regulation. We also report to you whether
in our opinion the information given in the Directors’
Report is consistent with the financial statements. The
information given in the Directors’ Report includes
that specific information presented in the Chairman’s
Statement, Chief Executive Statement and Financial
Review that is cross referred from the Business Review
section of the Directors’ Report.

In addition we report to you if, in our opinion, theCompany has not kept proper accounting records, if wehave not received all the information and explanations
we require for our audit, or if information specified
by law regarding directors’ remuneration and othertransactions is not disclosed.
We review whether the Corporate GovernanceStatement reflects the company’s compliance with thenine provisions of the 2006 Combined Code specified
for our review by the Listing Rules of the Financial
Services Authority, and we report if it does not. We
are not required to consider whether the board’s
statements on internal control cover all risks andcontrols, or form an opinion on the effectiveness ofthe group’s corporate governance procedures or its
risk and control procedures.
We read the other information contained in the
Annual Report and consider whether it is consistent
with the audited financial statements. We consider the
implications for our report if we become aware of any
apparent misstatements or material inconsistencies
with the financial statements. Our responsibilities do
not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with
International Standards on Auditing (UK and Ireland)issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in thefinancial statements and the part of the Directors’
Remuneration Report to be audited. It also includes anassessment of the significant estimates and judgments
made by the directors in the preparation of thefinancial statements, and of whether the accounting
policies are appropriate to the Group’s and company’s
circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as toobtain all the information and explanations which
we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance thatthe financial statements and the part of the Directors’
Remuneration Report to be audited are free frommaterial misstatement, whether caused by fraud orother irregularity or error. In forming our opinion wealso evaluated the overall adequacy of the presentationof information in the financial statements and the partof the Directors’ Remuneration Report to be audited.

Oxford Instruments plc

41

Report of the Independent Auditors to the members of Oxford Instruments plc

42

OpinionIn our opinion:• the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of thestate of the Group’s affairs as at 31 March 2008 and of its profit for the year then ended;• the Group financial statements have been properly prepared in accordance with the Companies Act 1985 andArticle 4 of the IAS Regulation;• the Parent Company financial statements give a true and fair view, in accordance with UK Generally Accepted
Accounting Practice, of the state of the Parent Company’s affairs as at 31 March 2008;• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited
have been properly prepared in accordance with the Companies Act 1985; and• the information given in the Directors’ Report is consistent with the financial statements.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
2 Cornwall Street
Birmingham
B3 2DL
10 June 2008

42

Oxford Instruments plc

Accounting Policies
Oxford Instruments plc (the Company) is a company
incorporated in Great Britain.

The accounting policies have been applied consistently
by all of the Group’s entities.

The Group financial statements consolidate those of
the Company and its subsidiaries (together referred
to as the “Group”). The parent company financial
statements present information about the Company asa separate entity and not about the Group.

(c) Basis of consolidation(i) Subsidiaries
Subsidiaries are entities controlled by the Company.
Control exists when the Company has the power,
directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefits
from its activities. In assessing control, potential voting
rights that presently are exercisable or convertible
are taken into account. The financial statements ofsubsidiaries are included in the consolidated financial
statements from the date that control commences
until the date that control ceases.

The Group financial statements have been prepared
and approved by the Directors in accordance with
International Financial Reporting Standards as adopted
by the EU (“Adopted IFRSs”). The Company has elected
to prepare its parent company financial statements inaccordance with UK GAAP; these are presented on
pages 89 to 96.
The accounting policies set out below have, unlessotherwise stated been applied consistently to all periods
presented in these Group financial statements.
(a)	New accounting standards
The financial statements comply with IFRS 7, Financial
Instruments: Disclosures and the Amendment to IAS 1:
Capital Disclosures. The adoption of these standards by
the Group in the current year has no impact on either
the profit or the net assets of the Group for the period
commencing 1 April 2007. The most notable effectof the changes implemented above is the additional
disclosure presented in the financial statements
recording credit, liquidity and interest rate risk set out
in Note 23.
(b) Basis of preparation
The financial statements are presented in £ sterlingrounded to the nearest £100,000. They are prepared on
the historical cost basis except that the following assets
and liabilities are stated at their fair value: derivative
financial instruments and financial instruments
classified as available-for-sale.
The preparation of financial statements in conformity
with IFRSs requires management to make judgements,
estimates and assumptions that affect the application ofpolicies and reported amounts of assets and liabilities,
income and expenses. The estimates and associatedassumptions are based on historical experience andvarious other factors that are believed to be reasonable
under the circumstances, the results of which form thebasis of making the judgements about carrying valuesof assets and liabilities that are not readily apparent
from other sources. Actual results may differ fromthese estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate isrevised if the revision affects only that period or in the
period of the revision and future periods if the revisionaffects both current and future periods. Further detailof the estimates and judgements made can be foundin note 38.

(ii) Transactions eliminated on consolidation
Intra-group balances and any unrealised gains andlosses or income and expenses arising from intragroup transactions are eliminated in preparing theconsolidated financial statements.
(d)	Foreign currency(i) Foreign currency transactions
Transactions in foreign currencies are translated
at the foreign exchange rate ruling at the dateof the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance
sheet date are translated to £ sterling at the foreignexchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in
the income statement. Non-monetary assets andliabilities that are measured in terms of historical costin a foreign currency are translated using the exchange
rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies
that are stated at fair value are translated to £ sterlingat foreign exchange rates ruling at the dates the fairvalue was determined.
(ii) Financial statements of foreign operations
The assets and liabilities of foreign operations,
including goodwill and fair value adjustments arisingon consolidation are translated to £ sterling at foreignexchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations aretranslated to £ sterling at rates approximating to
the foreign exchange rates ruling at the dates of thetransactions. Foreign exchange differences arisingon translation are recognised directly in equity.
Differences arising prior to 1 April 2004 are presented
within retained earnings. Differences arising after 1
April 2004 are presented as a separate component ofequity.
(e)	Derivative financial instruments
The Group uses derivative financial instruments tomanage its exposure to foreign exchange arising fromoperational and financing activities. In accordance with
its treasury policy, the Group does not hold or issue
derivative financial instruments for trading purposes.
Derivative financial instruments are recognised

Oxford Instruments plc

43Accounting Policies Continued

44

initially at fair value. Subsequent to initial recognition,
derivative financial instruments are stated at fairvalue. The gain or loss on remeasurement to fair value
is recognised immediately in the income statement.
The fair value of forward exchange or option contracts
is their quoted market price at the balance sheet date,
being the present value of the quoted forward price.
IAS 39 requires certain stringent criteria to be met
in order to hedge account, which, in the particular
circumstances of the Group, are considered by the
Board not to bring any significant economic benefit.
Accordingly, the Group does not hedge accountderivative financial instruments.
(f) Property, plant and equipment(i) Owned assets
Items of property, plant and equipment are stated atcost, or at deemed cost, less accumulated depreciation(see below) and impairment losses (see accounting
policy k). The cost of self-constructed assets includes
the cost of materials, direct labour and any other costs
directly attributable to bringing the asset to a working
condition for its intended use.
Certain items of property, plant and equipment that
had been revalued to fair value on or prior to 31 March
2004, the date of transition to IFRS, are measured on
the basis of deemed cost, being the revalued amountat the date of that revaluation.
Where parts of an item of property, plant andequipment have different useful lives, they areaccounted for as separate items of property, plant andequipment.
(ii) Depreciation
Depreciation is charged to the income statement on astraight line basis to write off the cost less estimatedresidual value of property, plant and equipment inequal instalments over their estimated useful lives ofeach part of an item of property plant and equipment
as follows:
Freehold land
Freehold buildings, long leasehold
land and buildings
Furniture and fittings
Machinery and other equipment

Nil
50 years
10 years
5 to 10 years

Computer equipment and software

4 years

Vehicles4 years

Leasehold land and buildings, where the period of thelease is less than 50 years, are written off on a straightline basis over the remaining period of the lease.
(iii) Subsequent costs
The Group recognises in the carrying value of an itemof property, plant and equipment the cost of replacing
part of such an item when that cost is incurred if it is44

Oxford Instruments plc

probable that the future economic benefits embodied
within the item will flow to the Group and the cost of
the item can be measured reliably. All other costs arerecognised in the income statement as an expense as
incurred.
(g) 	Intangible assets(i) Goodwill
All business combinations are accounted for by applying
the purchase method. Goodwill represents amounts
arising on acquisition of subsidiaries. In respect ofbusiness acquisitions that have occurred since 31 March
2004, goodwill represents the difference between
the cost of the acquisition and the net fair value ofthe identifiable net assets, liabilities and contingent
liabilities acquired.
In respect of acquisitions prior to this date, goodwill
is included on the basis of its deemed cost, which
represents the amount recorded under previous GAAP.
The classification and accounting treatment of businesscombinations that occurred prior to 31 March 2004
has not been reconsidered in preparing the Group’s
opening IFRS balance sheet at 31 March 2004.
Goodwill is stated at cost less any accumulated
impairment losses. Goodwill is allocated to cashgenerating units and is tested annually for impairment(see accounting policy k).
(ii) Research and development
Expenditure on research activities, undertaken withthe prospect of gaining new scientific or technicalknowledge and understanding, is recognised in theincome statement as an expense as incurred.
Expenditure on development activities, whereby
research findings are applied to a plan or design forthe production of new or substantially improved
products and processes, is capitalised if the productor process is technically and commercially feasible, if
future economic benefits are probable, the costs canbe measured reliably and the Group has sufficient
resources to complete development. The expenditure
capitalised includes the cost of materials, direct labour
and any other cost directly attributable to preparing
the asset for its intended use. Capitalised development
expenditure is stated at cost less accumulated
amortisation (see below) and impairment losses (seeaccounting policy k). Other development expenditureis recognised in the income statement as an expense
as incurred.
Research and development expenditure is accounted
for after deducting the relevant proportion of any
related grants receivable. If research and development
expenditure is recoverable under a customer contract
it is carried forward as work in progress at the lower ofcost and net realisable value.
(iii) Other intangible assets
Other intangible assets that are acquired by the GroupAccounting Policies Continued
are stated at cost less accumulated amortisation andimpairment losses (see accounting policy k).
(iv) Acquired Intangible Assets
Intangible assets recognised as a result of a businesscombination are stated at fair value at the dateof acquisition less accumulated amortisation andimpairment losses.
(v) Amortisation
Amortisation of capitalised development expenditureis charged to the income statement on the basis of unit
shipments over a product’s estimated useful economic
life. Amortisation in respect of other intangible assets
is charged to the income statement on a straight-line
basis over their estimated useful lives. Goodwill issystematically tested for impairment at each balance
sheet date. Other intangible assets are amortised fromthe date they are available for use.
The estimated useful lives are
as follows:
Capitalised development costs

3 to 5 years

Unpatented technology

5 to 10 years

Customer related intangibles

6 months to 2 years(h) 	Trade and other receivables
Trade and other receivables are stated at their cost less
impairment losses (see accounting policy k).
(i) 	Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost includes materials, direct labour,
an attributable proportion of production overheads
based on normal operating capacity and all otherexpenditure incurred in acquiring the inventories andbringing them to their existing location and condition.
Net realisable value is the estimated selling price in theordinary course of business, less the estimated costs ofcompletion and selling expenses.
Provision is made for obsolete, slow moving anddefective stock where appropriate in the light of recent
usage, expected future requirements, new productintroduction plans and likely realisable values. The
Group uses demonstration equipment to market its
products to customers. The majority of demonstrationequipment is held within inventory. All categories ofdemonstration equipment are written down during
use and then are actively marketed from time to time inorder to rotate assets so that as the older items are soldthey are replaced, as necessary, by new equipment.
(j) 	Cash and cash equivalents
Cash and cash equivalents comprise cash balances andcall deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash
management are included as a component of cash andcash equivalents for the purpose of the statement ofcash flows.

(k) 	Impairment
The carrying amount of the Group’s assets, other thaninventories (see accounting policy i) and deferred tax
assets (see accounting policy r), are reviewed at eachbalance sheet date to determine whether there is any
indication of impairment. If any such indication exists,
the asset’s recoverable amount is estimated (see (i)below).

45

An impairment loss is recognised whenever the
carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses arerecognised in the income statement.
Impairment losses recognised in respect of cashgenerating units are allocated first to reduce thecarrying amount of any goodwill allocated to cashgenerating units (group of units) and then, to reducethe carrying amount of the other assets in the unit
(group of units) on a pro rata basis.
(i) Calculation of recoverable amountThe recoverable amount of assets is the greater of
their fair value less cost to sell and value in use. 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 assessmentsof the time value of money and the risks specific to
the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount isdetermined for the cash-generating unit to which theasset belongs. Receivables with a short duration are
not discounted.
(ii) Reversals of impairment
An impairment loss in respect of goodwill is notreversed.
In respect of other assets, an impairment loss is reversed
if there has been a change in the estimates used todetermine the recoverable amount.
An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed thecarrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss had been recognised.
(l) 	Employee benefits
The Group operates a number of defined benefit anddefined contribution plans which require contributions
to be made to independent trustee administrated
funds.
(i) Defined contribution plans
Obligations for contributions to defined contribution
pension plans are recognised as an expense in theincome statement as incurred.

Oxford Instruments plc

45

Accounting Policies Continued

46(ii) Defined benefit plans
The Group’s net obligation in respect of defined benefit
pension plans is calculated separately for each plan by
estimating the amount of future benefit that current
and past employees have earned in return for theirservice in the current and prior periods; that benefit
is discounted to determine its present value, and thefair value of any plan assets is deducted. The discountrate is the yield at the balance sheet date on AA credit
rated bonds that have maturity dates appropriate to
the terms of the Group’s obligations. The calculation is
performed by a qualified actuary using the projected
unit credit method.
All actuarial gains and losses in calculating the Group’s
net obligation are recognised in the statement ofrecognised income and expense in the year.
Contributions to the scheme are paid in accordancewith the scheme rules and the recommendation of
the actuary. The charge to the income statement
reflects the current service cost. The expected returnon scheme assets and the interest cost on scheme
liabilities are included within financial income or
financial expenditure in the income statement.
(iii) Share-based payment transactions
The Group operates various equity settled share option
programmes. These share option programmes allow
Group employees to acquire shares of the Company.
The fair value of options granted is recognised as an
employee expense with a corresponding increase inequity. The fair value is measured at grant date andspread on a straight line basis over the period during
which the employees become unconditionally entitledto the options. The fair value of the options granted
is measured using the most appropriate models
for each scheme, taking into account the terms andconditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect
the actual number of share options that vest except
where forfeiture is only due to market performance
conditions not being met.
(m) Provisions
A provision is recognised in the balance sheet when theGroup has a present legal or constructive obligation
as a result of a past event and it is probable that an
outflow of economic benefits will be required to settle
the obligation. If the effect is material, provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and, whereappropriate, the risks specific to the liability.
(i) Warranty
A provision for warranty is recognised when theunderlying products are sold. The provision is based on
historical warranty data.

46

Oxford Instruments plc(ii) Restructuring
A provision for restructuring is recognised when theGroup has approved a detailed and formal restructuring
plan and the restructuring has either commenced or
has been announced publicly. Future operating costs
are not provided for.
(iii) Onerous contracts
A provision for onerous contracts is recognised whenthe expected benefits to be derived by the Group froma contract are lower than the unavoidable cost of
meeting its obligations under the contract.
(n) 	Trade and other receivables
Trade and other receivables are stated at theiramortised cost as reduced by appropriate allowancesfor estimated irrecoverable amounts as discussed inaccounting policy k.
(o) 	Trade and other payables
Trade and other payables are stated at amortised cost.
(p) Revenue(i) Goods sold and services rendered
Revenue is recognised in the income statement when
the significant risks and rewards of ownership havebeen transferred to the buyer.
Revenue, which excludes value added tax andsimilar sales based taxes, represents sales to externalcustomers of products and services and is stated before
commissions payable to agents. Revenue is recognised on
shipment, except for installation and service contracts.
Revenue from installation is separately recognised oncompletion of the installation. Revenue from contracts
for maintenance and support is recognised on a prorata basis over the contract period.
(ii) Government grants
Government grants are recognised in the balance
sheet initially as deferred income when there isreasonable assurance that they will be received
and that the Group will comply with the conditions
attaching to them. Grants that compensate the Groupfor expenses incurred are recognised as revenue in theincome statement on a systematic basis in the same
periods in which the expenses are incurred. Grantsthat compensate the Group for the cost of an asset arerecognised in the income statement as other operating
income on a systematic basis over the useful life of theasset.
(q) 	Expenses(i) Operating lease payments
Payments made under operating leases are recognisedin the income statement on a straight line basis over
the term of the lease. Lease incentives received arerecognised in the income statement as an integral partof the total lease expense.

Accounting Policies Continued(ii) Foreign exchange gains and losses
Foreign exchange gains and losses and gains and losses
on derivative financial instruments that are recognisedin the income statement are recognised within
administrative expenses and separately disclosed in
the notes to the accounts.

A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will
be available against which the asset can be utilised.
Deferred tax assets are reduced to the extent that it
is no longer probable that the related tax benefit will
be realised.

(iii) Financial income
Financial income comprises interest receivable on funds
invested, gains on derivative financial instruments andexpected return on pension scheme assets.

Additional income taxes that arise from the distributionof dividends are recognised at the same time as theliability to pay the related dividend.

Interest income is recognised in the income statement
as it accrues, using the effective interest method.
(iv) Financial expenditure
Financial expenditure comprises interest payable on
borrowings calculated using the effective interest
rate method, expected interest cost on pension
scheme obligations and losses on derivative financial
instruments.
(v) Warranty costs
Warranty costs are based on the historical relationshipbetween actual costs incurred and the relevant revenue
exposure.
(r) 	Income tax
Income tax on the profit or loss for the year comprises
current and deferred tax. Income tax is recognisedin the income statement except to the extent that it
relates to items recognised directly in equity, in whichcase it is recognised in equity.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, andany adjustment to tax payable in respect of previous
years.
Deferred tax is provided using the balance sheet
liability method, providing for temporary differences
between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used
for taxation purposes (the tax base). The following
temporary differences are not provided for: goodwill
not deductible for tax purposes, the initial recognitionof assets or liabilities that affect neither accounting
nor taxable profit and do not arise from a businesscombination, and differences relating to investments
in subsidiaries and associates to the extent that they
will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of thecarrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance
sheet date.

47(s) 	Segment reporting
A segment is a distinguishable component of theGroup that is engaged in providing products or services
in a particular business segment (business segment), orin providing products or services within a particular
economic environment (geographic segment), which
is subject to risks and rewards that are different fromthose of other segments.
The Group’s primary reporting format is businesssegments and its secondary format is geographicalsegments. Segment results, assets and liabilities,
include items directly attributable to a segment aswell as an allocation of central items. Transfer prices
between business segments are set on an arms length
basis.
(t) 	Held for sale assets
Immediately before classification as held for sale,the measurement of the assets is brought up-to-datein accordance with applicable IFRSs. Then, on initialclassification as held for sale, non-current assets arerecognised at the lower of their carrying amount andfair value less costs to sell.
Impairment losses on initial classification as held for sale
are included in the income statement, even when theasset has previously been revalued. The same applies
to gains and losses on subsequent remeasurement.
(u) Adopted IFRS not yet applied
IFRS 8, ‘Operating Segments:Disclosure’ applicablefor years commencing on or after 1 January 2009,
was available for early application but has not been
applied by the Group in these financial statements.
The Group does not expect this standard to have any
significant impact on the financial statements for theperiod commencing 1 April 2008.

Oxford Instruments plc

47Group Income Statement year ended 31 March 2008
48

2008

2007

Notes

£m

£m

2

176.5

161.6

Cost of sales(103.8)(95.0)

Gross profit

72.7

66.6

(62.1)(58.3)

10.6

8.3
-

Revenue

Trading expenses excluding cost of goods sold3

Trading profit
Other operating income

5

0.7

Amortisation of acquired intangibles

6

(2.9)

(1.1)

Restructuring and other non-recurring costs

7

-

(5.2)

Operating profit

8.4

2.0

Financial income

11

9.6

8.5

Financial expenditure12(13.0)

(9.2)

5.0

1.3

(2.3)

(2.8)

2.7

(1.5)

pence

pence

Profit before income tax
Income tax expense

13

Profit/(loss) for the year attributable to equity
shareholders of the parent

Earnings per share
Basic earnings per share

14

5.6

(3.2)

Diluted earnings per share

14

5.5

(3.2)

Dividends paid

15

8.4

8.4

Dividends proposed

15

8.4

8.4

Dividends per share

Total dividends£m£m

Dividends paid

4.1

4.0

Dividends proposed

4.1

4.0

£m

£m

9.5

7.5

pence

pence

Adjusted profit before tax

1Adjusted earnings per share
Basic earnings per share

14

11.7

9.6

Diluted earnings per share

14

11.7

9.5

Oxford Instruments plc

Group Statement of Recognised Income and Expense year ended 31 March 2008
2008
Note
Foreign exchange translation differences

2007

£m

£m

3.1

(1.7)

Actuarial gain in respect of post retirement benefits

30

7.1

22.1

Taxation effect in respect of post retirement benefits

13

(2.6)

(6.7)

Recycling of fair value movements of available for sale equity
securities-

0.2

Net profit recognised directly in equity

7.6

13.9

Profit/(loss) for the year

2.7

(1.5)

Total recognised income for the year attributable to equity
shareholders of the parent

10.3

12.4

Oxford Instruments plc

49Group Balance Sheet as at 31 March 2008
50

2008
£m

2007
£m

17
18
19
20

22.4
44.0
0.6
9.6
76.6

21.5
18.1
0.6
11.6
51.8

21
22

34.9
53.5
0.7
0.6
7.9
97.6

25.6
45.1
0.5
0.5
3.9
7.0
82.6

174.2

134.4

Notes
AssetsNon-current assets
Property, plant and equipment
Intangible assets
Available for sale equity securities
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Current income tax recoverable
Derivative financial instruments
Cash and cash equivalents
Held for sale assets

24
25
26

Total assets
EquityCapital and reserves attributable to the Company’s equity
shareholders
Share capital
Share premium
Other reserves
Translation reserve
Retained earnings

27
27
27
27
27

2.5
21.2
0.1
2.3
36.4
62.5

2.5
20.9
0.1
(0.8)
33.1
55.8

Liabilities
Non-current liabilities
Bank loans
Other payables
Retirement benefit obligations
Deferred tax liabilities

29
31
30
20

24.9
2.4
21.2
6.1
54.6

0.2
30.8
31.0

29
25
31

0.1
0.7
46.2
2.7
3.3
4.1
57.1

1.0
1.1
40.2
1.8
0.2
3.3
47.6

Total liabilities

111.7

78.6

Total liabilities and equity

174.2

134.4

Current liabilities
Bank loans
Bank overdrafts
Trade and other payables
Current income tax payables
Derivative financial instruments
Provisions

24
32

The financial statements were approved by the Board of Directors on 10 June 2008 and signed on its
behalf by:
Jonathan Flint			Director				Oxford Instruments plc

Kevin Boyd
Director

Group Statement of Cash Flows year ended 31 March 2008
51
2008

2007

£m

£m

2.7

(1.5)

Income tax expense

2.3

2.8

Net financial expense

3.4

0.7

Restructuring and non-recurring costs-

5.2

Amortisation of acquired tangibles

2.9

1.1

Other operating income

(0.7)

-

Depreciation of property, plant and equipment

4.1

3.4

Profit/(loss) for the year
Adjustments for:

Amortisation of capitalised development costs

1.9

1.5

Earnings before interest, tax, depreciation and amortisation

16.6

13.2

Loss on disposal of property, plant and equipment-

0.2

Cost of equity settled employee share schemes

0.2

0.2

Restructurings costs paid

-

(2.9)

Cash payments to the pension scheme more than the charge to theincome statement

(2.1)

(0.7)

Operating cash flows before movements in working capital

14.7

10.0

(Increase)/decrease in inventories

(6.9)

0.6

Increase in receivables

(6.9)

(2.3)

Increase in payables

2.3-

Increase/(decrease) in provisions

0.3

(0.3)

Cash generated from operations

3.5

8.0

Interest paid

(1.7)

(0.3)

Income taxes paid

(1.9)

(2.5)

Net cash from operating activities

(0.1)

5.2

Proceeds from sale of property, plant and equipment-

0.1

Proceeds from sale of held for sale assets

7.7-

Proceeds from sale of available for sale equity securities-

0.3

Interest received

0.3

0.2

Acquisition of subsidiaries, net of cash acquired(12.7)(0.3)

Acquisition of property, plant and equipment

(3.8)

(4.4)

Capitalised development expenditure

(6.6)

(5.6)

Net cash used in investing activities(15.1)

(9.7)

0.3

0.8

Repayment of borrowings

(1.0)

(1.9)

Increase in borrowings

24.2

-

Dividends paid

(4.1)

(4.0)

Net cash from financing activities

19.4

(5.1)

Net increase/(decrease) in cash and cash equivalents

4.2

(9.6)

Cash and cash equivalents at beginning of the year

2.8

12.7

Effect of exchange rate fluctuations on cash held

0.2

(0.3)

Cash and cash equivalents at end of the year

7.2

2.8

Cash flows from investing activities

Cash flows from financing activities
Proceeds from issue of share capital

Oxford Instruments plc

Notes to the Financial Statements
52

1

Reconciliation between profit and adjusted profit
2008

2007

£m

£m

Profit before income tax

5.0

1.3

Other operating income

(0.7)

-

Amortisation of acquired intangibles

2.9

1.1

Restructuring and non-recurring costs (note 7)-

5.2

Financial instruments (see below)

2.3

(0.1)

Adjusted profit before income tax

9.5

7.5

Under IAS 39, derivative financial instruments are recognised initially at fair value – this includes the fixed forward
and option based foreign exchange contracts the Group has entered into in order to manage its exposure toforeign exchange rate movements. Subsequent to initial recognition, derivative financial instruments aremeasured at fair value. The Group does not take advantage of the hedge accounting rules provided for in
IAS 39 since that standard requires certain stringent criteria to be met in order to hedge account, which, in theparticular circumstances of the Group, are considered by the Board not to bring any significant economic benefit.
Accordingly, the Group accounts for its derivative financial instruments as trading instruments with the profit orloss on remeasurement to fair value being taken immediately to the income statement. Adjusted profit for theyear is stated before changes in the valuation of these instruments so that the underlying performance of theGroup can more clearly be seen.
2	Segment information
Information is presented in the consolidated financial statements in respect of the Group’s two business segments
being the primary basis of the Group’s segmental reporting. Our Analytical business provides measurement
and fabrication instruments for industrial and commercial customers. Our Superconductivity business provides
materials, tools and systems for industrial and Government customers working at the frontiers of science.
Segment results include items directly attributable to a segment as well as those which can be allocated on areasonable basis.

Oxford Instruments plc

Notes to the Financial Statements Continued

53

2	Segment information Continueda)Analysis by BusinessYear to 31 March 2008
Analytical

Superconductivity

Total

£m

£m

£m

Revenue

115.7

60.8

176.5

Trading profit before costs of OII

11.0

2.0

13.0

Costs of OII(2.4)

Trading profit

10.6

Other operating income

0.7

Amortisation of acquired intangibles(2.9)

Operating profit

8.4

Net financial expense(3.4)

Income tax expense(2.3)

Profit for the year

2.7

Segment assets

99.7

55.7

155.4

Unallocated assets

18.8

Total assets

174.2

Segment liabilities

38.7

18.3

57.0

Unallocated liabilities

54.7

Total liabilities

111.7

Depreciation charge

2.6

1.5

4.1

Amortisation charge

3.9

0.9

4.8

Capital expenditure, including capitalised researchand development

8.0

2.4

10.4

Research and development to enhance existing products and develop new ones is undertaken within both theAnalytical and Superconductivity business segments. In addition, Oxford Instruments Innovation (OII) carriedout initial investigations into new product lines that would not normally be undertaken by the operating
businesses. Trading profit is shown both before and after OII costs so as to give a more meaningful indication of
the performance of the business segments.

Oxford Instruments plc

53

Notes to the Financial Statements Continued

54

2	Segment information Continueda)Analysis by Business Continued

Year to 31 March 2007
Analytical
£m
100.7

Superconductivity
£m
60.9

Total
£m
161.6

Trading profit before costs of OII
Costs of OII
Trading profit
Amortisation of acquired intangibles
Restructuring and non-recurring costs
Operating profit
Net financial expense
Income tax expense
Loss for the year

10.1

1.6

11.7
(3.4)
8.3
(1.1)
(5.2)
2.0
(0.7)
(2.8)
(1.5)

Segment assets
Unallocated assets
Total assets

64.0

46.8

110.8
23.6
134.4

Segment liabilities
Unallocated liabilities
Total liabilities

26.4

17.0

43.4
35.2
78.6

Depreciation charge
Amortisation charge
Capital expenditure, including capitalised researchand development

1.9
2.4

1.6
0.2

3.5
2.6

8.3

1.7

10.0

Revenueb) Geographical Analysis
Year to 31 March 2008
UK

Revenue fromexternal customers
Segment assets
Unallocated assets
Total
Capital expenditure,including capitalised
research anddevelopment

54

Oxford Instruments plc

North
America
£m

Japan

£m

Continental
Europe£mRest of
World
£m

Total

£m

Rest of
Asia
£m

20.4

44.2

54.2

20.1

32.4

5.2

176.5

58.6

51.2

36.4

7.8

1.4

-

155.4
18.8
174.2

7.3

1.1

1.9

-

0.1

-

10.4

£m

Notes to the Financial Statements Continued

55

2	Segment information Continuedb)

Geographical Analysis Continued

Year to 31 March 2007
UK

Continental

North

Japan

Rest ofRest of

Total

EuropeAmerica

Asia

World

£m

£m

£m

£m

£m

£m

£m

Revenue fromexternal customers

18.5

41.5

54.2

18.2

25.4

3.8

161.6

Segment assets

55.7

15.6

32.8

6.0

0.7

-

110.8

Unallocated assets

23.6

Total

134.4

Capital expenditure,including capitalised
research anddevelopment

5.7

1.2

2.9

0.1

0.1

-

10.0

3	Trading expenses excluding cost of goods sold
2008

2007

£m

£m

Selling and marketing costs

29.5

26.7

Administration and shared services

21.0

20.3

Foreign exchange loss/(gain)

0.1

(0.8)

Research and development (note 4)

11.5

12.1

62.1

58.3

£’000

£’000

96

86

Audit of financial statements of subsidiaries pursuant to legislation

179

146

Tax advisory services

18

1

-

2

293

235

Auditor’s remuneration
Audit of these financial statements
Amounts received by auditors and their associates in respect of:Other services
Total fees paid to auditor and its associates

Oxford Instruments plc

55

Notes to the Financial Statements Continued

56

4

RESEARCH AND DEVELOPMENT

The total research and development spend by the Group is as follows:
2008
Analytical

Superconductivity

Total

£m

£m

£m

Total cash spent on research and development
during the year

10.7

5.5

16.2

Less: amount capitalised

(5.5)

(1.1)

(6.6)

Add: amortisation of amounts previously
capitalised

1.8

0.1

1.9

Research and development charged to income
statement

7.0

4.5

11.5

Analytical

Superconductivity

Total

£m

£m

£m

2007

Total cash spent on research and development
during the year

10.6

5.6

16.2

Less: amount capitalised

(5.3)

(0.3)

(5.6)

Add: amortisation of amounts previously
capitalised

1.4

0.1

1.5

Research and development charged to income
statement

6.7

5.4

12.1

2008

2007

£m

£m

0.7

-

5	Other operating income

Profit on disposal of held for sale assets

Other operating income comprises the profit on disposal of previously held for sale freehold properties in
Abingdon and Eynsham, UK.

6

Amortisation of acquired intangibles
2008
Amortisation of acquired intangibles
Adjustment to carrying value of goodwill as required by IAS12

2007

£m

£m

2.9

0.2

-

0.9

2.9

1.1

The adjustment to the carrying value of goodwill in the prior year arose due to the utilisation of tax losses whichwere not recognised as a deferred tax asset at the time of acquisition. IAS 12 requires that when such losses are
utilised subsequent to acquisition the carrying value of goodwill is reduced so that it reflects the carrying valuethat would have arisen had a deferred tax asset been recognised at the time of acquisition.

56

Oxford Instruments plc

Notes to the Financial Statements Continued
7

57

RESTRUcturing and non-recurring costs

Restructuring and non-recurring costs for the year ended 31 March 2007 comprise £1.7m in respect of thesettlement of an onerous contract, £2.9m in respect of the exit from the high field magnet business, £0.3m in
respect of the disposal of the Group’s interest in Oxford BioSignals Ltd and £0.3m in respect of costs associatedwith the exit from the held for sale factory which became surplus to requirements following the restructuringof the UK magnet business in 2006.
8	personnel COSTS
2008

2007

£m

£m

Wages and salaries

45.5

43.1

Social security costs

4.2

4.1

Charge in respect of defined benefit pension schemes

2.9

3.7

Contributions to defined contribution pension plans

1.5

1.2

Charge in respect of employee share options

0.2

0.2

54.3

52.3

Directors’ emoluments are disclosed in the Directors’ Remuneration Report on pages 32 to 39 of this document.
9	Employees
The average number of people employed by the Group (including Directors) during the year was as follows:
2008

2007
As restated

NumberNumberProduction

677

679

Sales and marketing

362

292

Research and development

242

234

Administration and shared services

220

183

Total average number of employees

1,501

1,388

Previously the Group has excluded temporary employees in this note. These employees have now been included
and the prior year figure has been restated accordingly.

Oxford Instruments plc

57

Notes to the Financial Statements Continued

58

10	SHARE OPTION SCHEME EXPENSE
Administrative expenses include a charge of £0.2m (2007 £0.2m) in respect of the cost of providing share options.
The cost is calculated by estimating the fair value of the option at grant date and spreading that amount overthe vesting period. Further details of the assumptions used in these calculations are given below.
The terms and conditions of all awards and grants made since 7 November 2002 and which are exercisable orpotentially exercisable at 31 March 2008 are as follows; all awards and option exercises are settled by physicaldelivery of shares:
Grant date

Plan

Employees
Entitled

December 2007

Executive Share
Option Scheme

Certain Senior
Executives

September 2007

Executive Share
Option Scheme

Certain Senior
Executives

514,500

July 2007

Senior Executive
Long Term
Incentive Scheme
UK Save As You
Earn scheme 21
Senior Executive
Long Term
Incentive Scheme
Executive Share
Option Scheme

Certain Senior
Executives

87,500All UK employees

250,043

Certain Senior
Executives

12,500Certain Senior
Executives

66,667

Senior Executive
Long Term
Incentive Scheme
Executive share
Option Scheme

Certain Senior
Executives

75,000Certain Senior
Executives

450,550

Senior Executive
Long Term
Incentive Scheme
Executive Share
Option Scheme

Certain senior
executives

40,000Certain senior
executives

6,000

UK Save as You
Earn scheme 20
Senior Executive
Long Term
Incentive Scheme
Executive Share
Option Scheme

All UK employees

156,881

Certain senior
executives

50,000Certain senior
executives

540,300

UK Save as You
Earn scheme 19
Executive Share
Option Scheme

All UK employees

221,749

Certain senior
executives

786,213

UK Save as You
Earn scheme 18
Executive Share
Option Scheme

All UK employees

227,157

Certain senior
executives

932,037

December 2006
September 2006

September 2006

July 2006

July 2006

December 2005

December 2005

December 2005
July 2005

July 2005

December 2004
July 2004

December 2003
July 2003

Number of
instruments
granted
2,000

Vesting
conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three or five years ofserviceThree years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three or five years ofserviceThree years of service
plus satisfaction of
performance conditions
Three years of service
plus satisfaction of
performance conditions
Three or five years ofserviceThree years of service
plus satisfaction of
performance conditions
Three or five years ofserviceThree years of service
plus satisfaction of
performance conditions

Contractual
Life of option
10 years

10 years

7 years

3.5 or 5.5 years
7 years

10 years

7 years

10 years

7 years

10 years

3.5 or 5.5 years
7 years

10 years

3.5 or 5.5 years
10 years

3.5 or 5.5 years
10 years

Full details of the performance conditions can be found in the Directors’ Remuneration Report on pages
32 to 39.

58

Oxford Instruments plc

Notes to the Financial Statements Continued

59

10	SHARE OPTION SCHEME EXPENSE Continued
Fair value of share options and assumptions
Executive Share Option Scheme
December
2007

September
2007

September
2006

July
2006

December
2005

July
2005

July
2004

July
2003

Fair value atmeasurement date
Share price
Exercise price

38.0p
£1.86
£1.92½

51.3p
£2.30
£2.32

44.6p
£2.05½£2.03¾

46.6p
£2.10
£2.10

64.0p
£2.42¼£2.42½

56.5p£2.17½£2.19

64.5p£2.18½£2.18

47.5p£1.87½£1.88

Expected volatility

29.8%

30.2%

33.5%

34.3%

37.3%

38.4%

41.9%

41.7%

Expected option life
(expressed as weighted
average life used in themodelling)
Expected dividend
yield
Risk free interest rate

6 years

6 years

6 years

6 years

6 years

6 years

6 years

6 years

4.5%
5.5%

3.7%
5.8%

4.1%
4.6%

4.0%
4.7%

3.5%
4.3%

3.9%
4.2%

3.8%
5.1%

4.5%
3.9%

24.9%

33.7%

31.4%

33.6%

24.2%

23.0%

21.0%

26.0%

Performance condition
discount in respect of
TSR condition

Senior Executive Long Term Incentive Scheme
July

September

July

December

July

2007

2006

2006

2005

2005

Fair value at measurement date

£1.86

£1.38

£1.41

£1.62

£1.46

Share price£2.71£2.05½£2.10£2.42¼£2.17½

Exercise price

£nil

£nil

£nil

£nil

£nil

Expected volatility

22.8%

25.5%

26.5%

32.2%

34.8%

Expected option life (expressed as weighted
average life used in the modelling)

3 years

3 years

3 years

3 years

3 years

Expected dividend yield

3.1%

4.1%

4.0%

3.5%

3.9%

Risk free interest rate

5.5%

4.8%

4.7%

4.3%

4.2%

Performance condition discount in respect of TSR
condition

48.8%

47.6%

47.7%

51.5%

23.0%

Oxford Instruments plc

59

Notes to the Financial Statements Continued

60

10	SHARE OPTION SCHEME EXPENSE Continued
UK Save as You Earn scheme – 3 year
December
Fair value at measurement date

December

December

2006

2005

2004

83.7p

65.0p

63.0p

Share price

£2.55

£2.44

£2.14

Exercise price

£1.83

£2.14

£1.75

Expected volatility

25.8%

33.3%

35.0%

Expected option life (expressed as weighted average
life used in the modelling)

3.25 years

3.25 years

3.25 years

Expected dividend yield

3.3%

3.4%

3.9%

Risk free interest rate

5.1%

4.3%

4.4%

UK Save as You Earn scheme – 5 year
December

December

December

2006

2005

2004

2003

Fair value at measurement date

98.5p

79.0p

78.0p

69.0p

Share price

£2.55

£2.44

£2.14

£1.95

Exercise price

£1.73

£2.02

£1.65

£1.64

Expected volatility

31.0%

34.2%

39.8%

43.7%

Expected option life (expressed as weighted
average life used in the modelling)

December

5.25 years

5.25 years

5.25 years

5.25 years

Expected dividend yield

3.3%

3.4%

3.9%

4.3%

Risk free interest rate

4.9%

4.2%

4.4%

4.7%

In all cases expected volatility has been based on historical volatility over a period of time of the same length as
the expected option life and ending on the grant date. The volatility has been used to incorporate a discount for
Total Shareholder Return (TSR) market condition in the ESO and SELTIS schemes.
The Executive Share Option and Senior Executive Long Term Incentive Schemes have been valued using aninternal calculation based on Monte- Carlo stochastic and modified Black-Scholes models. The Save as You Earnschemes have been valued using a modified Black-Scholes model.

60

Oxford Instruments plc

Notes to the Financial Statements Continued

61

10	SHARE OPTION SCHEME EXPENSE Continued
The number and weighted average exercise prices of share options are as follows:
Weighted
average
exercise price

Numberofoptions

Weighted
average
exercise price

Numberofoptions

2008

2008

2007

2007

Outstanding at the beginning of theperiod

£1.93

2,826,523£1.85

3,289,600

Granted during the year

£1.98

604,000£1.78

854,760

Forfeited during the year

£2.74

(202,582)£2.42(234,166)

Exercised during the year

£1.78

(189,824)£1.21(685,627)

Lapsed during the year

£1.52

(296,208)£1.25(398,044)

Outstanding at the year end£1.87

2,741,909£1.93

2,826,523

Exercisable at the year end£1.97

406,768£2.12

424,589

11 financial income
2008

2007

£m

£m

Bank interest receivable

0.3

0.2

Expected return on pension scheme assets

9.3

8.2

Mark to market gain in respect of derivative financial instruments

-

0.1

9.6

8.5

2008

2007

£m

£m

Interest payable and similar charges on bank loans and overdrafts

1.7

0.3

Interest charge on pension scheme liabilities

9.0

8.9

12 financial expenditureMark to market loss in respect of derivative financial instruments

2.3

-

13.0

9.2

Oxford Instruments plc

61

Notes to the Financial Statements Continued

62

13	Income tax expense
Recognised in the income statement
2008

2007

£m

£m

Current year

2.9

2.4

Adjustment in respect of prior years

0.2

-

3.1

2.4

(0.8)

0.6

Current tax expense

Deferred tax expense
Origination and reversal of temporary differences
Adjustment in respect of prior years

-

(0.2)

(0.8)

0.4

2.3

2.8

Profit before income tax

5.0

1.3

Income tax using the UK corporation tax rate (30%)

1.5

0.4

Tax rates in foreign jurisdictions

0.2

0.4

Amortisation of intangible assets

0.1

0.3

Non-tax deductible expenses

0.1

0.2

Profit on disposal of held for sale assets

(0.2)

-

Tax incentives not recognised in the income statement

(0.1)

(0.2)

Temporary differences not recognised for deferred tax

0.2

0.2

Effect of current tax losses not utilised

0.7

2.6

Effect of previous tax losses now utilised

(0.4)

(0.9)

Under/(over) provided in prior years

0.2

(0.2)

Total tax expense

2.3

2.8

Current tax – relating to employee benefits

0.6-

Deferred tax - relating to employee benefits

(3.2)

(6.7)

(2.6)

(6.7)

Total tax expense
Reconciliation of effective tax rate

Effect of:

Taxation recognised directly in equity

62

Oxford Instruments plc

Notes to the Financial Statements Continued

63

14	Earnings per sharea) Unadjusted
The earnings per share is as follows:
2008

2007

pence

pence

Basic

5.6

(3.2)

Diluted

5.5

(3.2)

b) Adjusted
The earnings per share before other operating income, amortisation of acquired intangibles, restructuring andnon-recurring costs, and mark to market gains or losses in respect of certain derivatives is as follows:
2008

2007

pence

pence

Basic

11.7

9.6

Diluted

11.7

9.5

A reconciliation of the profit for the years used to calculate earnings per share to the adjusted profit for the years
used to calculate the adjusted earnings per share shown above is set out below:
2008

2007

£m

£m

Adjusted profit before income tax (note 1)

9.5

7.5

Taxation

(3.7)

(2.8)

Adjusted profit

5.8

4.7

c) Basic
The calculation of basic earnings per share is based on a weighted average number of ordinary shares outstanding
during the year, excluding shares held by the Employee Share Ownership Trust, as follows:
SharesSharesmillionmillionWeighted average number of shares outstanding

49.3

48.9

Less shares held by Employee Share Ownership Trust

0.6

0.7

Weighted average number of shares used in calculation of
earnings per share

48.7

48.2

d)	Diluted
The following table shows the effect of share options on the calculation of both adjusted and unadjusted diluted
basic earnings per share. However, in the prior year in respect of unadjusted earnings per share that effect was
antidilutive and so was excluded from the calculation.

Number of ordinary shares per basic earnings per share calculations

2008

2007

SharesSharesmillionmillion

48.7

48.2

Effect of shares under option

0.3

0.3

Number of ordinary shares per diluted earnings per share calculations

49.0

48.5

Oxford Instruments plc

63Notes to the Financial Statements Continued

64

15

dividends per share

The following dividends per share were paid by the Group:
2008

2007

pence

pence

Previous year interim dividend

2.4

2.4

Previous year final dividend

6.0

6.0

8.4

8.4

The following dividends per share were proposed by the Group in respect of each accounting year presented:
2008

2007

pence

pence

Interim dividend

2.4

2.4

Final dividend

6.0

6.0

8.4

8.4

The final proposed dividend of 6.0 pence per share (2007: 6.0 pence) will not be provided for until authorised byshareholders at the forthcoming Annual General Meeting.
Interim dividends of 2.4 pence per share (2007: 2.4 pence) are provided for when the dividend is paid.
Subject to the approval of the shareholders at the Annual General Meeting on 23 September 2008, the proposed
final dividend will be paid on 23 October 2008 to shareholders registered at the close of business on 26 September
2008. The ordinary shares will be quoted ex-dividend on 24 September 2008. The latest date for exercising the
Dividend Reinvestment Plan (DRIP) Dividend alternative is 29 September 2008. The dividends payable on theshares held in trust have been waived.

64

Oxford Instruments plc

Notes to the Financial Statements Continued
16

65

ACQUISITIONSWorldwide Analytical Systems AG
During the period from 25 July 2007 to 2 August 2007 the Group acquired 100% of the voting rights of Worldwide
Analytical Systems AG based in Uedem, Germany for a net cash consideration of £9.5m. The company is a leading
manufacturer of Arc/Spark optical emission instrumentation.
In the period subsequent to acquisition the company contributed profit before tax of £0.8m to the Group. Had
the acquisition taken place on the first day of the financial year additional revenue of £8.3m and profit of £1.2m
would have been earned by the Group. The following table gives an analysis of the assets acquired and the
goodwill arising.

Book value

Fair value

Fair value

adjustments

to the Group

£m

£m

£m

Intangible assets

0.1

12.2

12.3

Property, plant and equipment

1.2

(0.3)

0.9

Deferred tax assets

-

0.3

0.3

Inventories

2.0

(0.4)

1.6

Receivables

1.1

-

1.1

Net overdraft

(0.3)

-

(0.3)

Payables and provisions

(2.4)

(0.2)

(2.6)

-

(3.7)

(3.7)

(0.8)

-

(0.8)

Deferred tax liabilities
Borrowings
Total net assets acquired

8.8

Goodwill

0.7

Net cash outflow in respect of the purchase*

9.5

Add overdraft acquired

0.3

Net cash outflow on acquisition

9.8* Includes costs associated with the acquisition of £0.2m.

The book value of the assets acquired is based on the financial accounting records at the date of acquisition.
The fair value adjustments relate to the recognition of both customer and technology related intangible assets,
the reduction of certain inventories to net realisable value and the provision for certain liabilities. The goodwill
comprises the value attributable to the employee workforce as well as expected revenue and cost synergies thatwill arise following the integration of the business into the Group.

Oxford Instruments plc

65Notes to the Financial Statements Continued

66

16

ACQUISITIONS Continued

VeriCold Technologies GmbHOn 19 August 2007 the Group acquired 100% of the voting rights in VeriCold Technologies GmbH based in
Ismaning, Germany for a net cash consideration of £2.0m. Further contingent consideration of up to e5.5m ispayable based on post acquisition order intake. The Group’s best estimate of this contingent consideration at thecurrent time is £2.1m. The company is a manufacturer of pulse tube refrigerators.
In the period subsequent to acquisition the company contributed a profit before tax of £0.1m to the Group.
Had the acquisition taken place on the first day of the financial year additional revenue of £2.2m and profit of£0.2m would have been earned by the Group. The following table gives an analysis of the assets acquired andthe goodwill arising.

Fair value

Fair value

Book value

adjustments

to the Group

£m

£m

£m

Intangible assets

-

6.4

6.4

Property, plant and equipment

0.1

-

0.1

Deferred tax assets

-

0.3

0.3

Inventories

0.7

(0.2)

0.5

Receivables

0.2

-

0.2

Payables and provisions

(1.2)

(0.5)

(1.7)

Deferred tax liabilities

-

(2.0)

(2.0)

Total net assets acquired

3.8

Goodwill

0.3

Total purchase cost*

4.1

Less contingent consideration(2.1)

Net cash outflow in respect of the purchase/acquisition

2.0* Includes costs associated with the acquisition of £0.1m.

The book value of the assets acquired is based on the financial accounting records at the date of acquisition.
The fair value adjustments relate to the recognition of both customer and technology related intangible assets,
the reduction of certain inventories to net realisable value and the provision for certain liabilities. The goodwill
comprises the value attributable to the employee workforce as well as expected revenue and cost synergies thatwill arise following the integration of the business into the Group.

66

Oxford Instruments plc

Notes to the Financial Statements Continued
16

67

ACQUISITIONS Continued

Technologies and Devices International Inc
On 9 April 2008 the Group acquired 100% of the voting rights in Technologies and Devices International Inc
based in Silver Spring, Maryland, USA for a net cash consideration of £0.5m. Further contingent consideration of
up to £2.5m is payable based on post acquisition revenue growth. The Group’s best estimate of this contingent
consideration at the current time is £0.7m. The company is a manufacturer and developer of Hydride Vapour
Phase Epitaxy templates.
The following table gives a provisional analysis of the assets acquired and the goodwill arising.
Provisional

Intangible assets

Provisional

Provisional

fair value

fair value

book value

adjustments

to the Group

£m

£m

£m

0.2

3.4

3.6

Receivables

0.1

-

0.1

Payables and provisions

(1.4)

-

(1.4)

Deferred tax liabilities

-

(1.2)

(1.2)

Total net assets acquired

1.1

Goodwill

0.1

Total purchase cost

1.2

Less contingent consideration(0.7)

Net cash outflow in respect of the purchase/acquisition

0.5

The book value of the assets acquired is based on the management accounts at the date of acquisition. The fairvalue adjustment relates to the recognition of technology related intangible assets. The goodwill comprises
the value attributable to the employee workforce as well as expected revenue and cost synergies that will arise
following the integration of the business into the Group.
Oxford Instruments Nordiska AB
On 28 May 2008 the Group acquired 100% of the voting rights in Oxford Instruments Nordiska AB from LINK
Analytical AB based in Lidingo, Sweden for a net cash consideration of £0.6m. The Group then sold its 10%
holding in LINK Analytical AB to the 90% majority shareholder for a nominal amount.
Further contingent consideration of up to £0.6m is payable based on post acquisition revenue growth. The
Group’s best estimate of this contingent consideration at the current time is £0.4m. The company is a distributorof Oxford Instruments NanoAnalysis equipment in Scandinavia.
The remaining disclosure required by IFRS3 has been omitted since due to the timing of the acquisition the initialaccounting is incomplete at the date of publication of this report.

Oxford Instruments plc

67

Notes to the Financial Statements Continued

68

17	property, plant anD equipment
Land and

Plant andFixtures andbuildings

equipment

fittings

Total

£m

£m

£m

£m

Balance at 1 April 2006

16.9

32.4

7.6

56.9

Acquisitions

0.2

3.8

0.4

4.4

Cost

-

(3.4)

-

(3.4)

Transfers to held for sale assets

Disposals

(2.9)

(0.1)

-

(3.0)

Effect of movements in foreignexchange

(0.3)

(1.4)

(0.1)

(1.8)

Balance at 31 March 2007

13.9

31.3

7.9

53.1

Balance at 1 April 2007

13.9

31.3

7.9

53.1

Acquisitions – business combinations

0.8

0.1

0.1

1.0

Acquisitions - other

0.2

3.6

-

3.8

Disposals

(0.1)

(1.2)

(0.1)

(1.4)

Effect of movements in foreignexchange

0.2

0.2

-

0.4

Balance at 31 March 2008

15.0

34.0

7.9

56.9

Balance at 1 April 2006

3.7

24.3

5.5

33.5

Depreciation charge for the year

0.3

2.7

0.5

3.5

Depreciation and impairment losses

-

(3.1)

-

(3.1)

Transfers to held for sale assets

Disposals

(1.0)

-

-

(1.0)

Effect of movements in foreignexchange

(0.1)

(1.1)

(0.1)

(1.3)

Balance at 31 March 2007

2.9

22.8

5.9

31.6

Balance at 1 April 2007

2.9

22.8

5.9

31.6

Depreciation charge for the year

0.3

3.6

0.2

4.1

Disposals

(0.1)

(0.9)

-

(1.0)

Effect of movements in foreignexchange

-

(0.2)

-

(0.2)

Balance at 31 March 2008

3.1

25.3

6.1

34.5

At 1 April 2006

13.2

8.1

2.1

23.4

At 31 March 2007 and 1 April 2007

11.0

8.5

2.0

21.5

At 31 March 2008

11.9

8.7

1.8

22.4

Carrying amounts

68

Oxford Instruments plc

Notes to the Financial Statements Continued
18

69

intangible assets

Cost
Balance at 1 April 2006
Acquisitions - internally developed
Disposals
Effect of movements in foreignexchange
Balance at 31 March 2007
Balance at 1 April 2007
Acquisitions - internally developed
Acquisitions – business combinations
Effect of movements in foreignexchange
Balance at 31 March 2008
Amortisation and impairment losses
Balance at 1 April 2006
Amortisation charge for the year
Impairment charge
Adjustment relating to recognitionof deferred tax asset
Disposals
Balance at 31 March 2007

Goodwill£m

Customer
relatedacquiredintangibles£mTechnology
relatedacquiredintangibles£m

Development
costs
£m

Total
£m

9.6
-

0.9
-

1.1
-

8.0
5.6
(0.2)

19.6
5.6
(0.2)

(0.3)
9.3

0.9

1.1

(0.2)
13.2

(0.5)
24.5

9.3
1.4

0.9
1.7

1.1
17.0

13.2
6.6
-

24.5
6.6
20.1

0.8
11.5

0.5
3.1

2.9
21.0

0.4
20.2

4.6
55.8

0.2
-

0.9
-

0.4
0.2

2.5
1.5
-

4.0
1.5
0.2

0.9
1.1

0.9

0.6

(0.2)
3.8

0.9
(0.2)
6.4

Balance at 1 April 2007
Amortisation charge for the year
Effect of movements in foreignexchange
Balance at 31 March 2008

1.1
-

0.9
1.2

0.6
1.7

3.8
1.9

6.4
4.8

1.1

0.3
2.4

0.2
2.5

0.1
5.8

0.6
11.8

Carrying amounts
At 1 April 2006

9.4

-

0.7

5.5

15.6

At 31 March 2007 and 1 April 2007

8.2

-

0.5

9.4

18.1

At 31 March 2008

10.4

0.7

18.5

14.4

44.0

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs)
that are expected to benefit from that business combination. The carrying amount of goodwill was allocated togroups of CGUs as follows:

Analytical
Superconductivity

2008
£m
6.4
4.0
10.4

2007
£m
4.6
3.6
8.2

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill
might be impaired.

Oxford Instruments plc

69Notes to the Financial Statements Continued

70

18

intangible assets Continued

The impairment test operates by determining recoverable amounts of the relevant cash generating units, whichis calculated as the higher of the fair value less costs to sell or its value in use. The recoverable amount of
the Group’s goodwill is based on value in use calculations. Three year cash flow forecasts prepared by the
management of each CGU are used as a basis for the value in-use calculations which are prepared over a five year
period. The key assumptions are those regarding discount rates, growth rates and expected changes to selling
prices and direct costs during the period. Management estimates discount rates using rates that reflect current
market assessments of the time value of money and the risks specific to the CGU. The growth rates are based on
industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectationsof future changes in the market.
The rate used to discount the forecast cash flows is 8% being the Directors’ estimate of the weighted average
cost of capital of the Company. In both cases the value in use exceeds the carrying amount of goodwill and no
impairment provision is therefore required.
19	available for sale equity securities
2008
Available for sale equity securities

2007

£m

£m

0.6

0.6

Percentage ofcompany
owned

Carryingvalue£mAvailable for sale equity securities at 31 March 2008 comprise:
Security

Principal activity

ARKeX Limited

Supply of gravity-gradiometry exploration andrelated services to the oil, gas and minerals
industries

16.7%

0.3

LINK Analytical AB

Scandinavian distributor of Oxford Instruments
NanoAnalysis X-ray systems for chemicalelemental analysis

10.0%

-

Oxford Diffraction
LimitedX-ray diffraction systems and ancillary products
for chemical crystallography and protein
structure determination

23.0%

0.3

The Group considers that ARKeX Limited and Oxford Diffraction Limited are not associates because in both cases
the Group is unable to exert significant influence over their financial and operating policies due to the dominant
influence exerted by other investors.
The investments relate to unlisted entities which are engaged in the development of new high technology
products. Due to the inherent uncertainties this creates, the Group considers that it is not possible to reliably
estimate the fair value of these investments.
On 4 April 2008 the Group sold its holding in Oxford Diffraction Limited for a gross cash consideration of£3.5m. An additional cash amount of up to £1.1m may be received over the next three years conditional on theperformance of Oxford Diffraction Limited. The profit on disposal on the initial consideration was £3.2m.
During the prior year the Group disposed of its investment in Oxford BioSignals Limited. The proceeds of disposal
were £0.4m. No profit on disposal arose. A fair value movement taken to the statement of recognised income
and expenditure during 2006 was recycled through the income statement.
During the prior year additional “B” round funding resulted in the Group’s percentage holding in ARKeX Ltd
being reduced from 18.9% to 16.7%.
See note 16 for details regarding the transactions occurring after the balance sheet date of the Group’s investment
in LINK Analytical AB.

70

Oxford Instruments plc

Notes to the Financial Statements Continued
20

71

deferred TAX

Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilities

Net

2008

2007

2008

2007

2008

£m

£m

£m

£m

£m

2007
£m

Property, plant and equipment

3.3

2.5

(0.1)

(0.1)

3.2

2.4

Deferred revenue

0.4

0.3

-

-

0.4

0.3

Inventories

1.4

1.2

-

-

1.4

1.2

Employee benefits

6.9

9.7

-

-

6.9

9.7

Provisions

0.6

0.4

-

-

0.6

0.4

Intangible assets

-

-

(9.3)

(2.5)

(9.3)

(2.5)

Other items

0.7

-

(0.5)

(0.1)

0.2

(0.1)

Tax value of loss carry-forwards
recognised

0.1

0.2

-

-

0.1

0.2

Tax assets/(liabilities)

13.4

14.3

(9.9)

(2.7)

3.5

11.6

Set off of tax

(3.8)

(2.7)

3.8

2.7

-

-

Net tax assets /(liabilities)

9.6

11.6

(6.1)

-

3.5

11.6

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
2008
Deductible temporary differences
Tax losses

2007

£m

£m

2.8

2.5

9.2

7.8

12.0

10.3

Tax losses amounting to £0.5m (2007: £1.6m) expire between the year end and 2016. The balance do not expire
under current tax legislation. The deductible temporary differences do not expire under current tax legislation.
Deferred tax assets have not been recognised in respect of these items as it is not probable that future taxable
profits will be available in the subsidiaries concerned against which the Group can utilise the benefits there
from.

Oxford Instruments plc

71

Notes to the Financial Statements Continued

72

20

deferred TAX Continued

Movement in temporary differences during the year
Balance

Foreign

Balance

1 April

Recognised

Recognised

exchange

31 March

2006

in incomein equity

adjustment

2007

£m

£m

£m

£m

£m

Property, plant andequipment

1.6

0.8

-

-

2.4

Deferred revenue

0.4

(0.1)

-

-

0.3

Inventories

1.5

(0.3)

-

-

1.2

Employee benefits

16.5

0.2

(6.7)

(0.3)

9.7

Provisions

0.4

-

-

-

0.4

Intangible assets

(1.3)

(1.1)

-

(0.1)

(2.5)

Other items

(0.1)

-

-

-

(0.1)

Tax value of loss carryforwards recognised

0.1

0.1

-

-

0.2

19.1

(0.4)

(6.7)

(0.4)

11.6

Balance

Foreign

Balance

1 April

Recognised

Recognised

Recognised

exchange

31 March2007

onacquisition

in incomein equity

adjustment

2008

£m

£m

£m

£m

£m

£m

Property, plant andequipment

2.4

-

0.8

-

-

3.2

Deferred revenue

0.3

-

0.1

-

-

0.4

Inventories

1.2

0.1

0.1

-

-

1.4

Employee benefits

9.7

-

0.4

(3.2)

-

6.9

Provisions

0.4

0.4

(0.2)

-

-

0.6

Intangible assets

(2.5)

(5.7)

(0.6)

-

(0.5)

(9.3)

Other items

(0.1)

-

0.3

-

-

0.2

Tax value of loss
carry forwards
recognised

0.2

-

(0.1)

-

-

0.1

11.6

(5.2)

0.8

(3.2)

(0.5)

3.5

21	INVENTORIES
2008

2007

£m

£m

Raw materials and consumables

10.9

8.6

Work in progress

11.0

11.7

Finished goods

13.0

5.3

34.9

25.6

The amount of inventory recognised as an expense comprises cost of sales and, in the prior year, £0.7m included
within restructuring and other non recurring costs.

72

Oxford Instruments plc

Notes to the Financial Statements Continued
22

73

trade and other receivables
2008
£m
48.2
(0.6)
47.6
2.3
3.6
53.5

Trade receivables
Less provision for impairment of receivables
Net trade receivables
Prepayments
Other receivables

2007
£m
40.5
(0.4)
40.1
2.5
2.5
45.1

Trade receivables are non-interest bearing. Standard credit terms provided to customers differ according tobusiness and country, and are typically between 30 and 60 days.
The maximum exposure to credit risk for trade receivables by geographic region was:UK
Continental Europe
North America
Japan
Rest of World

2008
£m
14.2
12.0
15.3
6.6
0.1
48.2

2007
£m
14.4
6.9
13.8
5.4
40.5

2008
£m
29.4
9.8
4.4
4.6
48.2

2007
£m
24.6
7.8
3.4
4.7
40.5

The ageing of trade receivables at the balance sheet date was:Current (not overdue)
Less than 31 days overdue
More than 30 days but less than 91 days overdue
More than 90 days overdue

The movement in the allowance for impairment of trade receivables during the year was as follows:

Balance at start of year
Increase in allowance
Balance at end of year

2008
£m

2007
£m

0.4
0.2
0.6

0.4
0.4

23	Financial Risk Management
The Group’s multinational operations and debt financing expose it to a variety of financial risks. In the course ofits business, the Group is exposed to foreign currency risk, interest rate risk, liquidity risk, and credit risk. Financial
risk management is an integral part of the way the Group is managed. Financial risk management policies are
set by the Board of Directors. These policies are implemented by a central treasury department that has formal
procedures to manage foreign exchange risk, interest rate risk, and liquidity risk, including, where appropriate,
the use of derivative financial instruments. The Group has clearly defined authority and approval limits.
In accordance with its treasury policy, the Group does not hold or use derivative financial instruments for tradingor speculative purposes. Such instruments are only used to manage the risks arising from operating or financial
assets or liabilities or highly probable future transactions.

Oxford Instruments plc

73

Notes to the Financial Statements Continued

74

23	Financial Risk Management Continued
Foreign Currency Risk
Foreign currency risk arises both where sale or purchase transactions are undertaken in currencies other than therespective functional currencies of Group companies (transactional exposures) and where the results of overseas
companies are consolidated into the Group’s reporting currency of sterling (translational exposures). The Grouphas operations around the world which record their results in a variety of different local functional currencies. In
countries where the Group does not have operations, it invariably has some customers or suppliers that transact
in a foreign currency. The Group is therefore exposed to the changes in foreign currency exchange rates between
a number of different currencies but the Group’s primary exposures relate to the US dollar, the Euro, and theJapanese Yen. To reduce uncertainty the Group maintains a rolling hedge equivalent to 80% of the exposure
expected to arise over the next 12 months. The hedge comprises a mixture of fixed forward contracts andoption based products. The remaining 20% is sold on the spot market as it arises. Losses on currency contracts
recognised as a liability as at 31 March 2008 amount to £2.7 m (2007: gain £0.3m).
Changes in the fair value of derivative financial instruments are recognised in the income statement immediately.
However, in order to facilitate a more meaningful comparison of the Group’s performance year on year suchchanges are treated as an adjusting item in the calculation of adjusted earnings (see note 1).
The Group’s translational exposures to foreign currency risks can relate both to the income statement andnet assets of overseas subsidiaries. The Group’s policy is not to hedge the translational exposure that arises
on consolidation of the income statements of overseas subsidiaries. The Group finances overseas company
investments partly through the use of foreign currency borrowings in order to provide a natural economic hedge
of foreign currency risk arising on translation of the Group’s net investment.
Interest Rate Risk
Interest rate risk comprises both the interest rate price risk that results from borrowing at fixed rates of interest
and also the interest cash flow risk that results from borrowing at variable rates. At this time, the majority of
the Group’s borrowings attract floating rates of interest and therefore the Group’s principal interest rate risk is acash flow risk. The Group does not currently use derivative financial instruments to manage either interest rate
price or cash flow risk.
Liquidity Risk
Liquidity risk represents the risk that the Group will not be able to meet its financial obligations as theyfall due. The Group’s approach to managing this risk is to ensure, as far as possible, that it will always havesufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation. The Group manages this risk by maintaining
adequate committed lines of funding from high quality lenders. The facilities committed to the Group as at
31 March 2008 are set out in note 29.
Credit Risk
Credit risk arises because a counterparty may fail to perform its obligations. The Group is exposed to credit
risk on financial assets such as cash balances, derivative financial instruments, trade and other receivables. The
Group’s credit risk is primarily attributable to its trade receivables. The amounts recognised in the balance sheet
are net of appropriate allowances for doubtful receivables, estimated by the Group’s management based onprior experience and their assessment of the current economic environment. Trade receivables are subject tocredit limits, and control and approval procedures in the operating companies.
Due to its large geographic base and number of customers, the Group is not exposed to material concentrationsof credit risk on its trade receivables. Credit risk associated with cash balances and derivative financial instruments
is managed by transacting with financial institutions with high quality credit ratings. Accordingly the Group’s
associated credit risk is limited. The Group has no significant concentration of credit risk. The Group’s maximum
exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial
instruments, in the Group balance sheet.

74

Oxford Instruments plc

Notes to the Financial Statements Continued

75

23	Financial Risk Management Continued
Exposure to credit risk
The carrying amount of financial assets represent the maximum credit exposure. The maximum exposure tocredit risk at 31 March 2008 was £60.3m (2007: £47.6m).
2008

2007

£m

£m

Available for sale equity securities

0.6

0.6

Trade receivables

47.6

40.1

Other receivables

3.6

2.5

Cash and cash equivalents

7.9

3.9

Forward exchange contracts

0.6

0.5

60.3

47.6

The maximum exposure to credit risk for trade receivables is discussed in note 22.
Other receivables include £1.9m in respect of VAT and similar taxes which are not past due.
Capital Management
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary sharesand share options are recognised as a deduction from equity, net of any tax effects. The Board’s policy is tomaintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The Board of Directors monitors both the demographic spread of shareholders andthe level of dividends to ordinary shareholders.
The Board encourages employees to hold shares in the company. Up to 31 March 2008 this has been carried out
through a Save As You Earn option scheme in the UK, as well as various executive share option plans. Full detailsof these schemes are given in note 10. In April 2008 all UK employees were offered the opportunity to take partin a Share Incentive Plan. It is envisaged that no further Save As You Earn options will be offered.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels ofborrowings and the advantages and security afforded by a sound capital position. From time to time the Grouppurchases its own shares in the market; the timing of these purchases depends on market prices. Buy and selldecisions are made on a specific transaction basis by the Board. There were no changes to the Group’s approachto capital management during the year. Neither the company nor any of its subsidiaries are subject to externallyimposed capital requirements. To assist the Board in capital management earnings per share is regularly reported
to them.

Oxford Instruments plc

75Notes to the Financial Statements Continued

76

24

financial instruments

Fair values of financial assets and liabilities
The fair values of financial assets and liabilities together with the carrying amounts shown in the balance sheet
are as follows:
Carrying

Fair

Carrying

Fair

amountvalue

amount

value

2008

2008

2007

2007

£m

£m

£m

£m

Available for sale equity securities

0.6

0.6

0.6

0.6

Trade receivables

47.6

47.6

40.1

40.1

Other receivables

3.6

3.6

2.5

2.5

Cash and cash equivalents

7.9

7.9

3.9

3.9

Derivative financial instruments:
Assets

0.6

0.6

0.5

0.5

Liabilities

(3.3)

(3.3)

(0.2)

(0.2)

Unsecured bank borrowings

-

-

(1.0)

(1.0)

Secured bank borrowings(25.0)(25.0)--

Trade and other payables(48.6)(48.6)(40.4)(40.4)

Bank overdraft

(0.7)

(0.7)

(1.1)

(1.1)

The following summarises the major methods and assumptions used in estimating the fair values of financial
instruments reflected in the above table.
Available for sale equity securities
See note 19.
Derivative financial instruments
Derivative financial instruments are either marked to market using listed market prices or by discounting thecontractual forward price and deducting the current spot rate.
Floating rate borrowings
The fair value of floating rate borrowings approximates to the carrying value because interest rates are atfloating rates where payments are reset to market rates at intervals of less than one year.
Fixed rate borrowings
The fair value of fixed rate borrowings is estimated by discounting the future contracted cash flow using
appropriate interest rates to net present value.
Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect thefair value. All other receivables/payables are discounted to determine the fair value.

76

Oxford Instruments plc

Notes to the Financial Statements Continued
24

77

financial instruments continued

Maturity of financial liabilities
31 March 2008

Bank overdrafts

Carrying
amount£’000

Contractual
cash flows
£’000

Due
withinone year£’000

Due
1 – 5 years
£’000

Due
more than
5 years
£’000

0.7

0.7

0.7

-

-

Secured bank loans

25.0

29.6

1.1

28.0

0.5

Trade and other payables

48.6

48.6

48.6

-

-

Foreign exchange contracts

3.3

2.9

2.9

-

-

77.6

81.8

53.3

28.0

0.5

Carrying
amount£’000

Contractual
cash flows
£’000

Due
withinone year£’000

Due
1 – 5 years
£’000

Due
more than
5 years£’000

Bank overdrafts

1.1

1.1

1.1

-

-

Unsecured bank loans

1.0

1.0

1.0

-

-

Trade and other payables

40.4

40.4

40.4

-

-

Foreign exchange contracts

0.2

0.2

0.2

-

-

42.7

42.7

42.7

-

-

31 March 2007

At the reporting date the interest rate profile of the Group’s interest – bearing financial instruments was:Carrying
amount2008£m

Carrying
amount
2007
£m

7.9

3.9

(25.0)

(1.1)

(0.8)

-

Variable rate instruments
Financial assets
Financial liabilities
Fixed rate instruments
Financial liabilities
Bank overdraft
The bank overdraft is repayable on demand and carries an interest rate of 5.2%.
Sensitivity analysis
At 31 March 2008 it is estimated that a general increase of one percentage point in interest rates would reduce
the Group’s profit before tax by approximately £0.2m (2007: £nil).
As explained in note 23 the Group hedges 12 months forward against foreign currency movements. Accordingly,
exchange rate fluctuations occurring during an operating period have limited impact on reported profit for that
period. Had the Group not adopted this hedging policy then for the year ended 31 March 2008 it is estimatedthat a one percentage point weakening in the value of the US Dollar against sterling would have decreased theGroup’s profit before tax by approximately £0.3m (2007: £0.3m), a one percentage point weakening in the valueof the Euro against sterling would have decreased the Group’s profit before tax by approximately £0.2m (2007:£0.2m) and a one percentage point weakening in the value of the Japanese Yen against sterling would havedecreased the Group’s profit before tax by approximately £0.1m (2007: £0.1m).

Oxford Instruments plc

77Notes to the Financial Statements Continued

78

25

Reconciliation of Cash and Cash equivalents to net Borrowing
2008

2007

£m

£m

Increase/(decrease) in cash and cash equivalents

4.2

(9.6)

Effect of foreign exchange rate changes on cash and cash equivalents

0.2

(0.3)

4.4

(9.9)

Cash outflow from decrease in debt

1.0

1.9

Cash inflow from increase in debt

(24.2)-

Borrowings acquired on acquisition

(0.8)

-

Movement in net cash in the year

(19.6)

(8.0)

1.8

9.8

(17.8)

1.8

Net cash at start of the year
Net (borrowing)/cash at the end of the year
Analysed as:
Cash and cash equivalents (per Balance Sheet)

7.9

3.9

Bank overdrafts

(0.7)

(1.1)

Cash and cash equivalents (per Statement of cash flows)

7.2

2.8

Borrowings(25.0)(1.0)

Net (borrowing)/cash at end of the year

(17.8)

1.8

26 held for sale assets
At the prior year end held for sale assets comprised a property in Eynsham, UK with a carrying value of £2m and aproperty in Abingdon, UK with a carrying value of £5m. Both properties were sold during the year (see note 5).

78

Oxford Instruments plc

Notes to the Financial Statements Continued

79

27	reconcilation of movement in capital and reserves

Total recognised (expense)/
income for the year
Credit in respect of employee
service costs settled by award of
share options
Proceeds from shares issued
Dividends paid

Sharecapital£mSharepremium
account£m

Capitalredemption
reserve£m

Foreignexchangetranslation
reserve£m

Retainedearnings
£m

Total
£m

-

-

-

(1.7)

14.1

12.4

-

-

-

-

0.2

0.2

0.1

0.7

-

-

-

0.8

-

-

-

-

(4.0)

(4.0)

Opening equity shareholders’funds at 1st April 2006

2.4

20.2

0.1

0.9

22.8

46.4

Closing equity shareholders’funds at 31st March 2007

2.5

20.9

0.1

(0.8)

33.1

55.8

£m

£m

£m

£m

£m

£m

-

-

-

3.1

7.2

10.3

Total recognised income forthe year
Credit in respect of employee
service costs settled by award of
share options

-

-

-

-

0.2

0.2

Proceeds from shares issued

-

0.3

-

-

-

0.3

Dividends paid

-

-

-

-

(4.1)

(4.1)

Opening equity shareholders’funds at 1st April 2007

2.5

20.9

0.1

(0.8)

33.1

55.8

Closing equity shareholders’funds at 31st March 2008

2.5

21.2

0.1

2.3

36.4

62.5

The capital redemption reserve represents the nominal value of shares repurchased and then cancelled during
the year ended 31 March 1999.
The foreign exchange translation reserve comprises all foreign exchange differences arising since 1 April 2004
from the translation of the Group’s net investments in foreign subsidiaries into Sterling.
The Group holds 585,265 (2007 595,749) of its own shares in an employee benefit trust. The cost of these sharesis included within retained earnings.

Oxford Instruments plc

79

Notes to the Financial Statements Continued

80

28	CALLED UP SHARE CAPITAL
Issued and fully paid ordinary shares:
2008

2007

Number of shares

Number of shares

49,197,896

48,738,592

At the beginning of the year
Issued for cash
At the end of the year

179,340

459,304

49,377,236

49,197,896

2008

2008

Number of

2007

2007

Number ofshares£mshares£m

58,000,000

2.9

58,000,000

2.9

49,377,236

2.5

49,197,896

2.5

Authorised
Ordinary shares of 5p each
Allotted, called up and fully paid
Ordinary shares of 5p each

NumberAggregate

Considerationof shares

nominal value

per share

Exercise of Savings Related Share Options

53,401£2,670£1.27 - £2.02

Exercise of Executive Share Options

125,939£6,297£1.875 - £2.18

New issues of ordinary shares of 5p each during the
year

2008

OptionPeriod2007

Number

price

when

Numberof shares

range

exercisableof shares

Options subsisting at the year end onunissued ordinary shares:
Executive Share Option Schemes

1,855,560£1.48 - £2.425

01/04/08 – 17/12/17

1,856,707

Savings Related Share Option Scheme

503,610£1.27 - £2.14

01/04/08 – 31/07/12

608,745

Total options subsisting on unissued
ordinary shares

2,359,170

2,465,452

4.8%

5.0%

Percentage of issued share capital
Options subsisting at the year end on
existing ordinary shares held in trust:
Senior Executive Long Term Incentive
Scheme265,000

Nil

15/07/08 – 25/07/14

Executive Share Option Scheme

48,850£1.945 - £1.96

01/04/08 – 23/12/09

Individual Options

Nil

Savings Related Share Option Scheme

68,889Total options subsisting on existing
ordinary shares held in trust

382,739

179,500
52,25050,000£1.64 - £1.75

01/04/08 – 31/07/09

79,321
361,071

The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote pershare at meetings of the Company.

80

Oxford Instruments plc

Notes to the Financial Statements Continued

81

29	borrowings
Borrowings with a book and fair value of £24.2m are supported by a £50m revolving credit facility made available
to Oxford Instruments plc. It is repayable in July 2012 and carries a floating interest rate of LIBOR plus 0.65%
on the first £14m and LIBOR plus 1% on the remainder. It is secured on certain freehold property and certain
intellectual property of the Group. All necessary conditions precedent and covenants were met at 31 March 2008.
It reprices on 28 April 2008. Thereafter repricing occurs after 1, 3 or 6 months at the Group’s option.
Borrowings with a book and fair value of £0.8m relate to a mortgage made available to WAS Worldwide
Analytical Systems AG in respect of a property in Uedem, Germany of which £0.1m is repayable within one year.
The borrowing is denominated in Euro and carries a fixed rate of 4.6% until 2011. It is repayable in instalmentsof £0.1m per year until 2011 and in instalments of £50k per year until 2021.
Borrowings of £1.0m in the prior year relate to a US dollar bank loan made in the US to the Group’s US operation.
It was repayable on demand and carried an interest rate of LIBOR plus 1%. It was not secured on the assets of
the Group.
30	retirement benefit obligations
The Group operates defined benefit plans in the UK and US; both offer pensions in retirement and death benefit
to members. Pension benefits are related to members’ final salary at retirement and their length of service. Bothschemes are now closed to new members.
The Group has opted to recognise all actuarial gains and losses immediately via the Statement of Recognised
Income and Expense (SORIE).
The amounts recognised in the balance sheet are:
UK

USA

Total

UK

USA

Total

2008

2008

2008

2007

2007

2007

£m

£m

£m

£m

£m

£m

Present value of funded obligations

154.0

7.0

161.0

159.4

6.5

165.9

Fair value of plan assets(134.8)(5.0)(139.8)(130.7)(4.4)(135.1)

19.2

2.0

21.2

28.7

2.1

30.8

Recognised liability for defined benefit
obligations

Reconciliation of the opening and closing balances of the present value of the defined benefit obligation
UK

USA

Total

UK

USA

Total

2008

2008

2008

2007

2007

2007

£m

£m

£m

£m

£m

£m

159.4

6.5

165.9

173.2

7.6

180.8

Interest on obligation

8.6

0.4

9.0

8.5

0.4

8.9

Current service cost

2.5

0.4

2.9

3.1

0.6

3.7

Contributions paid by plan participants

0.5

-

0.5

1.0

-

1.0

Benefits paid

(2.5)

(0.3)

(2.8)

(3.2)

(0.2)

(3.4)

Actuarial (gain)/loss on obligation(14.5)

0.1(14.4)(23.2)(0.9)(24.1)

-

(0.1)

(0.1)

-

(1.0)

(1.0)

154.0

7.0

161.0

159.4

6.5

165.9

Benefit obligation at the beginning of
the year

Exchange rate adjustment
Benefit obligation at the end of the year

Oxford Instruments plc

81Notes to the Financial Statements Continued

8230	retirement benefit obligations continued
Reconciliation of the opening and closing balances of the fair value of plan assets
UK

USA

Total

UK

USA

Total

2008

2008

2008

2007

2007

2007

£m

£m

£m

£m

£m

£m

130.7

4.4

135.1

123.3

4.1

127.4

Expected return on plan assets

9.0

0.3

9.3

7.9

0.3

8.2

Contributions by employers

4.3

0.7

5.0

3.8

0.6

4.4

Fair value of plan assets at the beginningof the year

Contributions paid by plan participants

0.5

-

0.5

1.0

-

1.0

Benefits paid

(2.5)

(0.3)

(2.8)

(3.2)

(0.2)

(3.4)

Actuarial (loss)/gain on assets

(7.2)

(0.1)

(7.3)

(2.1)

0.1

(2.0)

-

-

-

-

(0.5)

(0.5)

134.8

5.0

139.8

130.7

4.4

135.1

Exchange rate adjustment
Fair value of plan assets at the end of
the yearDefined contribution schemes
Since 1 April 2001 all new joiners in the UK have been offered participation in the defined contribution Oxford
Instruments Stakeholder Plan. During the year ended 31 March 2008 the Company paid contributions to thescheme on a variable scale up to a maximum of 5% for members who contributed at a rate of at least 2%.
Employees make contributions at a rate of their choice. Other defined contribution schemes are the Oxford
Instruments 1998 Executive Pension Scheme, a UK scheme, and the 401k defined distribution plan in the USA.
Expense recognised in the income statement
2008
Current service cost

2007

£m

£m

2.9

3.7

Interest on obligation

9.0

8.9

Expected return on plan assets

(9.3)

(8.2)

Total – defined benefit

2.6

4.4

Contributions to defined contribution schemes

1.5

1.2

4.1

5.6

2008

2007

The pension costs are recorded in the following lines of the income statement:

82

£m

£m

Cost of sales

1.6

1.6

Selling and marketing costs

0.8

0.8

Administration and shared services

0.9

1.6

Research and development

1.1

0.9

Financial income

(9.3)

(8.2)

Financial expenditure

9.0

8.9

4.1

5.6

Oxford Instruments plc

Notes to the Financial Statements Continued

83

30	retirement benefit obligations continued
Actuarial gains and losses shown in the Statement of recognised income and expense:
2008
Actuarial gain

2007

£m

£m

7.1

22.1

2008

2007

£m

£m

Actual return on plan assets

Expected return on plan assets

9.3

8.2

Actuarial loss

(7.3)

(2.0)

Actual return on plan assets

2.0

6.2

History of experience gains and losses are as follows:
UK
2008

2007

2006

2005

Difference between the expected and actual
return:Amount £m

(7.2)

(2.1)

15.2

1.9

% of scheme assets

(5%)

(2%)

12%

2%

Amount £m

14.5

23.2

(25.1)(6.8)% of the present value of the scheme liabilities

(9%)

(15%)

15%

5%

Experience gains/(losses) on scheme liabilities:

US
2008

2007

2006

2005

Amount £m

(0.1)

0.1

-

-

% of scheme assets

(2%)

2%

-

-

Difference between the expected and actual
return:Experience (losses)/gains on scheme liabilities:
Amount £m

(0.1)

0.9

(0.4)

(1.2)

% of the present value of the scheme liabilities

1%

(12%)

5%

20%

Oxford Instruments plc

83Notes to the Financial Statements Continued

84

30	retirement benefit obligations continued
Defined benefit scheme - United Kingdom
A full actuarial valuation of the UK plan was carried out as at 31 March 2006 and has been updated to 31 March
2008 by a qualified independent actuary. The major assumptions used by the actuary were (in nominal terms):
As at

As at

31 March

31 March

2008

2007

%

%

Discount rate

6.4

5.4

Rate of salary increase

4.4

4.0

Rate of increase to pensions in payment (pre
1997)

2.8

2.5

Rate of increase to pensions in payment (post
1997)

3.4

2.8

Rate of inflation
Mortality – pre and post-retirement – males andfemales

3.4

3.0

PA92 – year of birth:
medium cohort

PA92 – year of birth

The assumptions used in determining the overall expected rate of return of the plan have been set with reference
to yields available on government bonds and appropriate risk margins.
The mortality assumptions imply the following expected future lifetime from age 65:
2008

2007

Pre-retirement – males

22.9

20.9

Pre-retirement – females

25.7

23.9

Post-retirement – males

22.0

19.9

Post-retirement – females

24.9

22.9

The assumptions have been chosen by the Directors from a range of possible actuarial assumptions, which dueto the timescales covered, may not be borne out in practice.
The assets in the plan and the expected rate of return were:Long-term rateof return
expected at
31 March
2008%

Value at
31 March
2008£mLong-term rateof return
expected at
31 March
2007%

Value at
31 March
2007£mEquities

8.0

58.7

8.0

70.4

Corporate bonds

6.4

26.1

5.4

19.9

Gilts

4.5

29.2

4.5

27.0

Cash and other assets

5.3

5.7

5.3

2.8

Absolute return fund

7.3

15.1

7.3

134.8

84

Oxford Instruments plc

10.6
130.7

Notes to the Financial Statements Continued

85

30	retirement benefit obligations continued
Defined benefit scheme - United States
A full actuarial valuation of the US plan was carried out as at 1 January 2005 and has been updated to 31
December 2007 by a qualified independent actuary. Results at 31 March 2008 have been taken to be the same as
those at 31 December 2008. The major assumptions used by the actuary were (in nominal terms):
As at

As at

31 March

31 March

2008

2007

%

%

Discount rate

5.50

5.75

Rate of salary increase

4.00

4.00

Rate of increase to pensions
in payment

0.00

0.00

Rate of inflation

3.00

3.00

RP-2000 combined mortality table,
male and female projected to 2005
with scale AA

RP-2000 combined mortality table,
male and female projected to 2005
with scale AA

Mortality – pre and postretirement

The assumptions used in determining the overall expected rate of return of the plan have been set with reference
to yields available on government bonds and appropriate risk margins.
The assets in the plan and the expected rate of return were:Long termLong term

rate of return

rate of return

expected at

Value atexpected at

Value at

31 March

31 March

31 March

31 March

2008

2008

2007

2007

%

£m

%

£m

Equities

9.2

2.7

9.2

2.3

Bonds

6.1

1.9

6.0

1.8

Property

8.2

0.4

8.4

0.3

5.0

4.4

31	TRADE AND OTHER PAYABLES
2008

2007

£m

£m

Trade payables

19.4

22.3

Social security and other taxes

1.7

1.1

Accrued expenses

21.8

13.9

Other creditors (including deferred consideration)

5.7

3.1

48.6

40.4

Amounts due after more than one year – other creditors

(2.4)

(0.2)

46.2

40.2

Deferred consideration relates to amounts payable in respect of acquisitions made during the year.

Oxford Instruments plc

85

Notes to the Financial Statements Continued

86

32	provisions for other liabilities and charges
Warranties

Other

Total

£m

£m

£m

Balance at 1 April 2007

2.5

0.8

3.3

Provisions made during the year

2.0

0.1

2.1

Provisions used during the year

(1.2)

-

(1.2)

Provisions released during the year

(0.2)

(0.1)

(0.3)

Effect of movements in foreign exchange

0.1

0.1

0.2

Balance at 31 March 2008

3.2

0.9

4.1

Warranty provisions reflect the Group’s standard terms and conditions. In general these apply for a year, and, asa result, the majority of the provision is expected to be utilised within a twelve-month period. Other provisions
relate to obligations in respect of onerous leases and obligations to employees in Japan on termination of theiremployment.
33 operating leases
LeasesNon-cancellable future minimum operating lease rentals are payable as follows:
2008

2007

£m

£m

Less than one year

1.1

0.2

Between one and five years

1.6

4.0

More than five years

3.6

2.3

6.3

6.5

During the year ended 31 March 2008 £1.7m was recognised as an expense in the Consolidated Income Statement
in respect of operating leases (2007: £2.6m).
The leases relate to motor vehicles and various properties used mainly as sales offices.
34

capital commitments

During the year ended 31 March 2008, the Group entered into contracts to purchase property, plant andequipment for £0.1m (2007 £0.2m). These commitments are expected to be settled in the following financial
year.
35

contingencies

Certain subsidiaries of the Group have, in the normal course of business, given guarantees in respect ofperformance bonds.
In an international group of companies a variety of legal claims arise from time to time. The Board, having taken
legal advice, are of the opinion that the ongoing actions and investigations will not have a material impact on
the Group’s financial position.

86

Oxford Instruments plc

Notes to the Financial Statements Continued
36

87

RELATED PARTIESThe Group has a related party relationship with its Directors and Executive officers.
Transactions with key management personnel are disclosed in the Director’s Remuneration Report on pages 32
to 39. There were no other significant transactions with key management personnel in either the current or
preceding year other than the following.
During the year the Company had the following transactions with Imperialise Limited of which Nigel Keen is a
Director:
Purchases
2008

Current liabilities
2007

2008

2007

£m

£m

£m

£m

0.1

0.1

-

-

Equity ownedbythe company
%
100
100
100
*100
*100
*100
*100
*100

Country ofincorporation
EnglandEnglandEnglandEnglandEnglandEnglandEnglandEnglandPrincipal
activity
Holding
Holding
Holding
MarketingTrading
Trading
Trading
Trading

*100
*100
*100
*100
*100
*100
*100
*100
*100
*99.5
*100
*100
*100
*100
*100
*100
*100

USA
USA
USA
USA
USA
USA
USA
China
Denmark
FinlandFranceGermany
Germany
Germany
GermanyJapan
Singapore

Distribution
Holding
Holding
Holding
Trading
Trading
Trading
Trading
Trading
Trading
Distribution
Distribution
Distribution
Manufacturing
Manufacturing
Distribution
Marketing

37 GROUP ENTITIESOxford Instruments Analytical Holdings Ltd
Oxford Instruments Overseas Holdings Ltd
Oxford Instruments Superconductivity Holdings Ltd
Oxford Instruments Overseas Marketing Ltd
Oxford Instruments Analytical Ltd
Oxford Instruments Molecular Biotools Ltd
Oxford Instruments Plasma Technology Ltd
Oxford Instruments Superconductivity Ltd (trading as
Oxford Instruments NanoScience)
Oxford Instruments America Inc
Oxford Instruments OST Holdings LLC
Oxford Instruments (Tennessee) Inc
Oxford Instruments Holdings Inc
Austin Scientific Company
Oxford Instruments X-Ray Technology Inc
Oxford Superconducting Technology
Oxford Instruments (Shanghai) Company Ltd
Oxford Instruments HKL Technologies A/S
Oxford Instruments Analytical Oy
Oxford Instruments SAS
Oxford Instruments GmbH
Oxford Instruments Measurement Systems GmbH
Vericold Technologies GmbHWorldwide Analytical Systems AG
Oxford Instruments KK
Oxford Instruments Pte Ltd

A full list of the Group companies as at 31 March 2008 is available for inspection at the Company’s registeredoffice.
With the exception of holding companies, all the above companies are engaged in advanced instrumentation.
Equity owned by subsidiary companies is indicated by an asterisk (*). All the above companies are included in
the Group accounts.
Oxford Instruments Analytical Oy is accounted for as though it is a 100% subsidiary since the 0.5% minority
interest is not considered material.

Oxford Instruments plc

87Notes to the Financial Statements Continued

88

38

ACCOUNTING ESTIMATES AND JUDGEMENTSManagement discussed with the Audit Committee the development, selection and disclosure of the Group’s
critical accounting policies and estimates and the application of these policies and estimates.
Provisions
Note 32 contains information about provisions. Provisions are judgemental by their nature. Amounts provided
are the Group’s best estimate of exposure based on currently available information.
Impairment of goodwill
Note 18 contains information about the assumptions relating to goodwill impairment tests. Estimating the value
in use requires the Group to make an estimate of the expected future cash flows from the cash generating units
and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
Foreign currency exposure
Note 23 contains information about the foreign currency exposure of the Group and risks in relation to foreignexchange movements.
Pension assumptions
The principal actuarial assumptions applied to pensions are shown in note 30. The actuarial evaluation of pension
assets and liabilities is based on assumptions in respect on inflation, future salary increases, discount rates, returns
on investments and mortality rates. Due to their sizes relatively small changes in the assumptions underlying theactuarial valuation of pension schemes can have a significant impact on the net pension liability included in thebalance sheet and the associated deferred tax asset.
Tax
Note 20 contains information regarding the impact on the carrying value of deferred tax of changes in tax
rates.
39

subsequent events

The interim dividend of 2.4p per share (total cost £1.1m) was paid after the balance sheet date. In addition on 10
June 2008 the Director’s proposed a final dividend of 6.0p per ordinary share (total cost £2.9m). The total amountof £4.0m has not been provided for and there are no income tax consequences.
See note 16 for details of acquisitions made after the balance sheet date and note 19 for details of disposals
made after the balance sheet date.
40	EXCHANGE RATESThe principal exchange rates to sterling used were:

88

Average translation rates

2008

2007

Year end rates

2008

2007

US Dollar

2.01

1.89

US Dollar

1.99

1.96

Euro

1.42

1.47

Euro

1.25

1.47

Yen

228

221

Yen

198

232

Oxford Instruments plc

Parent Company Balance Sheet as at 31 March 2008
Notes

2008

2007

£m

£m

Fixed assets
Tangible assets

c

1.2

1.5

Investments in subsidiary undertakings

d

51.6

51.4

Other investments

d

0.6

0.6

53.4

53.5

85.4

60.2

19.4

19.3

104.8

79.5

Current assets
DebtorseCash at bank and in hand

Creditors: amounts falling due within one year
Bank loans and overdrafts

(1.8)

(1.4)

(12.5)(12.6)(14.3)(14.0)Net current assets

90.5

65.5

Total assets less current liabilities

143.9

119.0

Other creditorsfCreditors: amounts falling due after more than one year
Bank loansg(24.2)-

Provisions for liabilities and charges

h

(0.3)

(0.3)

119.4

118.7

Net assets

Share capital

j

2.5

2.5

Share premium account

j

21.2

20.9

Other reserves

j

7.7

7.7

Profit and loss account

j

88.0

87.6

119.4

118.7

Equity shareholders’ funds

The financial statements were approved by the Board of Directors on 10 June 2008 and signed on its behalf by:
Jonathan Flint					Director						Kevin Boyd
Director

Oxford Instruments plc

89

Notes to the Parent Company Financial Statements
90a) Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are consideredmaterial in relation to the Company’s financial statements, except as noted below.
Basis of preparation
The financial statements have been prepared in accordance with applicable UK GAAP accounting standards andunder the historical cost accounting rules. In accordance with S230(4) of the Companies Act 1985, the Company
is exempt from the requirement to present its own profit and loss account.
In accordance with FRS1 the company is exempt from preparing its own cash flow statement.
In accordance with FRS 8: Related Parties, the company is exempt from such disclosure requirements.
Going concern
The Financial Statements have been prepared on a going concern basis, based on the Directors’ opinion, after
making reasonable enquiries, that the Company has adequate resources to continue in operational existence forthe foreseeable future.
Taxation
The charge for taxation is based on the result for the year and takes into account taxation deferred because oftiming differences between the treatment of certain items for taxation and accounting purposes. Deferred tax
is recognised, without discounting, in respect of all timing differences between the treatment of certain items
for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except asotherwise required by FRS 19.
LeasesOperating lease rentals are charged to the profit and loss account on a straight-line basis over the life of thelease.
Fixed assets and depreciation.
Depreciation is provided to write off the valuation or the cost less estimated residual value of tangible fixed
assets by equal instalments over their estimated useful economic lives as follows:
Freehold buildings 		
Machinery and equipment
Computer equipment 		
Motor vehicles 			
Furniture and fittings 		

50 years
5 to 10 years
4 years
4 years
10 years

Leasehold land and buildings, where the period of the lease is less than 50 years, are written off on a straight-line
basis over the remaining period of the lease. Freehold land is not depreciated.
Post retirement benefits
The Company participates in a group wide pension scheme providing benefits based on final pensionable pay.
The assets of the scheme are held separately from those of the Company. The Company is unable to identify its
share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as
required by FRS 17 Retirement benefits, accounts for the scheme as if it were a defined contribution scheme. As
a result, the amount charged to the profit and loss account represents the contributions payable to the scheme
in respect of the accounting period. Refer to note k for the additional disclosures required by FRS 17.
Foreign currencies
The Company enters into forward exchange contracts to mitigate the currency exposures that arise on sales andpurchases denominated in foreign currencies. Transactions in foreign currencies are converted into Sterling at therate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies aretranslated at the rates ruling at the balance sheet date or at the appropriate forward contract rates. Exchange
profits and losses arising from the above are dealt with in the profit and loss account.

Oxford Instruments plc

Notes to the Parent Company Financial Statements Continueda)91

Accounting Policies Continued

Classification of financial instruments issued by the Company
Following the adoption of FRS 25, financial instruments issued by the Company are treated as equity (ie. forming
part of shareholders’ funds) only to the extent that they meet the following two conditions:i) they include no contractual obligation upon the Company to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under conditions that are potentially unfavourable to
the Company; andii) Where the instrument will or may be settled in the Company’s own equity instruments, it is either a nonderivative that includes no obligation to deliver a variable number of the Company’s own equity instruments or
is a derivative that will be settled by the Company’s exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where
the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in thesefinancial statements for called up share capital and share premium account exclude amounts in relation to thoseshares.
Finance payments associated with financial liabilities are dealt with as part of interest payable and similar charges.
Finance payments associated with financial instruments that are classified as part of shareholders’ funds (seedividend policy), are dealt with as appropriations in the reconciliation of movements in shareholders’ funds.
Own shares held by ESOP trust
Transactions of the Group-sponsored ESOP trust are included in the Group financial statements. In particular, thetrust’s purchase of shares in the company are debited directly to equity.
Share-based payments
The share option programme allows employees to acquire shares of the Company. The fair value of options
granted after 7 November 2002 and those not yet vested as at 1 April 2005 is recognised as an employee expensewith a corresponding increase in equity. The fair value is measured at grant date and spread over the period
during which the employees become unconditionally entitled to the options. The fair value of the options
granted is measured using an option pricing model, taking into account the terms and conditions upon which
the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of shareoptions that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.
When options are granted to employees of subsidiaries of the Company, the fair value of options granted isrecognised as an employee expense in the financial statements of the subsidiary undertaking together with thecapital contribution received. In the financial statements of the Company, the options granted are recognised as
an investment in subsidiary undertakings with a corresponding increase in equity.
Dividends on shares presented within shareholders’ funds
Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they
are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do notmeet these criteria are disclosed in the notes to the financial statements.
Financial guarantee contracts
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies
within its group, the Company considers these to be insurance arrangements, and accounts for them as such. In
this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomesprobable that the Company will be required to make a payment under the guarantee.

Oxford Instruments plc

91

Notes to the Parent Company Financial Statements Continued

92b) Profit for the year
The Company’s profit for the financial year was £4.3m (2007 £nil).
The auditor’s remuneration comprised £69,000 (2007 £65,000) for statutory audit and £nil (2007: £6,000) for tax
advice.
The average number of people employed by the Company (including Directors) during the year was 39 (2007:45). All of these individuals were involved in administration.
The aggregate payroll costs (including Directors) of these people were as follows:
2008

2007

£m

£m

Wages and salaries

3.2

2.8

Social security costs

0.3

0.3

Other pension costs

0.2

0.4

3.7

3.5

The share based payment expense was £nil (2007: £nil).
Full details of the emoluments paid to Directors can be found in the Directors’ Remuneration Report on pages
32 to 39.
c)	Tangible fixed assets
Property£m

Other fixed
assets
£m

Total

Cost
Balance at 1 April 2007
Additions
Disposals
Balance at 31 March 2008

0.3
(0.3)
-

2.9
0.6
(0.2)
3.3

3.2
0.6
(0.5)
3.3

Depreciation
Balance at 1 April 2007
Charge for year
Eliminated on disposals
Balance at 31 March 2008

0.1
(0.1)
-

1.6
0.6
(0.1)
2.1

1.7
0.6
(0.2)
2.1

Net book value
At 31 March 2007

0.2

1.3

1.5

At 31 March 2008

-

1.2

1.2

2008

2007

£m

£m

-

0.2

1.2

1.3

£m

Net book value is analysed by fixed asset category as follows:

Property
Freehold buildings
Other fixed assets
Computer equipment

92

Oxford Instruments plc

Notes to the Parent Company Financial Statements Continued

93d) 	Investments
Investments
in subsidiary

Other

undertakings

investments

Total

£m

£m

£m

67.1

0.6

67.7

Cost or valuation
Balance at 1 April 2007
Additions

0.2

-

0.2

Balance at 31 March 2008

67.3

0.6

67.9

Investments
in subsidiary

Other

undertakings

investments

Total

£m

£m

£m

Amortisation balance
as at 1 April 2007 and 31 March 2008

15.7

-

15.7

Net book value at 31 March 2007

51.4

0.6

52.0

Net book value at 31 March 2008

51.6

0.6

52.2

Other investments at 31 March 2008 comprise:
Investment

Principal activity

Percentage of

ARKeX Limited

Supply of gravity-gradiometry exploration and related
services to the oil, gas and minerals industries

16.7%

Oxford Diffraction
LimitedX-ray diffraction systems and ancillary products
for chemical crystallography and protein structure
determination

23.0%

company owned

The addition to subsidiary investments of £0.2m (2007 £0.4m) relates to the awarding of share options toemployees of subsidiary companies. Details of the subsidiary investments are given in note 37.
On 4 April 2008 the Company sold its holding in Oxford Diffraction Limited for a gross cash consideration of£3.5m. An additional cash amount of up to £1.1m may be received over the next three years conditional on theperformance of Oxford Diffraction Limited. The profit on disposal on the initial consideration was £3.2m.

Oxford Instruments plc

93

Notes to the Parent Company Financial Statements Continued

94e) 	Debtors

Amounts falling due within one year:
Amounts owed by subsidiary undertakings
Other debtors
Derivative financial instruments
Prepayments and accrued income

Amounts falling due after one year:
Deferred tax

2008
£m

2007
£m

84.1
0.6
0.2
0.1
85.0

58.9
0.3
0.3
0.3
59.8

0.4

0.4

85.4

60.2

2008
£m
0.3
10.5
0.7
0.6
0.3
0.1
12.5

2007
£m
0.4
10.2
0.7
0.8
0.2
0.3
12.6

f) 	Creditors: amounts falling due within one year

Trade creditors
Amounts owed to subsidiary undertakings
Tax, social security and sales related taxes
Accruals and deferred income
Derivative financial instruments
Other creditorsg)	Creditors: amounts falling due after one year
Details of the bank loans are included in note 29 on page 81.
h) Provisions for liabilities and charges
Vacant leaseprovision£m
0.3

At beginning and end of the yeari)	Deferred Tax

Deferred tax asset
At beginning and end of the year

2008
£m

2007
£m

0.4

0.4

The amounts of deferred tax assets, representing the full potential liability, are as follows:
Recognised

Excess of depreciation overcorresponding capital allowances
Carried forward tax losses

94

Oxford Instruments plc

Unrecognised

2008

2007
£m

2008

2007
£m

0.4
0.4

0.4
0.4

0.2
0.2
0.4

0.1
0.1

Notes to the Parent Company Financial Statements Continuedi)	Deferred Tax Continued
A deferred tax asset has been recognised in the accounts relating to short-term timing differences and accelerated
capital allowances. The Company has recognised the assets only to the extent that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can be deducted.
j)95

Reserves
SharecapitalBalance at 1 April 2007

£m

Share
premium
account£m

Capitalredemption
reserve£m

Otherreserves£m

Profit andlossaccount
£m

Total
£m

2.5

20.9

0.1

7.6

87.6

118.7

Retained profit for the
year

-

-

-

-

4.3

4.3

Premium on issued shares

-

0.3

-

-

-

0.3

Share options awarded to
employees of subsidiaries

-

-

-

-

0.2

0.2

Dividends paid

-

-

-

-

(4.1)

(4.1)

2.5

21.2

0.1

7.6

88.0

119.4

Balance at 31 March 2008k) Pension commitments
The Company and its employees contribute to the Oxford Instruments Pension Scheme, a defined benefit scheme.
Contributions are based on pension costs across the Group as a whole. The assets of the Scheme are held in a
separate trustee administered fund.
The Oxford Instruments Pension Scheme was closed to new members from 1 April 2001. Since this date new
employees have been invited to join the Oxford Instruments Stakeholder Plan, a defined contribution scheme.
The company makes contributions to this scheme.
The Directors do not believe it possible to allocate the assets and liabilities of the scheme to individual groupmembers on a consistent and reasonable basis. Accordingly, under FRS 17 the Company is exempt from recognising
its share of the net pension deficit and accounts for the scheme as though it were a defined contribution scheme.
The following disclosures relate to the pension commitments for the whole scheme.
The latest actuarial valuation was carried out at 31 March 2006 and updated to 31 March 2008 by a qualified
independent actuary.
The major assumptions used by the actuary were (in nominal terms):
At 31 March

At 31 March

2008

2007

%

%

Rate of increase in salaries

4.4

4.0

Rate of increase in pensions in payment (pre 1997)

2.8

2.5

Rate of increase in pensions in payment (post 1997)

3.4

2.8

Discount rate

6.4

5.4

Inflation assumptions

3.4

3.0

Oxford Instruments plc

95

Notes to the Parent Company Financial Statements Continued

96k)Pension commitments Continued
Long term
Rate of
ReturnExpected at
31 March
2008

Equities
Corporate bonds
Gilts
Property
Cash and otherassetsAbsolute return
fund

Value at
31 March
2008

Long term
Rate of
ReturnExpected at
31 March
2007

Value at
31 March
2007

Long term
Rate of
ReturnExpected at
31 March
2006

Long term
Rate of
ReturnExpected at
31 March
2005

Value at
31 March
2006

Value at
31 March
2005

%

£m

%

£m

%

£m

%

£m

8.0
6.4
4.5
-

58.7
26.1
29.2
-

8.0
5.4
4.5
-

70.4
19.9
27.0
-

7.5
4.9
4.2
6.0

66.5
8.4
26.9
10.6

8.0
n/a
4.7
6.5

56.1
23.6
8.8

5.3

5.7

5.3

2.8

4.5

0.9

4.0

1.6

7.3

15.1

7.3

10.6

7.0

10.0

7.5

8.5

Total market valueof assets

134.8

130.7

123.3

98.6

Present value ofscheme liabilities(154.0)(159.4)(173.2)(139.1)

Deficit in thescheme(19.2)(28.7)(49.9)(40.5)

Related deferred tax
asset *

5.4

8.6

15.0

12.2

Net pension liability(13.8)(20.1)(34.9)(28.3)* Based on 28% (previous years 30%) rate of tax.

The contributions paid by the Company were £0.2m (2007 £0.3m)l) Guarantees
The Company has given a guarantee to the pension scheme in respect of the liability of its UK subsidiaries to thepension scheme.
m)	Commitments
2008

2007

£m

£m

Within one year--

In the second to fifth years inclusive

0.1

0.1

Over five years

-

-

0.1

0.1

Operating leases which expire:

There were no capital commitments as at 31 March 2008 (2007 £nil).
n)	Subsequent events
See note 39 for details of dividends paid or declared after the balance sheet date.

96

Oxford Instruments plc

Notice of the 2008 Annual General Meeting
THIS DOCUMENT IS IMPORTANT
If you are in any doubt as to what action you
should take, you are recommended to consult yourstockbroker, bank manager, solicitor, accountant orother independent professional adviser authorised
under the Financial Services and Markets Act 2000. If
you have recently sold or transferred all your shares in
Oxford Instruments plc please pass this document andthe accompanying Form of Proxy to the purchaser ortransferee, or to the agent through whom the sale ortransfer was effected for transmission to the purchaser
or transferee.
Notice is hereby given that the forty-fourth Annual
General Meeting of Oxford Instruments plc will beheld at 2.30pm on 23 September 2008 at the officesof Oxford Instruments Group Head Office, Tubney
Woods, Abingdon, Oxon, OX13 5QX to transact thefollowing business:
1 Directors’ Report and Accounts
To receive and adopt the Reports and Financial
Statements for the year ended 31 March 2008 and theReport of the Auditors thereon.
2 Final dividend
To declare the final dividend for the year to 31 March2008.
3 Directors’ Remuneration Report
To approve the Directors’ Remuneration Report set
out on pages 32 to 37 of the Reports and Financial
Statements for the year ended 31 March 2008.
4 Re-election of Directors(a) To re-elect Mike Hughes who retires by rotation
but, being eligible, will be proposed for re-election.
(b) To re-elect Kevin Boyd who retires by rotation but,being eligible, will be proposed for re-election.
(c) To re-elect Nigel Keen who is required to retire
annually as he has been a Non-Executive Director for
more than 9 years.
(d) To re-elect Peter Morgan who is required to retire
annually as he has been a Non-Executive Director for
more than 9 years.
(e) To re-elect Mike Brady who is required to retire
annually as he has been a Non-Executive Director for
more than 9 years.
5 Appointment and remuneration of Auditors(a) To appoint KPMG Audit Plc as Auditors to theCompany for the period until the next Annual General
Meeting.
b) To authorise the Directors to agree the remunerationof the Auditors.

6. Permission for the Directors to allot further shares
To consider as an Ordinary Resolution that the authority
conferred by Article 10.1 of the Articles of Association
be renewed until the earlier of the expiry of the next
following Annual General Meeting of the Company
and the date which is fifteen months from the date of
the passing of this Resolution and that the Section 80
amount be £431,138.
7. Relaxation of the restrictions which normally apply
when ordinary shares are issued for cash
To consider as a Special Resolution that the authority
conferred by Article 10.2 of the Articles of Association
be renewed until the earlier of the expiry of the next
following Annual General Meeting of the Company
and the date which is fifteen months from the date of
the passing of this Resolution and that the Section 89
amount be £123,443.
8. Authority to buy back up to 10% of the Company’s
issued share capital
To consider as a Special Resolution that pursuant to
Article 4 of the Articles of Association of the Company
and subject to the provisions of the Companies Act
1985 (“the Act”) the Company be generally andunconditionally authorised to purchase by market
purchase (as defined by Section 163 of the Act) up to
4,937,723 ordinary shares of 5p each in its own capitalsubject to the following:(i) the purchase price for any share so purchased
shall not exceed a sum (exclusive of all expenses)
equal to 105% of the average of the middle market
quotations for ordinary shares for the five businessdays immediately preceding the day of purchase (asderived from the London Stock Exchange Daily Official
List) and shall not be less than the nominal value ofthe share;(ii) the authority shall expire on the earlier of the closeof the following Annual General Meeting or the expiryof fifteen months from the date of the passing of thisResolution;(iii) the Company may make a contract for purchasewhich would, or might, be executed wholly or partly
after the expiry of the authority; and(iv) any shares purchased pursuant to the authority
may be selected by the Directors in any manner as theyfrom time to time deem appropriate.
9. Donations to EU political organisations and EU
political expenditure
To consider as an Ordinary Resolution that the Company
be and is hereby authorised to:(i) make Donations to any one or more EU Political
Organisation which is not a Registered Party; and(ii) incur EU Political Expenditure in an aggregate
amount not exceeding £100,000 per annum during theperiod commencing on the date of this Resolution andending on the date of the Annual General Meeting in2009.

Oxford Instruments plc

97

Notice of the 2008 Annual General Meeting Continued

98

For the purposes of this Resolution, the expressions“Donations”, “EU Political Organisations”, “EU
Political Expenditure” and “Registered Party” have themeanings set out in section 347A of the Companies Act
1985 (as amended by the Political Parties, Elections andReferendums Act 2000).
10. Amendments to the Company’s Articles of
Association
To consider as a Special Resolution that the Articles of
Association in the form laid before the meeting and forthe purposes of identification signed by the Chairman
be and are adopted as the Articles of Association of
the Company in the place and to the exclusion of allexisting Articles of Association.
Meeting notes
1. A member entitled to attend and vote at the AGM
may appoint one or more proxies (who need not be amember of the Company) to attend and to speak andto vote on his or her behalf whether by show of hands
or on a poll. A member can appoint more than one
proxy in relation to the meeting, provided that eachproxy is appointed to exercise the rights attaching todifferent shares held by him. In order to be valid an
appointment of proxy (together with any authority
under which it is executed or a copy of the authority
certified notarially) must be returned, no later than
48 hours before the meeting by one of the following
methods:– in hard copy form by post, by courier or by handto the Company’s registrars, Capita Registrars, Proxy
Department, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU;
– via www.capitashareportal.com.
2. The right to appoint a proxy does not apply to persons
whose shares are held on their behalf by anotherperson and who have been nominated to receive
communication from the Company in accordance with
Section 146 of the Companies Act 2006 (“nominatedpersons”). Nominated persons may have a right underan agreement with the registered shareholder who
holds shares on their behalf to be appointed (or to havesomeone else appointed) as a proxy. Alternatively, if
nominated persons do not have such a right, or do notwish to exercise it, they may have a right under such an
agreement to given instructions to the person holding
the shares as to the exercise of voting rights.
3. In order to facilitate voting by corporate
representatives at the meeting, arrangements
will be put in place at the meeting so that (i) if a
corporate shareholder has appointed the Chairmanof the meeting as its corporate representative with
instructions to vote on a poll in accordance with thedirections of all of the other corporate representatives
for that shareholder at the meeting, then on a poll
those corporate representatives will give voting
directions to the Chairman and the Chairman will vote

98

Oxford Instruments plc(or withhold a vote) as corporate representative inaccordance with those directions; and (ii) if more than
one corporate representative for the same corporateshareholder attends the meeting but the corporateshareholder has not appointed the Chairman of themeeting as its corporate representative, a designatedcorporate representative will be nominated, fromthose corporate representatives who attend, who will
vote on a poll and the other corporate representatives
will give voting directions to that designatedcorporate representative. Corporate shareholders arereferred to the guidance issued by the Institute ofChartered Secretaries and Administrators on proxies
and corporate representatives (www.icsa.org.uk) for
further details of this procedure. The guidance includes
a sample form of representation letter if the Chairman
is being appointed as described in (i) above.
4. The issued share capital of the Company as at 10
June 2008 was 49,389,750 ordinary shares, carrying
one vote each.
5. Pursuant to Regulation 41 of the UncertificatedSecurities Regulations 2001, the Company specifies
that only those shareholders registered in the registerof members of the Company as at 2.30pm on 21
September 2008 shall be entitled to attend or voteat the Meeting in respect of the number of Ordinary
Shares registered in their name at that time. Changes
to entries on the relevant register of securities after
2.30pm on 21 September 2008 shall be disregarded indetermining the rights of any person to attend or voteat the Meeting.
6. Copies of the following documents will be available
for inspection at the Registered Office of the Company
and at the offices of the Company’s solicitors, Laytons,
Carmelite, 50 Victoria Embankment, London EC4Y
0LS during normal business hours on any weekday(Saturdays and public holidays excepted) from the dateof this Notice until the conclusion of the Meeting:(i) the service contracts of the Executive Directors;(ii) the register of interests of Directors (and theirfamilies) in the shares of the Company; and(iii) the written terms of reference of the Board
Committees;(iv) a copy of the company’s existing Articles of
Association showing the amendments as tracked
changes.
The Directors believe that the proposed resolutions
are in the best interests of the Company and its
shareholders, and accordingly unanimously recommend
shareholders to vote in favour of resolutions 1 to
10 inclusive to be proposed at the Annual General
Meeting, as they propose to do so in respect of theirbeneficial shareholdings.
By Order of the Board
Susan Johnson-Brett, Company Secretary
23 July 2008

Notice of the 2008 Annual General Meeting Continued
Explanatory Notes on the Proposed Resolutions
The explanatory notes below summarise the purposeof the Resolutions to be voted upon by shareholders at
this year’s Annual General Meeting.
Resolutions 1 to 6 and 9 will be proposed as ordinary
resolutions. More than 50% of the votes cast must
support these resolutions in order for them to bepassed. Resolutions 7, 8 and 10 will be proposed as
special resolutions and 75% or more of the votes castmust support them in order for these resolutions to bepassed.
Resolution 1 –Shareholders will be asked to approve
the adoption of the Reports and Financial Statements
for the year ended 31 March 2008.
Resolution 2 – Shareholders will be asked to approve
payment of a final dividend of 6p per ordinary sharefor the year ended 31 March 2008. If approved at theAnnual General Meeting, the dividend will be paid on
23 October 2008 to shareholders registered at the closeof business on 26 September 2008.
Resolution 3 – Shareholders will be asked to approve
the adoption of the Directors’ Remuneration Reportfor the year ended 31 March 2008. Under the
Directors’ Remuneration Report Regulations 2002,
Directors are required to ask shareholders to vote on
the Directors’ Remuneration Report (shown on pages
32 to 39 of the Annual Report and Accounts 2008).
The Directors, who have unanimously endorsed the
Directors’ Remuneration Report, consider that asking
the shareholders to vote on this Report facilitatesaccountability and transparency.
Resolution 4 – The Company’s Articles of Association
state that at each Annual General Meeting, thefollowing Directors must retire from office: (i) any
Director who has held office for three years or moresince his last election or for whom the Meeting is thethird Annual General Meeting since he was last elected,
and (ii) one third of the Directors at the commencementof the Annual General Meeting. All Directors take it inturn to retire in this way. This gives shareholders the
chance to confirm their re-appointments. At the 2008
Annual General Meeting Mike Hughes and Kevin Boyd
are retiring under this provision and, being eligible,
are standing for re-election.
(a) Mike Hughes is an Independent Non-Executive
Director and joined the Board in 2004. He is a memberof the Audit, Remuneration and Nomination Board
Committees.
(b) Kevin Boyd, Group Finance Director, was firstelected at the Annual General Meeting in 2006, having
been appointed by the Board as an Executive Director
in August of that year.
(c) Nigel Keen, Chairman, was first elected at the Annual
General Meeting in 1999 and as of February 2008 has

served on the Board for nine years. He is currently
Chairman of the Nomination and Remuneration
Committees as the Board considers that for a small
company the Chairman’s prime roles are: to procure
an excellent strategy for the business; to recruit andretain the best available management team to execute
this strategy; to put in place a Board of independent
directors whose experience can add value to thework of the management; and to ensure that thebusiness maintains the highest standard of corporate
governance. In order to fulfil these obligations theBoard believes that it is appropriate and necessary for
the Chairman of the Board to also be Chairman of theNomination and the Remuneration Committees. Nigel
Keen also serves as Chairman of Oxford Instruments
Pension Trustee Limited, which is the Trustee of the UK
defined benefit pension scheme.

99(d) Peter Morgan is an Independent Non-Executive
Director and as of April 2008 had served on the Board
for nine years. He is currently Chairman of the Audit
Committee and a member of the Remuneration and
Nomination Committees. Peter Morgan has indicatedhis intention to retire as Chairman of the Audit
Committee at the end of 2008 and the Board is currently
in the final stage of appointing a new non-executive
director to replace him and to become Chairman of
the Audit Committee. He first became a Non-Executive
Director of the Company in 1999; accordingly the
Board has considered whether it is appropriate in viewof his length of service that he continue in office andif so whether he should continue to be considered to
be independent. After careful consideration, taking
into account the composition of the board as a whole,
his wide ranging commercial experience unrelated to
the Group or other members of the Board and the factthat he qualifies as independent in all other criteria
referred to in the Combined Code, the Board has
concluded that it is appropriate that he continues in
office until the next Annual General Meeting and thathe should properly be considered to be independent.
(e) Mike Brady is Deputy Chairman and (until July 2007)
Senior Independent Director and as of June 2008 hadserved on the Board for thirteen years. He is currently amember of the Audit, Remuneration and Nomination
Board Committees. Mike Brady first became a NonExecutive Director of the Company in 1995; accordingly
the Board has considered whether it is appropriate inview of his length of service that he continue in office
and if so whether he should continue to be considered
to be independent. Having taken into account his
technical expertise as the only Non-Executive Director
from a scientific profession; the value of that expertise
to Board discussions; the strength of his professionaland business interests unrelated to the Group or othermembers of the Board; his continual constructive
probing of the technical aspect of proposals consideredby the Board; the composition of the Board generally
and the fact that he qualifies as independent in allother criteria referred to in the Combined Code, theBoard has concluded that it is appropriate that he

Oxford Instruments plc

99

Notice of the 2008 Annual General Meeting Continued

100

continues in office and that he should properly beconsidered to be independent. This year, Nigel Keen,Peter Morgan and Mike Brady retire in accordancewith the provisions of the Combined Code and offer
themselves for re-election to allow shareholders theopportunity to express their views on the matter.
In reviewing the recommendations of the Nomination
Committee concerning these re-elections, the Board has
concluded that each of the Non-Executive Directors inquestion is independent in character and judgment andcontinues to make effective and valuable contribution
to the Board and to demonstrate commitment to therole. The formal performance evaluations have shownthat each of their performances are still effective
and the Board feel that they have all demonstrated
commitment to the role. The Board unanimously
recommends their re-election.
The biographical details of all the Directors standing
for re-election are set out on pages 20 to 21 of theAnnual Report and Accounts 2008.
Resolutions 5 (a) and (b) – The Company is required
to appoint auditors at each general meeting at which
accounts are laid before the shareholders. The auditors
are appointed from the conclusion of the forthcoming
Annual General Meeting until the conclusion ofnext year’s Annual General Meeting. Following
the recommendation of the Audit Committee,
shareholders will be asked to appoint KPMG Audit
Plc as the Company’s auditors until next year’s Annual
General Meeting and to authorise the Directors to set
their fees.
Resolution 6 – This Resolution lifts the restrictions
which would apply to the Directors’ power to allot or
agree to allot new shares and will allow the Directors
to allot or agree to allot further relevant securities
up to an aggregate nominal amount of £431,138.
This represents the unissued ordinary share capital on
31 March 2008. This authority replaces the previous
power of the Directors to allot relevant securities
and, if passed, will lapse at the earlier of the Annual
General Meeting following its passing or, if later, on
22 December 2009. The Directors have no present
intention of allotting new ordinary shares, other thanpursuant to the exercise of options under employees’
share schemes. The Company presently holds notreasury shares.
Resolution 7 – Unless they are given an appropriate
authority, Directors may allot new equity shares(including treasury shares) for cash (excluding sharesissued under employees’ share schemes) only if they
have first been offered to existing shareholders inproportion to their holdings. There may however beoccasions when in order to act in the best interests ofthe shareholders and the Company, the Directors willneed the flexibility to finance business opportunities

100

Oxford Instruments plc

as they arise by the issue of a small number of sharesfor cash in circumstances such as the acquisition of a
new company or business by the Group. The maximum
number of ordinary shares to be covered under the
power, with the exception of a rights issue or otherpre-emptive offers, is 2,468,861 which represents 5%of the issued ordinary share capital on 31 March 2008.
This Special Resolution replaces the Directors’ existing
authority and, if passed, will lapse at the earlier of theAnnual General Meeting following its passing or iflater, on 22 December 2009.
Resolution 8 – This Special Resolution is a renewal of
the authority granted to Directors at the 2007 Annual
General Meeting. It allows the Company to buy backup to 4,937,723 of its issued ordinary shares on thestock market. This is equal to 10% of the Company’s
issued share capital on 31 March 2008. The Resolution
sets out the lowest and highest prices the Company
can pay for the shares.
The Directors are committed to creating shareholder
value. Buying back the Company’s shares is one of theoptions they keep under review. The Directors will
only implement such purchases if they think it is in
the shareholders’ best interests. Before making sucha decision they would consider the effect on earnings
per share.
The Companies (Acquisition of Own Shares) (Treasury
Shares) Regulations 2003 allow companies to holdshares acquired by way of market purchase in treasury,
rather than having to cancel them. The Company may
therefore consider holding any of its own shares thatit purchases pursuant to the authority conferred bythis Resolution as treasury shares as an alternative
to cancelling them. This would give the Company
the ability to re-issue such shares quickly and costeffectively, and would provide the Company withadditional flexibility in the management of its capitalbase. The Directors believe that it is desirable for theCompany to have this flexibility.
Unless the Directors determine that they are to beheld as treasury shares (see above) any shares in
its own capital purchased by the Company shall becancelled and the number of shares in issue will be
reduced accordingly. Shares held in treasury will not
automatically be cancelled and will not be taken into
account in future calculations of earnings per share(unless they are subsequently resold or transferred outof treasury).
No dividends will be paid on shares whilst held intreasury and no voting rights will be exercisable inrespect of treasury shares.
This power will automatically lapse at the end of theCompany’s next Annual General Meeting or on 22
December 2009 whichever is earlier.

Notice of the 2008 Annual General Meeting Continued
Resolution 9 –The Company did not make any donations
to political parties in the European Union in the year
under review and it is the Company’s current policy
not to do so. However, the Political Parties, Elections
and Referendums Act 2000 (“PPERA”) effective fromFebruary 2001, defines EU Political Organisations
and Donations very widely and, as a result, in certain
circumstances, donations intended for charitable orsimilar purposes may now be regarded as political innature.
In order to comply with its obligations and to avoid
any inadvertent infringement of PPERA, the Company
considers it is prudent to seek shareholders’ approval
for a maximum aggregate level of donation. Resolution
9 seeks authority for the Company to make Donations
to EU Political Organisations or incur EU Political
Expenditure not exceeding £100,000 per annum.
The Company has no present intention of using thisauthority for any purpose other than a continuationof normal business and employment practices. In
particular this authority will not be used to make any
political donations as that expression would have been
understood before PPERA became law.
This authority would last until the conclusion of theCompany’s Annual General Meeting in 2009.
Resolution 10 – The principal changes to the Articles
of Association are summarised below and a copy of
the Company’s existing Articles of Association (“theExisting Articles”) showing the amendments as tracked
changes is available for inspection as stated at note 6
to the notice of the meeting:(a)	Statutory Provisions
The Existing Articles contain references to
the Companies Act 1985 and these have been
amended to cause them to correspond with therelevant provisions of the 2006 Act both in thedefinitions clause and throughout the Existing
Articles.
(b)	Extraordinary Resolutions
The concept of extraordinary resolutions has beenabandoned under the 2006 Act and accordingly
those provisions of the Existing Articles whichrefer to extraordinary resolutions have been
amended appropriately.
(c)

General Meetings
The provisions of the Existing Articles relating to
the convening of general meetings and notice
periods for doing so are amended to conformto the relevant provisions of the 2006 Act. In
particular, a general meeting to consider a special
resolution now requires only 14 days’ noticeinstead of the former 21 days’ notice.

(d)	Voting
The provisions of the Existing Articles relating
to the appointment and powers of proxy areamended to reflect the relevant provisions of the2006 Act. In particular, proxies may vote on a showof hands and not only on a poll; multiple proxies
may be appointed provided that each proxy is
appointed to exercise the rights attached todifferent shares held by the appointing member.

101(e)	Corporate Representatives
The new Articles enable a corporate shareholder
to appoint separate representatives to exercise
the rights attached to different shares heldby it and permit those rights to be exercised indifferent ways by the respective representatives.
(f)	Directors’ Conflicts of Interest
The 2006 Act sets out Directors’ general duties
and as from 1 October 2008 these duties include
the obligation that a director avoids any situation
where he has or can have a direct or indirectinterest which conflicts or may conflict with
the interests of the Company. The obligation is
widely-drafted and could include circumstanceswhere the Company’s interests are not prejudiced;
accordingly, the 2006 Act specifically empowers
directors to authorise conflicts and potential
conflicts where appropriate if the Articles of
Association of the company contain a provision tothis effect and it also permits that such Articles of
Association to contain other provisions for dealing
with conflicts of interest so as to avoid breachesof duty. The new Articles give the directors theauthority to give such approval and include otherprovisions to allow conflicts of interest to be dealt
with in a way similar to the current position. The
new Articles contain safeguards which will apply
when directors decide whether or not to give
authority in respect of a conflict or potential
conflict: only directors with no interest in thematter under consideration may participate in
the relevant decision and in doing so they must
act in a way which they consider in good faith will
be most likely to promote the company’s success.
The directors may impose limits or conditions
in giving authority where they feel this to beappropriate.
In addition, to avoid difficulties arising in relation
to confidential information in the context of aconflict, the new Articles contain provisions inthis respect.
(g)	Execution of Documents
The 2006 Act amends the ways in which acompany may execute documents and the new
Articles contain provisions in this regard.

Oxford Instruments plc

101

Historical Financial Summary under UK GAAP
102

2004
£m
Profit and loss accountGroup and share of joint venture turnoverLess share of joint venture turnoverGroup turnover *193.1(10.8)
182.3

Group operating profit before goodwill, exceptional items and discontinued businesses**
Exceptional items
Discontinued businesses before goodwill **Goodwill amortisation
Group operating profit
Group share of operating loss of joint venture
Total operating profit
Loss on sale of business before goodwill
Profit on disposal of investment before goodwill
Goodwill previously written off
Net interest payable
Profit on ordinary activities before tax
Taxation
Profits attributable to shareholders

7.9
(1.6)
0.1
(0.7)
5.7
(0.2)
5.5
6.8
(0.2)
(0.2)
11.9
(1.9)
10.0

Balance sheet
Intangible assets – goodwill
Tangible fixed assets
Investments

2.6
32.6
1.6

Stocks
Debtors
Other creditors
Net current assets, excluding net cash

28.5
58.9
(47.5)
39.9

Cash at bank and on short term deposits
Bank loans and overdrafts
Net cash

23.2
(2.5)
20.7

Provisions for liabilities and charges
Net assets employed

(5.3)
92.1

Equity shareholders’ funds ***92.1

Cash flow
Net cash inflow from operating activities
Interest and dividends, paid and received
Taxation
Investing activities
Net cash inflow before management of liquid resources and financing

17.8
(4.0)
(2.4)
6.1
17.5
pence

Per ordinary share
Earnings
Earnings from continuing operations before exceptional items **Dividends

21.3
25.7
8.4

Employees
Average number of employees

1,537* Not adjusted for change of accounting policy regarding revenue in 2007.
** After adjusting for disposal of Medical business 2004 only.
*** After deducting investment in own shares 2004.

Oxford Instruments plc

Historical Financial Summary under IFRS
Income statement
Revenue
Trading profit
Other operating income
Amortisation of acquired intangibles
Restructuring and non-recurring costs
Operating profit/(loss)
Net financing costs
Profit/(loss) before taxation
Income tax expense
Loss after taxation but before profit on
discontinued operations
Profit from discontinued operations, netof taxProfit/(loss) for the year
Balance sheet
Property, plant and equipment
Intangible assets
Available for sale equity securities
Deferred and current tax
Inventories
Trade and other receivables
Held for sales assets
Trade and other payables
Net current assets excluding net cash
Cash and cash equivalents
Bank borrowings
Net cash
Provisions and other items
Retirement benefit obligations
Net assets employed
Capital and reserves attributable to thecompany’s equity holders
Cash flow
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net increase/(decrease) in cash
equivalents

2005
£m

2006
£m

2007
£m

2008
£m

135.8

147.4

161.6

176.5

7.4
0.2
(1.3)
(6.2)
0.1
0.1
(1.7)

4.4
2.0
(0.2)
(6.7)
(0.5)
(0.4)
(0.9)
(2.5)

8.3
(1.1)
(5.2)
2.0
(0.7)
1.3
(2.8)

10.6
0.7
(2.9)
8.4
(3.4)
5.0
(2.3)

(1.6)

(3.4)

(1.5)

2.7

7.2
5.6

(3.4)

(1.5)

2.7

23.0
12.5
1.6
14.1
23.9
46.5
5.4
(44.3)
82.7
28.6
(2.1)
26.5
(7.9)
(43.3)
58.0

23.4
15.6
1.0
18.1
27.1
45.4
5.0
(39.0)
96.6
12.7
(2.9)
9.8
(6.6)
(53.4)
46.4

21.5
18.1
0.6
10.3
25.6
45.6
7.0
(40.4)
88.3
2.8
(1.0)
1.8
(3.5)
(30.8)
55.8

22.4
44.0
0.6
1.5
34.9
54.1
(48.6)
108.9
7.2(25.0)(17.8)(7.4)(21.2)
62.5

58.0

46.4

55.8

62.5

5.9
15.3
(14.7)

(8.0)
(7.0)
(1.2)

5.2
(9.7)
(5.1)

(0.1)
(15.1)
19.4

6.5(16.2)

(9.6)

4.2

pence

pence

pence

pence

Per ordinary share
Earnings – continuing
Adjusted earnings *Dividends – excluding special dividend
Dividends – special

(3.0)
13.9
8.4
25.0

(7.2)
3.9
8.4
-

(3.2)
9.6
8.4
-

5.6
11.7
8.4
-

Employees
Average number of employees **

1,325

1,412

1,388

1,501

* Before other operating income, amortisation of acquired intangibles, restructuring and non-recurring costs and mark tomarket gains or losses in respect of certain derivatives.
** Employee numbers in 2005 and 2006 exclude temporary employees.

Oxford Instruments plc

103

Shareholder Information
104

Financial calendar
27 February 2008
29 February 2008
29 February 2008
31 March 2008
7 April 2008
10 June 2008
10 June 2008
Late July
23 September 2008
24 September 2008
26 September 2008
29 September 2008
23 October 2008

Ordinary shares quoted ex-dividend
DRIP date (Dividend Reinvestment Plan)
Record date for interim dividend
Financial year end
Payment of interim dividend
Announcement of preliminary results
Announcement of final dividend
Publication of Annual Report
Annual General Meeting
Ordinary shares quoted ex-dividendRecord date for final dividend
DRIP Date
Payment of final dividend

Administrative enquiries concerning shareholdings
Administrative enquiries concerning shareholdings in Oxford
Instruments plc, such as the loss of a share certificate, dividend
payments, or a change of address should be directed, in thefirst instance, to the Registrar, Capita Registrars.
Capita Registrars
Northern House, Woodsome Park, Fenay Bridge,
Huddersfield, West Yorkshire HD8 0GA
Tel 0871 664 0331
Correspondence should refer to Oxford Instruments plc
and state clearly the registered name and address of theshareholder. Please notify the Registrar promptly of any
change of address.
Dividend bank mandates
If you wish dividends to be paid directly into a bank orbuilding society account and notification to be sent to yourshareholder register address, please contact the Company’s
Registrar at the address given above for a dividend mandate
form.
Consolidation of share certificatesIf your total registered ordinary shareholding is represented
by several share certificates, you may wish to have these
replaced by one consolidated certificate. There is no charge
for this service. You should send your share certificates to
the Company’s Registrar (address as above), together with aletter of instruction.
Capita Share Dealing Services
A quick and easy share dealing service to either sell or buy
shares in many leading UK companies is provided by Capita
Share Dealing Services. An on-line and telephone facility isavailable providing our shareholders with an easy to accessand simple to use service.
There’s no need to pre-register and there are no complicatedforms to fill in. The online and telephone dealing service
allows you to trade “real time” at a known price which will
be given to you at the time you give your instruction.
To deal on-line or by telephone all you need is your surname,
Investor Code (IVC*) reference number, full postcode andyour date of birth. Your Investor Code can be found on a

recent share certificate, statement or tax voucher. Please
have the appropriate documents to hand when you log on
or call, as this information will be needed before you canbuy or sell shares.
For further information on this service, or to buy and sellshares, please contact:www.capitadeal.com (online dealing)
0871 664 0446 (telephone dealing – calls cost 10p per minuteplus network extras)
Full terms, conditions and risks apply and are available on
request or by visiting www.capitadeal.com.
This is not a recommendation to buy or sell shares. Remember
the price of shares can go down as well as up, and you are
not guaranteed to get back the amount that you originallyinvested.
* Should you not be able to locate your IVC number, pleasecontact Capita Registrars on 0871 664 0313 (calls cost 10p per
minute plus network extras)
Shareholder enquiries
Shareholders who have questions relating to the Group’sbusiness or who wish to have additional copies of the Annual
Report and Accounts or Interim Statement should apply to:Company Secretary
Oxford Instruments plc
Tubney Woods, Abingdon, Oxon OX13 5QX
Tel 01865 393200
Fax 01865 393442
E-mail info.oiplc@oxinst.com
Website www.oxford-instruments.com
Company registration
Registered office: Tubney Woods
Abingdon Oxon OX13 5QXRegistered number: 775598
Registered in EnglandWebsite – www.oxford-instruments.com
Oxford Instruments has an extensive website which gives
details of all its products and services, contact information,
vacancies and latest news announcements. An interactive
investor relations section gives information on recent
trading reports, share price data and forthcoming events.
During 2008, the web site will be redesigned and relaunchedto reflect the extensive range of applications and processes
that Oxford Instruments tools and systems address.
Share dealing scheme
In association with JPMorgan Cazenove Limited a low
cost share dealing service has been introduced providing
shareholders with a simple way of buying and selling Oxford
Instruments plc ordinary shares. Further information isavailable from the Company Secretary or:
JPMorgan Cazenove Limited
20 Moorgate, London, EC2R 6DA
Tel 020 7155 5377
Fax 020 7155 9220

Analysis of shareholders as at 31 March 2008
Size of shareholding
Up to 5,000 shares
5,001 to 50,000 shares
50,001 to 200,000 sharesOver 200,000 shares
Total

Oxford Instruments plc

Number ofholders% of total

Total holding% of total

2,660
190
50
38
2,938

90.54
6.47
1.70
1.29
100.001,740,118
2,871,387
5,199,549
39,566,182
49,377,236

3.52
5.82
10.53
80.13
100.00Oxford Instruments Directory
Oxford Instruments plc

Plasma Technology

Regional Sales and Service Offices

Head OfficeTubney Woods, Abingdon
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393442
email info.oiplc@oxinst.com

Plasma etching, deposition
equipment and nanostructure
fabrication
North End, Yatton, Bristol
BS49 4AP, UK
Tel +44 (0) 1934 837000
Fax +44 (0) 1934 837001
email plasma.technology@oxinst.com

China
Room 714, Tower 3
Henderson Centre,
No. 18 Jianguomennei Avenue,
Beijing 100005, China
Tel: 86 (0)10 6518 8160/1/2
Fax: 86 (0)10 6518 8155
email bj@oichina.cn

12214 Plum Orchard Drive
Silver Spring
MD 20904, USA
Tel +1 301 572 7834
Fax +1 301 572 6435
email welcome@tdi.com

Room 14-F,
No. 1 Plaza,No. 800 Nanjing East Road
Shanghai 200001, P. R. China
Tel : +86 (0)21 6360 8530/1/2/3
Fax: +86 (0)21 6360 8535
email sh@oichina.cn

Industrial Analysis
X-ray Fluorescence, X-ray
Technology, Optical Emission
Spectroscopy, Coating Thickness
Measurement
Halifax Road, High Wycombe,
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email analytical@oxinst.com
P.O. Box 85 (Nihtisillankuja 5)
FI-02631 Espoo, Finland
Tel: +358 9 329 411
Fax:+358 9 32941 300
Email info@oxinst.fi
945 Busse Road,
Elk Grove Village,
Illinois 60007, USA
Tel +1 847 439 4404
Fax +1 847 439 4425
email info@msys.oxinst.com
360 El Pueblo Road
Scotts Valley, CA, 95066, USA
Tel +1 831 439 9729
Fax +1 831 439 6051
email sales@oxfordxtg.com
Wellesweg 3147589 Uedem, Germany
Tel +49 (0) 2825 9383-0
Fax +49 (0) 2825 9383-100
email info@was-ag.com

NanoAnalysis
X-ray Microanalysis andElectron Backscatter Diffraction
Halifax Road, High Wycombe,
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email nanoanalysis@oxinst.com

NanoScience
Physical Science : low temperatureand high vacuum environments
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email nanoscience@oxinst.com

No.129, Lane 150
Pingbei Road, Xinzhuang
Industrial Area,
Minhang District, Shanghai,
201109, China
Tel: +86 (0)21 6490 8580/8280
Fax: +86 (0)21 6490 4042
email sh@oichina.cn

Bahnhofstrasse 21
85737 Ismaning
GermanyTel +49 89 9699 8560
Fax +49 89 9699 8569
email info@vericold.com

Room2112 Bai Hui Plaza,
193 Zhong Shan Wu Road,
Guangzhou 510030, China
Tel : +86 (0)20 8364 9990/1
Fax: +86 (0)20 8364 9996
email gz@oichina.cn

Molecular Biotools

Czech Republic
Velvarska 13, CZ-160 00 Praha
Czech Republic
Tel +420 233 343 264
Fax +420 224 311 724
email info@oxford.de

In-vitro dynamic nuclear
polarising (DNP) systems, NMR, andimaging systems
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email molecularbiotools@oxinst.com
8403 Cross Park Drive, Suite 3F
Austin, Texas 78754, USA
Tel +1 512 339 0640
Fax +1 512 339 0620
email benchtopNMR@ma.oxinst.com

Oxford Superconducting
Technology

Majsmarken 1
Hobro
DK 9500
Denmark
Tel: +45 9657 2600
Fax: +45 9657 2609
email hkl@oxinst.com

Superconducting wire and MRI
support services
600 Milik Street, P O Box 429,
Carteret,
New Jersey 07008-0429, USA
Tel +1 732 541 1300
Fax +1 732 541 7769
email sales@ost.oxinst.com

Lejonvägen 28
Box 1097
S-18122 Lidingö
SwedenTel +46 8 544 81550
Fax +46 8 544 81558
email sales@nordiska.se

Austin Scientific
Cryogenic pumps and compressors
4114 Todd Lane, Austin,
Texas 78744, USA
Tel +1 512 441 6893
Fax + 1 512 443 6665
email cryo-sales@oxinst.com

Designed and produced by Wave Seven Ltd www.wave-seven.co.uk

105

Japan
Haseman Bldg., 2-11-6 Tomioka,
Koto-ku, Tokyo 135-0047, Japan
Tel +81 (0)3 5245 3251
Fax +81 (0)3 5245 4472
email info@oxinst.co.jp
Shin-Osaka Nishiura Bldg.,
2-7-38 Nishi-Miyahara,
Yodogawa-ku,
Osaka 532-0004, Japan
Tel +81 (0)6 6350 0555
Fax +81 (0)6 6350 0880
email info@oxinst.co.jp
Latin America
13575 58th Street N. - Suite 154,
Clearwater, Florida 33760, USA
Tel +1 727 538 7702
Fax +1 727 538 4205
email oxford@gate.net
RussiaDenisovskiy per. 26
105005 Moscow
Russian Federation
Tel +7 (095) 933 51 23
Fax +7 (095) 933 51 24
email info@oxford.de
Singapore
10 Ubi Crescent #04-81
Ubi Tech Park Lobby E
Singapore 408564
Tel +65 6337 6848
Fax +65 6337 6286
email oi.admin@oxford-instruments.com.sg

Taiwan1F, No. 23, Jing-Shang 19th Street,
FranceHsinchu Taiwan
Bâtiment Ariane
Tel +886 3 5788696
Domaine Technologique de Saclay Fax +886 3 5789993
4 rue René Razel
email oi.admin@oxford-instruments.com.tw
91892 Saclay
FranceUSA
Tel : +33 1 69 85 25 25
300 Baker Avenue,
Fax +33 1 69 41 46 80
Suite 150,
Email info@oxford-instruments.fr Concord
MA 01742
USA
Tel +1 978 369 9933
Fax +1 978 369 8287
email info@ma.oxinst.com

Germany
Otto-von-Guericke-Ring 10,65205 Wiesbaden, Germany
Tel +49 6122 937 0
Fax +49 6122 937 100
email info@oxford.de
India
Office no 17, Shreeji Arcade,
Almeida Road, Panchapakhadi,
Thane 400 602 India
Tel/Fax +91 22 25452424
email india.analytical@oxinst.com

7020 Koll Center Parkway, Suite 140
Pleasanton, CA 94566, USA
Tel +1 510 656 8820
Fax +1 925 461 5340
email info@ma.oxinst.com

Oxford Instruments plc

Oxford Instruments plc
Tubney Woods, Abingdon
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393442
email info.oiplc@oxinst.com

Cert no. SGS-COC-003231