Oxford Instruments plc
Reports and Financial Statements 2011

Oxford Instruments

Contents
Business Overview
Financial Summary

1

Revenue by Sector

2-3Chairman’s Statement

4

Chief Executive’s Statement

5-6

Operational Review

7-8

Financial Review

9-11

Key Performance Indicators

12

Principal Risks

13

The global challenges we face today cannot be addressed
without a partnership between the commercial and theacademic sectors. Companies like Oxford Instruments form
the bridge between science and the consumer. Science iscapable of coming up with the solutions to many of society’s
problems and Oxford Instruments turns that smart science
into commercially successful products.

UÊ Oxford Instruments’ X-ray Fluorescence (XRF) andCorporate GovernanceDirectors and Advisers

14-15

Report of the Directors

16-17

Corporate and Social
Responsibility

18-21

Corporate Governance

22-29

Directors’ Remuneration Report

30-37

Directors’ Responsibilities

38

Report of the Independent
Auditors

39

Financial Statements
Accounting Policies

40-45

Reports and Financial
Statements

46-50

Notes to the Financial
Statements

51-76

Parent Company Financial
Statements

77-82

Historical Financial Summary

Oxford Instruments is a leading provider of high technology
tools and systems for research and industry. It designs andmanufactures equipment that can fabricate, analyse andmanipulate matter at the atomic level. Nanotechnology
applications are today being used to address some of theworld’s most pressing problems across a broad range ofindustries and Oxford Instruments is equipping thoseindustries, worldwide.

83

Optical Emissions Spectroscopy (OES) analysers are being
used for quality control and environmental monitoring
applications across a wide range of industries. They
detect hazardous substances in materials, metals, soil,
petrochemicals and consumer goods.

UÊ Benchtop Nuclear Magnetic Resonance (NMR) andXRF analysers are being used to analyse fat in foods,
nutrients in rice and oil in seeds.

UÊ The search for a sustainable, practical, renewablesource of energy is one of the major global issues ofthe 21st Century. The multinational ITER programmeseeks to ﬁnd a solution by harnessing fusion power.
Oxford Instruments supplies the high performancesuperconducting wire for the vast electromagnet thatwill lie at the heart of the ITER facility.

UÊ Oxford Instruments is providing plasma etch anddeposition tools to the developers of high brightness
light emitting diodes and photovoltaic devices. They are
seeking to produce carbon efﬁcient lighting and costeffective solutions for turning sunlight into electricity.

UÊ Next generation systems for the analysis of materials
on electron microscopes are being used in thedevelopment of new, stronger and safer materials andpharmaceuticals and forensic science.

UÊ Oxford Instruments’ innovative range of liquid helium
Other information
Shareholder Information

84

Worldwide Directory

85

free cryogenic systems are used in fundamental physics
research into cutting edge applications, such as quantum
information processing, which is widely predicted to be
the basis of a new generation of ultra fast computersrequired for applications such as ﬁnancial security,
climate modelling and drug development.

Oxford Instruments plc

2011 Financial Highlights
Group Orders

2011£273.5m+9.4%

Revenue

2010£250.0m

2011£262.3m +24.0%

2010

Adjusted Proﬁt Before Tax

2011£26.2m +120.2%

2010

Adjusted EPS

41.5p£273.5m£262.3m£211.5m£26.2m
£11.9m2011+133.1%

Trading Proﬁt. Return on Sales (%)

10.7%

+370

2010

41.5p
17.8p

2011
2010

10.7%
7.0%

basis points

Group Results
2011

2010

£m

£m

Orders

273.5

250.0

Revenue

262.3

211.5

Trading proﬁt

28.1

14.7

Adjusted proﬁt before tax (note 1)

26.2

11.9

Net cash / (borrowing)

13.1(10.4)

Equity93.5

52.2

Year ended 31 March

2011

2010

pence perpence per

share

share

Total basic earnings

65.3

27.2

Adjusted earnings

41.5

17.8

9.0

8.4

Net assets

186.3

105.3

Employees at year end *

1,566

1,389

Proposed dividends* Includes temporary employees.

Oxford Instruments plc

1

Business Overview
Revenue by Market Sector
Nanotechnology Tools

Industrial Products

ServiceUÊ NanoAnalysis
UÊ NanoScienceUÊ Plasma Technology

UÊ Industrial Analysis
UÊ Magnetic ResonanceUÊ Superconducting WireUÊ OI Service
UÊ Austin Scientiﬁc
UÊ Service of other 2 sectors£m Revenue£m Revenue£m Revenue

2011

2010

2011

2010

2011

2010

121.4

101.5

95.6

71.0

45.3

39.0

£m Trading proﬁt£m Trading proﬁt£m Trading proﬁt

2011

2010

2011

2010

2011

2010

14.6

8.2

5.9

1.0

7.6

5.5

Return on sales

Return on sales

Return on sales

2011

2010

2011

2010

2011

12.0%

8.1%

6.2%

1.4%

2010

16.8% 14.1%

Oxford Instruments Worldwide
Oxford Instruments’ customers and partners
are supported by a wide sales and service
network comprising ofﬁces, manufacturing
sites, distributors and agents across the world.
In June 2011 this network was strengthenedby the addition of two acquisitions. Omniprobe
Inc. in the USA and Omicron Nanotechnology GmbH,
which has sites in Germany, UK, USA, France and Japan.
Both companies join the Nanotechnology Tools business sector.

2

Oxford Instruments plc

Business Overview

Diverse End Markets

Diverse Geographies
2009/20102010/2011
A key factor in the Group’s growth and success is thediversity of its markets and geographical reach.

Business Locations

Oxford Instruments plc

3

Chairman’s Statement
Oxford Instruments generates shareholder value by being a leading provider ofsystems used by our customers to analyse and manipulate matter at the smallest
scale. We address both research and industrial markets and operate in all regions
around the world. This broad spread of customers and geographical markets
served to insulate us from the worst of the effects of the recent recession. Now
that trading conditions have improved, this diversity has enabled us to deliversigniﬁcant growth during the year.
The Group delivered its strongest performance in its 51 year history. Revenuesrose to £262.3 million (2010: £211.5 million) and adjusted proﬁt before tax morethan doubled to £26.2 million (2010 £11.9 million). Adjusted earnings per sharerose signiﬁcantly to 41.5p (2010: 17.8p). The Group had a net positive cash
balance of £13.1 million (2010: borrowing of £10.4 million) at the year-end.
These results reﬂect ﬁve years of continuous progress in the development of
new products for high growth markets and sustained efﬁciency improvements.
The rapid strengthening of industrial markets after the recession of 2008/2009
was faster than we had expected and our new product launches have been
more successful than we had predicted. As a result we announced increased
performance expectations for the year in September 2010 and April 2011, andraised our interim dividend to 2.52 pence (2010: 2.4 pence).
The Group is recommending a ﬁnal dividend of 6.48 pence bringing the total
for the year to 9.0 pence (2010: 8.4 pence).
This year’s strong result has been made possible by all our people around theworld. I would like to thank them for their hard work during the year.

Key Information
Earnings per Share

41.5p+133.1%Dividend per ordinary share

9.0p

4

It is now ﬁve years since we announced our plan to double the size of Oxford
Instruments and signiﬁcantly improve our margins. The implementation of thestrategy to achieve these challenging targets has been successful as reﬂected bythis strong set of results. Today, as outlined later in the statement, we unveil
the next mid-term target, the 14 Cubed Objective. This will form the basis of
the next stage of the development of the Group as we continue to deliver
shareholder value by using technology to address the issues facing society.
Nigel Keen Chairman
14 June 2011

+7.1%

Oxford Instruments plc

Chief Executive’s Statement
Financial year 2010/2011
The Group delivered an excellent result in the year from both our Research and our
Industrial markets. We continue to beneﬁt from strong demand from our researchbased customers helped by our innovative new products. Demand for our industrial
products increased signiﬁcantly as our customer base emerged from recession.
Our order intake reached £273.5 million (2010: £250.0 million). This strong
performance is particularly pleasing given that the prior year included the large
one off order for superconducting wire for ITER, the multinational carbon freeenergy programme. Excluding ITER, order intake grew by 30.5%. The order booknow stands at £115.3 million (2010: £101.5 million). Most of these orders are fordelivery in the ﬁrst half of the current year.
The Group continues to beneﬁt from strong growth in Asia, where sales grew by
40.5%. In China, our second largest market after the United States, sales increased
by 70.1%. To support this growth we opened a ﬁfth China ofﬁce in Chengdu andincreased production capabilities in our Shanghai factory. Japan, which generated
10.9% of our revenue, also saw good growth. The earthquake in March 2011 caused
extensive disruption to our day-to-day operations but had a very limited effect on
trading in the reported year. It is too early to predict the ongoing effect to us of thedisaster. Our focus on the opportunities presented by emerging markets continues
to strengthen with plans to open an ofﬁce in Brazil this summer. We have seen
good performance across all product groups in Russia, particularly in the researchmarkets. Growth in India is particularly strong in our industrial markets and we arelooking to strengthen our presence there.
Sales in the more established markets of Europe and North America increased by
10.5% and 23.4% respectively. Going forward we expect a progressively higher
proportion of our revenue to come from Asia.

Key Information
Order in-take£273.5m+9.4%

More detail about the Group’s operational performance is set out on pages 7 to 8.

Order Book

£115.3m +13.6%
Sales per Head£175k

Our strong organic growth has been driven by our focussed R&D programme. Our
growing end markets offer the potential to increase market share through theintroduction of new technologies. In order to more fully exploit this opportunity
rich environment, we increased our R&D cash spend by 29% to £16.9 million (2010:£13.1 million).

+11.1%

Five years of progress: Laying the foundations for further proﬁtable growth
In 2006 we announced a ﬁve year objective to double the size of the businessand improve our net margins by ten percentage points through organic growth
and acquisitions. We set out to achieve this by becoming a more customer
focused business, increasingly concentrating on new products in markets such as
nanotechnology.
Having reached the end of the ﬁve year period, we have achieved very signiﬁcantprogress and a substantial increase in shareholder value. Our growth target equatedto a compound average annual growth rate of 15.0%. We achieved 14.4%. This
reﬂects our success in beating our ﬁve year organic growth target, delivering an
average annual compound organic growth rate of 12.8%, compared to our 10.0%
target. This was facilitated by the rapid culture change that has been achieved
across our businesses, bringing a highly commercial focus to our R&D capability andsigniﬁcantly accelerating the pace and quality of technological innovation acrossthe Group, despite the severe downturn suffered by the global economy.
The plan envisaged that acquisitions would deliver the remaining ﬁve per cent ofgrowth per annum. We made four successful acquisitions during 2007 and 2008.
In 2009, we took the decision to suspend acquisitions until such time as the world
economy stabilised. This inevitably delayed the acquisitive part of our growthand impacted the margin improvement which had been planned to come fromacquisitions. We are now actively searching for appropriate acquisition targets.
At the beginning of the plan in 2005/06, the Group delivered a return on salesof 3.0%. The corresponding ﬁgure for 2010/11 is 10.7%. This progress has beenachieved through internal efﬁciency improvements, the better targeting of our
R&D towards the needs of our customers and improved operational gearing.
All parts of the Group are now performing well and the foundations have beenlaid for further proﬁtable growth. Our brand, our technology and our global reachposition us well for the next stage in our evolution.

Oxford Instruments plc

5

Chief Executive’s Statement

2011 to 2014: The “14 Cubed” Plan
Having broadly achieved the objectives of our ﬁve year plan, we are now focused on delivering the next phase of growth. Our
objective over the next three years is to target an average compound annual revenue growth rate of 14% per year. At the endof the three year period we plan to have a net return on sales of at least 14%. This plan, to achieve compound growth of 14%
and a return on sales of 14% by 2014, is known within the Group as the “14 Cubed” Plan.
Our annual trading patterns are now more predictable due to the operational improvements that have been achieved acrossthe Group. We enjoy a broad spread of customers, applications and geographic markets. This, together with improved processes
for R&D and cash management, increases our ability to plan more conﬁdently for the medium term. For this reason we haveselected a three year time horizon for our next strategic plan. We believe that this also better reﬂects the time horizons ofmany of our investors and customers.
The new plan will be driven by three elements; strong organic growth, continuous efﬁciency improvements and targeted
acquisitions. These will each contribute to our targets for growth and margin improvement.
The 14% compound growth rate is planned to be achieved more through organic growth than by acquisition. We believethat this growth level can be obtained because of the valued position of the Oxford Instruments brand in our high technology
markets, our high exposure to the growing markets of Asia and our customer targeted R&D programme. We are proud of thefact that our customers from around the world often specify that they want “The Oxford” when procuring new systems.
Our product development pipeline is populated with new, commercially driven products which will be released over the next
two years. This will further consolidate and grow our market position and as a result we believe that our organic growth cancontinue as evidenced by the strong average rate achieved over the last ﬁve years.
Organic growth will be supplemented by targeted acquisitions. Today in a separate statement, we announce two acquisitions:
Omicron Nanotechnology GmbH, a German company specialising in the manufacture of very high end microscopes fornanotechnology research and Omniprobe, Inc., an American company which designs and manufactures nano-manipulators foruse within scanning electron microscopes. The aggregate consideration is £40.2 million on a no cash, no debt basis.
Further exploitation of the Oxford Instruments brand, our superior technology and exposure to markets where demand is
growing faster than supply will drive continued margin progression. This, together with our ability to implement greater
economies of scale and efﬁciency improvements, underpins our conﬁdence in achieving our 14% return on sales target.
Oxford Instruments has a proud scientiﬁc heritage embodied in our strong worldwide cadre of engineers who bring world classskills in the most advanced technological ﬁelds. As the business grows, increased operational gearing will enable us to deliver
even greater value from this highly skilled team.
We have an internal efﬁciency programme which seeks both to increase revenues (byboosting our customer satisfaction levels) and to manage costs. This programme is built
around ﬁve key goals:

UÊ Delivering for shareholders
UÊ Liberating cashUÊ Investing for the futureUÊ Realising the Brand
UÊ Adding personal value
Each of these goals is measured by key performance indicators against which we calibrate ourprogress, enabling us to monitor momentum at both divisional and Group level on a regular basis.
Current Trading
We are now two months into the time period covered by the 14 Cubed Plan. Trading to date has been in line with our
expectation with orders, sales and proﬁt better than the same period in the prior year. As part of our annual trading cycle there
has been a cash outﬂow in the period and the cash balance at the end of May 2011 was £4.1 million.
Outlook
The progress made over the last ﬁve years in commercialising and focusing the Group has laid the foundations for long term
proﬁtable growth. Our markets, and the position of our products in those markets, is strong.
As we enter the next stage of the evolution of Oxford Instruments, the 14 Cubed Plan outlines the framework through which
all of our stakeholders will beneﬁt from increased proﬁtability, greater scope to invest in organic growth and acquisitions,continued innovation and global recognition of the Oxford Instruments Brand.

Jonathan Flint
Chief Executive
14 June 2011

6

Oxford Instruments plc

Operational Review
Nanotechnology Tools
The Nanotechnology Tools sector comprises our NanoAnalysis, NanoScience andPlasma Technology businesses. This sector produces our highest technology
products and serves research customers in both the public and private sectors.
Revenues were £121.8 million, an increase of 20% on the prior year. Trading Proﬁt
was £14.6 million (2010: £8.2 million), with performance up across both industrial
and research markets worldwide.
Our NanoAnalysis business produces analysis tools which give precise chemical andstructural data to users of electron microscopes. It was an excellent year for orders
and shipments due to recovering industrial markets and strong demand for nanocharacterisation of new materials in the automotive, aerospace and solar markets.
Much of this demand has been met through the launch of innovative 3D analyticalsoftware giving customers more information than ever before, particularly in thesemi-conductor and metallurgy markets where detailed analysis of the structure ofa sample is required. Sales of our large area silicon drift detector, X-Max, continue
to exceed expectations, and this year we sold our 1,000th detector. A new variantof the X-Max for high performance electron microscopes, launched in 2010, offers
signiﬁcant beneﬁts to the semiconductor and materials research markets andgenerated sales which exceeded expectations. We have seen signiﬁcant growthin the sales of our Electron Backscatter Diffraction (EBSD) systems due to productenhancements and improved marketing. April 2011 saw the introduction of AZtec,
a revolutionary materials characterisation system which will ultimately replace ourworld-renowned INCA platform. The launch was particularly successful and orders
are exceeding expectations.
Our NanoScience business produces equipment for experimental research in
the areas of very low temperature and very high magnetic ﬁelds. The business
continues to improve its performance, further consolidating the process efﬁciencies
introduced over the last two years. Demand continues to be strong, with particularinterest from institutes conducting research into quantum information processing,which will directly inﬂuence next generation computers and security systems. New
market leading cryogen free magnet systems were developed and launched in
2010, laying the foundations for development of a wider cryogen free platform
and offering further opportunities to grow market share. This new technology has
also led to record sales in China, where we have increased our investment in oursales and service capability.
Our Plasma Technology business provides nanotechnology fabrication tools which
are used to manipulate materials at the atomic scale for research and advanced
manufacturing applications. This business delivered a strong performance. The
majority of its sales were in Asia, driven by strong demand in the High Brightness
Light Emitting Diode (HBLED) sector. We have opened a research facility in Taiwan
to offer further collaboration with our partners and customers. A similar facility was
also opened in the UK and our production capacity has been more than doubled asa result of a factory refurbishment. Two new products were launched this year to
support the continued growth in the photovoltaic and HBLED markets. As a resultof its improved performance in the export market, Plasma Technology was a winnerof a 2011 Queen’s Award for International Trade.
Industrial Products
The Industrial Products sector contains our Industrial Analysis, Superconducting
Wire and Magnetic Resonance businesses. Revenue increased to £97.6 million(2010: £72.1 million), reﬂecting signiﬁcant growth in demand from the industrial
markets worldwide. Trading Proﬁt in this sector rose to £5.9 million (2010: £1.0
million) on the increased volume.
Our Industrial Analysis business produces analytical equipment for industrial
quality control and environmental monitoring. We have seen strong growth in thisbusiness, particularly in the metals and petroleum markets. Our X-ray Fluorescencerange of products, which includes the X-MET hand-held analysers, has seen asigniﬁcant increase in sales due to increased investment in our sales and service
teams worldwide and the strengthening of our industrial markets in general. Our
Optical Emission Spectrometers are now leading the market in metals analysis andthis business continues to perform well.

Oxford Instruments plc

7

Operational Review

Our Superconducting Wire business is the world leader in the provision of wire for
the MRI scanner market where demand for wire for MRI scanners has continued tostrengthen, with a signiﬁcant increase in sales recorded this year. We also provide
high speciﬁcation superconducting wire to customers engaged in research. Plans
to expand the facility in New Jersey, USA are now underway following a successful
ramp up in production of wire for the ITER project.
Our Magnetic Resonance business produces bench top equipment which can be used
to analyse industrial and food products, particularly oils and fats. It also provides
magnetic resonance analytical tools for the petrochemical industry, providing data
to improve the efﬁciency of oil extraction. This business has returned strong sales
due to the focus on its core product line, particularly in the oil from sunﬂower seeds
market.
ServiceThis sector consists of our MRI Service businesses in North America and Asia, ourAustin Scientiﬁc business and the service elements of Nanotechnology Tools andIndustrial Products. Turnover was £45.4 million (2010: £39.0 million) and Trading
Proﬁt was £7.6 million (2010: £5.5 million). The USA is our biggest service region but
we are seeing increased revenue in China and Japan as our installed base grows.
The MRI Service businesses provide service and support to the MRI industry, offering
magnet service, parts and accessories predominantly in North America and Japan.
This business has continued to perform well.
Our Austin Scientiﬁc business supplies, services and refurbishes high quality
cryogenic vacuum pumps, helium compressors and cold heads for customers in thesemiconductor, medical and research sectors. This business has recorded its bestever results due to signiﬁcant growth across all revenue streams.
PeopleOur talented workforce is a key element of our success. We periodically undertake
all-employee surveys in order to measure attitudes amongst our staff worldwide. We
achieve levels of employee engagement which are signiﬁcantly above the industry
benchmark and are rising. We have launched a Group wide incentive plan throughwhich all staff will beneﬁt with the achievement of our 14 Cubed objectives.
We have also launched an Oxford Instruments management development
programme which promotes high standards of performance and aims to develop
the talented, international managers needed to deliver our strategy. Over 100
employees will undertake management training during the coming year.
Our people continue to develop innovative, market leading products, offer quality
customer service and meet the needs of more customers than ever before. In
particular, our staff in Oxford Instruments Japan deserve special recognition. In theaftermath of the March earthquake and tsunami they continued to support ourcustomers in very difﬁcult circumstances. Some also assisted the emergency services
in the affected areas.
All our people have made the difference. They deliver against demanding targets
and have my admiration and thanks.
Sustainability
Our Sustainability programme continues to command a high proﬁle across theGroup. Every site has an Energy Champion who is actively responsible for reducing
our carbon footprint locally.
We have set an annual target of a 5% reduction in energy consumption as apercentage of sales. Our teams achieved a 15% reduction in electricity consumed
as a percentage of sales in 2010/11.

8

Oxford Instruments plc

Financial Review
Trading Performance
Orders of £273.5 million were £23.5 million ahead of the same period last year.
Excluding the one-off ITER order received in the prior year, orders grew by £63.9
million or 30.5%.
Revenues for the year grew by 24.0% to £262.3 million (2010: £211.5 million). The
majority of growth came through increased volumes in all parts of the business,with a positive foreign exchange variance of £2.4 million being offset by adverse
pricing of approximately £2.9 million.
In our Nanotechnology Tools division, which had been less affected by the global
downturn and therefore has a stronger comparator year, sales grew by 19.6%
while the Industrial Products division continued the recovery seen in the twelve
months to September with growth of 35.4%. This was helped by ﬁve shipmentsof superconducting wire to the ITER programme, representing some 21.5% of thetotal contract. Service revenues grew by 16.4% on the back of a strong performancefrom our Austin Scientiﬁc business and a more general willingness in the market torenew service contracts.
Gross margins fell from 42.8% to 41.7% due to the pricing impact mentioned above,
an adverse mix variance as superconducting wire became a bigger proportion ofGroup sales and a desire to maintain strategic market positions, particularly within
the fast growing HBLED market.
Constant currency operating expenses increased by £11.2 million. Sales andmarketing costs increased by 10.5% due to the growth in variable overhead
costs as a result of higher volumes and our investing for the future in terms ofincreased sales presence. R&D increased by 34.4% while other costs rose by 16.5%
due, among other things, to one-off ITER set up expenses. Translational foreignexchange effects added £0.4 million, resulting in a net increase of £11.6 million inreported operating expenses.

Key Information
Revenue£262.3m+24%

Trading proﬁt£28.1m+91.2%Cash generated before dividend£27.6m

Trading proﬁt increased by £13.4 million to £28.1 million. The majority of thisincrease was a result of the higher sales volume, although a signiﬁcant proportion
was due to better transactional foreign exchange rates.
Other Operating Income
In July 2010 the Group ceased future accrual for those employees who weremembers of our UK and US deﬁned beneﬁt pension schemes. This resulted in aone-off credit of £4.1 million which is being treated as an exceptional proﬁt item.
In addition £0.6 million that had been accrued as a potential ‘earn-out’ payment to
the employees of TDI, an acquisition made in April 2008, is now not thought to benecessary and has been released to the income statement as an exceptional proﬁt.
Reorganisation costs and impairment
As reported in our Half Year results, it was decided that the relocation of our Yattonsite would not take place as originally planned. Due to the exceptional growth of
the Plasma Technology business, the site which had been selected is now too small
and a new location is therefore being sought. As a result, £0.6 million of costs
relating to the move have been written off as an exceptional item.
Amortisation of acquired intangibles
Amortisation of acquired intangibles was in line with the prior year at £4.7 million(2010: £4.1 million). No acquisitions were made in the year.
Financial income and expenditureWithin ﬁnancial income and expenditure, total interest on debt reduced by £0.1
million to £1.2 million as debt levels fell. The interest charge on pension scheme
liabilities exceeded the expected return on pension scheme assets by £0.7 million, areduction of £0.8 million over the prior year.
Currency hedging
The Group uses derivative products to hedge its exposure to ﬂuctuations in foreignexchange rates. It is Group policy to have in place at the beginning of a ﬁnancial
year hedging instruments to cover 80% of its forecast transactional exposure forthat period.
In common with a number of other companies, the Group has decided that theadditional costs of meeting the extensive documentation requirements of IAS 39

Oxford Instruments plc

9Financial Review

to apply hedge accounting to the foreign exchange hedges cannot be justiﬁed. Accordingly the Group does not use hedge
accounting for these derivatives. Net movements on marking to market such derivatives at the balance sheet date are disclosed
in the income statement as Financial Expenditure and excluded from our calculation of adjusted proﬁt before tax (note 1).
Commodity hedging
The Group also uses derivative products to hedge its exposure to ﬂuctuations in the price of copper, a major component
for the Superconducting Wire business. Given the small number of contracts involved we apply hedge accounting for thesetransactions and consequently the results of marking to market are excluded from the Income Statement.
Taxation
The underlying tax rate on the proﬁt before tax for the Group before operating income, amortisation of acquired intangibles,
reorganisation costs, impairments and marking to market of hedging derivatives was 22% (2010: 27%). The rate has reduced
due to the UK parts of the Group being proﬁtable for tax purposes and therefore able to offset their expenses.
The Group has signiﬁcant tax losses and timing differences in the UK available to set off against future taxable proﬁts fromcertain business streams. Due to the improved performance of the Group’s UK business units, we now believe that there is ahigh degree of certainty that these losses and timing differences will be able to be relieved against future proﬁt streams and as
a result have recognised a deferred tax asset of £11.3 million in the year and a corresponding credit to the Income Statement.
We believe that this is exceptional in nature and quantum and have therefore excluded it from our calculation of adjusted
earnings per share shown in note 1.
Earnings
After a tax credit of £5.5 million (2010: charge £4.8 million) the reported net proﬁt for the ﬁnancial year was £32.2 million(2010: £13.3 million). With a weighted average number of shares of 49.3 million (2010: 48.9 million), the basic earnings per
share were 65.3 pence (2010: 27.2 pence).
Adjusted proﬁt before tax (note 1), which we believe gives a better indication of the underlying performance of the business,grew by £14.3 million to £26.2 million which equated to an adjusted earnings per share of 41.5 pence (2010: 17.8 pence), an
increase of 133%.
Dividends
The Group’s proposed ﬁnal dividend of 6.48 pence per share (2010: 6.0 pence), payable on 27 October 2011 to shareholders
who are on the register on 30 September 2011, gives a total dividend for the year of 9.0 pence per share (2010: 8.4 pence).
Dividend cover for the underlying business before other operating income, reorganisation costs and impairments, amortisationof acquired intangibles and marking to market of hedging derivatives was 4.6 times (2010: 2.1 times).
Investment in research and development (R&D)
The total cash spent on research and development in the year was £16.9 million (2010: £13.1 million). A reconciliation between
the cash spent and the amounts charged to the Income Statement is given below:
2011£ million
17.6

2010
£ million
13.1

Less: depreciation of R&D related ﬁxed assets

(0.6)

(0.6)

Add: amounts capitalised as ﬁxed assets

2.3

0.6

Less: amortisation of R&D costs capitalised as intangibles

(5.4)

(4.0)

Add: amounts capitalised as intangible assets

3.0

4.0

Total cash spent on research and development during the year

16.9

13.1

Research and development expense charged to the consolidated statement ofincome.

The net book value of capitalised R&D at the end of the ﬁnancial year was £15.0 million (2010: £17.5 million).
Balance sheet
Non-current assets fell from £85.0 million to £82.6 million primarily due to the amortisation of acquired intangible assets.
Net working capital (excluding derivative ﬁnancial instruments and tax payable/receivable) reduced by £9.6 million in theyear to £15.9 million, despite £2.4 million of the £10.2 million deposit that was received in the prior year for the ITER contract
unwinding.
Inventory turns increased by 0.2 to 3.3 while debtor days reduced from 59 days to 48 days.

10

Oxford Instruments plc

Financial Review

Pensions
The Group has deﬁned beneﬁt pension schemes in the UK and the US. Both have been closed to new entrants since 2001. The
total deﬁcit, before tax, under IAS19 on these pension schemes decreased in the year by £23.4 million to £11.7 million with acorresponding deferred tax asset of £3.1 million.
Assets of the schemes at 31 March 2011 were £173.1 million (2010: £157.6 million), while liabilities fell from £192.7 million to£184.8 million principally as a result of the closure of the schemes to future accrual in July 2010 and the movement from RPI
to CPI as the measure of inﬂation for deferred members. In ceasing future accrual the Group sought to mitigate the risk ofliabilities rising. The alternatives offered to the employees are cash neutral to the Group.
The latest triennial actuarial valuation of the UK scheme was carried out as at 31 March 2009 and resulted in an actuarial deﬁcitof £39.5 million. A long-term plan for recovering the deﬁcit over 13 years was agreed between the Company and the Pension
Trustee, which involves a payment of £3.1 million for the year to March 2010, £5.3 million for the year to March 2011 and £4.2
million for the year to March 2012. For the subsequent 11 years the 2012 payment of £4.2 million will be inﬂated by 2.85% perannum. Should the Group increase the dividend per share paid to shareholders in the period to March 2012, the payment to
the pension fund will be similarly increased.
Cash
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by £15.0 million to £37.5 million. Working
capital in the year reduced by £6.9 million, building on a reduction of £16.4 million in the prior year.
Cash generated from operations was £39.2 million, an increase of £6.4 million on the prior year. Excluding the exceptional ITER
deposit of £10.2 million received in the prior year, the increase was £16.6 million.
Net cash at the year-end was £13.1 million (2010: net borrowing of £10.4 million). In December the Group announced that it
had agreed a committed Revolving Credit Facility with a club of three banks. The new facility, which will last for four years,
is for £50 million and is extendable to £70 million by mutual consent. In addition the Group has various overdraft and otherfacilities totalling £14.8 million.
Employees
The average number of people employed during the year was 1,498, an increase of 157 over the prior year.
Average sales per employee increased by 11% to £175,000.
Share price
The closing mid-market price of the ordinary shares at the end of the ﬁnancial year was £7.00, compared with £2.69 at the
beginning of the year. The highest and lowest prices recorded in the ﬁnancial year were £7.36 and £2.56 respectively.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are
set out in the Chief Executive’s Statement. The ﬁnancial position of the Group, its cash ﬂows, liquidity position and borrowing
facilities are described in this Financial Review.
The relatively diverse nature of the Group together with its current ﬁnancial strength provides a solid foundation. The Directors
have reviewed the Group’s forecasts and ﬂexed them to incorporate a number of potential scenarios relating to changes in
trading performance and believe that the Group will be able to operate within its existing debt facility which expires in
December 2014. This review also considered hedging arrangements in place. As a consequence, the Directors believe that theGroup is well placed to manage its business risks successfully.
The Financial Statements have been prepared on a going 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.

Kevin Boyd
Group Finance Director
14 June 2011

Oxford Instruments plc

11Key Performance Indicators
The Group uses a range of measures to monitor progress against its strategic plans. The key performance indicators arepresented below:

Financial goal
To deliver shareholder
return throughgrowth in turnoverand margin.

What we measure
Revenue growth

Why we measure

How we performed

Tracks our performance on our
growth strategy

24.0%
17.0%

2.4%
2009

Net return on sales

Tracks our performance on our
Proﬁtability strategy

2009

Liberating Cash

What we measure
Cash conversion fromproﬁt

Why we measure

2011

10.7%
6.3%

Strategic Priorities

2010

7.0%

2010

2011

How we performed
212.9%

Monitors our use of Fixed Assets,
Working Capital and R&D

126.7%
89.3%

Investing in the
FutureRealising the Brand

Adding Personal
Value

1

12

Proportion of revenue
coming from products
launched in theprevious 3 years

Net Promoter Score1‘Value Add’ – (Trading
Proﬁt + Employment
Costs)/Employment
Costs

Measures the effectiveness of our
R&D programmes

2009

2010

28%

29%

2009

2010

2011

34%

Measures Customer Feedback

2011
9

2009

2010

1.20

1.24

2009

2010

Measures efﬁciency

2011
1.42

2011

The Net Promoter Score is a new metric which has been introduced Group wide during 2011. No data exists for earlier years. It is compiled byasking customers at the completion of a piece of service work whether they would recommend Oxford Instruments to a friend or colleague.
Customers give a score between zero and ten where zero is no and ten is yes. Those customers who score nine or ten are promoters, thosecustomers who score seven or eight are neutral and customers who score six or less are detractors. The net promoter score is the difference
between the numbers of promoters and the number of detractors (both expressed as a percentage of the number of replies received). The
score can range between -100 (no customers are promoters) and +100 (all customers are promoters). A positive score indicates that thecompany has more promoters than detractors.

Oxford Instruments plc

Principal Risks
Speciﬁc Risk

Context

Risk

Possible Impact

Technical Risk

The Group provides
high technology
equipment andsystems to its
customers.

Failure of
the advanced
technologies appliedby the Group to
produce commercial
products, capable ofbeing manufactured
and sold proﬁtably.

Lower proﬁtability
and ﬁnancial
returns.

The recent global
recession andprevailing economic
downturn haveresulted in cuts toboth government
and private sector
spending.

Demand for theGroup’s products
may be lower than
anticipated.

Lower proﬁtability
and ﬁnancial
returns.

Part of the growth of
Oxford Instruments
is to come fromacquisitions which
provide the Group
with complementary
technologies.

Appropriateacquisition targets
will not be available
in the necessary
timescale.

Economic
Environment

Acquisitions

Negative impact
on the Group’s
reputation

Associated strategic
priorities and goals
Realising the Brand- Using ‘Voice of the
Customer’ to drive
rapid new productdevelopment.
Adding Personal Value- Support and develop our
employees to maximise
their value add.

Realising the Brand- Developing a strong
brand in existing anddeveloping markets.
Delivering Shareholder
Value- Focus on balanced andattractive global markets.

Alternatively, once
acquired, targets may
fail to provide theplanned value.

Lower proﬁtability
and ﬁnancial
returns.
Management focus
taken away fromthe core businessin order to manage
integration issues.

Realising the Brand- Developing a strong
brand in existing anddeveloping markets.
Investing in the Future- Using ‘Voice of the
Customer’ to drive
rapid new productdevelopment.

Mitigation
The Group has moved awayfrom large scale, single
customer development
programmes towards morecommercially orientatedproducts.
The New Product Introduction
programme that any new R&D
projects must pass throughprovides a framework within
which the commercial viabilityof projects are scrutinised andassessed.
The Group has a broad spreadof customers, applications andgeographical markets.
The Group is expanding inthe so called BRIC nations,especially China, which has not
suffered from the downturn.
Extensive ﬁnancial andtechnical due diligence isundertaken by the Groupduring any acquisition
programme.
Each transaction has
a comprehensive postacquisition integration plan
which is reviewed at thehighest level.

Adding Personal Value- Supporting anddeveloping our
employees.
Foreignexchangevolatility

Outsourcing

Raw material
volatility

Pensions

A signiﬁcant
proportion of theGroup’s proﬁt is
made in foreign
currencies.

The Group’s proﬁt
levels are exposed
to ﬂuctuations in
exchange rates.

The Group’s strategicplan includes theoutsourcing of asigniﬁcantly higher
proportion of thecosts of its products
to beneﬁt from
economies of scaleand natural currency
hedges.

Failures in the supply
chain impacting sales.

The Group relies on
the purchase of asigniﬁcant amountof copper for the
production of its
superconductingwire.

As copper prices rise,
proﬁtability falls.

The Group’s
calculated pension
deﬁcit is sensitive
to changes in theactuarial assumptions

Movements in theactuarial assumptions
may have anappreciable effect on
the reported pension
deﬁcit.

Oxford Instruments plc

Lower proﬁtability
and ﬁnancial
returns

Disruption tocustomers.
Negative impact
on the Group’s
reputation.

Lower proﬁtability.
Occasional
disruption to
production.

Delivering Shareholder
Value - Focus on balanced
and attractive global
markets.

The Group seeks to mitigate
the exposure to transactionalrisk by the use of natural
hedges wherever possible.

Liberating Cash
- Developing acompetitive global supply
base that supports our
growth.

The remaining transactional
foreign exchange risk in any
year is mitigated throughthe use of forward andnon-premium based option
exchange contracts.

Liberating Cash
- Developing acompetitive global supply
base that supports our
growth.

Relationships with outsourcing
businesses are monitored
closely and any potential issues
are acted upon swiftly to avoid
disruption.

Realising the Brand- Developing a strong
brand in existing anddeveloping markets.

Where practical dual sources
are used for key components
and services

Liberating Cash
- Developing acompetitive global supply
base that supports our
growth.

The Group has enteredinto agreements withthe two largest buyers ofsuperconducting wire to pass
the vast majority of pricing risk
to them.

Delivering Shareholder
Value- Focus on balanced andattractive global markets.
Additional cash
required by theGroup to fund thedeﬁcit.

Delivering Shareholder
Value- Focus on balanced andattractive global markets.

The Group has closed its
deﬁned beneﬁt pension
schemes in the UK and US tofuture accrual.

Reduction in net
assets.

Liberating Cash
- Developing acompetitive global supply
base that supports our
growth.

The Group has a funding planin place to reduce the pension
deﬁcit over the short tomedium term.

13

Directors and Advisers
Nigel Keen
Non-Executive Chairman
joined the Board in 1999. He has an engineering degree from Cambridge University, is a Fellow of the Institute of Chartered
Accountants and has been involved in the formation and development of high technology businesses for more than thirty
years. He is Chairman of Laird PLC, Bioquell PLC and Deltex Medical Group plc and a Non-Executive Director of ISIS Innovation
Ltd. (Oxford Instruments and Oxford University maintain a close relationship and the Group’s Directors are strongly represented
on the Board of ISIS Innovation, the University’s intellectual property company).

Jonathan Flint
Chief Executive
joined the Group as Chief Executive in April 2005. He holds a BSc in Physics from Imperial College and an MBA from Southampton
University. He is a Fellow of the Institute of Physics, Institution of Engineering and Technology and the Royal Academy ofEngineering. He sits on the Council of the Institute of Physics and is a member of advisory panels to the UK Science andTechnology Funding Council. Prior to Oxford Instruments, he held senior commercial management positions within Vislink plc,
BAE Systems, GEC Marconi and Matra Space Systems.

Kevin Boyd
Group Finance Director
joined Oxford Instruments in August 2006 as Group Finance Director. He holds a BEng in Electronic and Information Engineeringfrom Queen’s University Belfast and is a Chartered Engineer (FIET) and Chartered Accountant (FCA), having qualiﬁed with
Arthur Andersen. Prior to joining Oxford Instruments he was Group Finance Director of Radstone Technology plc, FinanceDirector of Siroyan Ltd and held senior ﬁnance positions in the TI Group (now Smiths Group plc). He is a Non-Executive Directorof Guidance Ltd.

Charles Holroyd
Group Business Development Director
was appointed to the Board in November 2005, having joined Oxford Instruments in 1999, and is responsible for Group Business
Development. He has a BSc in Electrical and Electronics Engineering from Bristol University and an MBA from INSEAD. He isa Chartered Engineer and a Fellow of the Institution of Engineering and Technology. Previously he held senior management
positions within United Industries plc, B Elliott plc, Spirent plc (previously Bowthorpe plc) and Chloride Group plc.

Professor
Sir Michael Brady
Deputy Chairman and Non-Executive Director
joined the Board in 1995 and is Emeritus Professor in the Department of Radiation Oncology and Biology at the Universityof Oxford, having recently retired as BP Professor of Information Engineering. He is also a Fellow of the Royal Society, of theRoyal Academy of Engineering and of the Academy of Medical Sciences and a Commissioner of the Commission for the Royal
Exhibition of 1851. He is a founding Director (and Chairman) of Guidance Ltd, Mirada Medical Ltd and Matakina Ltd (a New
Zealand based company), a Director of Dexela Ltd and of ISIS Innovation Ltd and Chairman of Acuitas Ltd.

Professor
Michael Hughes
Senior Independent Non-Executive Director
joined the Board in November 2004. He is Chairman of EA Technology Ltd and a Non-Executive Director of South Staffordshire
Water Ltd. Previously he held senior management positions in GEC plc before becoming CEO of Midlands Electricity plc until
2002 and then Executive Vice President of GPU Inc International Operations Group.

Jock Lennox
Independent Non-Executive Director
joined the Board on 1 April 2009. He is a Non-Executive Director of Enquest PLC, Hill & Smith Holdings PLC and A&J Mucklow
plc. He is a member of the Council of the Institute of Chartered Accountants of Scotland (chairing the Qualiﬁcation Board)and is Chairman of the Tall Ships Youth Trust. He is also a member of the Advisory Board of Alchemy, the private equity ﬁrm.
He was a Senior Audit Partner at Ernst & Young until April 2009.

Bernard Taylor
Independent Non-Executive Director
joined the Board in 2002 and is Vice-Chairman of Evercore Partners. He is a member of The Council of the University of
Oxford and is Chairman of the University’s Audit Committee. He is Chairman of ISIS Innovation Ltd and a Commissioner of theCommission for the Royal Exhibition of 1851. He is also a Fellow of the Royal Society of Chemistry and an Honorary Fellow of
St. John’s College, Oxford.

14

Oxford Instruments plc

Directors and Advisers

Directors
The Directors at the date of the Report were:N J Keen, Non-Executive Chairman
D J Flint, Chief Executive
K J Boyd, Group Finance Director
C J A Holroyd, Group Business Development Director
J M Brady, Deputy Chairman and Non-Executive Director
M A Hughes, Senior Independent Non-Executive Director
J F Lennox, Independent Non-Executive Director
B J Taylor, Independent Non-Executive Director
Board Committees
Audit: JF Lennox, Chairman; MA Hughes; BJ Taylor
Remuneration: NJ Keen, Chairman; MA Hughes; JF Lennox; BJ Taylor
Nomination: NJ Keen, Chairman; JM Brady; MA Hughes; JF Lennox; BJ Taylor
Administration: Any two Directors
JM Brady ceased to be a member of the Audit Committee on 13 September 2010.
Honorary President
Sir Martin Wood OBE FRS Hon FREng DL
Company Secretary
Susan Johnson-Brett
Advisers
Auditors: KPMG Audit Plc
Principal Bankers: HSBC Bank plc; Clydesdale Bank plc and Santander plc
Stockbrokers: JPMorgan Cazenove
UK Solicitors: Laytons LLP, Ashurst LLPUS Counsel: Holland & Knight LLP, WilmerHale LLPMichael Hughes Kevin Boyd Bernard Taylor Jock Lennox Charles Holroyd
Michael Brady Jonathan Flint Nigel Keen

Oxford Instruments plc

15

Report of the Directors
The Directors present their Report and the Financial Statements of Oxford Instruments plc for the year ended 31 March 2011.
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 tools and systems. The Company is required to set out in this report afair and true view of the business of the Group during the ﬁnancial year ended 31 March 2011, the position 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 4 to 11 and corporate and social responsibilities on
pages 18 to 21, which are incorporated in this report by reference. The business, the strategy, the research and development
activities and likely future prospects of the Group are reviewed in the Chairman’s Statement on page 4, the Chief Executive’sStatement on pages 5 to 6, the Operational Review on pages 7 to 8 and the Financial Review on pages 9 to 11.
Results and dividends
The results for the year are shown in the Consolidated Statement of Income on page 46. The Directors recommend a ﬁnal
dividend of 6.48p per ordinary share, which together with the interim dividend of 2.52p per ordinary share makes a total of
9.0p per ordinary share for the year (2010: 8.4p). Subject to shareholder approval, the ﬁnal dividend will be paid on 27 October
2011 to shareholders registered at close of business on 30 September 2011.
Risks and Uncertainties
The Board exercises proper and appropriate corporate governance for the Group. It ensures that there are effective systems
of internal controls in place to manage effectively shareholders’ interests and the Group’s assets, including the assessment andthe management of the risks to which the businesses are exposed, and to monitor and manage the compliance with all thelegal requirements that affect the Group’s worldwide business activities.
The Executive Directors report to the Board on changes in the business and in the external environment which may affectthe risks which the Group faces. The Executive Directors also provide the Board with monthly ﬁnancial information. Key
performance indicators are reviewed quarterly.
There are a number of risks and uncertainties which may have a material effect on the Oxford Instruments Group. These aredescribed in the Financial Review on page 9 to 11.
Directors
Biographies of all the Directors at the date of this report, including the Non-Executive Directors, appear on page 14.
Directors’ conﬂicts of interest
With effect from 1 October 2008, the Companies Act 2006 allows directors of public companies to authorise conﬂicts andpotential conﬂicts of interest, where appropriate. Only directors with no interest in the matter 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. A conﬂicts policy has been drawn up and a register of conﬂicts and potential conﬂicts ismaintained.
Directors’ interests
The beneﬁcial interests of the Directors in the Company’s
share capital, all in fully paid up shares at 31 March 2011, areshown in the table. Details of share options for the Executive
Directors are shown in the Directors’ Remuneration Reporton pages 30 to 37.
No Director was beneﬁcially interested in the shares ofany subsidiary company at any time during the year. In theyear to 31 March 2011 no Director had a material interest
in any contract of signiﬁcance with the Company or anyof its subsidiaries other than as described in the Directors’
Remuneration Report on page 30 to 37. There have been nochanges since the year end.

Kevin Boyd
Mike Brady
Jonathan Flint
Charles Holroyd
Mike Hughes
Nigel Keen
Jock Lennox
Bernard Taylor

2011
Shares28,4102,500
50,701
59,58012,354
126,580
3,500
190

2010
Shares10,5442,500
30,754
48,224
12,216
126,580
3,500
190

Insurance cover and Directors’ indemnities
For some years the Group has purchased insurance to cover its Directors and Ofﬁcers against their costs in defending themselvesin legal proceedings taken against them in that capacity and in respect of damages resulting from the unsuccessful defenceof any proceedings.
Neither the insurance nor the indemnity provides cover for situations where the Director has acted fraudulently or
dishonestly.
To the extent permitted by UK law, the Group indemniﬁes its Directors and Ofﬁcers.
Share capital
The Company only has one class of share capital which comprises ordinary shares of 5p each. All shares forming part of theordinary share capital have the same rights and carry one vote each. There are no unusual restrictions on the transfer of a

16

Oxford Instruments plc

Report of the Directors Continued

share. The full rights and obligations attaching to the Company’s ordinary shares, as well as the powers of the Directors, are set
out in the Company’s Articles of Association, a copy of which is available on the Company’s website. These can also be obtained
from Companies House or by writing to the Company Secretary.
During the year to 31 March 2011 the issued share capital was increased by 1.2% with the issue of 607,585 ordinary shares(2010: 157,977) following the exercise of options under the Company’s share option schemes. At 31 March 2011, the issued
share capital of the Company was 50,174,913 ordinary shares of 5p each. 433,794 ordinary shares (representing 0.9% of
the total issued share capital of the Company) are held by the Company in a separately administered trust. No shares wereacquired by the Company during the year. Details of the share capital and options outstanding as at 31 March 2011 are set out
in note 20 of the Financial Statements. Since the year end the issued share capital of the Company has increased by a further
6,485 ordinary shares.
At this year’s Annual General Meeting, the Directors propose to renew the authority granted to them at last year’s AGM to:(a) allot up to one-third of the Company’s issued share capital as new ordinary shares (Resolution 14(a)) and, including thoseshares allotted under Resolution 14(a), up to two-thirds of the Company’s issued share capital where full pre-emption rights
are applied (Resolution 14(b)); (b) allot up to 5% of the Company’s issued share capital without ﬁrst offering them to existing
shareholders (Resolution 15); and (c) to buy back up to 10% of the Company’s issued share capital (Resolution 16). Details ofthese resolutions are set out in the notice of the meeting.
Substantial shareholdings
The following are beneﬁcial interests of 3% or more of which the Directors have been notiﬁed in accordance with Chapter 5of the Disclosure and Transparency Rules, of the Company’s issued ordinary share capital, the only class of voting capital, at 9
May 2011:

BlackRockAmeriprise Financial
Schroder Investments
Sir MF and Lady KA WoodBAE Pension Fund Investment Management (UK)
Legal & General Investment Management Ltd (UK)
Hermes Equity Ownership Services Ltd

Direct/Indirect

Shares
000

% of
Total

Indirect
Indirect/direct
Indirect
DirectDirectDirect

7,025,415*
4,983,663
4,940,549
3,593,530
2,010,677
1,946,028

14.0
9.9
9.8
7.2
4.0
3.9

Proxy voting rights

2,857,706

5.7* of which 2,288,613 shares are held in Contracts for Difference which are disclosable under the Disclosure and Transparency
Rules.
Payment of Suppliers
The Group does not follow a standard payment practice but agrees terms and conditions for its business transactions with eachof its suppliers. Payment is then made in accordance with these terms. At 31 March 2011 trade creditors of the Company and
the Group’s UK subsidiaries were equivalent to 10 days’ (2010: 27) and 78 days’ (2010: 62) of 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 made charitable donations of £8,210. There have been no political donations during the year.
Fixed Assets
Whilst the market value of some ﬁxed assets may differ from book value, the Directors believe that the differences are notmaterial.
Disclosure of Information to Auditors
Pursuant to Section 418(2) of the Companies Act 2006 the Directors who held ofﬁce at the date of approval of this Directors’
Report conﬁrm that, so far as they are each aware, there is no relevant audit information of which the Company’s Auditors areunaware; 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 establish that the Company’s Auditors are aware of that
information.
Annual General Meeting
The Notice of the Annual General Meeting to be held on 13 September 2011 is set out in a letter to shareholders together with
explanatory notes relating to the resolutions.
A resolution to re-appoint KPMG Audit Plc as Auditor and to authorise the Directors to set their remuneration will be proposedat the Annual General Meeting.
By Order of the Board
Susan Johnson-Brett, Company Secretary
14 June 2011

Oxford Instruments plc

17

Corporate and Social Responsibility
The Group is committed to enhancing shareholder value in an ethical and socially responsible manner by considering theinterests of its wide community of stakeholders including investors, employees, customers, suppliers and local communities.
It believes that integrity in dealing with its partners is a prerequisite for a successful and sustained business relationship.
This principle governs all aspects of the Group’s approach to working with all stakeholders and in developing commerciallysuccessful products and services.
The Group’s products and services provide solutions which help address the global issues of environmental control, energy
conservation, healthcare and security through the development of high technology, innovative instruments and systems. Manyof Oxford Instruments’ systems are used to protect the environment, including the screening and detection of hazardous
substances in soils, electronic goods and petroleum. The Group participates in ITER, a multi-national, government sponsoredglobal project to research into alternative clean, sustainable energy sources, in which its superconducting wire is a key enabling
factor . The Group is continually looking for new applications for its existing technologies to support the growing need toprotect the world and the people who live in it.
Ethical Operations
The Group’s Business Conduct and Ethics Code sets out the standards expected from its employees, partners and third parties.
This Code reﬂects Oxford Instruments’ long established culture, values and brand, and is continually reviewed to ensure thatthese standards are upheld. The Group’s brand and reputation, together with the trust and conﬁdence of those it works withis one of its most valuable assets. It actively encourages ethical behaviour from its employees and business partners.
In light of the new Anti-Bribery legislation that will come into force on 1st July 2011, Oxford Instruments has begun an anti
bribery programme. The programme consists of, among other things, a risk assessment and an update to policies and procedures.
A training programme will use external and internal resources to ensure effective programme generation, implementationand compliance. The Board is committed to fostering a culture within the organisation of zero tolerance and fully supports
the anti-bribery programme.
In addition all employees must comply with any anti-bribery and anti-corruption rules derived from relevant legislation andregulations. A business malpractice policy includes guidelines on personal conduct, and gives advice on recognising and dealing
with conﬂict of interests, business gifts, and bribery and corruption. The business malpractice policy provides employeeswith the opportunity to report unethical or illegal corporate conduct. The Group’s Senior Independent Director provides analternative channel of communications for those employees who require it and this is communicated to employees throughthe Group’s intranet.
The Business Conduct and Ethics Code and the Business Malpractice policy are updated regularly and are available on thecorporate website or from the Company on request.
A fair and open culture is fostered throughout the business in which everyone’s views and contributions are encouraged andrespected. New employees are introduced to the Company’s values through an induction process which actively supports thecorporate strategy. Business managers are provided with practical guidance explaining the Group’s policies and standards ofconduct.
The Board believes that operating ethically is an important part of efﬁcient and proﬁtable business management, andrecognises that success depends on the involvement and commitment of everyone in the organisation.
Sustainability
The Group is committed to pursuing the highest standards of environmental performance. Responsibility for sustainabilitylies with the Board and all employees. Charles Holroyd, an Executive Director, is responsible for co-ordinating the Group’s
sustainability and carbon performance objectives, reviewing performance against these objectives and for relationships withexternal agencies.
The Board also reviews the sustainability performance of Group sites. Every site has an Energy Champion who is responsible for
implementing plans to reduce its carbon footprint . Each site reports its monthly energy consumption and reduction activities.
In the ﬁnancial year 2009/10 the Group’s global electricity consumption as a percentage of sales fell by 6.4% against a 5%
target reduction. This ﬁnancial year, 2010/11, the Group reduced energy consumption as a percentage of sales by 15%. In
order to assist with this target the company invested in equipment such as automatic meter reading, sub-meters, more efﬁcient
air conditioning chillers and lighting, and voltage power optimisation.
There are a number of European directives aimed at beneﬁtting the environment that are complied with by the Group.
Such directives include the Waste Electrical and Electronic Equipment (WEEE) Directive, the Restriction on use of Hazardous
Substances (RoHS) Directive, the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACh) Directive andthe Energy use of Products (EuP) Directive.
The Group has achieved the Carbon Trust Standard in the UK, awarded in recognition of the work undertaken to reduce thecarbon footprint.
The Carbon Reduction Commitment Energy Efﬁciency Scheme (CRCEES) is a UK Government initiative to reduce the amount of
CO2 released to the atmosphere by organisations that consumed more than 6GWh during 2008. Oxford Instruments falls into
this category and is a full participant in Phase 1 of the CRC which currently runs from 2010 to 2013.

18

Oxford Instruments plc

Corporate and Social Responsibility Continued

All major sites have a responsibility to recycle waste materials. These materials include cardboard, paper, wood and metals.
Employees are encouraged to recycle paper, packaging, bottles and cans.
All corporate literature is printed on environmentally friendly paper using Forest Stewardship Council (FSC) accredited printers.
This, together with the vegetable oils used to coat the paper, means that the documents are bio-degradable and recyclable.
Health and Safety
Oxford Instruments is committed to providing the highest standards of safety in the workplace for its employees and to thecontinual improvement of its health and safety (H&S) performance.
Responsibility for Health and Safety lies with the Board. Charles Holroyd, an Executive Director, is responsible for formulating
the Group’s H&S strategy and objectives, reviewing performance against these objectives and for ensuring that key H&S issues
are effectively identiﬁed and managed.
The Board reviews the H&S performance of the Group’s operations at each meeting. All Group businesses regularly reportprogress on H&S issues to the Group Health, Safety and Environment Manager who is responsible for keeping Charles Holroyd,and consequently the Board, informed of serious issues. The Group Health, Safety and Environment Manager is responsible for
auditing each site annually.
Key H&S risks within the business are subjected to a more focused review by the Board. Current risks receiving closer attention
are those involved with driving for work, new production processes and the management of radiation issues in those businesses
providing X-ray products.
Two of the Group’s major sites are certiﬁed to the OHSAS18001 Health and Safety Management System standard.
Employees are kept informed of current H&S issues through information provided by local H&S committees. Members include
staff from all areas of the business and meet on a regular basis.
In addition, information on health and safety matters is published on the Group intranet, notice boards and in monthly
cascades and quarterly business reports. Employees are actively encouraged to suggest improvements that can be made inworking conditions and practices.
Employees
The Board recognises that the Group’s employees are critical to the overall delivery of its business strategy. It acknowledges that
the Group’s business success is delivered through the commitment, skills, experience and passion of its employees. Relations
with employees are based on respect and collaboration. 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 andreputation of the Group. The Group HR Director reports directly to the Board on all employee related issues.
The Group’s aim is to ensure there are equal opportunities for all employees with no discrimination on account of gender,
marital status, family responsibilities, sexual orientation or preference, colour, race, nationality, religious belief, ethnic origin,disability, age and unrelated or spent criminal convictions. Ability and contribution are the determining factors in the selection,
training, career development and promotion of all employees.
The success of Oxford Instruments is dependent upon the skills and abilities of its people, and all employees are encouraged
to realise their potential. Training, development and career planning needs are regularly reviewed, and both the technicaland interpersonal skills that sustain the economic success of the business are actively developed. This year, management
development programmes have been extended to include modules focusing on management of results, people and self. These
programmes are offered to all managers across the business.
All employees are kept informed of progress against the Group’s strategic plan through regular video presentations on theintranet and face-to-face meetings with the Chief Executive, monthly team meetings, the Company intranet and newsletters.
In addition, the performance of individual business groups is communicated through cascades and team meetings. The Group
conducts regular all-employee surveys on issues such as management team effectiveness, communication of business strategy,
working conditions and overall employee engagement. Speciﬁc action plans are in place across the Group to address key
areas.
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 an annual basis. Financial participation in the Groupis encouraged through the Share Incentive Plan in the UK, Executive Share Options granted to management, and throughbonus schemes based on ﬁnancial performance.

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19Corporate and Social Responsibility Continued

Each year, the Chairman hosts The Chairman’s Awards
for Innovation which reward and recognise technicaland process innovation. Employees are encouraged toenter projects and/or activities that show innovationand customer service excellence in its broadest sense
and at the same time have brought value to thebusiness. Winners receive a trophy and a cash prize,
awarded at a gala dinner. This year a new award forbrand champion was added, building on current branddevelopment work. A record number of entries wasreceived from all business groups and all locations
world-wide.
The Oxford Instruments Brand
An extensive programme was initiated in 2009/10
to energise the Oxford Instruments brand. This has
inﬂuenced the way the Group is represented in its
markets and what it stands for. It has led to a redeﬁnitionand communication of Company Values, which werevalidated through feedback from employees and theresults of a customer survey conducted in June 2010.
Oxford Instruments’ values are:
Trusted: Builds long term relationships based on trust and respect
Inclusive: Listens and engages with customers, colleagues, shareholders and partners for mutual success
Innovative & Progressive: Brings skill, experience and openness to new ideas to meet the needs of the 21st Century
Wholehearted: Approaches what we do with passion, with care, with pace and with commitment

These values, together with the Group’s brand identity inﬂuence employee engagement activities, product and software design,
distributor and partner relationships and public relations. In March 2011, a consistent product styling protocol was introduced
to provide a corporate image consistent with a professional, forward-thinking, successful business. A broad programme ofactivities and processes is in place to ensure the Oxford Instruments brand is adopted and championed across the businesses.

20

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Corporate and Social Responsibility Continued

Customers
The Group believes that customer relationships are built on mutual trust and integrity. This principle governs all aspects ofthe business. The Group values its customers and the trust that they place in the Group, and will safeguard the information
provided by customers in accordance with relevant laws and contractual commitments.
The Group’s ‘Voice of the Customer’ work puts customer needs at the core of the business. Oxford Instruments’ customers
expect to receive and do 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, and are backed by aglobal network of skilled support teams.
Results of the customer survey held in June 2010 highlighted strengths and weaknesses across the Group. Actions are now inplace to improve on the weaknesses and consolidate the strengths. The next customer survey is planned for 2013.
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.
There is a Group supplier management process in place which promotes a common supply chain strategy split by commodity,
driving the business towards fewer high level suppliers. This process has resulted in substantial savings and cost avoidanceacross the Group, as well as enabling reductions in working capital.
The Strategic Sourcing Team regularly inspects and audit suppliers covering all aspects of their operational capability, including
their compliance with our Business Conduct and Ethics Code, and closely manages outsourcing to low cost countries. ‘Road
maps’ and regular strategic reviews are in place for strategically important suppliers. In accordance with ISO9001 and ISO
14001, only quality approved organisations are used.
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 positive working environment It strives to attract highcalibre individuals to the business who share in its values and vision in all locations in which it operates. Many of the Group’s
employees have long and successful careers with Oxford Instruments.
The Group is an active supporter of local, national and international science communities both on a corporate level, a businessgroup level and an individual level. We also sponsor a number of international and national awards and events including theprestigious Sir Martin Wood Prize through the Millennium Science Forum in Japan and the Parliamentary Science Engineeringand Technology (SET) Awards for young researchers in the UK.
Business groups and employees are supported in any activities that promote good relations with the local communities bycontributing to, and supporting, local charities and community activities. The focus is on supporting science in business, andencouraging innovation and the promotion of science in schools and universities. UK employees are encouraged to contributeto local charities using the Give-As-You-Earn scheme. Local social clubs run annual fundraising activities for a chosen charity
and the Group supports these efforts with an additional donation. Oxford Instruments does not make contributions to politicalparties or organisations.
Summary
Oxford Instruments pursues responsible development and deeper understanding of the world through science and technology,
meeting customer needs through advanced technology and service. Its values embrace a wholehearted commitment toemployees, customers, partners, shareholders and communities. This commitment to Corporate Social Responsibility in all theways described above enables long term relationships to be developed, based on trust and respect, and by working together
for mutual beneﬁt and success.

Jonathan Flint Chief Executive
14 June 2011

Oxford Instruments plc

21

Corporate GovernanceIntroduction
The Board is committed to ensuring that high standards of 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 (“the Code”), except as detailed below.
The Board’s policies and procedures are documented in the Board Reference File that sets out the roles and delegatedauthorities applying to the Directors, the Board and the Board Committees. The Board Reference File is reviewed annually by
the Board as part of the annual governance review undertaken by the Chairman.
Compliance
The Board considers that, throughout the period under review, the Group has complied with the provisions recommended
in Section 1 of the Code, other than in respect of Provision B.2.1 with the appointment of Nigel Keen as Chairman of theRemuneration Committee as described below.
Board of Directors and management structure
Board of Directors
The Board comprises the Chairman, four Non-Executive Directors and three Executive Directors. The Directors’ biographiesand details of length of service are shown on page 14. All the Directors have written letters of appointment that have been
approved by the Board and which are available for inspection at the Company’s Annual General Meeting.
The Chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role. The division of
responsibilities between the role of Chairman and the Chief Executive has been set out in writing and agreed by the Board.
The Board has delegated the management of health, safety and the environment to the Group Business Development
Director.
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 the Executive Directors, the Group Operations Director, the Group Technical Director and
the Group Human Resources Director.
The General Committee meets at least twice a month either physically or by video or telephone conference and focuses onGroup wide performance and risk management and twice a year for strategic away days.
Executive Committee
The General Committee is supported by an Executive Committee that consists of the members of the General Committee withthe addition of the Managing Directors of each of the principal businesses which comprise the Group.
Operation of the Board
The Board is responsible to shareholders for delivering sustainable incremental shareholder value through entrepreneurial
leadership within a framework of controls for managing risk. The Board sets the Group’s strategy, maintains the policy anddecision making framework in which this strategy is implemented, veriﬁes that the necessary ﬁnancial and human resources
are in place to meet strategic aims, monitors performance against key ﬁnancial and non-ﬁnancial indicators, oversees thesystem of risk management and sets values and standards in governance matters.
The details of the way the Board operates, including a schedule of matters reserved to the Board for decision, are set out inthe Board Reference File.
The Board retains control over strategy, investments and capital expenditure, and limits the decisions which can be taken bymanagement in the areas of strategic and ﬁnancial management and reporting, capital structure, corporate actions, mergers
and acquisitions, major contracts and other commitments, 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 Board meets on a regular basis, at least ten times a year, and otherwise as required. Of the ten regular meetings, typicallyeight are held at Group locations, and the remaining two are held by telephone conference.
Board meetings involve reviews of ﬁnancial and business performance against the plan approved by the Board. Risk
management review, both at Group level and also for each of the business units, is embedded in the reporting system. On arotating basis, the Board receives presentations from the 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 by a pre-circulated paper analysing all
relevant aspects of the proposal and recommending a course of action.

22

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Corporate Governance Continued

Board papers are distributed in advance of the relevant meeting in sufﬁcient time to allow the Directors to prepare formeetings. Minutes of Committee meetings are circulated to the relevant Directors. In the very few instances when a Director
has not been able to attend Board or Committee meetings, his comments on 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 leading these meetings.
The Non-Executive Directors also meet annually without the Chairman in attendance. The Deputy Chairman chairs thesemeetings.
The Company Secretary and the Company Secretary’s Ofﬁce are responsible for implementing Board procedures and foradvising the Board on corporate governance matters.
Board balance and independence
The Code requires the Board should be of sufﬁcient size that the balance of skills and experience is appropriate for therequirements of the business and that there is a balance of Executive and Non-Executive Directors such that no individual or
small group of individuals can dominate the Board’s decision making.
The composition of the Board and the combination of diverse backgrounds and expertise of the Non-Executive Directors meetthese principles.
Nigel Keen, Chairman, has been a member of the Board since February 1999. He has a degree in engineering from Cambridge
University, is a Fellow of the Institute of Chartered Accountants and has been involved in the formation and development ofhigh technology businesses for more than thirty years. He fulﬁlled the independence criteria at the time of his appointment as
set out in the Combined Code, is Chairman of the Nomination and Remuneration Committees as the Board considers that fora SmallCap company the Chairman’s prime roles are: to procure an excellent strategy for the business; to recruit and retain thebest available management team to execute this strategy; to put in place a Board of independent directors whose experiencecan add value to the work of the management; and to ensure that the business maintains the highest standard of corporate
governance. Taking into consideration the size of the Company, the Board believes that in order to fulﬁl these obligations
it is appropriate and necessary for the Chairman of the Board to also be Chairman of the Nomination Committee and theRemuneration Committee. Nigel Keen also serves as Chairman of Oxford Instruments Pension Trustee Limited, which is theTrustee of the UK deﬁned beneﬁt pension scheme. The Board of the Company and the Board of the Trustee to the Pension
Scheme have each independently considered whether it is appropriate to have the Chairman of the Company as Chairman
to the Board of the Trustee of the Pension Scheme, notwithstanding the potential conﬂicts of interest inherent in the same
person holding both these positions, and they each have unanimously conﬁrmed that they believe that it is in the interest of
all parties for this to continue.
Mike Brady, Deputy Chairman, has been a member of the Board since June 1995. He is Emeritus Professor in the Department ofRadiation Oncology and Biology at the University of Oxford, having recently retired as BP Professor of Information Engineering,and is one of the UK’s leading engineers. He brings a depth of technical expertise to Board discussions. His independence ofmind gained from a career as a senior academic supervisor of research programmes in a major technical discipline at Oxford
University, his technical expertise as the only Non-Executive Director from a scientiﬁc profession and the value of that expertise
to Board discussions, the breadth of his professional and business interests unrelated to the Group, his continual constructive
probing of the technical aspect of proposals being considered by the Board and the composition of the Board generally leads
the Board to conclude that it is appropriate that he should continue in ofﬁce. Although the Board continues to value Mike’s
input and does not regard this input as being less valuable as a result of his tenure as a director of the Company, the Board
has reviewed Mike’s status as an independent director and in the light of guidance by the Combined Code has determinedthat he should no longer be considered independent. Following this determination, Mike stepped down as a member of theRemuneration and Audit Committees in 2010.
Mike Hughes, Senior Independent Non-Executive Director, has been a member of the Board since November 2004. He iscurrently the Chairman of EA Technology Ltd and a Non-Executive director of South Staffordshire Water Ltd. Previously
he held senior management positions within GEC before becoming CEO of Midlands Electricity plc and then Executive Vice
President of GPU Inc International Operations Group.
Jock Lennox was appointed to the Board as an Independent Non-Executive Director on 1 April 2009. Until April 2009 he wasa Senior Audit Partner at Ernst & Young where he gained extensive experience advising clients in a variety of industries on
ﬁnancial reporting, ﬁnancing, transactions and international expansion. Jock is Chairman of the Audit Committee and isa member of the Remuneration and Nomination Board Committees. The Board believes that Jock’s skills, experience andknowledge enhance and maintain an effective Board and provide a well qualiﬁed Chairman of the Audit Committee.
Bernard Taylor was appointed to the Board as an Independent Non-Executive Director in November 2002. He has worked atvarious 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 Executiveof its European business. He is also a fellow of the Royal Society of Chemistry, Chairman of ISIS Innovation Ltd and a memberof The Council of the University of Oxford.
Further information on each of the Non-Executive Directors is to be found in the Directors’ Biographies on page 14.

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23

Corporate Governance Continued

Independence of Non-Executive Directors
In the opinion of the Board, Mike Hughes, Jock Lennox and Bernard Taylor are currently independent and Mike Brady is nolonger considered to be independent in accordance with the guidelines set out in the Combined Code. The Board considers
that they are each independent in character and judgement and do not have relationships which are likely to affect theirjudgement. This opinion is based on current participation and performance on both the Board and Board Committees including
consideration of the length of service at Oxford Instruments plc.
Term of appointment of Non-Executive Directors
Each Non-Executive Director was appointed for an initial term of three years. In line with provision B.7.1 of the UK Corporate
Governance code, the Board has determined that all directors of the Board are to be subject to annual election by shareholders
and accordingly the appropriate resolutions will be put to shareholders at the Company’s forthcoming AGM.
Board development and evaluation
Board development
On appointment, Directors undertake an induction process which is designed to develop knowledge and understanding of
the Group’s businesses through visits to various Group operating sites, discussion of relevant technology, as well as productdemonstrations, brieﬁngs from management and familiarisation with investor 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 team and 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 and ensure compliancewith 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 theCompany Secretary are matters for the Board as a whole.
Board evaluation
For the year ended 31 March 2011 the Board has 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 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 andtraining, internal control and risk management. In addition, each Director has prepared a written statement concerning
governance of the Company and has discussed the statement with the Chairman at the individual one-to-one interviews which
the Chairman holds with each director. The Chief Executive is also involved in the process by giving his input on the way the
Board helps him in his role. The output from these evaluations allows the Chairman to review objectively the overall balanceof the Board. The Non-Executive Directors meet annually to appraise the Chairman’s performance.
In light of provision B.6.1 of the UK Corporate Governance code, the Board is undertaking a review of how best to carry out
an evaluation of the board which is being externally facilitated with a view to complying with this provision during the courseof 2011.
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 on matters where he has
a conﬂict of interest. Further details of the individual Committees’ activities are described below.

24

Oxford Instruments plc

Corporate Governance Continued

The following table sets out the frequency of, and attendance at, Board and principal Board Committee meetings for the year
to 31 March 2011:

Number of meetings held
Nigel Keen
Jonathan Flint
Kevin BoydCharles Holroyd
Mike Brady
Mike Hughes
Jock Lennox
Bernard Taylor

Main
Board
11
11
11
11
11
10
8
11
11

Audit
Committee
6
6¹
6¹
6¹
6¹
52
6
6
3

Remuneration
Committee
5
5
1¹
53
5
5
4

Nomination
Committee
2
2
1¹
2
2
2
2

Note:
¹ Attended by invitation
2
Attended by invitation from 13 September 2010
3
Attended by invitation from 6 July 2010
Board Committees
The Board has formed the following Committees: Nomination, Remuneration, Audit and Administration.
Membership of Board Committees, which is set out on page 14 to 15, is determined by the Board and is reviewed regularly.
The written terms of reference of the Board Committees are reviewed annually by each Committee and the Board and areavailable on the Company’s website at www.oxford-instruments.com/investors and from the Company on request. They will
be on display at the Annual General Meeting.
Nomination Committee
The Nomination Committee comprises all the Non-Executive Directors, under the chairmanship of the Chairman of the Board.
The Nomination Committee is responsible for assisting the Board in the formal selection and appointment of Directors andconsiders succession planning for the Board. It also considers potential candidates and recommends appointments of new
Directors to the Board. The appointments are based on merit and against objective criteria including the time available andthe commitment that will be required of the potential 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. Each appointment process begins with anevaluation of the balance of skills, knowledge and experience existing on the Board that is effected through a series of oneon-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 is prepared using the information gathered. Candidates meet with the
Chairman and the Deputy Chairman and a ﬁnal selection of potential appointees meets several Directors individually. Following
these meetings, the Nomination 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 provided with an induction programme including site visits andmeetings with senior management. This induction is supported by brieﬁng papers prepared by the Company 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 at
the end of each term, taking into account the performance of the individual.
The Nomination Committee also annually reviews the performance of the Chief Executive and succession planning within thebusiness.

Oxford Instruments plc

25

Corporate Governance Continued

Remuneration Committee
The Remuneration Committee comprises all the Independent Non-Executive Directors and the Chairman of the Board. The
Chairman of the Board, Nigel Keen, who fulﬁlled the independence criteria at the time of his appointment as set out in
the Code, is Chairman of the Remuneration Committee because as set out on page 23 above, the Board considers that in a
SmallCap company it is 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 for recommending 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 is sought
when considered necessary. Under its terms of reference the Chairman of the Board may be Chairman of 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, for example when
consideration is being given to the performance of other Executive Directors and on signiﬁcant Group wide changes in salarystructure and terms and conditions affecting other employees at senior executive level. Further details of the Remuneration
Committee are included in the Directors’ Remuneration Report set out on pages 30 to 37.
Audit Committee
The Audit Committee comprises all the Independent Non-Executive Directors and is chaired by Jock Lennox. The Chairman and
Deputy Chairman of the Board and members of senior management such as the Chief Executive and Group Finance Director
are invited to attend all or part 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 the Committee on a regular basis, including at the half year, atthe planning stage before the audit and after the audit at the reporting stage. At least once a year the Committee meets withthe external auditors without the Executive Directors present.
The primary objective of the Audit Committee is to assist the Board of Directors in fulﬁlling its responsibilities relating toexternal ﬁnancial reporting and associated announcements, oversight of the external audit process including consideration of
the independence of the Group’s external auditors, the resourcing and plans of the Internal Audit function and the adequacyand effectiveness of the ﬁnancial control environment.
The Audit Committee’s terms of reference include all matters indicated by the Combined Code. The terms of reference areconsidered annually by the Audit Committee and are then referred to the Board for approval. The Audit Committee structure
requires the inclusion of one member with relevant recent ﬁnancial experience, currently the Committee Chairman, andexpects all Audit Committee members to be ﬁnancially literate.
The Audit Committee Chairman reports the outcome of 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 toemployees of the Group and the external auditor.
The Audit Committee reviews all public statements containing ﬁnancial information, including the half year and annual
ﬁnancial statements and interim management statements, together with the related Stock Exchange announcements, having
received information on the accounting principles, policies and practices adopted in the Group’s accounts, changes proposedto those principles, policies and practices, signiﬁcant accounting issues and contingent liabilities affecting the Group, potential
tax contingencies and the Group’s compliance with statutory tax obligations.
The Audit Committee is responsible for the development, implementation and monitoring of the Group’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 of the external auditors following the completion of the annual audit.
To assess the effectiveness of the external auditors, the Audit Committee reviews:

UÊ The external auditors’ fulﬁlment of the agreed audit plan and variations from the planUÊ The robustness and perceptiveness of the auditors in their handling of key accounting and audit judgements
UÊ The external auditors’ comments in respect of ﬁnancial controls

26

Oxford Instruments plc

Corporate Governance Continued

To fulﬁl its responsibility regarding the independence of the external auditors, the Audit Committee reviews the changes inkey 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 their arrangements 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 Chairmanof the Audit Committee reviews the provision of non-audit services by the external auditors where the proposed fee exceeds£20,000 and with formal Audit Committee approval where fees are £50,000 or above. Competitor quotes are obtained where
the proposed fee is in excess of £50,000.
Details of the audit fees, together with fees for non-audit services for the year, are set out in note 3 (page 53) to the Financial
Statements.
The Audit Committee is required to assist the Board to fulﬁl its responsibilities relating to the adequacy and effectiveness of
the ﬁnancial control environment. This includes consideration of the adequacy of both the resourcing and the plans of theInternal Audit function.
To fulﬁl these duties the Committee reviews:

UÊ The Group’s risk framework and risk management policies
UÊ Any internal control ﬁndings reported by the external auditor
UÊ 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 and the outcomes of the planned activity

UÊ Internal Audit reports on key audit areas and signiﬁcant control environment deﬁciencies
UÊ Reports on the systems of ﬁnancial controls and ﬁnancial risk management
The Group’s Business Malpractice Policy comprises an internal process that has been communicated directly to all employees
by which employees can raise a concern, including concerns relating to fraud, damage to the environment, criminal activity
or danger to health and safety, in the knowledge that it will be taken seriously, treated as conﬁdential and that no action
will be taken against them. There is also provision within the Policy for employees to raise concerns directly with the Senior
Independent Director. The Policy is reviewed annually by the Committee.
Administration Committee
The Administration Committee consists of a minimum of two Directors and deals with items of a routine and administrative
nature. The Board receives copies of the minutes of the Administration Committee.
Investor relations
The Group places considerable importance on regular communications with its shareholders with whom it has an ongoingprogramme of dialogue. All shareholders are encouraged to participate in the Annual General Meeting at which the Chairman
and Chief Executive present an overview of the Group’s business and review the results and make comments on strategy andcurrent business activity.
The Non-Executive Directors meet informally with shareholders both before and after the Annual General Meeting andrespond to shareholder queries and requests. The Chairman and the Senior Independent Director make themselves available
to meet any shareholders, as required.
All Group announcements are posted on the Group website, www.oxford-instruments.com/investors, as soon as they are
released. The Investor Relations section of the website 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 theprovisions of the Combined Code relating to the disclosure of proxy votes, the separation of resolutions and the attendance ofCommittee Chairmen. The Group arranges for the Annual Reports and Financial Statements and related papers to be posted
on its website and, where shareholders have elected to receive papers copies, posted to shareholders so as to allow at least 20
working days for consideration prior to the AGM. The next AGM will be held on 13 September 2011.
Risk management
Within the Group there is an ongoing embedded process for identifying, evaluating and managing the signiﬁcant risks facedby 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 business to identify
signiﬁcant business risks and to classify them both as to probability and potential impact.

Oxford Instruments plc

27

Corporate Governance Continued

Once identiﬁed, mitigating action, where possible, is formulated and responsibility within the management team assigned. Ona regular basis each business reviews and updates its risk summary which is then reported to the Chief Executive. If a material
risk changes or arises, 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 and the mitigating actions
in place are reported to and reviewed by the Board. The Principal Risks review (page 13) gives an overview of the major risks
and uncertainties faced by the Group.
In addition, the Board considers risks to the Group’s strategic objectives which are not addressed within the Group’s businesses
and develops appropriate actions to manage and mitigate these risks.
Internal audit
The Group has an established process of internal audits of both ﬁnancial and non-ﬁnancial areas of all the Group’s operating
businesses and Head Ofﬁce. Non-ﬁnancial audits are overseen by the Board and ﬁnancial audits are overseen by the Audit
Committee.

UÊ Non-ﬁnancial audits are carried out in the areas of Operations, Human Resources, IT, Health and Safety and Research andDevelopment. These audits are carried out by the Group functional heads (or their delegate). Audit cycles vary between
one and four years dependent on the risk proﬁle of that function in each operating business.

UÊ Financial audits are carried out by members of the ﬁnance function who are qualiﬁed accountants. Approximately half of
the audits are carried out by members of the Group ﬁnance team and half by the operating businesses’ Finance Directors
as it is felt that internal audits carried out on peer businesses allows a sharing of best practice. In Japan, internal audits
are carried out by an external ﬁrm of auditors due to the signiﬁcant language barrier and the Head Ofﬁce treasury
function is reviewed by external consultants. Financial internal audits occur on a three year cycle unless risk factors
trigger a more frequent occurrence.
Following an internal audit, local management are asked to comment on any issues raised and put in place remedial actionplans. On a bi-annual basis, a summary of the results of the non-ﬁnancial audits is reported to the Board and a summary of
the results of the ﬁnancial audits is reported to the Audit Committee.
There is a review at least annually of the internal audit process which determines whether it continues to be ﬁt for purpose orneeds to be amended. It has been determined that it continues to be appropriate for internal audits to be carried out by Group
personnel as it is felt that this is the most appropriate way for a business of the size and complexity of the Group.
Internal control
The Board is ultimately responsible for the Group’s system of internal control and for reviewing its effectiveness. However,such a system is designed to manage rather than eliminate the risk of failure to achieve 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 is delegated to the Executive Directors.
During the year the Directors have reviewed the effectiveness 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.
They are regularly reviewed by the Board and accord with the Turnbull guidance. These controls include ﬁnancial, operational,
compliance and risk management.

28

Oxford Instruments plc

Corporate Governance Continued

The key components designed to provide effective internal control within the Group are as follows:UÊ there is a formal schedule of matters reserved to the Board for decision; other than these matters, the Board delegates to
the Chief Executive and reviews the delegation of authorities throughout the management structure;UÊ the Group’s management structure comprises the General Committee whose members have Group wide ﬁnancial
responsibilities and to whom day-to-day responsibility for the management of the Group is delegated. The responsibility
is based on the identiﬁcation of separate businesses for each of the Group’s activities, the heads of these businesses
together with the Chief Executive, the Group Finance Director and certain other members of the senior management
team form the Group’s Executive Committee. There are clearly deﬁned lines of management responsibilities at all levels
up to and including the Group Board and the Group’s accounting and reporting functions reﬂect this organisation;

UÊ ﬁnancial executives within Group businesses report to their own operational head but there is also a well established andacknowledged functional reporting relationship through to the Group Finance Director;

UÊ the Board reviews strategic issues and options formally once a year during the annual strategic planning process andduring the year as appropriate. In addition the Executive Directors maintain a three year planning model of the Groupand its individual businesses;

UÊ annual budgets are prepared for each of the Group’s businesses which include monthly ﬁgures for turnover, proﬁt, capital
expenditure, cash ﬂow and borrowings. The budgets are reviewed through the Group management structure and resultin a Group ﬁnancial budget which is considered and approved by the Board;UÊ 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 for orders, turnover, operating proﬁt and cash. Both arereviewed by the Board monthly;UÊ the Board approves all acquisition and divestment proposals and there are established procedures for the planning,approval and monitoring of capital expenditure;UÊ for all major investments the performance of at least the ﬁrst twelve months against the original proposal is reviewed by
the Board;UÊ each Group site, except for representative sales ofﬁces, is required to submit a self assessment internal control
questionnaire annually;UÊ internal audit is carried out through a system of regular reviews of the ﬁnancial and non-ﬁnancial internal controls at
each site. These reviews are coordinated by a manager in Head Ofﬁce.

UÊ ﬁnancial internal audit visits are conducted by accountants from other parts of the Group and in Japan, due to language
differences, by local external auditors

UÊ non-ﬁnancial internal audit visits are conducted by the Group’s functional heads, or their delegates
UÊ work performed is based on a standardised Group format but involves random testing, together with a review of theinternal control questionnaire;UÊ where required, action plans are drawn up by the businesses in conjunction with the Group Finance Director to remedy
any signiﬁcant control weaknesses that are identiﬁed from completion of the internal control questionnaire or as a resultof the internal audit. The results of audit reviews are reported to local management, the Group Finance Director and the
Audit Committee and checks on the progress of the action items arising are made;UÊ the Board receives regular updates on treasury, tax, property, pensions, insurance, litigation, human resources and healthand safety matters;

UÊ authorisation limits are set at appropriate levels throughout the Group; compliance with these limits is monitored by theGroup Finance Director and internal audit;

UÊ all requests to quote for substantial ﬁxed price contracts are reviewed by the Chief Executive and/or the Group FinanceDirector to assess both technical and ﬁnancial risk and to ﬁx an appropriate balance between risk and reward. However,no procedure can guarantee the avoidance of losses on ﬁxed price contracts of a technical nature; andUÊ with respect to the UK pension scheme the Group has its own trustee representatives, involves its own independentactuary with whom actuarial assumptions are reviewed, agrees the investment policy with the Trustee, ensures there isan independent actuarial valuation every three years and agrees funding levels to provide adequate funding to meet the
beneﬁt payments of the members as they fall due.
Susan Johnson-Brett, Company Secretary
14 June 2011

Oxford Instruments plc

29

Directors’ Remuneration Report
Remuneration Committee
The Remuneration Committee is responsible for recommending to the Board the remuneration packages for Executive Directors
and the bonus and share incentive strategy for the Group’s executive management. The Board as a whole is responsible fordetermining the remuneration of the Non-Executive Directors, including the Chairman.
The role of the Committee includes:UÊ considering and determining the remuneration policy for the Executive Directors and executive management
UÊ within this agreed policy, considering and determining the total remuneration packages of each Executive Director of theCompanyUÊ approving the design and performance targets for all performance-related plans as well as the overall total annual
payments made under such plansUÊ reviewing and noting remuneration trends across the Group; andUÊ determining the policy for pension arrangements, service agreements and termination payments to Executive Directors
and the executive management
The Remuneration Committee comprises all the Independent Non-Executive Directors and the Chairman of the Board. The
Chairman of the Board, Nigel Keen, who fulﬁlled the independence criteria at the time of his appointment as set out in theCode, is Chairman of the Remuneration Committee. The Board considers that for a SmallCap company the Chairman’s primeroles 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. Taking into consideration the size of
the Company, the Board believes that in order to fulﬁl these obligations it is appropriate and necessary for the Chairman of
the Board to also be Chairman of the Remuneration Committee.
The Committee normally meets at least four times a year and the members of the Committee are appointed by the Board.
The Chief Executive is invited to attend Remuneration Committee meetings as deemed appropriate, for example, when
considering the performance of other Executive Directors and on signiﬁcant Group-wide changes in salary structure and terms
and conditions affecting other employees at senior executive level. However, no Executive Director is present when theCommittee is determining his or her remuneration.
The performance of the Committee is reviewed at least once a year as part of the wider Board evaluation process.
The Committee acts within its agreed written terms of reference (which are published on the company’s website, www.oxfordinstruments.com/investors) and complies with the provisions of the Combined Code on Corporate Governance (the Code)regarding best practice on the design of performance-related remuneration.
During the year the Committee:-UÊ set the performance targets for the bonus and long-term incentive awards
UÊ calculated the bonus out-turn and the vesting of long-term incentives
UÊ set the salary and bonus payments of the Executive Directors and reviewed their general terms and conditions of
employment

UÊ reviewed the bonus payments and pay packages for the Group as a wholeUÊ received an update on any signiﬁcant Group-wide changes in senior employees’ salaries and terms and conditions
UÊ considered senior executives’ pension plansUÊ designed a new executive share option schemeUÊ consulted with shareholders
UÊ consulted with the Committee’s advisors and the Chief Executive.
The Committee takes independent advice from Hewitt New Bridge Street (a trading name of Aon Corporation). Aon
Corporation also provided some insurance broking services to the Company during the year. The Committee also sought
advice from Laytons, the Company’s lawyer.
The report is divided into two parts:

UÊ Part A: which is not subject to audit and explains the Company’s current remuneration policy for Executive Directors andthe executive management; andUÊ Part B: which is audited and shows how the remuneration policy has been applied to Executive Directors for the year
under review and contains tables detailing the Executive Directors’ emoluments for the year ended 31 March 2011, theiraccrued pensions and their interests under the Company’s long-term incentive arrangements.

30

Oxford Instruments plc

Directors’ Remuneration Report Continued

PART A
Remuneration policy
The Company has an incentive-driven remuneration policy that seeks to reward executives fairly and responsibly based onGroup performance and their individual contribution. Overall the remuneration package aims to be appropriate to attract,
motivate and retain high calibre executives.
The remuneration policy promotes the delivery of the Group strategy and seeks to align the interests of Directors andshareholders. The Committee regularly reviews the link between performance and strategy and believes that measuring the
success of the strategy through sustained and signiﬁcant earnings growth and the delivery of superior long-term shareholder
returns ensures a strong performance pay related culture. When appropriate, the Chairman has contact with principal
shareholders regarding remuneration policy.
The 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 on matters such as governance, environmental and social issues. Moregenerally, the Committee ensures that the overall remuneration policy does not encourage inappropriate operational risk.
The Committee reviews the Executive Directors’ packages annually taking account of the level of remuneration paid tocomparable positions in similar companies within the industry, as well as pay and conditions throughout the remainder of thegroup. Comparative pay data is used carefully recognising the potential for an upward ratchet in remuneration caused by overreliance on such data. The policy for Executive Director remuneration can be summarised as follows:
Fixed Remuneration

Base salaryBeneﬁts
E.g. carbeneﬁt, life
& health
insurance

PensionDeﬁnedcontribution

Performance-Related Remuneration

Annual Bonus
Measured over 1 year.
Corporate ﬁnancial
measures and speciﬁc
strategic objectives.
Max 100% of salary for CEO& FD
Max 75% of salaryfor Group Business
Development Director

Long-Term Incentives
Measured over 3 years.
Executive Share Options – based on
EPS performance,
Long-Term Incentive Scheme – basedon TSR performance,

Shareholding guideline of a minimum of 100% of base salary for Executive Directors(to be built up by retaining shares on exercise of options granted from 2007 equal to a minimum of 50% of the net gain)
Base salary
The Committee reviews salaries annually. When setting Executive Directors’ salaries, the Committee takes account of the
Director’s experience, performance and responsibilities as well as the performance of the Company and salary increases for
employees generally. It also has regard to market data for comparable positions in similar companies within the industry.
For the salary year starting 1 July 2011, staff salaries are reviewed dependent on individual performance with annualised
increases across the UK expected to average 2.5% for an on-target performer and 3% plus for performance that exceeds
expectations. In order to appropriately reward excellence, there is no automatic upper limit on individual increases. In lightof the increase in size and complexity of the Group and the improvement in its results, the salaries of the senior management
team, including the Executive Directors, will be increased by 5% per annum reﬂecting the individual’s strong performance.
Annual Bonus
Executive Directors and other employee groups are eligible to participate in a non-pensionable discretionary annual bonus. The
Committee sets targets for Executive Directors and the executive management which are primarily based on the achievementof challenging corporate ﬁnancial targets, with the balance payable for meeting speciﬁc strategic objectives.
For the year ended 31 March 2011, the bonus awarded was based against the following metrics: proﬁt, cash generation andother strategic objectives. The level of payment for the year took account of the Company’s exceptionally strong performancewith order intake up 9.4%, adjusted PBT up 120.2% and net cash position of £13.1m reﬂecting the Company’s continuing
improvement in performance.

Oxford Instruments plc

31

Directors’ Remuneration Report Continued

The on-target and maximum bonus potentials for the Executive Directors as well as the amount actually payable are set out
below.

Jonathan Flint
Kevin BoydCharles Holroyd
12

On-Target Bonus (% ofsalary)Maximum Bonus (% ofsalary)Actual Bonus Payable for2010/11 (% of salary)

75%
55%1
55%

100%
100%2
75%

100%
100%
70%

On-Target Bonus increased to 75% for the ﬁnancial year 2011/12
Maximum bonus potential increased from 75% in the ﬁnancial year 2009/10

For the ﬁnancial year to 31 March 2012 the target and maximum bonus potential of Executive Directors’ annual bonuses will
be unchanged except that the on-target bonus for Kevin Boyd has been increased from 55% to 75% and the structure will besimilar to the year to 31 March 2011 with performance metrics including proﬁt and cash generation.
Long-Term Incentive Schemes
The Company operates two discretionary plans to incentivise Executive Directors and employees:

UÊ the Executive Share Option Scheme (ESOS); andUÊ the Senior Executive Long-Term Incentive Scheme (SELTIS).
Under the ESOS executives may be granted options to purchase shares at an exercise price based on the prevailing share priceon the date of grant. Options may be exercised between three years and ten years from the date of grant subject to theachievement of performance conditions measured over three years. Under the SELTIS executives may be granted options topurchase shares at zero cost. Options may be exercised between three years and seven years from the date of grant subject tothe achievement of performance conditions measured over three years. At the discretion of the Committee, the gain made on
an option may be settled in the form of issuing fully paid up shares equivalent to the gain.
As set out below, the ESOS provides a focus on share price growth and measures performance using adjusted earnings per
share. The SELTIS provides a focus on stock market out-performance through measuring Total Shareholder Return (TSR)
relative to a comparator group of companies. The Remuneration Committee considers that the combination of these different
plans and measures encourages shareholder value creation. When setting performance conditions at grant, the Committee
considers the Company’s internal ﬁnancial planning, market forecasts and the business environment.
The ten-year life of the ESOS will expire prior to this year’s AGM. Accordingly, the Committee has reviewed the policy forlong-term incentives going forward and has concluded that the current policy in relation to long-term incentives, which has
evolved over time, has provided an excellent link between reward and performance, together with a strong alignment ofinterest between executives and shareholders. However the current ESOS is about to reach the end of its ten-year life and areplacement scheme is being put forward for shareholder approval at this year’s AGM.
Having reviewed the structure of long-term incentives and considered the various alternatives, the Committee believes that
it would be appropriate to continue with the policy of awarding a mix of performance shares under the SELTIS (with a TSR
performance condition) and share options under a replacement ESOS (with a stretching EPS performance condition). This
provides a good focus on the outcomes of the Company strategy, namely sector-beating stock market returns together withsustainable improvements in long term proﬁtability. The Committee considers that weighting the long-term incentive policy
towards share options provides excellent ongoing alignment with shareholders, as the exercise price and EPS growth targets
will be referenced off the current all-time-highs.
Under the requirements for the drafting of Company remuneration reports, we are required, where possible, to describe theperformance conditions applying to awards to be made in the forthcoming year. These performance conditions will be set atthe time awards are made under the new scheme. For the initial awards in 2011/12 to the Executive Directors, it is proposedthat the Earnings Per Share targets in the ESOS will be increased by the addition of a CPI benchmark to the 5%-10% range.
Accordingly, the range will require average annual EPS growth of CPI+5%-CPI+10% per annum for between 33.3% and 100%of the options to vest. It is proposed that the performance condition for the SELTIS Scheme will be consistent with theapproach taken in prior years, i.e. based on a relative Total Shareholder Return. The performance conditions applying to theawards made January 2011 are set out on page 35.
Shareholding guidelines
The Committee, in 2007, established shareholding guidelines which encourage the Executive Directors to build up a shareholding
equivalent in value to 100% of basic salary. Until the guideline is met in full whenever ESOS or SELTIS options granted afterJune 2007 are exercised Executive Directors are expected to retain or purchase shares equivalent to the value of 50% of the
net amount realised from exercise of the options after allowing for tax payable.
As at 31 March 2011, Jonathan Flint, Kevin Boyd and Charles Holroyd held shares in the Company valued at 106%, 86% and219% of salary respectively. They are complying with the guidelines.

32

Oxford Instruments plc

Directors’ Remuneration Report Continued

All-Employee Share Schemes
Up until 1 April 2008, the Company granted options under a SAYE scheme. The SAYE scheme is administered in accordancewith Inland Revenue guidelines and there are no performance conditions attached to exercise.
The SAYE scheme has been replaced by a Share Incentive Plan (SIP) which since 1 April 2008 has been open to all UK permanent
staff employed for at least six months. The Executive Directors all participate in the SIP to the maximum extent permitted by
HMRC. The Company offers a 1:5 match for partnership shares purchased by employees. During the year, each of the Executive
Directors were awarded 72 matching shares.
Dilution limits
The ESOS, SELTIS and SAYE share option schemes provide that overall dilution through the issuance of new shares for employee
share schemes should not exceed an amount equivalent to 10% of the Company’s issued share capital over a 10 year period.
Awards made under the SELTIS scheme prior to 2009 and shares required by the SIP are satisﬁed by market purchased shares.
The Committee monitors the position prior to the making of any award under these share option schemes to ensure that theCompany remains within this limit. As at the date of this Report, the Company’s headroom position remains within the 10%
limit.
Contracts
Details of the service contracts of the Executive Directors are as follows:

Jonathan Flint
Kevin BoydCharles Holroyd

Contract Date
21 February 2005
9 May 2006
22 November 2005

Notice Period
12 months
12 months
12 months

Unexpired Term of Contract
Rolling contract
Rolling contract
Rolling contract

The service contract of each Executive Director may be terminated on 12 months’ notice in writing by either side, in accordancewith current market practice, with the Company having a right to pay 12 months’ salary in lieu of notice if it so determines. The
Remuneration Committee’s policy on early termination is to provide compensation which reﬂects the Company’s contractual
obligations (which do not include entitlement to bonus after the date of notiﬁcation of termination), whilst recognising theprinciple of mitigation of losses.
Outside appointments
The Board allows Executive Directors to accept appropriate outside commercial non-executive appointments provided theaggregate 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.
Jonathan Flint holds positions as a member of the Council of the Institute of Physics and a member of the advisory board of
the ISIS neutron spellation instrument. During the year he received fees of £850 from ISIS.
Kevin Boyd is a Non-Executive Director of Guidance Ltd. During the year he received fees of £16,875.
Independent Non-Executive Directors
Under an arrangement between the Company and Imperialise Limited, Nigel Keen is retained to act as Chairman of theCompany and Chairman of the Trustee to the Oxford Instruments Pension Scheme and he must account to Imperialise Limited
for his services. His current term of appointment commenced on 25 February 2011 and is for three years. This arrangement canbe terminated by either party at any time by the giving of 6 months’ notice. Imperialise Limited is paid a sum equivalent to theemployer’s national insurance contributions on these fees as it is responsible for the cost of national insurance on payments to
Nigel Keen, whereas national insurance contributions in respect of the other Non-Executive Directors are made direct to the
UK Inland Revenue. Nigel Keen’s fees were increased to £127,000 per annum with effect from 25 February 2011, this being
the ﬁrst increase applied for three years. Nigel Keen also acts as Chairman to the Trustee of the Oxford Instruments Pension
Scheme and with effect from the same date, it has been agreed that fees of £25,000 per annum for these services be also paid
to Imperialise Limited. Accordingly Nigel Keen’s fees as Chairman were £102,475 (2010: £100,000) and as Chairman to theTrustee were £20,458 (2010: £20,000) 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 both these fees of £15,735.
Non-Executive Directors do not have service contracts but are appointed for an initial period 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 ofcompanies, and reimbursement 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 fee that reﬂects the time commitment and responsibilities of the role and is
sufﬁcient to attract individuals with appropriate knowledge and experience.

Oxford Instruments plc

33

Directors’ Remuneration Report Continued

Date of Appointment
25 February 2011
1 August 2010
3 July 2010
1 April 200913 November 2008

Nigel Keen
Mike Brady
Mike Hughes
Jock Lennox
Bernard Taylor

Notice Period
6 months
None
None
None
None

Mike Brady, Mike Hughes and Jock Lennox receive an additional fee of £5,000 per annum for acting as Deputy Chairman,
Senior Independent Director and Chairman of the Audit Committee respectively.
PART B: The information in this part of the report has been audited
Executive Directors’ Emoluments
The remuneration paid to the Executive Directors during the year under review is summarised in the table below:

Jonathan Flint2
Kevin BoydCharles Holroyd
Total

Salary4£000

Beneﬁts1£000

Annual
Bonus
£000

323
223
188
734

14
14
11
39

334
230
134
698

Total Remuneration
2011
£000

Total
Remuneration
2010
£000

PensionContribution
2011
£000

671
467
333
1,471

594
364
307
1,265

45
31
233
99

1

Beneﬁts comprise provision of a car or car allowance and health insurance.
During the year the Company and Jonathan Flint purchased a house in joint ownership with the Company contributing£300,000. Jonathan Flint lives in the house and pays a full commercial rent amounting to £773.50 per month for use of theCompany asset.
3
Includes an additional Company pension contribution of £5,080 has been made since the year end to uplift the Company
pension contribution into the Oxford Instruments Stakeholder Plan from 10% to 14% of base salary for the period from 1
August 2010 to 31 March 2011.
4
Under the terms of a salary sacriﬁce arrangement, UK employees are able to elect to cease making personal contributions
into relevant pension schemes. Each employee’s salary is reduced by the amount of their pension contributions and theCompany pays the same amount directly to the pension schemes. Accordingly, the annual salaries of Jonathan Flint, KevinBoyd and Charles Holroyd were reduced to £290,362, £200,250 and £177,724 respectively. For reasons of clarity, the salaries
shown in the table above for these Directors are the amount they would have been paid had they not made such salarysacriﬁces. These ‘notional’ base salaries are used to calculate salary linked remuneration such as bonus and some beneﬁts.
2

Remuneration of the Chairman and Non-Executive Directors:
Remuneration paid to the Chairman and Non-Executive Directors during the year under review are set out below. They receive
no other beneﬁts.

Nigel Keen, Chairman1
Mike Brady
Mike Hughes
Jock Lennox
Peter Morgan2
Bernard Taylor
Total

2011

2010

£000
116
35
35
35
0
30
251

£000
113
35
35
34
15
30
262

1

Nigel Keen’s fees above include a payment of £13,117 to Imperialise Limited in respect of employers’ national insurance
contributions. In addition, he received fees of £20,458 for his services as Chairman to the Trustee of the Oxford Instruments
Pension Scheme together with a payment of £2,618 to Imperialise Limited in respect of employers’ national insurance
contributions.

2

34Peter Morgan resigned as a Non-Executive Director on 15 September 2009.

Oxford Instruments plc

Directors’ Remuneration Report Continued

Outstanding Share Incentive Awards
As at the 31 March 2011, the outstanding options for Jonathan Flint, Kevin Boyd and Charles Holroyd under the ESOS, SELTIS
and SAYE schemes were as follows:

Name

SchemeMarch
2011

Jonathan
Flint

ESOS
ESOS
ESOS
ESOS
ESOS
ESOS
SELTISSELTISSELTISSELTIS
ESOS
ESOS
ESOS
ESOS
ESOS
SELTISSELTISSELTISSELTIS
ESOS
ESOS
ESOS
ESOS
ESOS
ESOS
ESOS
ESOS
SELTISSELTISSELTISSELTIS

55,000140,000
220,000
100,000
074,78827,50070,000110,000
0
38,00095,000150,000
00
19,00047,50075,000031,00085,000150,00000000
15,50042,50075,000
0

Kevin
Boyd

CharlesHolroyd

Movements during the Year
Granted Exercised
Lapsed(note 1)
(note 2)55,00050,00023,21227,50025,00025,00038,00040,00033,33319,000

6,250

6,250

31,00040,00012,50019,60025,00025,00015,500

6,250

6,250

March
2010

Exercise
Price

Share
Price
on Dateof Grant

Date of
Grant

Date for
Earliest
Exercise

Date for
LatestExercise0
140,000
220,000
100,000
50,00098,000070,000110,000
50,000095,000150,000
40,00033,333047,50075,00012,500085,000150,000
40,00012,50019,60025,00025,000042,50075,00012,500£7.05£2.035
£1.35
£2.32
£2.10
£2.19
Nil
Nil
Nil
Nil
£7.05
£2.035£1.35£2.32£2.0375
Nil
Nil
Nil
Nil
£7.05
£2.035
£1.35
£2.32
£2.10
£2.19
£2.18
£1.875
£7.05
Nil
Nil
Nil

£7.02
£2.03
£1.33
£2.30
£2.10
£2.18
£7.02
£2.03
£1.33
£2.71
£7.02
£2.03
£1.33
£2.30
£2.06
£7.02
£2.03
£1.33
£2.71
£7.02
£2.03
£1.33
£2.30
£2.10
£2.18
£2.19
£1.88
£7.02
£2.03
£1.33
£2.71

07/01/11
17/12/09
16/12/08
28/09/07
15/07/06
15/07/05
07/01/11
17/12/09
16/12/08
26/07/07
07/01/11
17/12/09
16/12/08
28/09/07
04/09/06
07/01/11
17/12/09
16/12/08
26/07/07
07/01/11
17/12/09
16/12/08
28/09/07
15/07/06
15/07/05
15/07/04
15/07/03
07/01/11
17/12/09
16/12/08
26/07/07

07/01/14
17/12/12
16/12/11
28/09/10
15/07/09
15/07/08
07/01/14
17/12/12
16/12/11
26/07/10
07/01/14
17/12/12
16/12/11
28/09/10
04/09/09
07/01/14
17/12/12
16/12/11
26/07/10
07/01/14
17/12/12
16/12/11
28/09/10
15/07/09
15/07/08
15/07/07
15/07/06
07/01/14
17/12/12
16/12/11
26/07/10

06/01/21
16/12/19
15/12/18
27/09/17
14/07/16
14/07/15
06/01/18
16/12/16
15/12/15
25/07/14
06/01/21
16/12/19
15/12/18
27/09/17
03/09/16
06/01/18
16/12/16
15/12/15
25/07/14
06/01/21
16/12/19
15/12/18
27/09/17
14/07/16
14/07/15
14/07/14
14/07/13
06/01/18
16/12/16
15/12/15
25/04/14

1

During the year Jonathan Flint, Kevin Boyd and Charles Holroyd exercised SELTIS and ESOS options on 17 September 2010
and 25 January 2011 when the mid market closing price on the date of exercise was 429.0p and 650.5p respectively. Charles
Holroyd also exercised ESOS options on 29 September 2010 when the mid market closing price was 499.5p. The gain yieldedon the exercise of options during the year for Jonathan Flint, Kevin Boyd and Charles Holroyd was £412,793, £326,823 and£538,198 respectively.
2
Lapsed as performance conditions were not met.
The market price of the shares at 31 March 2011 was 700p. (2010: 269p) and the range during the year was 256p-736p (2010:110p-275p).
Performance conditions outstanding for awards are described below (all other awards in the table above have achieved therelevant performance conditions that had been set):
December 2008

1
2

ESO
EPS growth – RPI + 5% p.a. (50% vesting) – RPI+ 10% p.a. (100% vesting)1

December 2009

EPS growth – 5% p.a. (33.3% vesting) – 10%
p.a. (100% vesting)1

January 2011

EPS growth – 5% p.a. (33.3% vesting) – 10%
p.a. (100% vesting)1

SELTISTSR v FTSE Small Cap Index (excluding certain
sectors2) – median (50% vesting) – upper
quartile (100% vesting)
TSR v FTSE Small Cap Index (excluding certain
sectors2) – median (33.3% vesting) – upper
quartile (100% vesting)
TSR v FTSE Small Cap Index (excluding certain
sectors2) – median (33.3% vesting) – upper
quartile (100% vesting)For employees who are not Executive Directors, options become exercisable in full for achieving the threshold level.
Sectors excluded are Food & Drug Retailers, General Retailers, Banks, Non-life Insurance, Life Insurance, Real Estate, General
Financial, Equity Investment Instruments and Non-equity Investment Instruments Sectors.

Oxford Instruments plc

35

Directors’ Remuneration Report Continued

Achievement of performance conditions
The calculation of the TSR performance conditions were independently measured by Thomson Reuters for options granted
prior to 2008 and are measured by Hewitt New Bridge Street for options granted thereafter. EPS performance conditions
are measured using the audited accounts of the Company. All performance conditions are then veriﬁed by the Committee.
During the year the 2007 ESOS grants vested as to 100% and the 2007 SELTIS grants as to 50% because of the failure of the
TSR performance condition.
Pension Plans
For UK employees and Executive Directors, the Company operates the Oxford Instruments Stakeholder Plan (a deﬁned
contribution scheme). It also operates the Oxford Instruments deﬁned beneﬁt pension scheme but this has been closed to new
employees since April 2001 and became closed to new accruals at the end of July 2010.
Deﬁned Contribution Pension Arrangements (UK)
Employees and Executive Directors are offered membership of the Oxford Instruments Stakeholder Plan. Executive Directors
can elect that contributions be made into a deﬁned contribution plan of his or her choice in accordance with contractuallyagreed contribution rates. Under this arrangement only base salary is pensionable. Such contributions are treated as a nonsalary beneﬁt as they are paid directly to the pension plan and are not included in the calculation of bonus entitlements
and share awards. The Company contribution rate and employee contribution rate varies between grades and whether theindividual had previously been in the deﬁned beneﬁt scheme. The Company contribution ranges between 4% and 14% ofbase salary.
Oxford Instruments Deﬁned Beneﬁt Pension Scheme
For UK based Executive Directors and employees employed prior to April 2001, a contributory pension, depending on lengthof service, of up to two thirds of pensionable salary is provided on retirement through 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. Early retirement is possible on a reduced pension from age 55 with theconsent of the Company. Pensions in payment are guaranteed to increase by a level of inﬂation up to a maximum of 3% peryear on pension earned before 1 April 1997 and a maximum of 5% per year thereafter, subject to any applicable statutory
requirements. In the case of death before retirement a spouse’s pension of one half of the member’s pension at death ispayable and a refund of the member’s contributions. This Scheme was closed to future accrual on 31 July 2010.
Executive Director Pension Arrangements
Under the terms of their service contracts Jonathan Flint and Kevin Boyd can ask the Company to contribute to a pension planof their own choice. The Company contributes a maximum of 14% of base salary if matched by a contribution of 10% by the
director. Cash bonuses are excluded from contribution calculations. From 1 April 2011, the maximum pension contributions
per tax year is capped at £50,000 with the director contribution reducing ﬁrst and then the Company contribution. Where
the Company contribution exceeds £50,000 a balancing payment will be paid to the director which will be taxed in the usual
way. During the year the Company contributed £45,167 (2010:£40,600) into a personal deﬁned contribution pension plan inrespect of Jonathan Flint and £31,450 (2010: £28,000) into the UK Oxford Instruments Stakeholder Pension Plan in respect of
Kevin Boyd.
Charles Holroyd is the only current Executive Director who is a member of the UK deﬁned beneﬁt pension scheme. His
pensionable pay is capped at £123,600. Until the scheme closed to future accrual on 31 July 2010, the Company contributed
to the scheme at a rate of 12.7% of pensionable salary and Charles Holroyd had chosen to contribute at a rate 16.3% for a
1/50th accrual rate and to enable him to take all beneﬁts at the age of 65. The following table shows the compulsory member’s
contributions, the increase in accrued entitlement during the year in excess of inﬂation and the accrued entitlement at the endof the reporting period, together with the transfer value of the accrued pensions:Charles Holroyd

Charles Holroyd36

Age as at
31 March
2011
Years
55

Accruedyears ofservice
Years
11

Member’s
contributions
during the
year
£000
7

Additional
annual pension
earned during
the year£000 pa
1

Transfer value of additional
pension earned during the year inexcess of inﬂation£000-8Additional annual
pension earned
during the year inexcess of inﬂation£000 pa-1

Transfer value of
accrued pension
2011
2010
£000
£000
388
336

Accruedannual pension
entitlement atyear end£000 pa
26

Change in transfer
value over year lessmember contributions£000
45

Oxford Instruments plc

Directors’ Remuneration Report Continued

In July 2010 the UK deﬁned beneﬁt pension scheme closed to future accrual and Charles Holroyd became a deferred member.
From 1 August 2010 to 31 March 2011, the Company has contributed £12,700, 10% of base salary, into the Oxford Instruments
Stakeholder plan on his behalf. Prior to 1 April 2011, the anti-forestalling rules restricted the Company contribution into the
Stakeholder plan to 10%. Since 1 April 2011, to align the Company contribution for Charles Holroyd with that made for theother Executive Directors, the Company has increased its contribution to 14% of base salary with a 10% contribution from Mr
Holroyd (subject to the £50,000 cap referred to above) and has made a balancing Company contribution of £5,080 to increase
the Company contribution from 10% to 14% for the year to 31 March 2011.
Death in Service Life Cover
There is death in service life cover for all employees in the UK, including the Executive Directors, of three times basic salary.
This is an insured scheme provided through the Oxford Instruments Life Assurance Scheme. All employees have the option topurchase an additional level of cover of up to a further three times basic salary.
Performance graph
The graph below shows for the ﬁve years ended 31 March 2011 the Total Shareholder Return (TSR) on a holding of theCompany’s ordinary shares compared with a hypothetical holding of shares made up of shares of the same kind and number
as those by reference to which the FTSE Small Cap, FTSE Techmark and FTSE Electronic and Electrical Equipment indices arecalculated. These indices have been chosen as they are considered to be the most appropriate comparator groups for theCompany. TSR has been calculated by reference to the relevant share price for each constituent company assuming dividends
are reinvested.

Oxford Instruments

FTSE Techmark

FTSE E&EE

FTSE Small Cap

450
400
350
300
250
200
150
100
50
0
March 2006

March 2007

March 2008

March 2009

March 2010

March 2011

Source: Thomson Financial Datastream

The graph above shows the value, at 31 March 2011, of £100 invested in Oxford Instruments plc on 31 March
2006 compared with the value of £100 invested in the FTSE Techmark All Share Index, the FTSE All Share
Electronic and Electrical Equipment Index or the FTSE Small Cap Index over the same period.

This report was adopted by the Remuneration Committee at a meeting on 7 June 2011 and has been approved subsequently
by the Board for submission to shareholders at the Annual General Meeting to be held on 13 September 2011.
Nigel Keen Chairman of the Remuneration Committee
14 June 2011

Oxford Instruments plc

37

Directors’ Responsibilities in relation to the Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report and the Group and Parent Company Financial Statements inaccordance 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 in accordance with UK AccountingStandards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the Directors must not approve the Financial Statements unless they are satisﬁed that they give a true andfair view of the state of affairs of the Group and Parent Company and of their proﬁt or loss for that period. In preparing eachof the Group and Parent Company Financial Statements, the Directors are required to:UÊ select suitable accounting policies and then apply them consistently;
UÊ make judgements and estimates that are reasonable and prudent;
UÊ for the Group Financial Statements, state whether they have been prepared in accordance with IFRSs as
adopted by the EU;UÊ for the Parent Company Financial Statements, state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the Parent Company Financial Statements; andUÊ prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group and the
Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufﬁcient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy at any time the ﬁnancial position of the Parent Company andenable them to ensure that its Financial Statements comply with the Companies Act 2006. They have general responsibility fortaking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud andother irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report, Directors’
Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
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 of ﬁnancial statements may differ fromlegislation in other jurisdictions.
Responsibility statement of the Directors in respect of the annual ﬁnancial report
We conﬁrm that to the best of our knowledge:

UÊ the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fairview of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Company and the undertakings included in the
consolidation taken as a whole; andUÊ the Directors’ Report includes a fair review of the development and performance of the business and the position of theissuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face.

Kevin Boyd
Director
14 June 2011

38

Jonathan Flint
Director

Oxford Instruments plc

Report of the Independent Auditors to the members of Oxford Instruments plc
We have audited the Financial Statements of Oxford
Instruments plc for the year ended 31 March 2011 set out
on pages 40 to 50. The ﬁnancial reporting framework thathas been applied in the preparation of the Group Financial
Statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the EU. The
ﬁnancial reporting framework that has been applied in the
preparation of the parent company Financial Statements is
applicable law and UK Accounting Standards (UK Generally
Accepted Accounting Practice).
This report is made solely to the company’s members, asa body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken sothat we might state to the company’s members those matters
we are required to state to them in an auditor’s report andfor no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone otherthan the company and the company’s members, as a body, for
our audit work, for this report, or for the opinions we haveformed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities
Statement set out on page 38, the Directors are responsible
for the preparation of the Financial Statements and for being
satisﬁed that they give a true and fair view. Our responsibility
is to audit, and express an opinion on, the Financial Statementsin accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us tocomply with the Auditing Practices Board’s (APB’s) EthicalStandards for Auditors.

Opinion on other matters prescribed by the Companies Act
2006
In our opinion:UÊ Ì iÊ «>ÀÌÊ vÊ Ì iÊ ÀiVÌÀÃ½Ê ,iÕiÀ>ÌÊ ,i«ÀÌÊ ÌÊ LiÊ
audited has been properly prepared in accordance with theCompanies Act 2006;

UÊ the information given in the Directors’ Report for the
ﬁnancial year for which the Financial Statements areprepared is consistent with the Financial Statements; andUÊ the information given in the Corporate GovernanceStatement set out on pages 22 to 29 with respect tointernal control and risk management systems in relation
to ﬁnancial reporting processes and about share capital
structures is consistent with the Financial Statements.Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report toyou if, in our opinion:UÊ adequate accounting records have not been kept by theparent company, or returns adequate for our audit havenot been received from branches not visited by us; orUÊ the parent company Financial Statements and the part of
the Directors’ Remuneration Report to be audited are notin agreement with the accounting records and returns; orUÊ certain disclosures of directors’ remuneration speciﬁed bylaw are not made; orScope of the audit of the Financial StatementsUÊ we have not received all the information andexplanations we require for our audit; orA description of the scope of an audit of Financial Statements
is provided on the APB’s website atwww.frc.org.uk/apb/scope/private.cfm

UÊ a Corporate Governance Statement has not been

Opinion on Financial Statements

Under the Listing Rules we are required to review:

In our opinion:

UÊ the Directors’ statement, set out on page 38, in relation

UÊ the Financial Statements give a true and fair view of theUÊ the part of the Corporate Governance Statement onstate of the group’s and of the parent company’s affairs
as at 31 March 2011 and of the Group’s proﬁt for the year
then ended;UÊ the Group Financial Statements have been properly
prepared in accordance with IFRSs as adopted by the EU;UÊ the parent company Financial Statements have been
properly prepared in accordance with UK Generally
Accepted Accounting Practice;UÊ the Financial Statements have been prepared inaccordance with the requirements of the Companies Act
2006; and, as regards the Group Financial Statements,
Article 4 of the IAS Regulation.

prepared by the company.

to going concern;
pages 22 to 29 relating to the company’s compliance with
the nine provisions of the June 2008- Combined Codespeciﬁed for our review; andUÊ certain elements of the report to shareholders by the
Board on Directors’ remuneration.
S Haydn-Jones (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
One Snowhill
Snow Hill Queensway
Birmingham
B4 6GH
14 June 2011

Oxford Instruments plc

39Accounting Policies
Oxford Instruments plc (the “Company”) is a company incorporated and domiciled in the UK.
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 in accordance with UK GAAP; these are presented on pages 77 to 82.
The accounting policies set out below have, unless otherwise stated been applied consistently to all periods presented in theseGroup Financial Statements.
The Financial Statements are prepared on a going concern basis based on the assessment made by the Directors as describedin the Financial Review on page 9.
The Financial Statements were authorised for issuance on 14 June 2011.
(a) New accounting standards
In the current year, the Group has adopted the following new standards and interpretations:UÊ IFRS 3 (revised 2008), ‘Business combinations’ and consequential amendments to IAS 27, ‘Consolidated and separate
Financial Statements’, IAS 28 ‘Investments in associates’ and IAS 31 ‘Interests in Joint Ventures’. These changes have had
no impact on the accounts for the year to 31 March 2011. However, as noted in note 30 various business combinations
have arisen after the balance sheet date and so the standard will be relevant for the year to 31 March 2012.
The following new standards, amendments to standards or interpretations are mandatory for the ﬁrst time for the year ending
31 March 2011 but are not currently relevant for the group.

UÊ Amendments to IFRS 2 – Group cash-settled Share-based Payment Transactions
UÊ Amendments to IAS 39 – Eligible Hedged Items
UÊ Amendments to IFRIC 9 and IAS 39 – Embedded Derivatives
UÊ IFRIC 15 – Agreements for the Construction of Real EstateUÊ IFRIC 16 – Hedges of a Net Investment in a Foreign Operation
UÊ IFRIC 17 – Distribution of Non-Cash Assets to Owners
UÊ IFRIC 18 – Transfers of Assets from Customers
In addition to the above, amendments to a number of standards under the 2009 annual improvement project to IFRS, which
are mandatory for the year ended 31 March 2011, have been adopted in the year. None of these amendments have had amaterial impact on the Group’s Financial Statements.
(b) Basis of preparation
The Financial Statements are presented in pounds sterling and are prepared on the historical cost basis except as described
below under the heading ‘Financial Instruments’.
The preparation of Financial Statements in conformity with adopted IFRSs requires management to make judgements, estimatesand assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making the judgements about carrying values ofassets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The key judgements made in respect of theappropriateness of the Group accounting policies relate to:UÊ Fair value measurements on business combinations
The measurement of fair values on a business combination requires the recognition and measurement of the identiﬁable
assets, liabilities and contingent liabilities. The key judgements involved are the identiﬁcation and valuation of intangible
assets which require the estimation of future cash ﬂows and the selection of a suitable discount rate. (See Note 14)

UÊ Impairment of intangible assets (including goodwill) and tangible assets
Goodwill is held at cost and tested annually for impairment, and amortised intangibles and tangible assets are tested for
impairment where there are indications of impairment. These impairment tests require the Group to make an estimateof the expected cash ﬂows and to select suitable discount rates. These require an estimation of the value-in-use of theseassets. (See Note 14)

UÊ Capitalised development costs
Capitalised development costs involve judgements around the future economic beneﬁts that will ﬂow from the associateddevelopment activity and in particular the Group’s assessment of the technical and commercial feasibility of the productto be developed.

40

Oxford Instruments plc

Accounting Policies Continued

UÊ Measurement of deﬁned beneﬁt scheme liabilities
The Group recognises and measures costs relating to deﬁned beneﬁt pension schemes in accordance with IAS 19‘Employee Beneﬁts’. In applying IAS 19 the costs are assessed in accordance with the advice of independent qualiﬁed
actuaries. This requires the exercise of judgement in relation to the estimation of future changes in salaries and inﬂation,
as well as mortality rates, expected returns on plan assets and the selection of suitable discount rates. Further detail isprovided in note 22.

UÊ Provisions
Provisions are recognised in the period when it becomes probable that there will be a future outﬂow of funds resulting
from past expectations or events which can be reasonably estimated. The timing of recognition requires the application ofjudgement to existing facts and circumstances which can be subject to change. Amounts provided represent the Group’s
best estimate of exposure based on currently available information.

UÊ Deferred tax assets
A deferred tax asset is recognised in the period if it is probable that future taxable proﬁts will be available against which
the asset can be utilised. This requires the exercise of judgement in relation to the estimation of future taxable proﬁt
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects onlythat period or in the period of the revision and future periods if the revision affects both current and future periods. The
key areas where estimates have been used and assumptions applied are in the calculation of provisions, the valuationof acquired intangible assets, the impairment testing of goodwill and the estimation of deﬁned beneﬁt pension plan
liabilities.
(c) Basis of consolidation
The Group accounts include the accounts of Oxford Instruments plc and its subsidiary companies adjusted to eliminate intragroup balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern
the ﬁnancial and operating policies of an entity so as to obtain beneﬁts from its activities. In assessing control, potential voting
rights that are currently exercisable or convertible are taken into account. The results of subsidiary companies are included
from the date that control is obtained to the date of their disposal, where control is lost.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, aretranslated into sterling at exchange rates ruling at the end of the reporting period. Income statements and cash ﬂows offoreign operations are translated into sterling at average quarterly exchange rates which approximate foreign exchange rates
at the date of the transaction. Foreign exchange differences arising on retranslation are recognised directly in a separatetranslation reserve.
(d) Foreign currency
An individual entity’s transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of thetransaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at theforeign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in proﬁt or loss.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using theexchange rate at the date of the transaction.
(e) Financial instruments
Financial assets and liabilities are recognised in the Group’s Consolidated Statement of Financial Position when the Group
becomes a party to the contractual provisions of the instrument.
(i) The Group’s investments in equity securities are classiﬁed as available for sale ﬁnancial assets. Subsequent to initialrecognition, they are measured at fair value and changes therein, other than impairment losses and foreign exchange gains
and losses on available for sale monetary items, are recognised directly in equity. When an investment is derecognised, thecumulative gain or loss in equity is transferred to proﬁt and loss.
(ii) Derivative ﬁnancial instruments of the Group are used to hedge its exposure to interest rate, foreign currency andcommodity pricing risks arising from operational, ﬁnancing and investment activities. The Group does not hold or issue
derivative ﬁnancial instruments for trading purposes. All derivatives are initially recognised at fair value; attributabletransaction costs are recognised in proﬁt or loss as incurred. Derivatives comprising interest rate swaps, foreign exchange
contracts and options and metal futures contracts are classiﬁed as ‘fair value through proﬁt and loss’ under IAS 39, unlessdesignated as hedges. Subsequent to initial recognition, derivatives are measured at fair value, and gains or losses on thesettlement of such derivatives are recognised in operating expenses. Where such derivatives relate to the following year’s
exposure, any gains or losses resulting from the change in fair value are taken to the Mark to market gains/losses line
within ﬁnancial income or expense.

Oxford Instruments plc

41

Accounting Policies Continued(iii) Changes in the fair value of the derivative hedging instruments designated as cash ﬂow hedges are recognised in equity
to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognisedin the Consolidated Statement of Income. If the hedging instrument no longer meets the criteria for hedge accounting,expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain orloss previously recognised in equity remains there until the forecast transaction occurs. When the hedge item is a nonﬁnancial asset, the amount recognised in equity is transferred to the carrying amount of the asset when it is recognised.
In other cases the amount recognised in equity is transferred to the Consolidated Statement of Income in the same periodthat the hedged item affects proﬁt or loss.
(iv) The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by
discounting estimated future cash ﬂows based on the terms and maturity of each contract and using market interest rates
for a similar instrument at the measurement date.
(v) The fair value of forward exchange contracts is their quoted market price at the Consolidated Statement of Financial
Position date, being the present value of the quoted forward price. The gain or loss on remeasurement to fair value of
forward exchange contracts is recognised immediately in the Consolidated Statement of Income.
(vi) Interest bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initialrecognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in proﬁt or loss over the period of the borrowing on an effective interest basis.
(f) Property, plant and equipment
Property, plant and equipment is stated at historical cost less provisions for impairment (see accounting policy l) and depreciation
which, with the exception of freehold land which is not depreciated, is provided on a straight-line basis over each asset’s
estimated economic life. Depreciation is provided based on historical cost less estimated residual value. The principle estimatedeconomic lives used for this purpose are:Freehold buildings, long leasehold land and buildings

50 years

Leasehold improvements (less than 50 years duration)

Period of lease

Furniture and ﬁttings
Machinery and other equipment

10 years
5 to 10 years

Computer equipment and software

4 years

Vehicles4 years

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised in the Income Statement.
(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 of business acquisitions that have occurred since 31 March 2004, goodwill represents thedifference between the cost of the acquisition and the net fair value of the identiﬁable intangible assets, other 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 company now expenses transaction costs associated with its acquisitions and movements in liabilities relating to contingent
consideration within the income statement in conformity with the revised IFRS3.
Goodwill arising on acquisitions is stated at cost and allocated to cash-generating units that are anticipated to beneﬁt fromthe combination. It is not amortised but is tested annually for impairment (see accounting policy l), or more frequently when
there is an indicator that the unit may be impaired.
(ii) Development costs
Research and development costs are charged to the Consolidated Statement of Income in the year in which they are incurred
unless development expenditure meets certain strict criteria for capitalisation. These criteria include demonstration of thetechnical feasibility of completing a new intangible asset that will be available for sale and that the asset will generate
probable future economic beneﬁts. Where expenditure meets the criteria, development costs are capitalised and amortised
through the Consolidated Statement of Income over their useful economic lives.
(iii) Acquired intangible assets
An intangible asset acquired with a subsidiary undertaking is recognised as an intangible asset if it is separable from theacquired business or arises from contractual or legal rights, is expected to generate future economic beneﬁts and its fair value
can be reliably measured. The asset is amortised through the Consolidated Statement of Income over it useful economic life.

42

Oxford Instruments plc

Accounting Policies Continued(iv) Amortisation
Amortisation of intangible assets is charged to the Consolidated Statement of Income on a straight-line basis over theirestimated useful economic lives as follows:
Capitalised development costs
Technology related acquired intangibles
Customer related acquired intangibles

3 to 5 years
5 to 10 years
6 months to 8 years(h) Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently stated at their cost less appropriate allowances
for amounts which are expected to be non-recoverable.
(i) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour, an attributableproportion of production overheads based on normal operating capacity and all other expenditure incurred in acquiring theinventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in theordinary course of business, less the estimated costs of completion and selling expenses.
Provision is made for obsolete, slow moving and defective stock where appropriate in the light of recent usage, expected
future requirements, new product introduction plans and likely realisable values.
(j) Cash and cash equivalents
Cash and cash equivalents are carried in the Balance Sheet at amortised cost.
Cash and cash equivalents comprise cash balances and call deposits and are carried at amortised cost. 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 of cash ﬂows.
(k) Held for sale assets
A non-current asset is classiﬁed as held for sale if its carrying amount will be recovered principally through sale rather than
through continuing use, it is available for immediate sale and sale is highly probable within one year.
Immediately before classiﬁcation as held for sale, the measurement of the assets is brought up-to-date in accordance withapplicable IFRSs. Then, on initial classiﬁcation as held for sale, non-current assets are recognised at the lower of their carrying
amount and fair value less costs to sell.
Impairment losses on initial classiﬁcation as held for sale are included in the Consolidated Statement of Income, even when theasset has previously been revalued. The same applies to gains and losses on subsequent remeasurement.
(l) Impairment of non-current assets
All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying value may be
impaired. Additionally, goodwill is subject to an annual impairment review.
For the purposes of impairment testing assets are grouped together into the smallest group of assets that generates cash ﬂows
from continuing use that are largely independent of the cash inﬂows from other groups of assets.
An impairment loss is recognised in the Consolidated Statement of Income (reorganisation costs) and impairment to the extent
that an asset’s carrying value exceeds its recoverable amount, which represents the higher of the asset’s net realisable value
and it value in use. An asset’s value in use represents the present value of the future cash ﬂows expected to be derived fromthe asset or from the cash generating unit to which it relates. The present value is calculated using a discount rate that reﬂects
the current market assessment of the time value of money and the risks speciﬁc to the asset concerned.
Impairment losses recognised in previous periods for an asset other than goodwill are reversed if there has been a change inestimates used to determine the asset’s recoverable amount, but only to the extent that the carrying amount of the asset does
not exceed its carrying amount had the impairment loss not been recognised in previous periods. Impairment losses in respectof goodwill are not reversed.
(m) Employee beneﬁts
The Group operates a number of deﬁned beneﬁt and deﬁned contribution plans which require contributions to be made to
independent trustee administered funds.
(i) Deﬁned contribution plans
Obligations for contributions to deﬁned contribution pension plans are recognised as an expense in the Consolidated Statementof Income as incurred.

Oxford Instruments plc

43Accounting Policies Continued(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 their service in the current andprior periods. That beneﬁt is discounted to determine its present value and the fair value of any plan assets is deducted. 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 Consolidated Statement ofComprehensive Income in the year.
The charge to the Consolidated Statement of Income reﬂects the current service cost. The expected return on scheme assets
and the interest cost on scheme liabilities are included within ﬁnancial income or ﬁnancial expenditure in the Consolidated
Statement of Income respectively.
(iii) Share-based payment transactions
The fair value of equity settled share option programmes is measured at grant date and charged to the Consolidated Statementof Income, with a corresponding increase in equity, on a straight line basis 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 valuation 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 share options that vest except where forfeitureis only due to market performance conditions not being met.
(n) Provisions
A provision is recognised in the Consolidated Statement of Financial Position when the Group 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 theobligation. A provision for warranty is recognised when the underlying products are sold. A provision for restructuring is
recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced
or has been announced publicly. A provision for onerous contracts is recognised when the expected beneﬁts to be derived by
the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
(o) Trade and other payables
Trade and other payables are initially recognised at their fair value and subsequently stated at amortised cost.
(p) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initialrecognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value
being recognised in the income statement over the period of the borrowings on an effective interest basis.
(q) Revenue
Revenue is recognised in the Consolidated Statement of Income when the signiﬁcant risks and rewards of ownership havetransferred to the buyer. Revenue excludes value added tax and similar sales based taxes, represents sales to external customers
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 on completion of the installation.
Revenue from contracts for maintenance and support is recognised on a pro-rata basis over the contract period.
(r) Income tax
Income tax on the proﬁt or loss for the year comprises current and deferred tax. Income tax is recognised in proﬁt or loss except
to the extent that it relates to items recognised directly in equity, in which case 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 reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities forﬁnancial reporting purposes and the amounts used for taxation purposes. 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.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount ofassets and liabilities, using tax rates enacted or substantively enacted at the Statement of Financial Position date.
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.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay
the related dividend.
(s) Lease payments
Payments made under operating leases are recognised in proﬁt or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised in the income statement as an integral part of the total lease expense.

44

Oxford Instruments plc

Accounting Policies Continued(t) Segment reporting
An operating segment is a distinguishable component of the Group that engages in business activities from which it may earnrevenues and incur expenses, including any revenues and expenses that relate to transactions with any of the Group’s othercomponents. An operating segment’s operating results are reviewed regularly by the Group’s Board of Directors to makedecisions about resources to be allocated to the segment and to assess its performance, for which discrete ﬁnancial information
is available.
Segment results that are reported to the Board include items directly attributable to a segment as well as those that can beallocated on a reasonable basis.
(u) Dividends
Final dividends proposed by the board and unpaid at the end of the year are not recognised in the Financial Statements.
Interim and ﬁnal dividends are recognised when they are paid.
(v) Adopted IFRS not yet applied
The following standards and interpretations have been endorsed but are not yet effective and therefore have not yet been
applied by the Group in these Financial Statements:

UÊ Amendments to IAS 32 ‘Classiﬁcation of Rights Issues’ - requires that rights, options or warrants to acquire a ﬁxed numberof the entity’s own equity instruments for a ﬁxed amount of any currency are equity instruments if the entity offers
the rights options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity
instruments.

UÊ IFRIC 19 ‘Extinguishing Financial Liabilities with Equity Instruments’ - deals with how entities should measure equity
instruments issued in a debt for equity swap. It addresses the accounting for such a transaction by the debtor only.

UÊ Amendment to IFRIC 14 ‘Prepayments of a Minimum Funding Requirement’.
UÊ IAS 24 ‘Related parties’ - effective for periods commencing on or after 1 January 2011 - provides an exemption to
all government related entities which is not applicable to the group, however the revised standard also amends thedeﬁnition of a related party, which will be applicable.
In addition to the above, amendments to a number of standards and interpretations under the 2010 annual improvement
project will become mandatory for the year ending 31 March 2012.
The Group has considered the impact of these new standards and interpretations in future periods on proﬁt, earnings per
share and net assets. None of the above standards or interpretations are expected to have a material impact.

Oxford Instruments plc

45Consolidated Statement of Income year ended 31 March 2011

Revenue
Cost of sales
Gross proﬁt
Trading expenses excluding cost of sales
Trading proﬁt
Other operating income
Reorganisation costs and impairment
Amortisation of acquired intangibles
Operating proﬁt
Expected return on pension scheme assets
Mark to market gain in respect of derivative ﬁnancial instruments
Financial income
Interest payable on bank loans and overdrafts
Interest charge on pension scheme liabilities
Financial expenditure

Notes
2

3
5
6

22
1

22

Profit before income tax
Income tax credit/(expense)
Profit for the year attributable to equity shareholders of the parent

10

2011
£m
262.3
(152.8)109.5(81.4)
28.1
4.7
(0.6)
(4.7)
27.5

2010
£m
211.5
(120.9)90.6(75.9)
14.7
(0.4)
(4.1)
10.2

9.9
1.1
11.0

7.9
10.7
18.6

(1.2)
(10.6)(11.8)(1.3)(9.4)(10.7)

26.7

18.1

5.5
32.2

(4.8)
13.3

pence

pence

Earnings per share
Basic earnings per share
Diluted earnings per share

11
11

65.3
63.6

27.2
27.1

Dividends per share
Dividends paid
Dividends proposed

12
12

8.4
9.0

8.4
8.4

1

£m
26.7
(4.7)
0.6
4.7
(1.1)
26.2

£m
18.1
0.4
4.1
(10.7)
11.9

pence

pence

41.5
40.4

17.8
17.8

Adjusted profit before tax is calculated as follows:
Proﬁt before income tax
Other operating income
Reorganisation costs and impairment
Amortisation of acquired intangibles
Mark to market gain in respect of derivative ﬁnancial instruments
Adjusted proﬁt before tax

Adjusted earnings per share
Basic earnings per share
Diluted earnings per share

46

1, 11
1, 11

Oxford Instruments plc

Consolidated Statement of Comprehensive Income year ended 31 March 2011

Notes
Profit for the year
Other comprehensive income/(expense)
Foreign exchange translation differences
Actuarial gain/(loss) in respect of post retirement beneﬁts
Net gain on effective portion of changes in fair value of cash ﬂow
hedges, net of amounts recycled
Tax on items recognised directly in equity
Tax recognised in respect of share options
Total other comprehensive income/(expense)
Total comprehensive income/(expense) for the year attributable toequity shareholders of the parent

Oxford Instruments plc

22

10
10

2011
£m
32.2

2010
£m
13.3

(0.9)
14.4

(3.8)
(22.8)

0.3
(4.6)
2.7
11.9

0.8
6.1
(19.7)

44.1

(6.4)

47

Consolidated Statement of Changes in Equity year ended 31 March 2011

Balance at 1 April 2010
Total comprehensive income/(expense)
attributable to equity shareholders of
the parent

Sharecapital
£m
2.5

Share
premium
account
£m
21.6

Other
reserves£m
0.2

Foreignexchangetranslation
reserve£m
4.1

Retainedearnings
£m
23.8

Total
£m
52.2

-

-

0.2

(0.9)

44.8

44.1

Transactions recorded directly in equity:- Credit in respect of employee service
costs settled by award of share options- Proceeds from shares issued- Dividends paid
Total contributions by and distributions
to equity shareholders
Balance at 31 March 2011

-

0.9
-

-

-

0.4
(4.1)

0.4
0.9
(4.1)

2.5

0.9
22.5

0.4

3.2

(3.7)
64.9

(2.8)
93.5

Balance at 1 April 2009

2.5

21.3

(0.3)

7.9

30.5

61.9

Total comprehensive income/(expense)
attributable to equity shareholders of
the parent

-

-

0.5

(3.8)

(3.1)

(6.4)

-

0.3
-

-

-

0.5
(4.1)

0.5
0.3
(4.1)

2.5

0.3
21.6

0.2

4.1

(3.6)
23.8

(3.3)
52.2

Transactions recorded directly in equity:- Credit in respect of employee service
costs settled by award of share options- Proceeds from shares issued- Dividends paid
Total contributions by and distributions
to equity shareholders
Balance at 31 March 2010

Other reserves comprise the capital redemption reserve which represents the nominal value of shares repurchased and thencancelled during the year ended 31 March 1999, and the hedging reserve in respect of the effective portion of changes in valueof commodity contracts.
The foreign exchange translation reserve comprises all foreign exchange differences arising since 1 April 2004 from thetranslation of the Group’s net investments in foreign subsidiaries into Sterling.
The Group holds 433,794 (2010: 493,594) of its own shares in an employee beneﬁt trust. The cost of these shares is included
within retained earnings.

48

Oxford Instruments plc

Consolidated Statement of Financial Position as at 31 March 2011
2011
£m

2010
£m

13
14
15

23.6
41.6
17.4
82.6

22.8
49.3
12.9
85.0

16
17

46.6
52.5
1.3
1.0
24.5
125.9

39.3
60.2
0.9
0.8
11.2
112.4

208.5

197.4

20

2.5
22.5
0.4
3.2
64.9
93.5

2.5
21.6
0.2
4.1
23.8
52.2

21
23
22
15

10.5
0.1
11.7
4.1
26.4

19.6
0.9
35.1
6.7
62.3

21
19
23

0.1
0.8
76.5
3.4
1.1
6.7
88.6

0.1
1.9
69.1
2.6
4.3
4.9
82.9

Total liabilities

115.0

145.2

Total liabilities and equity

208.5

197.4

Notes
AssetsNon-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets

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

19

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

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

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

19
24

The Financial Statements were approved by the Board of Directors on 14 June 2011 and signed on its behalf by:

Jonathan Flint
Director

Oxford Instruments plc

Kevin Boyd
Director

49

Consolidated Statement of Cash Flows year ended 31 March 2011
2011
£m
32.2

2010
£m
13.3

(5.5)
0.8
(4.7)
0.6
4.7
4.0
5.4
37.5
0.4
(5.6)
32.3
(8.2)
7.4
8.8
(1.1)
39.2
(0.8)
(3.1)
35.3

4.8
(7.9)
0.4
4.1
3.8
4.0
22.5
0.5
(3.2)
(3.4)
16.4
(0.4)
(3.7)
11.2
9.3
32.8
(1.1)
(0.6)
31.1

0.1
(0.1)
(5.8)
(3.0)
(8.8)

0.2
0.7
(2.4)
(3.6)
(4.0)
(9.1)

Cash flows from financing activities
Proceeds from issue of share capital
Repayment of borrowings
Increase in borrowings
Dividends paid
Net cash from financing activities

0.9(19.1)
10.0(4.1)(12.3)

0.3(12.2)(4.1)(16.0)Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate ﬂuctuations on cash held
Cash and cash equivalents at end of the year

14.2
9.3
0.2
23.7

6.0
3.6
(0.3)
9.3

14.2
0.2
14.4
19.1
(10.0)
23.5(10.4)
13.1

6.0
(0.3)
5.7
12.2
17.9
(28.3)(10.4)

Proﬁt for the year
Adjustments for:
Income tax (credit)/expense
Net ﬁnancial expense/(income)
Other operating income
Reorganisation costs and impairment
Amortisation of acquired intangibles
Depreciation of property, plant and equipment
Amortisation and impairment of capitalised development costs
Earnings before interest, tax, depreciation and amortisation
Cost of equity settled employee share schemes
Restructuring costs paid
Cash payments to the pension scheme more than the charge to operating proﬁt
Operating cash flows before movements in working capital
Increase in inventories
Decrease/(increase) in receivables
Increase in payables and provisions(Decrease)/increase in customer deposits
Cash generated from operations
Interest paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of available for sale equity securities
Acquisition of subsidiaries, net of cash acquired
Acquisition of property, plant and equipment
Capitalised development expenditure
Net cash used in investing activities

Reconciliation of changes in cash and cash equivalents to movement in net borrowing
Increase in cash and cash equivalents
Effect of foreign exchange rate changes on cash and cash equivalents
Cash outﬂow from decrease in debt
Cash inﬂow from increase in debt
Movement in net cash/borrowing in the year
Net borrowing at start of the year
Net cash/(borrowing) at the end of the year

50

Oxford Instruments plc

Notes to the Financial Statements
1

RECONCILIATION BETWEEN PROFIT AND ADJUSTED PROFIT
2011£m

Proﬁt before income tax

26.7

2010
£m
18.1

Other operating income

(4.7)

-

Reorganisation costs and impairment

0.6

0.4

Amortisation of acquired intangibles

4.7

4.1

Mark to market gain in respect of derivative ﬁnancial instruments(1.1)

Adjusted proﬁt before income tax

26.2(10.7)
11.9

Share of taxation

(5.7)

(3.2)

Adjusted proﬁt

20.5

8.7

Adjusted earnings per share
Basic
Diluted

pence
41.5
40.4

pence
17.8
17.8

Adjusted ﬁgures are stated before other operating income, amortisation of acquired intangibles, reorganisation costs andimpairment and mark to market gains in respect of derivative ﬁnancial instruments.
The tax credit during the year was £5.5m. In calculating the share of tax attributable to adjusted proﬁt before tax a tax
charge relating to the adjusting of items of £0.1m and a one-off recognition of deferred tax assets relating to the Group’s UK
businesses of £11.3m have been excluded. In future years part of this deferred tax asset will unwind as tax losses are utilised
or if recognition criteria change. The Group intends to exclude this unwinding effect from the calculation of the share of tax
attributable to adjusted proﬁt before tax in the years in which it arises.
Under IAS 39, all derivative ﬁnancial instruments are recognised initially at fair value. Subsequent to initial recognition, they
are also measured at fair value. In respect of instruments used to hedge foreign exchange risk and interest rate risk 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 the particular circumstances of the Group, are considered by the Board
not to bring any signiﬁcant economic beneﬁt. Accordingly, the Group accounts for these derivative ﬁnancial instruments atfair value through proﬁt or loss. Adjusted proﬁt for the year is stated before changes in the valuation of these instruments sothat the underlying performance of the Group can more clearly be seen.
See note 11 for details of the number of shares used in the calculation of earnings per share.

2

SEGMENT INFORMATION

The group has eight operating segments. The operating results of each are regularly reviewed by the Chief Operating Decision
Maker, which is deemed to be the Board of Directors. Discrete ﬁnancial information is available for each segment and used by
the Board of Directors for decisions on resource allocation and to assess performance.
These operating segments have been aggregated to the extent that they have similar economic characteristics, with relevanceto products and services, type and class of customer, methods of sale and distribution and the regulatory environment inwhich they operate. The group’s internal management structure and ﬁnancial reporting systems differentiate the operating
segments on the basis of these economic characteristics and accordingly present these as three separate reportable segments
as discussed below.
- The Nanotechnology Tools segment contains a group of businesses supplying similar products, characterised by a high degreeof customisation and high unit prices. These are Group’s highest technology products serving research customers in both the
public and private sectors.
- The Industrial Products segment contains a group of businesses supplying high technology products and components
manufactured in medium volume for industrial customers.
- The Service segment contains the Group’s service business as well as service revenues from other parts of the Group.
Segment results include items directly attributable to a segment as well as those which can be allocated on reasonable basis.
Inter-segment pricing is determined on arm’s length basis.
No asset information is presented below as this information is not allocated to operating segments in reporting to the Group’s
Board of Directors.

Oxford Instruments plc

51

Notes to the Financial Statements Continueda)Analysis by BusinessYear to 31 March 2011

External revenue
Inter-segment revenue
Total segment revenue

Nanotechnology
Tools
£m
121.4
0.4
121.8

Industrial
Products
£m
95.6
2.0
97.6

Service
£m
45.3
0.1
45.4

Total
£m
262.3

Segment trading proﬁt

14.6

5.9

7.6

28.1

External revenue
Inter-segment revenue
Total segment revenue

Nanotechnology
Tools
£m
101.5
0.3
101.8

Industrial
Products
£m
71.0
1.1
72.1

Service
£m
39.0
39.0

Total
£m
211.5

Segment trading proﬁt

8.2

1.0

5.5

14.7

2011
£m
28.1
4.7
(0.6)
(4.7)
11.0
(11.8)
26.7

2010
£m
14.7
(0.4)
(4.1)
18.6
(10.7)
18.1

Year to 31 March 2010

Reconciliation of reportable segment profit

Proﬁt for reportable segments
Other operating income
Reorganisation costs and impairment
Amortisation of acquired intangibles
Financial income
Financial expenditure
Profit before income tax

Depreciation, amortisation and impairment and capital expenditure arise in the following segments:

Nanotechnology Tools
Industrial Products
Service
Unallocated Group
items
Total

2011
Depreciation
£m
1.9
1.5
0.2

2011
Amortisation
£m
2.6
2.8
-

2011
Capitalexpenditure
£m
3.7
1.5
0.1

2010
Depreciation
£m
2.0
1.2
0.1

2010
Amortisation
£m
1.5
2.5
-

2010
Capitalexpenditure
£m
1.3
2.0
0.1

0.4
4.0

4.7
10.1

0.5
5.8

0.5
3.8

4.1
8.1

0.2
3.6

Amortisation of Research and Development costs is included in arriving at segment trading proﬁt. Amortisation of acquired
intangibles is included below segment trading proﬁt and so has been included within unallocated Group items.

52

Oxford Instruments plc

Notes to the Financial Statements Continuedb)

Geographical Analysis

The Group’s reportable segments are located across several geographical locations, and make sales to customers in countries
across the world.
The analysis below shows revenue and non-current assets (excluding deferred tax) for individual countries or regions that
represent more than 5% of revenue.
Revenue from external customers by destination

USA
Rest of Europe
Rest of Asia
UK
Japan
China
Germany
Rest of World
Total

2011
£m
66.8
46.4
32.8
24.4
28.6
38.1
13.1
12.1
262.3

2010
£m
54.4
34.2
25.2
24.5
23.2
22.4
17.2
10.4
211.5

2011
£m
29.8
16.9
10.1
8.1
0.1
0.2
65.2

2010
£m
30.4
19.8
13.1
8.6
0.1
0.1
72.1

2011
£m
39.9
23.3
17.6
0.6
81.4

2010
£m
36.1
20.0
13.1
6.7
75.9

Non current Assets (excluding deferred tax)

UK
Germany
USA
Rest of Europe
Japan
China
Total

3

TRADING EXPENSES EXCLUDING COST OF SALES

Selling and marketing costs
Administration and shared services
Research and development (note 4)
Foreign exchange loss

The foreign exchange loss represents the loss arising on foreign exchange hedging instruments which matured during theyear.
Auditor’s remuneration

Audit of these Financial Statements
Amounts received by auditors and their associates in respect of:
Audit of Financial Statements of subsidiaries pursuant to legislation
Other services relating to tax
Other services
Total fees paid to auditor and its associates

Oxford Instruments plc

2011

2010

£’000
112

£’000
107

198
18
26
354

188
7
6
308

53

Notes to the Financial Statements Continued

4

RESEARCH AND DEVELOPMENT

The total research and development spend by the Group is as follows:
2011
Nanotechnology
Tools£m
Research and development
expense charged to theconsolidated statement of income
Less: depreciation of R&D related
ﬁxed assets
Add: amounts capitalised as ﬁxed
assetsLess: amortisation of R&D
costs previously capitalised as
intangibles
Add: amounts capitalised as
intangible assets
Total cash spent on research anddevelopment during the year

5

Industrial
Products
£m

9.7

2010

Total
£m

Nanotechnology
Tools
£m

Industrial
Products
£m

Total
£m

7.9

17.6

6.5

6.6

13.1

(0.5)

(0.1)

(0.6)

(0.5)

(0.1)

(0.6)

2.2

0.1

2.3

0.6

-

0.6

(2.6)

(2.8)

(5.4)

(1.5)

(2.5)

(4.0)

1.9

1.1

3.0

3.2

0.8

4.0

10.7

6.2

16.9

8.3

4.8

13.1

OTHER OPERATING INCOME

Shareholder earnout no longer required
Curtailment gains

2011
£m
0.6
4.1
4.7

2010
£m
-

During the year, the Group recognised other operating income of £0.6m in relation to a shareholder earnout provided at thetime of the acquisition of Technologies and Devices Inc. and which is no longer required.
During the year, the Group’s deﬁned beneﬁt pension schemes in the UK and US were closed to future accrual. This gave rise toa curtailment gain under IAS19 as the majority of members’ accrued beneﬁts are no longer linked to future salary growth.

6

REORGANISATION COSTS AND IMPAIRMENT

Impairment of carrying value of assets
Restructuring costs

2011
£m
(0.6)
(0.6)

2010
£m
(0.4)
(0.4)

During the year, the Group recognised an impairment charge of £0.6m against costs capitalised in relation to the planned sitemove of the Plasma Technology business in the UK. This move will now not take place in the form originally planned.
In the prior year, the Group concluded the restructuring programme started in the previous year. This resulted in additional
redundancy and related costs at sites in Japan, France, Finland and the UK of £0.4m.

54

Oxford Instruments plc

Notes to the Financial Statements Continued

7

PERSONNEL COSTS

Wages and salaries
Social security costs
Charge in respect of deﬁned beneﬁt pension schemes
Contributions to deﬁned contribution pension plans
Charge in respect of employee share options

2011
£m
56.6
6.0
0.8
2.9
0.4
66.7

2010
£m
51.6
5.1
1.9
2.0
0.5
61.1

Directors’ emoluments are disclosed in the Directors’ Remuneration Report on pages 30 to 37 of this Annual Report.

8

EMPLOYEESThe average number of people employed by the Group (including Directors and temporary employees) during the year was
as follows:

Production
Sales and marketing
Research and development
Administration and shared services
Total average number of employees

9

2011
Number
740
332
207
219
1,498

2010
Number
584
366
184
207
1,341

SHARE OPTION SCHEMESThe Group operates four share option schemes.
All employee Save As You Earn Scheme
Options awarded under the Save As You Earn scheme have a vesting period of either 3 or 5 years. The exercise prices are
determined according to the mid-market closing share price on the day before the date of grant. Options must be exercised
within 6 months of vesting. There are no performance conditions associated with this scheme. The ﬁnal grant under thisscheme was made in December 2006 and at the current time the Directors do not intend to grant any further options under
this scheme.
Executive Share Option Scheme (ESO)
Options awarded under the Executive Share Option scheme are made annually to certain senior executives. The exercise prices
are determined according to the mid-market closing share price on the day before the date of grant. Options have a life of
10 years and a vesting period of 3 years.

Oxford Instruments plc

55

Notes to the Financial Statements Continued

Senior Executive Long Term Incentive Scheme (SELTIS)
Options awarded under the Senior Executive Long Term Incentive scheme are made annually to certain senior executives. The
exercise prices are nil. Options have a life of 7 years and a vesting period of 3 years.
Both the Executive Share Option scheme and Senior Executive Long Term Incentive Scheme are subject to performance
conditions which can be found in the Directors’ Remuneration Report on pages 30 to 37.
All employee Share Incentive Plan (SIP)All UK employees are eligible to participate in the Group’s HM Revenue and Customs approved SIP. Participating employees
make a cash contribution to the plan each month. The Group contributes a further amount equal to 20% of the employee’s
contribution. Independent trustees then purchase shares in the market on behalf of the employees. The matching shares veston the completion by the participating employee of a further three years service and can be withdrawn from the plan tax-free
after 5 years service.
Administrative expenses include a charge of £0.4m (2010: £0.5m) 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 over the vesting period.
Fair values are determined using an internal calculation based on a modiﬁed Black-Scholes model. 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. Half of the ESO options issued before 2009 and all SELTIS options use Total Shareholder Return (TSR) as a performance
condition. As TSR is a market based performance condition, the accounting treatment differs from that for shares subject tointernal performance conditions. This means that the TSR performance conditions have been incorporated into the calculationof the fair value as a discount in calculating the fair value.
For options granted in 2010 and 2011, the fair value per option granted and the assumptions used in the calculation are as
follows:

Fair value at measurement date
Share price
Exercise price
Expected volatility
Expected option life (expressed as weighted
average life used in the modelling)
Expected dividend yield
Risk free interest rate
Performance condition discount in respect of
TSR condition

56

Senior Executive Long Term
Incentive Scheme
2011
2010
£2.975£0.784£7.050£2.030
£nil
£nil
47.0%
44.2%

Executive Share Option Scheme
2011£2.479£7.050£7.05037.6%

2010£0.494£2.030£2.03535.3%

3 years
1.2%
1.5%

3 years
4.1%
1.7%

6 years
1.2%
2.4%

6 years
4.1%
3.0%

56.3%

56.3%

n/a

n/a

Oxford Instruments plc

Notes to the Financial Statements Continued

The options existing at the year end were as follows:

Options subsisting at the year end on unissued
ordinary shares
Executive Share Option Schemes
July 2000
July 2003
July 2004
July 2005
July 2006
September 2006
September 2007
December 2007
December 2008
December 2009
January 2011
Save As You Earn
December 2004
December 2005
December 2006
December 2006
Total options subsisting on unissued ordinary
sharesPercentage of issued share capital
Options subsisting at the year end on existing
ordinary shares held in trust
Senior Executive Long Term Incentive Scheme
December 2005
July 2006
July 2007
December 2008
December 2009
January 2011
Total options subsisting on existing ordinary
shares held in trust

2011
Numberof shares

Exercise
Price

Period when
Exercisable

2010
Numberof shares

15,751
15,11891,01230,975
168,904
2,000
821,000
661,500
463,800£1.83£1.875
£2.18
£2.19
£2.10
£2.038£2.32£1.925£1.35£2.035£7.05

01/04/10 – 21/12/10
01/04/10 – 15/07/13
01/04/10 – 15/07/14
01/04/10 – 15/07/15
01/04/10 – 15/07/16
01/04/10 – 04/09/16
28/09/10 – 28/09/17
18/12/10 – 18/12/17
16/12/11 – 16/12/18
17/12/12 – 17/12/19
07/01/14 - 07/01/21

125
87,00084,750182,742
159,350
33,333
397,500
2,000
844,000
667,500-

99,752

£1.65
£2.02
£1.83
£1.73

01/04/10 – 31/07/10
01/02/11 – 31/07/11
01/04/10 – 31/07/10
01/02/12 – 31/07/12

10,80959,601
11,661
104,450

2,369,812
4.7%

2,644,821
5.3%

260,000
160,000
62,000

Nil
Nil
Nil
Nil
Nil
Nil

01/04/10 – 25/07/12
25/07/09 – 25/07/13
25/07/10 – 25/07/14
16/12/11 – 18/12/15
17/12/12 – 18/12/16
07/01/14 – 07/01/18

482,000

9,800
6,250
87,500260,000
160,000
523,550

The number and weighted average exercise prices of those options are as follows:
Weighted
Average

NumberOf

Weighted
Average

NumberOf

exercise price

Options

exercise price

Options

Outstanding at the beginning of the period
Granted during the year
Forfeited during the year
Exercised during the year
Lapsed during the year

2011
£1.55
£6.22
£1.92
£1.94
£1.45

2011
3,168,371
525,800(36,398)(667,385)(138,576)

2010
£1.58
£1.64
£1.79
£1.27
£1.87

2010
3,314,120
827,500(141,266)(233,777)(598,206)

Outstanding at the year end£2.32

2,851,812£1.55

3,168,371

Exercisable at the year end£2.23

323,760£1.99

749,871

Oxford Instruments plc

57

Notes to the Financial Statements Continued

10 INCOME TAX EXPENSE
Recognised in the Consolidated Statement of Income
2011

2010

£m

£m

Current tax expense
Current year

6.1

2.8

Adjustment in respect of prior years

(0.5)

(0.8)

5.6

2.0

0.9

2.0

Recognition of deferred tax not previously recognised(11.9)-

Adjustment in respect of prior years

(0.1)

0.8

(11.1)

2.8

(5.5)

4.8

Proﬁt before income tax

26.7

18.1

Income tax using the UK corporation tax rate of 28%

7.5

5.1

Tax rates other than the standard rate

0.4-

Change in rate at which deferred tax recognised

(0.2)

-

Non-taxable income and expenses

0.2

0.3

Tax incentives not recognised in the Consolidated Statement of Income

(0.7)

(0.3)

Temporary differences not recognised for deferred tax-

0.1

Recognition of deferred tax not previously recognised(11.9)-

Effect of previous tax losses now utilised

(0.2)

(0.4)

Adjustment in respect of prior years

(0.6)

-

Total tax (credit)/expense

(5.5)

4.8

Current tax – relating to employee beneﬁts

(1.5)

(0.9)

Deferred tax - relating to employee beneﬁts

6.0

(5.5)

Deferred tax – relating to share options

(2.7)

-

Deferred tax – relating to cash ﬂow hedges

0.1

0.3

1.9

(6.1)

Deferred tax expense
Origination and reversal of temporary differences

Total tax (credit)/expense

Reconciliation of effective tax rate

Effect of:

Taxation recognised directly in equity

The 2011 Budget on 23 March 2011 announced that the UK corporation tax rate will reduce to 23% over a period of 4 years
from 2011. The ﬁrst reduction in the UK corporation tax rate from 28% to 27% was substantively enacted on 20 July 2010 andwill be effective from 1 April 2011, and a further reduction to 26% in the rate applicable from 1 April 2011 was substantively
enacted on 29 March 2011. This will reduce the company’s future current tax charge accordingly. The deferred tax asset atbalance sheet date has been calculated based on the rate of 26% substantively enacted at the balance sheet date. It has not
yet been possible to quantify the full anticipated effect of the announced further 3% rate reduction, although this will further
reduce the company’s future current tax charge and reduce the company’s deferred tax asset accordingly.

58

Oxford Instruments plc

Notes to the Financial Statements Continued

11 EARNINGS PER SHARE
The calculation of basic earnings per share is based on a weighted average number of ordinary shares outstanding during theyear, excluding shares held by the Employee Share Ownership Trust, as follows:

Weighted average number of shares outstanding
Less shares held by Employee Share Ownership Trust
Weighted average number of shares used in calculation of earnings per share

2011
SharesMillion
49.7
(0.4)

2010
SharesMillion
49.4
(0.5)

49.3

48.9

The following table shows the effect of share options on the calculation of diluted earnings per share:

Weighted average number of ordinary shares per basic earnings per sharecalculations
Effect of shares under option
Weighted average number of ordinary shares per diluted earnings per sharecalculations

2011
Sharesmillion2010
Sharesmillion

49.3
1.4

48.9
0.3

50.7

49.2

2011
pence
2.40
6.00
8.40

2010
pence
2.40
6.00
8.40

12 DIVIDENDS PER SHARE
The following dividends per share were paid by the Group:

Previous year interim dividend
Previous year ﬁnal dividend

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

Interim dividend
Final dividend

2011
pence
2.52
6.48
9.00

2010
pence
2.40
6.00
8.40

The interim dividend was not provided for at the year end and was paid on 7 April 2011. The ﬁnal proposed dividend of
6.48 pence per share (2010: 6.0 pence) was not provided at the year end and will be paid on 27 October 2011 subject toauthorisation by the shareholders at the forthcoming Annual General Meeting.

Oxford Instruments plc

59

Notes to the Financial Statements Continued

13 PROPERTY, PLANT AND EQUIPMENT
Land andbuildings£mPlant andequipment£mFixtures andﬁttings
£m

Total
£m

16.3
(0.3)

42.5
3.1
(5.7)

7.5
0.5
(1.0)

66.3
3.6
(7.0)

(0.2)
15.8

(1.1)
38.8

(0.1)
6.9

(1.4)
61.5

15.8
2.1
-

38.8
2.5
(0.6)

6.9
1.2
(0.5)

61.5
5.8
(1.1)

(0.2)
17.7

(0.5)
40.2

7.6

(0.7)
65.5

Balance at 1 April 2009
Depreciation charge for the year
Disposals
Effect of movements in foreign exchange
rates
Balance at 31 March 2010

4.0
0.4
(0.3)

32.7
2.9
(5.7)

6.1
0.5
(0.9)

42.8
3.8
(6.9)

(0.1)
4.0

(0.9)
29.0

5.7

(1.0)
38.7

Balance at 1 April 2010
Depreciation charge for the year
Disposals
Effect of movements in foreign exchange
rates
Balance at 31 March 2011

4.0
0.7
-

29.0
3.0
(0.1)

5.7
0.3
(0.4)

38.7
4.0
(0.5)

4.7

(0.3)
31.6

5.6

(0.3)
41.9

Carrying amounts
At 1 April 2009

12.3

9.8

1.4

23.5

At 31 March 2010 and 1 April 2010

11.8

9.8

1.2

22.8

At 31 March 2011

13.0

8.6

2.0

23.6

Cost
Balance at 1 April 2009
Additions
Disposals
Effect of movements in foreign exchange
rates
Balance at 31 March 2010
Balance at 1 April 2010
Additions
Disposals
Effect of movements in foreign exchange
rates
Balance at 31 March 2011
Depreciation and impairment losses

60

Oxford Instruments plc

Notes to the Financial Statements Continued

14 INTANGIBLE ASSETS

Goodwill£m
Cost
Balance at 1 April 2009
Additions
Disposals
Reclassiﬁcation
Effect of movements in foreign exchange
rates
Balance at 31 March 2010

Customer
RelatedAcquiredintangibles£mTechnology
RelatedAcquired
Intangibles£m

Development
Costs
£m

Total
£m

15.2
-

4.0
0.5

29.6
(0.5)

27.1
4.0
(1.1)
-

75.9
4.0
(1.1)
-

(0.5)
14.7

4.5

(1.1)
28.0

(0.4)
29.6

(2.0)
76.8

14.7
(0.1)

4.5
-

28.0
-

29.6
3.0
-

76.8
3.0
(0.1)

(0.1)
14.5

4.5

(0.4)
27.6

(0.3)
32.3

(0.8)
78.9

Balance at 1 April 2009
Amortisation charge for the year
Disposals
Reclassiﬁcation
Effect of movements in foreign exchange
rates
Balance at 31 March 2010

1.3
-

2.5
0.3
1.1

7.8
3.8
(1.1)

9.4
4.0
(1.1)
-

21.0
8.1
(1.1)
-

1.3

(0.1)
3.8

(0.2)
10.3

(0.2)
12.1

(0.5)
27.5

Balance at 1 April 2010
Amortisation and impairment charge for theyear
Effect of movements in foreign exchange
rates
Balance at 31 March 2011

1.3

3.8

10.3

12.1

27.5

-

0.2

4.5

5.4

10.1

1.3

4.0

(0.1)
14.7

(0.2)
17.3

(0.3)
37.3

Carrying amounts
At 1 April 2009

13.9

1.5

21.8

17.7

54.9

At 31 March 2010 and 1 April 2010

13.4

0.7

17.7

17.5

49.3

At 31 March 2011

13.2

0.5

12.9

15.0

41.6

Balance at 1 April 2010
Additions
Disposals
Effect of movements in foreign exchange
rates
Balance at 31 March 2011
Amortisation and impairment losses

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 to individual CGU’s as follows:

Nanotechnology Tools
NanoScience
NanoAnalysis
Plasma Technology
Industrial Products
Industrial Analysis
Magnetic Resonance
Service
Austin Scientiﬁc

Oxford Instruments plc

2011
£m

2010
£m

2.4
3.4
-

2.4
3.4
0.1

3.5
2.3

3.5
2.3

1.6
13.2

1.7
13.4

61

Notes to the Financial Statements Continued

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be
impaired.
The impairment test operates by determining the recoverable amounts of relevant cash generating units, which are calculated
as the higher of the fair value less costs to sell or their value in use. The recoverable amount of the Group’s goodwill is basedon value in use calculations. For the purpose of impairment testing, Board-approved three year cash ﬂow forecasts, preparedby the management of each CGU are used as a basis for the value in-use calculations together with 5% growth for each CGU
for the subsequent twenty years.
Key assumptions
The key assumptions are those regarding discount rates, growth rates, expected selling prices and direct costs during theperiod.
The growth rates are based on industry growth factors. Changes in selling prices and direct costs are based on past practices
and expectations of future changes in the market.
The post tax weighted average costs of capital used for Nanotechnology Tools, Industrial Products and Service in impairment
testing are 10.9%, 10.4% and 9.9% respectively in line with the risk associated with each of the business segments. Management
have estimated these discount rates by reference to past experience and an industry average weighted cost of capital as
adjusted for appropriate risk factors reﬂecting current economic circumstances and the risk proﬁles of each CGU.
Sensitivity analysis
The Group’s estimate of impairments are most sensitive to increases in the discount rate and forecast cash ﬂows. Sensitivity
analysis has been carried out by reference to both of these assumptions. This demonstrated that an impairment would only berequired if there was an increase in the discount rates by 15% or a 40% reduction in forecast cash ﬂows on the CGU with thelowest level of headroom. Sensitivity testing on the other CGUs shows an even greater level of headroom.
Based on the above, it is not considered possible that any reasonable change to the key assumptions would generate a
different impairment test outcome to the one included in these Financial Statements.

15 DEFERRED TAX
Movements in deferred tax assets and liabilities were as follows:

Balance 31 March 2009
Recognised in income
Recognised in equity
Foreign exchange
Balance 31 March 2010
Recognised in income
Recognised in equity
Foreign exchange
Balance 31 March 2011

Property,plant andequipment
3.5
(1.3)
2.2
0.9
3.1

Inventory

Employee
beneﬁts

Intangible
assetsTax losses

Other

Total

1.2
0.1
(0.1)
1.2
0.5
1.7

4.6
0.7
5.5
(0.1)
10.7
(0.6)
(3.9)
6.2

(12.3)
1.3
0.3(10.7)
3.2
0.1
(7.4)

2.1
(0.6)
1.5
7.1
8.6

4.6
(3.0)
(0.3)
1.3
(0.1)
(0.1)
1.1

3.7
(2.8)
5.2
0.1
6.2
11.0
(4.0)
0.1
13.3

2011
£m
13.3
13.3

Net
2010
£m
6.2
6.2

Certain deferred tax assets and liabilities have been offset as follows:

Gross assets/(liabilities)
OffsetNet assets/(liabilities)

62

2011
£m
20.8
(3.4)
17.4

Assets
2010
£m
17.2
(4.3)
12.9

2011
£m
(7.5)
3.4
(4.1)

Liabilities
2010£m(11.0)
4.3(6.7)

Oxford Instruments plc

Notes to the Financial Statements Continued

Deferred tax assets have not been recognised in respect of the following items:

Deductible temporary differences
Tax losses

2011
£m
0.5
1.3
1.8

2010
£m
2.2
12.7
14.9

Tax losses with a tax value of £0.3m expire in 2021. The remaining tax losses 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 brought forward tax losses.
No deferred tax liability has been recognised in respect of £27.6m (2010: £48.7m) of undistributed earnings of overseas
subsidiaries since the majority of such distributions would not be taxable. In other cases the Group considers that it is able tocontrol the timing of remittances so that any tax is not expected to arise in the foreseeable future.
On 23 March 2011 the Chancellor announced the reduction in the main rate of UK corporation tax to 26 per cent with effectfrom 1 April 2011. This change became substantively enacted on 29 March 2011 and therefore the effect of the rate reduction
creates a reduction in the deferred tax asset which has been included in the ﬁgures above.
The Chancellor also proposed changes to further reduce the main rate of corporation tax by one per cent per annum to 23 percent by 1 April 2014, but these changes have not yet been substantively enacted and therefore are not included in the ﬁgures
above. The overall effect of the further reductions from 26 per cent to 23 per cent, if these applied to the deferred tax balance
at 31 March 2011, would be to further reduce the deferred tax asset by approximately £1.7m.

16 INVENTORIES

Raw materials and consumables
Work in progress
Finished goods

2011
£m
14.3
19.7
12.6
46.6

2010
£m
10.2
14.1
15.0
39.3

2011
£m
43.0
(0.7)
42.3
3.8
6.4
52.5

2010
£m
53.1
(0.7)
52.4
2.1
5.7
60.2

The amount of inventory recognised as an expense comprises cost of sales.

17 TRADE AND OTHER RECEIVABLES

Trade receivables
Less provision for impairment of receivables
Net trade receivables
Prepayments and accrued income
Other receivables

Trade receivables are non-interest bearing. Standard credit terms provided to customers differ according to business andcountry, and are typically between 30 and 60 days.

Oxford Instruments plc

63Notes to the Financial Statements Continued

The maximum exposure to credit risk for trade receivables by geographic region of the selling business was:UK
Continental Europe
North America
Japan
Rest of World

2011
£m
14.6
5.6
12.7
9.2
0.9
43.0

2010
£m
16.3
10.4
14.6
10.5
1.3
53.1

2011
£m
25.6
7.0
5.4
5.0
43.0

2010
£m
33.8
8.7
6.1
4.5
53.1

The ageing of trade receivables at the reporting 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

In both periods presented the majority of the provision against trade receivables relates to balances 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

2011
£m
0.7
0.7

2010
£m
0.5
0.2
0.7

18 FINANCIAL RISK MANAGEMENTThe Group’s multinational operations and debt ﬁnancing expose it to a variety of ﬁnancial risks. In the course of its business,
the Group is exposed to foreign currency risk, interest rate risk, liquidity risk, commodity 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 Boardof Directors. These policies are implemented by a central treasury function that has formal procedures to manage foreignexchange risk, interest rate risk, and liquidity risk, including, where appropriate, the use of derivative ﬁnancial instruments.
Commodity risk is managed locally by the operating businesses. 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 trading or speculative
purposes. Such instruments are only used to manage the risks arising from operating or ﬁnancial assets or liabilities or highly
probable future transactions.
The Group uses derivative ﬁnancial instruments to hedge its exposure to ﬂuctuations in foreign exchange rates, interest rates
and commodity prices.
The Group has adopted hedge accounting for a limited number of related commodity contracts as outlined below. However,in common with a number of other companies, the Group has decided that the additional costs of meeting the extensive
documentation requirements of IAS 39 to apply hedge accounting to derivative ﬁnancial instruments used for hedging exposure
to foreign currency and interest rate volatility cannot be justiﬁed. Accordingly the Group does not use hedge accounting forsuch derivatives.
Foreign Currency Risk
Foreign currency risk arises both where sale or purchase transactions are undertaken in currencies other than the respectivefunctional currencies of Group companies (transactional exposures) and where the results of overseas companies areconsolidated into the Group’s reporting currency of sterling (translational exposures). The Group has operations around theworld which record their results in a variety of different local functional currencies. In countries where the Group does not haveoperations, it invariably has some customers or suppliers that transact in a foreign currency. The Group is therefore exposed tothe changes in foreign currency exchange rates between a number of different currencies but the Group’s primary exposuresrelate to the US dollar, the Euro and the Japanese Yen. To reduce uncertainty the Group maintains a rolling hedge equivalent
to 80% of the exposure expected to arise over the following 12 months. The hedge comprises a mixture of ﬁxed forward
contracts and option based products. The remaining 20% is sold on the spot market as it arises. The fair value of outstanding64

Oxford Instruments plc

Notes to the Financial Statements Continued

currency contracts recognised as a liability as at 31 March 2011 amount to £0.5m (2010: £3.4m) and those recognised as an asset
amount to £0.7m (2010: £0.7m).
Movements in the fair value of derivative ﬁnancial instruments are recognised in the Consolidated Statement of Income
immediately. However, in order to facilitate a more meaningful comparison of the Group’s performance year on year theelement of these movements that relate to hedges in respect of future sales are treated as adjusting item in the calculation ofadjusted earnings (see note 1).
The Group’s translational exposures to foreign currency risks can relate both to the Consolidated Statement of Income and net
assets of overseas subsidiaries. The Group’s policy is not to hedge the translational exposure that arises on consolidation of theConsolidated Statements of Income of overseas subsidiaries.
Interest Rate Risk
Interest rate risk comprises both the interest rate price risk that results from borrowing at ﬁxed rates of interest and also theinterest 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 a cash ﬂow risk. In May 2008 the Group
entered into an interest rate swap in order to manage its exposure to interest rate movements. Under the terms of the swap,
the Group pays ﬁxed interest of 4.1% on the notional amount of £14.8m and receives three months Sterling LIBOR.
The fair value of interest rate swaps entered into as at 31 March 2011 is estimated as a liability of £0.6m (2010: £0.9m). Theseamounts are based on market estimates of equivalent instruments at the Consolidated Statement of Financial Position date.
These interest rate swaps are not designated as cash ﬂow hedges, for hedge accounting purposes, and consequently they areaccounted for at fair value through proﬁt or loss. A credit of £0.3m was made to the Consolidated Statement of Income in the
period (2010: nil).
In April 2011, the Group closed out its position on the aforementioned interest rate swap for a settlement value of £0.6m.
Liquidity Risk
Liquidity risk represents the risk that the Group will not be able to meet its ﬁnancial obligations as they fall due. The Group’s
approach to managing this risk is to ensure, as far as possible, that it will always have sufﬁcient 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 2011 are set out in note 21.
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 Consolidated Statement of Financial Position are net of
appropriate allowances for doubtful receivables, estimated by the Group’s management based on prior experience and theirassessment of the current economic environment. Trade receivables are subject to credit 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 concentrations of credit
risk on its trade receivables. Credit risk associated with cash balances and derivative ﬁnancial instruments is managed bytransacting 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 Consolidated Statement of
Financial Position.
Exposure to credit risk
The carrying amount of ﬁnancial assets represent the maximum credit exposure. The maximum exposure to credit risk at 31
March 2011 was £73.9m (2010: £70.0m).

Trade receivables
Other receivables
Cash and cash equivalents
Forward exchange contracts

2011
£m
42.3
6.4
24.5
0.7
73.9

2010
£m
52.4
5.7
11.2
0.7
70.0

The maximum exposure to credit risk for trade receivables is discussed in note 17.
Other receivables include £0.9m (2010: £2.6m) in respect of VAT and similar taxes which are not past due.

Oxford Instruments plc

65Notes to the Financial Statements Continued

Commodity risk
The Group is exposed to changes in commodity prices, particularly in respect of copper used as a major component in theGroup’s US operations. It manages this exposure using derivative commodity hedging instruments.
At 31 March 2011, the Group had outstanding commodity hedge contracts with a fair value of £0.3m (2010: £0.1m) that were
designated and effective as cash ﬂow hedges of committed and highly probable forecast transactions. Fair value movementsof these contracts have been deferred in equity until the hedged transaction takes place. These contracts all mature within one
year of the Consolidated Statement of Financial Position date.
A £0.2m gain net of tax (2010: £0.5m gain) has been deferred in equity as at 31 March 2011 in respect of these contracts. A
gain of £0.3m (2010: £0.2m gain) has been recycled to current assets (inventory) in respect of contracts designated as cash ﬂow
hedges that have matured during the year to 31 March 2011.
Capital Management
Ordinary shares are classiﬁed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options
are recognised as a deduction from equity, net of any tax effects. The Board’s policy is to maintain 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 and the level of dividends to ordinary shareholders.
The Board encourages employees to hold shares in the Company. As well as various share option plans (full details of which are
given in note 9), from April 2008 all UK employees have been offered the opportunity to take part in a Share Incentive Plan
(SIP). Under this plan, employees are able to invest up to £1,500 each tax year in shares in the Company. The Company awards
one additional free share (a matching share) for every ﬁve shares bought by each employee. It is envisaged that no further
options will be offered under the Save as You Earn (SAYE) option scheme.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings andthe advantages and security afforded by a sound capital position. The Group maintains the right to purchase its own sharesin the market; the timing of these purchases would depend on market prices. Buy and sell decisions are made on a speciﬁctransaction basis by the Board. There were no changes to the Group’s approach to capital management during the year.
Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements. To assist the Board incapital management earnings per share is regularly reported to them.

66

Oxford Instruments plc

Notes to the Financial Statements Continued

19 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 Consolidated Statement of
Financial Position are as follows:
Fair
Value
hierarchy
Assets carried at amortised cost
Trade receivables
Other receivables
Cash and cash equivalents

Carrying
Amount
2011
£m

Fair
Value
2011
£m

Carrying
Amount
2010
£m

Fair
Value
2010
£m

42.3
6.4
24.5

42.3
6.4
24.5

52.4
5.7
11.2

52.4
5.7
11.2

Assets carried at fair value
Derivative ﬁnancial instruments:
AssetsForeign currency contracts
Copper hedging contracts

2
2

0.7
0.3
1.0

0.7
0.3
1.0

0.7
0.1
0.8

0.7
0.1
0.8

Liabilities carried at fair value
Liabilities
Foreign currency contracts
Interest rate swaps

2
2

(0.5)
(0.6)
(1.1)

(0.5)
(0.6)
(1.1)

(3.4)
(0.9)
(4.3)

(3.4)
(0.9)
(4.3)

(10.0)(0.6)(76.6)
(0.8)

(9.1)
(0.6)
(76.6)(0.8)(19.0)(0.7)(70.0)(1.9)(18.1)(0.7)(70.0)(1.9)

Liabilities carried at amortised cost
Unsecured bank borrowing
Secured bank borrowing (note 21)
Trade and other payables
Bank overdraft

The following summarises the major methods and assumptions used in estimating the fair values of ﬁnancial instruments
reﬂected in the above table.

Derivative financial instruments
Derivative ﬁnancial instruments are marked to market using listed market prices.
Fixed and floating rate borrowings
The fair value of ﬁxed and ﬂoating rate borrowings is estimated by discounting the future contracted principal and interest
cash ﬂows using the market rate of interest at the reporting date.
Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the carrying amount is deemed to reﬂect the fair value. Allother receivables/payables are discounted to determine the fair value.
Fair value hierarchy
The table above gives details of the valuation method used in arriving at the fair value of ﬁnancial instruments. The different
levels have been identiﬁed as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie.
as prices) or indirectly (ie. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data

Oxford Instruments plc

67

Notes to the Financial Statements Continued

Maturity of financial liabilities
31 March 2011

Bank overdrafts
Bank borrowing
Trade and other payables
Foreign exchange contracts
Interest rate swaps

Carrying
Amount
£m
0.8
10.6
76.6
0.5
0.6
89.1

Contractual
cash flows
£m
0.8
11.9
76.6
1.0
0.6
90.9

Due
Withinone year
£m
0.8
0.4
76.5
0.7
0.6
79.0

Due
1 – 5 years
£m
11.1
0.1
0.3
11.5

Due
More than
5 years£m
0.4
0.4

Carrying
Amount
£m
1.9
19.7
70.0
3.4
0.9
95.9

Contractual
cash ﬂows
£m
1.9
20.6
70.0
4.0
1.0
97.5

Due
Withinone year
£m
1.9
0.4
69.1
3.5
0.5
75.4

Due
1 – 5 years
£m
19.7
0.9
0.5
0.5
21.6

Due
more than
5 years£m
0.5
0.5

31 March 2010

Bank overdrafts
Bank borrowing
Trade and other payables
Foreign exchange contracts
Interest rate swaps

At the reporting date the interest rate proﬁle of the Group’s interest – bearing ﬁnancial instruments was:Carrying
Amount2011£m

Carrying
amount2010£m

Variable rate instruments
Financial assets
Financial liabilities

24.5(10.8)

11.2(20.9)

Fixed rate instruments
Financial liabilities

(0.6)

(0.7)

Bank overdraft
The bank overdrafts are repayable on demand. Bank overdrafts carry interest rates of 2.65% in the UK, 3% in Europe and
LIBOR+ 3.5% in Japan.
Sensitivity analysis
The Group has estimated the impact of the change to the fair value of its ﬁnancial instruments and the translation of currency
proﬁts and assets on the Consolidated Statement of Income and on equity for the following:•

one percentage point increase in interest rates•

ten percentage point weakening in the value of sterling against all currencies•

ten percentage point strengthening in the value of sterling against all currencies•

ﬁve percentage point increase in the cost of copper•

ﬁve percentage point decrease in the cost of copper

The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the speciﬁed changes occur
net of any hedging in place at the year end. Actual results in the future may differ materially from these estimates due tocommercial actions taken to mitigate any potential losses from such rate movements, to the interaction of more than one
sensitivity occurring and to further developments in global ﬁnancial markets. As such this table should not be considered as aprojection of likely future gains and losses.

68

Oxford Instruments plc

Notes to the Financial Statements Continued

1% increase
in interest
Rates
£m

10%
Weakeningin sterling¹£m

10%Strengthening
in sterling¹
£m

0.3

2.4

(2.4)

-

-

0.3

2.4

(2.4)

0.1

(0.1)

0.2

3.7

(3.7)

-

-

0.2

3.7

(3.7)

0.1

(0.1)

At 31 March 2011
Impact on Consolidated
Statement of Income
Impact on equity
At 31 March 2010
Impact on Consolidated
Statement of Income
Impact on equity

5% increasein copper
Prices£m

5% decreasein copper
prices£m¹ Of the effect on the Consolidated Statement of Income, £4.2m (2010: £3.1m) would have been recognised on the ‘Mark toMarket’ line (see Note 1).

20

CALLED UP SHARE CAPITAL

Issued and fully paid ordinary shares:

At the beginning of the year

2011

2010

Number of shares

Number of shares

49,567,328

49,409,351

607,585

157,977

50,174,913

49,567,328

Issued for cash
At the end of the year

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

2011
Number of
Shares

2011

2010

£m

2010
Number of
Shares

58,000,000

2.9

58,000,000

2.9

50,174,913

2.5

49,567,328

2.5

New issues of ordinary shares of 5p each during the year
Exercise of Savings Related Share Options
Exercise of Executive Share Options
Exercise of Executive Share Options –share appreciationrights£m

Numberof shares

Aggregate
nominal value

Consideration
per share

73,732
370,149
163,704£3,687£18,507£8,185£1.65-£2.02£1.83-£2.32£0.05

The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share atmeetings of the Company.

Oxford Instruments plc

69Notes to the Financial Statements Continued

21 BORROWINGSAt 31 March 2011 the Group had borrowings with a book value of £10.6m (2010: £19.7m).
In December 2010, the Group reﬁnanced its borrowing facilities and agreed a committed revolving credit facility with a clubof three banks. The new facility, which will last for four years, is for £50 million and is extendable to £70 million by mutual
consent. The facility replaces the previous revolving credit facility that was put in place in July 2007.
The facility carries a ﬂoating interest rate of LIBOR plus a margin of between 1.625% and 2.75% depending on the level ofnet debt in relation to earnings (current margin is 1.625%). All necessary conditions precedent and covenants were met at
31 March 2011. The next repricing of the LIBOR element of the loan after the year end is on 28 April 2011. Thereafter the
repricing of the LIBOR element occurs at 1, 2, 3 or 6 months at the Group’s option. The undrawn amount of the facilities at 31
March 2011 was £40.0m (2010: £31.0m under previous facility).
Borrowings with a book and fair value of £0.6m (2010: £0.7m) relate to a mortgage made available to Oxford Instruments
Analytical GmbH (formerly 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 ininstalments of £0.1m per year until 2011 and in instalments of £50k per year until 2021.

22 RETIREMENT BENEFIT OBLIGATIONSThe Group operates deﬁned beneﬁt plans in the UK and US; both offer pensions in retirement and death in service beneﬁt tomembers. Pension beneﬁts are related to members’ ﬁnal salary at retirement and their length of service. Both schemes havebeen closed to new members since 2001.
During the year, the Group’s deﬁned beneﬁt plans in the UK and the US were closed to future accrual.
The Group has opted to recognise all actuarial gains and losses immediately via the Consolidated Statement of Comprehensive
Income.
The amounts recognised in the Consolidated Statement of Financial Position are:Present value of funded obligations
Fair value of plan assets
Recognised liability for deﬁned beneﬁt
obligations

UK
2011
£m

USA
2011
£m

Total
2011
£m

UK
2010
£m

USA
2010
£m

Total
2010
£m

177.1
(166.5)

7.7
(6.6)

184.8
(173.1)183.7(151.7)

9.0
(5.9)

192.7
(157.6)

10.6

1.1

11.7

32.0

3.1

35.1

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

Beneﬁt obligation at the beginning of theyear
Interest on obligation
Current service cost
Contributions paid by plan participantsBeneﬁts paid
Actuarial (gain)/loss on obligation
Curtailment gains
Exchange rate adjustment
Beneﬁt obligation at the end of the year

UK
2011
£m

USA
2011
£m

Total
2011
£m

UK
2010
£m

USA
2010
£m

Total
2010
£m

183.7
10.2
0.6
(3.6)
(11.3)
(2.5)
177.1

9.0
0.4
0.2
(0.3)
0.4
(1.6)
(0.4)
7.7

192.7
10.6
0.8
(3.9)
(10.9)
(4.1)
(0.4)
184.8

131.1
8.9
1.5
0.1
(4.1)
46.2
183.7

8.3
0.5
0.4
(0.3)
0.5
(0.4)
9.0

139.4
9.4
1.9
0.1
(4.4)
46.7
(0.4)
192.7

The beneﬁt obligation under the UK pension scheme was reduced by approximately £10.6m during the year following theGovernment’s decision to move from RPI to CPI as the measure of inﬂation used in pension calculations. The Group expects
that as a result of these changes, and subject to the existing caps, CPI will be used to calculate the increase of pensions indeferment. Pensions in payment will, subject to the cap, continue to be indexed in line with RPI.

70

Oxford Instruments plc

Notes to the Financial Statements Continued

Reconciliation of the opening and closing balances of the fair value of plan assets

Fair value of plan assets at the beginning of
the year
Expected return on plan assets
Contributions by employers
Contributions paid by plan participantsBeneﬁts paid
Actuarial gain on assets
Exchange rate adjustment
Fair value of plan assets at the end of the year

UK
2011
£m

USA
2011
£m

Total
2011
£m

UK
2010
£m

USA
2010
£m

Total
2010
£m

151.7
9.5
5.9
(3.6)
3.0
166.5

5.9
0.4
0.5
(0.3)
0.5
(0.4)
6.6

157.6
9.9
6.4
(3.9)
3.5
(0.4)
173.1

119.8
7.6
5.0
0.1
(4.1)
23.3
151.7

5.2
0.3
0.3
(0.3)
0.6
(0.2)
5.9

125.0
7.9
5.3
0.1
(4.4)
23.9
(0.2)
157.6

Expense recognised in the Consolidated Statement of Income

Current service cost
Interest on obligation
Expected return on plan assets
Total – deﬁned beneﬁtContributions to deﬁned contribution schemes

2011
£m
0.8
10.6
(9.9)
1.5
2.9
4.4

2010
£m
1.9
9.4
(7.9)
3.4
2.0
5.4

The actual gain on plan assets was £13.4m (2010: £31.8m gain).
The Group expects to contribute approximately £4.2m to deﬁned beneﬁt plans in the next ﬁnancial year.
The pension costs are recorded in the following lines of the Consolidated Statement of Income:

Cost of sales
Selling and marketing costs
Administration and shared services
Research and development
Financial income
Financial expenditure

2011
£m
1.5
0.8
0.7
0.7
(9.9)
10.6
4.4

2010
£m
1.8
0.8
0.7
0.6
(7.9)
9.4
5.4

2011
£m
14.4

2010
£m
(22.8)

Actuarial gains and losses shown in the Consolidated statement of Comprehensive income

Actuarial gain/(loss)

Cumulative actuarial gains reported in the Consolidated Statement of Comprehensive Income since 1 April 2004, the transition
date to IFRS, are £10.8m (2010: £3.6m cumulative actuarial losses).

Oxford Instruments plc

71

Notes to the Financial Statements Continued

History of experience gains and losses are as follows:

Present value of beneﬁt obligations
Fair value of plan assets
Recognised liability for deﬁned beneﬁt
obligations
Difference between the expected and actual
return:Amount £m% of scheme assets
Experience (losses)/gains on scheme liabilities:
Amount £m% of the present value of the scheme liabilities

2011
£m
184.8
(173.1)

2010
£m
192.7
(157.6)

2009
£m
139.4
(125.0)

2008
£m
161.0
(139.8)

2007
£m
165.9
(135.1)

11.7

35.1

14.4

21.2

30.8

3.5
2%

23.9
15%

(27.2)
(22%)

(7.3)
(5%)

(2.0)
(1%)

10.9
6%

(46.7)
24%

33.6
(24%)

14.4
(9%)

24.1
(15%)

Defined benefit scheme - United Kingdom
A full actuarial valuation of the UK plan was carried out as at 31 March 2009 and has been updated to 31 March 2011 by
a qualiﬁed independent actuary. The major assumptions used by the actuary for the purposes of IAS 19 were (in nominal
terms):

Discount rate
Rate of salary increase
Rate of increase to pensions in payment (pre 1997)
Rate of increase to pensions in payment (post 1997)
Rate of inﬂation

Mortality – pre and post-retirement – males andfemales

As at
31 March
2011
%
5.6
n/a
2.4
3.2
2.7
94% of SP1A tables (97%for females) – year of birth:
medium cohort (min annual
improvement of 1%)

As at
31 March
2010
%
5.6
3.9
2.4
3.2
3.4
94% of SP1A tables (97%for females) – year of birth:
medium cohort (min annual
improvement of 1%)

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:

Pre-retirement – males
Pre-retirement – females
Post-retirement – males
Post-retirement – females

2011
23.0
25.2
21.6
23.9

2010
22.9
25.2
21.5
23.8

The assumptions have been chosen by the Directors from a range of possible actuarial assumptions, which due to the timescales
covered, may not be borne out in practice.

72

Oxford Instruments plc

Notes to the Financial Statements Continued

The assets in the plan and the expected rates of return were:

Equities
Corporate bonds
Gilts
Cash
Alternative

Long-term rateof return
expected at
31 March
2011
%
7.9
5.6
4.4
4.4
7.2

Value at
31 March
2011
£m
64.3
45.8
33.7
13.5
9.2
166.5

Long-term rateof return
expected at
31 March
2010
%
8.0
5.6
4.5
4.5
7.3

Value at
31 March
2010
£m
53.2
41.6
31.3
15.4
10.2
151.7

Defined benefit scheme - United States
A full actuarial valuation of the US plan was carried out as at 1 January 2005 which for reporting purposes has been updated
to 31 March 2011 by a qualiﬁed independent actuary. The major assumptions used by the actuary for the purposes of IAS 19
were (in nominal terms):

Discount rate
Rate of salary increase
Rate of increase to pensions inpayment
Rate of inﬂation
Mortality – pre and postretirement

As at
31 March
2011
%
5.75
n/a

As at
31 March
2010
%
5.75
3.00

0.00
3.00
2011 IRS prescribed mortality - optional
combined table for small plans, male andfemale0.00
3.00
2009 IRS prescribed mortality – optional
combined table for small plans, male andfemale

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 rates of return were:

Equities
Bonds
Property and otherLong term
rate of return
expected at
31 March
2011
%
9.2
6.1
8.4

Value at
31 March
2011
£m
3.5
2.9
0.2
6.6

Long term
rate of return
expected at
31 March
2010
%
9.2
6.1
8.4

Value at
31 March
2010
£m
3.0
2.6
0.3
5.9

Defined contribution schemes
In the UK employees are offered participation in the deﬁned contribution Oxford Instruments Stakeholder Plan. The Company
contribution rate and employee contribution rate varies between grades and whether the individual had previously been in
the Deﬁned Beneﬁt scheme. The Company contribution ranges between 4% and 14% of base salary. The Group also operates
a 401k deﬁned distribution plan in the USA. Details of pension schemes contributions made in respect of Directors can befound in the Directors’ Remuneration Report.

Oxford Instruments plc

73

Notes to the Financial Statements Continued

23 TRADE AND OTHER PAYABLES
2011
£m
29.7
16.5
1.5
27.4
1.5
76.6
(0.1)
76.5

Trade payables
Advances received
Social security and other taxes
Accrued expenses and deferred income
Other creditors (including deferred consideration)
Amounts due after more than one year – other creditors

2010
£m
25.5
18.2
1.4
21.9
3.0
70.0
(0.9)
69.1

Deferred consideration relates to amounts payable in respect of acquisitions made during prior years. During the year, deferredconsideration of £0.1m was paid in respect of the 2008 acquisition of Link Nordiska AB.

24 PROVISIONS FOR OTHER LIABILITIES AND CHARGES

Balance at 1 April 2010
Provisions made during the year
Provisions used during the year
Provisions released during the year
Balance at 31 March 2011

Warranties
£m
3.3
4.4
(2.0)
(0.4)
5.3

Restructuring
£m
0.1
(0.1)
-

Other
£m
1.5
0.3
(0.4)
1.4

Total
£m
4.9
4.7
(2.0)
(0.9)
6.7

Warranty provisions reﬂect the Group’s standard terms and conditions. In general these apply for a year and, as a result,the majority of the provision is expected to be utilised within a twelve-month period. Restructuring provisions relate to therationalisation of activities across the Group (see note 6). Other provisions relate to various obligations including obligations
in respect of onerous leases and obligations to employees in Japan on termination of their employment.

25 OPERATING LEASES
LeasesNon-cancellable future minimum operating lease rentals are payable as follows:

Less than one year
Between one and ﬁve years

2011
£m
2.2
2.7
4.9

2010
£m
2.2
1.9
4.1

During the year ended 31 March 2011 £2.2m was recognised as an expense in the Consolidated Statement of Income in respectof operating leases (2010: £2.2m).
The leases relate to motor vehicles and various properties used mainly as sales ofﬁces.

26 CAPITAL COMMITMENTS
During the year ended 31 March 2011, the Group entered into contracts to purchase property, plant and equipment which are
expected to be settled in the following ﬁnancial year for less than £0.1m (2010: £0.1m).

74

Oxford Instruments plc

Notes to the Financial Statements Continued

27 CONTINGENCIESIn 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.

28 RELATED PARTIESThe Group has a related party relationship with its Directors and Executive ofﬁcers.
Transactions with key management personnel are disclosed in the Directors’ Remuneration Report on pages 30 to 37. There
were no other signiﬁcant transactions with key management personnel in either the current or preceding year other than thefollowing.
During the year the Company paid £0.1m (2010: £0.1m) to Imperialise Limited, a company for whom Nigel Keen is a Director.
The payment was for his services as Chairman of the Group. The liability due to Imperialise Ltd at the year end was nil (2010:
nil).

29 PRINCIPAL GROUP ENTITIESOxford Instruments lndustrial Products Holdings Ltd
Oxford Instruments Holdings Europe Ltd
Oxford Instruments Overseas Holdings Ltd
Oxford Instruments Overseas Holdings 2008 Ltd
Oxford Instruments Nanotechnology Tools Holdings Ltd
Oxford Instruments Overseas Marketing Ltd
Oxford Instruments Industrial Products Ltd
Oxford Instruments Nanotechnology Tools Ltd
Oxford Instruments America Inc
Oxford Instruments OST Holdings LLC
Oxford Instruments OST Asset Co LLC
Oxford Instruments MRI Service LLC
Oxford Instruments Superconductivity Wire LLC
Oxford Instruments (Tennessee) Inc
Oxford Instruments Holdings Inc
Oxford Instruments Holdings 2008 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
Technologies and Devices Inc
Oxford Instruments SAS
Oxford Instruments GmbH
VeriCold Technologies GmbH
Oxford Instruments Analytical GmbH (formerly Worldwide
Analytical Systems AG)
Oxford Instruments KK
Oxford Instruments Pte Ltd

Equity owned by
the company
%
100
100
100
*100
100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100
*100

Country ofIncorporation
EnglandEnglandEnglandEnglandEnglandEnglandEnglandEngland
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
China
Denmark
Finland
USA
FranceGermany
Germany

Principal
Activity
Holding
Holding
Holding
Holding
Holding
MarketingTrading
Trading
Distribution
Holding
Holding
Trading
Trading
Holding
Holding
Holding
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Distribution
Distribution
Manufacturing

*100
*100
*100

GermanyJapan
Singapore

Manufacturing
Distribution
Marketing

Equity owned by the Company represents issued ordinary share capital.
A full list of the Group companies as at 31 March 2011 is available for inspection at the Company’s registered ofﬁce.
With the exception of holding companies, all the above companies are engaged in the research, development, manufactureand sale of high technology tools and systems. Equity owned by subsidiary companies is indicated by an asterisk (*). All theabove companies are included in the Group accounts.

Oxford Instruments plc

75Notes to the Financial Statements Continued

30 SUBSEQUENT EVENTS
The interim dividend of 2.52p per share (total cost £1.2m) was paid after the year end. In addition on 14 June 2011 theDirectors proposed a ﬁnal dividend of 6.48p per ordinary share (total cost £3.2m). The total amount of £4.4m has not been
provided for and there are no income tax consequences.
The Group made two acquisitions on 13 June 2011 details of which are given below. Some of the disclosure required by
IFRS3 has been omitted since due to the timing of the acquisitions the initial accounting is incomplete at the date of thispublication.
Omicron NanoTechnology GmbHThe Group acquired 100% of the share capital of Omicron NanoTechnology for a net cash consideration of €32.4m. Omicron
NanoTechnology specialises in the manufacture of very high end microscopes for nanotechnology research and is headquarteredin Taunusstein, Germany.
Omniprobe, Inc.
The Group acquired 100% of the share capital of Omniprobe, Inc. for a net cash consideration of $20m. Omniprobe, Inc.
designs and manufactures nano-manipulators for use within scanning electron microscopes and is headquartered in Dallas,
USA.

31 EXCHANGE RATESThe principal exchange rates to sterling used were:Year end rates
2011
1.60
1.13
133

2010
1.52
1.12
142

US Dollar
1.50
1.55
1.57
1.58

Euro
1.17
1.20
1.17
1.16

Yen
138
133
130
131

US Dollar
1.55
1.64
1.62
1.56

Euro
1.13
1.14
1.11
1.12

Yen
150
153
145
142

US Dollar
Euro
Yen

Average translation rates 2011
Quarter 1 2011
Quarter 2 2011
Quarter 3 2011
Quarter 4 2011

Average translation rates 2010
Quarter 1 2010
Quarter 2 2010
Quarter 3 2010
Quarter 4 201076

Oxford Instruments plc

Parent Company Balance Sheet as at 31 March 2011
2011
£m

2010
£m

c
d

0.7
127.2
127.9

0.6
61.8
62.4

e

47.3

102.2

9.8
57.1

3.1
105.3

(13.8)(22.1)(35.9)(0.6)(18.8)(19.4)Net current assets

21.2

85.9

Total assets less current liabilities

149.1

148.3

Notes
Fixed assets
Tangible assets
Investments in subsidiary undertakings

Current assets
Debtors (including £40.0m (2010: £99.8m) due after more than one
year)
Cash at bank and in hand

Creditors: amounts falling due within one year
Bank loans and overdrafts
Other creditorsfCreditors: amounts falling due after more than one year
Bank loansg(10.0)(19.0)

Provisions for liabilities and charges

h

(0.2)

(0.2)

138.9

129.1

2.5
22.5
7.7
106.2

2.5
21.6
7.7
97.3

138.9

129.1

Net assets

Share capital
Share premium account
Other reserves
Proﬁt and loss account

i
i
i
i

Equity shareholders’ funds

The Financial Statements were approved by the Board of Directors on 14 June 2011 and signed on its behalf by:
Jonathan Flint
Director

Kevin Boyd
Director

Company number: 775598

Oxford Instruments plc

77Notes to the Parent Company Financial Statementsa) Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are considered material 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 and under
the historical cost accounting rules. In accordance with S408 of the Companies Act 2006, the Company is exempt from therequirement to present its own proﬁt and loss account.
In accordance with FRS 1: Cash ﬂow statements, the company is exempt from preparing its own cash ﬂow statement.
Going concern
The Financial Statements have been prepared on a going concern basis, based on the Directors’ opinion, after making reasonableenquiries, that the Company has adequate resources to continue in operational existence for the foreseeable future.
Taxation
The charge for taxation is based on the result for the year and takes into account taxation deferred because of timing 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 havearisen but not reversed by the Balance Sheet date, except as otherwise required by FRS 19: Deferred Tax.
LeasesOperating lease rentals are charged to the proﬁt and loss account on a straight-line basis over the life of the lease.
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
Computer equipment
Motor vehicles

50 years
4 years
4 years

Financial instruments
The Company’s accounting policies for ﬁnancial instruments under UK GAAP, namely FRS 25 – Financial instruments: presentation,
FRS 26 – Financial instruments: measurement and FRS 29 – Financial instruments: disclosures, are the same as the group’s
accounting policies under IFRS, namely IAS 32 – Financial instruments: presentation, IAS 39 – Financial instruments: recognition
and measurement and IFRS 7 – Financial instruments: disclosures. These policies are set out in accounting policy ‘(e) Financial
instruments’ in the group accounting policies. As consolidated ﬁnancial information has been disclosed under IFRS 7 in note 19
to the consolidated Financial Statements, the parent company is exempt from the disclosure requirements of FRS 29.
Post retirement beneﬁts
The Company participates in a group wide pension scheme providing beneﬁts based on ﬁnal pensionable pay. The assets ofthe 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 j forthe additional disclosures required by FRS 17.
Foreign currencies
The Company enters into forward exchange contracts to mitigate the currency exposures that arise on sales and purchases
denominated in foreign currencies. Transactions in foreign currencies are converted into Sterling at the rate ruling on the dateof the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at theBalance 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.
Own shares held by Employee Benefit Trust (EBT)Transactions of the Group-sponsored EBT are included in the Group Financial Statements. In particular, the trust’s purchase ofshares in the company are debited directly to equity.
Investments
Investments in subsidiaries are stated at cost, less any provision for impairment, where appropriate.
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 expense with 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 share options that vest except where forfeiture is only due to share prices notachieving the threshold for vesting.

78

Oxford Instruments plc

Notes to the Parent Company Financial Statements Continued

When options are granted to employees of subsidiaries of the Company, the fair value of options granted is recognised as an
employee expense in the Financial Statements of the subsidiary undertaking together with the capital 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 not meet 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, theCompany treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will
be required to make a payment under the guarantee.
b) Proﬁt for the year
The Company’s proﬁt for the ﬁnancial year was £12.6m (2010: £7.8m).
The auditor’s remuneration comprised £112,000 (2010: £107,000) for statutory audit.
The average number of people employed by the Company (including Directors) during the year was 42 (2010: 42). All of these
individuals were involved in administration.
The aggregate payroll costs (including Directors) of these people were as follows:
2011
£m
4.5
0.6
0.2
5.3

Wages and salaries
Social security costs
Other pension costs

2010
£m
3.7
0.4
0.2
4.3

The share based payment expense was £nil (2010: £nil).
Full details of the emoluments paid to Directors can be found in the Directors’ Remuneration Report on pages 30 to 37.
c)Tangible ﬁxed assets
Land and
Buildings£m

Motor
Vehicles£mComputerEquipment
£m

Total

Cost
Balance at 1 April 2010
Additions
Disposals
Balance at 31 March 2011

0.3
0.3

0.2
0.1
(0.1)
0.2

3.4
0.1
3.5

3.6
0.5
(0.1)
4.0

Depreciation
Balance at 1 April 2010
Charge for year
Balance at 31 March 2011

-

0.1
0.1

2.9
0.3
3.2

3.0
0.3
3.3

Net book value
At 31 March 2010

-

0.1

0.5

0.6

At 31 March 2011

0.3

0.1

0.3

0.7

Oxford Instruments plc£m79

Notes to the Parent Company Financial Statements Continuedd)Investments
Investments
in subsidiary
Undertakings
£m

Other
Investments
£m

Total
£m

Cost or valuation
Balance at 1 April 2010
Additions
Balance at 31 March 2011

77.5
65.4
142.9

0.3
0.3

77.8
65.4
143.2

Amortisation
Balance at 1 April 2010
Balance at 31 March 2011

15.7
15.7

0.3
0.3

16.0
16.0

Net book value at 31 March 2010

61.8

-

61.8

Net book value at 31 March 2011

127.2

-

127.2

Other investments at 31 March 2011 comprise:
Investment

Principal activity

ARKeX Limited

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

Percentage ofcompany owned
9.3%

The addition to subsidiary investments of £65.4m relates to investments in Oxford Instruments Industrial Products Holdings
Limited and Oxford Instruments Nanotechnology Tools Holdings Limited, as well as £0.4m in relation to the awarding of shareoptions to employees of subsidiary companies.

e)

Debtors

Amounts falling due within one year:
Amounts owed by subsidiary undertakings
Other debtors
Prepayments and accrued income
Deferred tax asset
Tax recoverable

2011
£m

2010
£m

43.2
2.4
0.7
0.6
0.4
47.3

101.7
0.5
102.2

Amounts owed by subsidiary undertakings includes £40.0m (2010: £99.8m) due after more than one year.

f)

Other creditors

Trade creditors
Amounts owed to subsidiary undertakings
Tax, social security and sales related taxes
Other ﬁnancial liabilities
Accruals and deferred income
Other creditors

80

2011
£m
0.1
16.8
0.9
1.2
3.0
0.1
22.1

2010
£m
0.3
12.5
0.9
3.6
1.1
0.4
18.8

Oxford Instruments plc

Notes to the Parent Company Financial Statements Continuedg) Creditors: amounts falling due after one year
Details of the bank loans are included in note 21.

h)Provisions for liabilities and charges
Vacant lease
Provision
£m
0.2
0.2

Balance at 1 April 2010
Utilised during the year
Balance at 31 March 2011

The transfer of economic beneﬁts in relation to the vacant lease provisions is expected to be within one year.
The amounts of deferred tax assets are as follows:
Recognised
2010
£m

2011
£m
Excess of depreciation over corresponding
capital allowances
Carried forward tax losses
Other timing differences

0.6
0.6

2011
£m

-

-

Unrecognised
2010
£m
0.8
0.1
0.9

The Company recognises deferred tax 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.

i)

Reserves
Share
CapitalBalance at 1 April 2010
Retained proﬁt for the year
Proceeds from shares issued
Share options awarded to
employees of subsidiaries
Dividends paid
Balance at 31 March 2011

£m
2.5
-

Share
Premium
Account
£m
21.6
0.9

CapitalRedemption
Reserve
£m
0.1
-

Other
Reserves£m
7.6-

Proﬁt andLoss
Account
£m
97.3
12.6
-

Total
£m
129.1
12.6
0.9

2.5

22.5

0.1

7.6

0.4
(4.1)
106.2

0.4
(4.1)
138.9

Details of issued, authorised and allotted share capital are included in Note 20.
Details of treasury shares held by the Company are included as a note to the Consolidated Statement of Changes in Equity.
Details of the Group’s share option schemes are included in Note 9.
Other reserves relates to premium on shares issued as part of acquisitions made in the year to 31 March 1987.

Oxford Instruments plc

81Notes to the Parent Company Financial Statements Continuedj)Pension commitments

Deﬁned Beneﬁt scheme
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 administeredfund.
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.
During the year the Group’s deﬁned beneﬁt plan in the UK was closed for future accrual.
The Directors do not believe it is possible to allocate the assets and liabilities of the scheme to individual group members 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. Details of the scheme and mostrecent actuarial valuation can be found in note 22. The contributions paid by the Company to the Oxford Instruments Pension
Scheme were less than £0.1m (2010: £0.1m).
Stakeholder Pension scheme
The Company makes contributions to a stakeholder pension scheme. The pension costs charge for the year represents
contributions payable by the Company to the scheme. These amounted to £0.1m (2010: £0.1m). There were no outstanding
contributions at the end of the ﬁnancial year (2010: £nil).

k) Guarantees
The Company has given a guarantee to the pension scheme in respect of the liability of its UK subsidiaries to the pension
scheme.
l)Commitments

Operating leases which expire:Within one year

2011
£m

2010
£m

-

0.1
0.1

There were no capital commitments as at 31 March 2011 (2010: £nil).
m) Subsequent events
See note 30 for details of dividends paid or declared after the Balance Sheet date.
n)

Related party transactions

The Company has a related party relationship with its Directors and Executive ofﬁcers and with its wholly owned subsidiarycompanies.
Transactions with key management personnel are disclosed in the Director’s Remuneration Report on pages 30 to 37. There
were no other signiﬁcant transactions with key management personnel in either the current or preceding year other than thefollowing.
During the year the Company paid £0.1m (2010: £0.1m) to Imperialise Limited, a company for whom Nigel Keen is a Director.
The payment was for his services as Chairman of the Group. The liability due to Imperialise Ltd at the year end was nil (2010:
nil).

82

Oxford Instruments plc

Historical Financial Summary
2007
£m

2008
£m

2009
£m

2010
£m

2011
£m

Consolidated Statement of Income
Revenue

161.6

176.5

206.5

211.5

262.3

Trading proﬁt
Other operating income
Reorganisation costs and impairment
Amortisation of acquired intangibles
Operating proﬁt
Net ﬁnancing income/(costs)
Proﬁt/(loss) before taxation
Income tax (expense)/credit(Loss)/proﬁt for the year

8.3
(5.2)
(1.1)
2.0
(0.7)
1.3
(2.8)
(1.5)

10.6
0.7
(2.9)
8.4
(3.4)
5.0
(2.3)
2.7

13.1
(6.8)
(4.3)
2.0
(11.3)
(9.3)
2.6
(6.7)

14.7
(0.4)
(4.1)
10.2
7.9
18.1
(4.8)
13.3

28.1
4.7
(0.6)
(4.7)
27.5
(0.8)
26.7
5.5
32.2

Adjusted proﬁt before tax*

7.5

9.5

11.1

11.9

26.2

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)

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)

23.5
54.9
2.5
39.9
57.6
(54.3)
124.1
3.6(31.9)(28.3)(19.5)(14.4)

22.8
49.3
4.5
39.3
60.2
(70.0)
106.1
9.3(19.7)(10.4)(8.4)(35.1)

23.6
41.6
11.2
46.6
52.5
(76.6)
98.9
23.7(10.6)
13.1(6.8)(11.7)

55.8

62.5

61.9

52.2

93.5

5.2
(9.7)
(5.1)

(0.1)
(15.1)
19.4

14.4(10.6)
(6.6)

31.1
(9.1)
(16.0)

35.3(8.8)(12.3)

(9.6)

4.2

(2.8)

6.0

14.2

Consolidated Statement of Financial Position
Property, plant and equipment
Intangible assets
Available for sale equity securities
Deferred and current tax
Inventories
Trade and other receivables
Held for sale assets
Trade and other payables
Net 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 the company’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

pence

pence

pence

pence

pence

Per ordinary share
Earnings – continuing
Adjusted earnings *Dividends

(3.2)
9.6
8.4

5.6
11.7
8.4

(13.9)
14.8
8.4

27.2
17.8
8.4

65.3
41.5
9.0

Employees
Average number of employees

1,388

1,501

1,531

1,341

1,498

* Before other operating income, amortisation of acquired intangibles, reorganisation costs and impairment and mark tomarket gains or losses in respect of certain derivatives.

Oxford Instruments plc

83

Shareholder Information
Financial calendar
2 March 2011
4 March 2011
13 March 2011
31 March 2011
7 April 201114 June 201114 June 2011
Late July
13 September 2011
28 September 2011
30 September 2011
2 October 2011
27 October 2011
March 2012
March 2012
March 2012
31 March 2012

Shareholder enquiries
Shareholders who have questions relating to the Group’sbusiness or who wish to have additional copies of the Reportand Accounts 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

Ordinary shares quoted ex-dividendRecord date for interim dividend
Dividend reinvestment (DRIP)
last date for election
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
Ordinary shares quoted ex-dividend
Dividend reinvestment (DRIP)
last date for election
Record date for interim dividend
Financial year end

Company registration
Registered ofﬁce: Tubney Woods, Abingdon, Oxon OX13 5QXRegistered in England number: 775598
Website – 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.

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.
The Registry, 34 Beckenham Road
Beckenham, Kent BR3 4TU
Tel: 0871 664 0300 (calls cost 10p per minute plus network
extras; lines are open 8.30am to 5.30pm, Monday to Friday)
Overseas callers: +44 20 8639 3399
Email: shareholder.services@ capitaregistrars.com
Website: www.capitashareportal.com
Correspondence should refer to Oxford Instruments plc andstate clearly the registered name and address of the shareholder.
Please notify the Registrar promptly of any change of address.
Dividend bank mandates
If you wish dividends to be paid directly into a bank or building
society account and notiﬁcation to be sent to your shareholder
register address, please contact the Company’s Registrar at theaddress given above for a dividend mandate form. Overseas
holders can also choose to receive payment directly into theirbank account, or can be sent a draft in local currency. Further
details are available from Capita Registrars.
Freepost RLYX-GZTU-KRRG, SAS
The Registry, 34 Beckenham Road
Beckenham, Kent BR3 9ZA
Tel: 0871 664 0385 (calls cost 10p per minute plus network
extras; lines are open to 9.00am to 5.30pm,
Monday to Friday)
Overseas callers: +44 20 8639 3405
Website: www.capitaregistrars.com/international
Duplicate Share Register Accounts
If you are receiving more than one copy of our report, it may bethat your shares are registered in two or more accounts on our
register of members. If that was not your intention you might
consider merging them into one single entry. Please contact
Capita who will be pleased to carry out your instructions.

Shareholder Communications
Unless you have elected to continue to receive shareholder
communications by post, you will be notiﬁed by post or, where
you have given us an email address for electronic notiﬁcation,by email that shareholder communications are available forviewing on the Company’s website at www.oxford-instruments.
com/investors. The Company reserves the right to distribute
any communication in hard copy if it deems this necessary.
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 access andsimple 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-lineor by telephone all you need is your surname, Investor Code
(IVC*) reference number, full postcode and your date of birth.
Your Investor Code can be found on a recent share certiﬁcate,statement or tax voucher. Should you not be able to locate
your IVC number, please contact Capita Registrars on 0871 664
0300 (calls cost 10p per minute plus network extras; lines areopen 8.30am to 5.30pm, Monday - Friday). Please have theappropriate documents to hand when you log on or call, as thisinformation will be needed before you can buy or sell shares.
For further information on this service, or to buy and sellshares, please contact: www.capitadeal.com (online dealing) or
0871 664 0446 (telephone dealing – calls cost 10p per minuteplus network extras; lines are open 8.00am to 4.30pm, Monday– Friday excluding public holidays). Full terms, conditions andrisks 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.

Analysis of shareholders as at 31 March 2011
Size of shareholding
Up to 5,000 shares
5,001 to 50,000 shares
50,001 to 200,000 sharesOver 200,000 shares
Total

84

Number of
Holders% of total

Total holding% of total

2,358
168
59
39
2,624

89.86
6.40
2.25
1.49
100.001,509,894
2,485,701
6,699,411
39,479,907
50,174,913

3.01
4.95
13.35
78.69
100.00Oxford Instruments plc

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

Nanotechnology Tools
NanoAnalysis
Systems for materials analysis at
the nano-scale
Halifax Road, High Wycombe
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email nanoanalysis@oxinst.com
Lejonvägen 28
Box 1097
S-18122 Lidingö
SwedenTel +46 8 544 81550
Fax +46 8 544 81558
email nordiska@oxinst.com
Omniprobe10410 Miller Road
Dallas, Texas 75238, USA
Tel +1 214 572 6800
Fax +1 214 572 6801
email sales@omniprobe.com

Le plan d’Aigues
RN 7 13760
St.-Cannat
FranceTel: +33 442 50 68 64
Fax: +33 442 50 68 65
omicron.nanotechnology@wanadoo.fr
14850 Scenic Heights Road
Suite 140
Eden Prairie,
MN 55344 United States
Tel: +1 952 345 5240
Fax: +1 952 294 8043
info@omicronus.com
5-30-15-403 Kamata
Tokyo 144-0052
Japan
Tel: +81 3 666 10850
Fax: +81 3 666 10855
r.oiwa@omicron.jp

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

NanoScience
Environments fornanotechnology research
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email nanoscience@oxinst.com
Bahnhofstrasse 21
85737 Ismaning
GermanyTel +49 89 9699 8560
Fax +49 89 9699 8569
email nanoscience@oxinst.com

Omicron
Advanced microscopes andchemical analysis instruments
for nanotechnology research
Limburger Str. 75
65232 Taunusstein, Germany
Tel +49 6128 9870
Fax +49 6128 987 33230
email info@omicron.de
Willard Way
East Grinstead
United Kingdom
Tel: +44 1342 331 006
Fax: +44 1342 331 003
sales@omicron.co.uk

Austin Scientiﬁc

Oxford Instruments Service

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

Support services for MRI
34 Greet Street
Woodbridge, New Jersey 07095, USA
Tel +1 732 850 9323
Fax +1 732 802 8401
email mriservice@oxinst.com

Regional Sales and Service Ofﬁces
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 china.info@oxinst.com

Industrial Products
Industrial Analysis
Tools for QC, environmental andcompliance testing
Halifax Road , High Wycombe
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email industrial@oxinst.com

Plasma Technology
Tools for nanotechnology
fabrication
North End, Yatton, Bristol
BS49 4AP, UK
Tel +44 (0) 1934 837000
Fax +44 (0) 1934 837001
email plasma@oxinst.com

Service

P.O. Box 85 (Nihtisillankuja 5)
FI-02631 Espoo, Finland
Tel: +358 9 329 411
Fax:+358 9 32941 300
email industrial@oxinst.com
360 El Pueblo Road
Scotts Valley, CA, 95066, USA
Tel +1 831 439 9729
Fax +1 831 439 6051
email industrial@oxinst.com
Wellesweg 3147589 Uedem, Germany
Tel +49 (0) 2825 9383-0
Fax +49 (0) 2825 9383-100
email industrial@oxinst.com

Magnetic Resonance
Benchtop NMR for industrial
applications
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email magres@oxinst.com
8403 Cross Park Drive, Suite 3F
Austin, Texas 78754, USA
Tel +1 512 339 0640
Fax +1 512 339 0620
email magres@oxinst.com

Oxford Superconducting
Technology

Room 1/E, Building 1,
Xiangzhang Garden, No 248
Donglan Road
201102 Shanghai, China
Tel +86 (0) 21 6073 2929
Fax +86 (0) 21 6490 4042
email china.info@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 china.info@oxinst.com
Room2112 Bai Hui Plaza,
193 Zhong Shan Wu Road,
Guangzhou 510030, China
Tel +86 (0)20 8364 9990
Fax +86 (0)20 8364 9996
email china.info@oxinst.com
19F, Huamin Empire Plaza,No. 1 Fuxing Road, Chengdu,
610016
Tel: 86-28-86703596/7
Fax:86-28-86703595
email china.info@oxinst.com
Czech Republic
Velvarska 13, CZ-160 00 Praha
Czech Republic
Tel +420 233 343 264
Fax +420 224 311 724
email ofﬁce@oxinst.cz
France77 Z A de Montvoisin
91400 Gometz la Ville
FranceTel : +33 1 69 85 25 25
Fax +33 1 69 41 46 80
Email infofrance@oxinst.com

Germany
Otto-von-Guericke-Ring 10,65205 Wiesbaden, Germany
Tel +49 6122 937 0
Fax +49 6122 937 100
email ger_info@oxinst.com
India
Ofﬁce no 17, Shreeji Arcade,
Almeida Road, Panchapakhadi,
Thane 400 602 India
Tel/Fax +91 22 25452424
email india.analytical@oxinst.com
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.jp@oxinst.com
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,
Hsinchu Taiwan
Tel +886 3 5788696
Fax +886 3 5789993
email oi.admin@oxford-instruments.com.tw
USA/Canada/Latin America
300 Baker Avenue
Suite 150
Concord
MA 01742
USA
Tel +1 978 369 9933
Fax +1 978 369 8287
email info@ma.oxinst.com

Superconducting wire
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

Oxford Instruments plc

85

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
As part of Oxford Instruments’ environmental policy this brochure has been printed on FSC paper