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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

DIRECTORS’ RESPONSIBILITIES
in relation to the Annual Report
The Directors are responsible forpreparing the Report and the Groupand Parent Company Financial
Statements in accordance withapplicable 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 UKadopted International AccountingStandards and applicable law andhave elected to prepare the Parent
Company Financial Statements inaccordance with UK accounting
standards, including FRS 101 Reduced
Disclosure Framework.
Under company law the Directors
must not approve the Financial
Statements unless they are satisfied
that they give a true and fair view ofthe state of affairs of the Group andParent Company and of their profit orloss for that period. In preparing eachof the Group and Parent Company
Financial Statements, the Directors
are required to:•

select suitable accounting policies
and then apply them consistently;•

make judgements and estimatesthat are reasonable, relevant,reliable and prudent;•

for the Group Financial Statements,
state whether they have been
prepared in accordance with
UK‑adopted International
Accounting Standards;

•

•

•

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;
assess the Group and Parent
Company’s ability to continue asa going concern, disclosing, asapplicable, matters related to going
concern; anduse the going concern basis ofaccounting unless they either intend
to liquidate the Group or the Parent
Company or to cease operations,or have no realistic alternative but
to do so.

www.oxinst.com

The Directors are responsible forkeeping 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 and enable them toensure that its Financial Statementscomply with the Companies Act 2006.
They are responsible for such internal
control as they determine is necessary
to enable the preparation of Financial
Statements that are free from material
misstatement, whether due to fraud or
error, and have general responsibility
for taking such steps as are reasonably
open to them to safeguard the assetsof the Group and to prevent and detectfraud and other irregularities.

We consider the Annual Report, taken
as a whole, is fair, balanced andunderstandable and provides theinformation necessary for shareholders
to assess the Group’s position andperformance, business modeland strategy.
Signed on behalf of the Board

RICHARD TYSON
Chief Executive Officer

GAVIN HILL

Financial
Statements

Chief Financial Officer
10 June 2024

150 Consolidated statement of income

Under applicable law and regulations,the Directors are also responsible forpreparing a Strategic Report, Directors’
Report, Directors’ Remuneration
Report and Corporate GovernanceStatement that comply with that law
and those regulations.

151 Consolidated statement of comprehensive income

The Directors are responsible for the
maintenance and integrity of thecorporate 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.

155 Material accounting policies

Responsibility statementof the Directors in respect of
the annual financial report

204 Independent auditor’s report to themembers of Oxford Instruments plc

We confirm that to the best of ourknowledge:•

the Financial Statements, preparedin accordance with the applicableset of accounting standards, givea true and fair view of the assets,
liabilities, financial position andprofit or loss of the company andthe undertakings included in the
consolidation taken as a whole; and•the Strategic Report/Directors’
Report includes a fair review of thedevelopment and performance ofthe business and the position of
the issuer and the undertakings
included in the consolidation
taken as a whole, together with adescription of the principal risks
and uncertainties that they face.

152 Consolidated statement of financial position
153 Consolidated statement of changes in equity
154 Consolidated statement of cash flows

161 Notes to the Consolidated Financial Statements
192 Parent company statement of financial position
193 Parent company statement of changes in equity
194 Notes to the parent company financial statements

212 Historical financial summary

149

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Overview

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Financial Statements

CONSOLIDATED STATEMENT OF INCOMECONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 March 2024

Year ended 31 March 2024

Note

2023
Adjusting items(note 2)
£m

Total
£m

Adjusted
£m

Note
Total
£m

470.4

–

470.4

444.7

–

444.7

Cost of sales(228.0)–(228.0)(214.5)–(214.5)Gross profit

242.4

–

242.4

230.2

–

230.2

–

3.3

3.3

–

–

–

(39.1)–(39.1)(35.9)(0.8)(36.7)(74.5)–(74.5)(65.4)–(65.4)

Revenue

1

Adjusted£m2024
Adjusting items(note 2)£m

Other operating income
Research and development

3

Selling and marketing
Administration and shared services(58.7)(14.6)(73.3)(52.9)(10.3)(63.2)

Foreign exchange gain/(loss)

10.2

(0.7)

9.5

4.5

3.0

7.5

80.3

(12.0)

68.3

80.5

(8.1)

72.4

Financial income

6

4.7

–

4.7

2.7

–

2.7

Financial expenditure

7

(1.7)

–

(1.7)

(1.2)

(0.4)

(1.6)

Profit/(loss) before income tax

1

83.3

(12.0)

71.3

82.0

(8.5)

73.5

Income tax (expense)/credit

8(20.3)(0.3)(20.6)(17.0)

2.1(14.9)

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

63.0(12.3)

50.7

65.0

(6.4)

58.6

Earnings per share

pence

pence

pence

pence

109.0

87.7

112.7

101.6

107.5

86.5

111.3

100.3

Operating profit

Basic earnings per share

10

From profit for the year
Diluted earnings per share
From profit for the year10

The attached notes form part of these Financial Statements.

www.oxinst.com

Profit for the year

2024
£m

2023
£m

50.7

58.6

(5.5)

5.3

(19.4)(38.6)

Other comprehensive (expense)/income:Items that may be reclassified subsequently to Consolidated Statement of Income
Foreign exchange translation differences
Items that will not be reclassified to Consolidated Statement of Income
Remeasurement loss in respect of post-retirement benefits
Tax credit on items that will not be reclassified to Consolidated Statement of Income

24

4.8

9.7

Total other comprehensive expense(20.2)(23.6)

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

30.6

35.0

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Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 March 2024

Year ended 31 March 2024
Note

2024
£m

2023
£m

AssetsNon-current assets

Sharecapital£mSharepremium£m

Otherreserves£m

Translation
reserve£m

Retainedearnings
£m

Total
£m

As at 1 April 2023

2.9

62.6

0.2

12.9

265.4

344.0

–

–

–

–

50.7

50.7

Property, plant and equipment

12

80.5

59.3

Profit for the year

Intangible assets

13

137.9

132.1

Foreign exchange translation differences

–

–

–

(5.5)

–

(5.5)

Right-of-use assets

14

32.4

31.4

1.3

0.5

Remeasurement loss in respect of
post-retirement benefits

–

–

–

–

(19.4)(19.4)Tax credit on items that will not be reclassified
to Consolidated Statement of Income

–

–

–

–

4.8

4.8

Total comprehensive (expense)/income

–

–

–

(5.5)

36.1

30.6

Share-based payment transactions

–

–

–

–

3.0

3.0

Income tax on share-based payment transactions

–

–

–

–

(0.5)

(0.5)

Proceeds from shares issued

–

–

–

–

–

–

Long-term receivables
Derivative financial instruments

22

0.2

0.4

Retirement benefit asset

24

16.1

26.4

Deferred tax assets

8

13.7

12.5

282.1

262.6

Current assets
Inventories

15

108.4

81.4

Trade and other receivables

16

114.7

113.2

1.0

0.5

Dividends

–

–

–

–

(11.4)(11.4)

Total transactions with owners:

–

–

–

–

(8.9)

(8.9)

As at 31 March 2024

2.9

62.6

0.2

7.4

292.6

365.7

As at 1 April 2022

2.9

62.5

0.2

7.6

243.2

316.4

Profit for the year

–

–

–

–

58.6

58.6

Foreign exchange translation differences

–

–

–

5.3

–

5.3

Remeasurement loss in respect of
post-retirement benefits

–

–

–

–

(38.6)(38.6)Tax credit on items that will not be reclassified
to Consolidated Statement of Income

–

–

–

–

9.7

9.7

Total comprehensive income

–

–

–

5.3

29.7

35.0

Share-based payment transactions

–

–

–

–

2.4

2.4

Income tax on share-based payment transactions

–

–

–

–

0.7

0.7

Proceeds from shares issued

–

0.1

–

–

–

0.1

Dividends

–

–

–

–

(10.6)(10.6)

Total transactions with owners:

–

0.1

–

–

(7.5)

(7.4)

2.9

62.6

0.2

12.9

265.4

344.0

Current income tax receivable
Derivative financial instruments

22

2.3

1.6

Cash and cash equivalents

18

97.8

112.7

324.2

309.4

606.3

572.0

Total assets
EquityCapital and reserves attributable to the company’s equity shareholders
Share capital

25

2.9

2.9

Share premium

62.6

62.6

Other reserves

0.2

0.2

Translation reserve

7.4

12.9

Retained earnings

292.6

265.4

365.7

344.0

Liabilities
Non-current liabilities
Bank loans

19

0.9

0.9

Lease payables

14

28.6

26.2

Deferred tax liabilities

8

12.9

7.8

42.4

34.9

Current liabilities
Bank loans and overdrafts

19

13.1

11.6

Trade and other payables

20

166.2

159.4

Lease payables

14

4.8

5.2

7.6

8.1
1.2

Current income tax payables
Derivative financial instruments

22

0.1

Provisions

21

6.4

7.6

198.2

193.1

Total liabilities

240.6

228.0

Total liabilities and equity

606.3

572.0

The Financial Statements were approved by the Board of Directors on 10 June 2024 and signed on its behalf by:

RICHARD TYSON		GAVIN HILL

Director			Director
Company number: 775598
www.oxinst.com

As at 31 March 2023

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Annual Report 2024

Overview

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Governance

CONSOLIDATED STATEMENT OF CASH FLOWS

MATERIAL ACCOUNTING POLICIESYear ended 31 March 2024

Year ended 31 March 2024
Note

2024
£m

2023
£m

Cash flows from operating activities
Profit for the year

50.7

58.6

Adjustments for:
Income tax expense

20.6

14.9

Net financial income

8

(3.0)

(1.1)

Fair value movement on financial derivatives

0.7

(3.0)

WITec post-acquisition gross margin adjustment–

0.5

Impairment of capitalised development costs

13

–

0.8

Amortisation of right-of-use assets

14

5.0

4.6

Depreciation of property, plant and equipment

12

5.3

4.8

Amortisation of intangible assets

13

9.8

10.7

Charge in respect of equity settled employee share schemes

26

Contributions paid to the pension scheme more than the charge to operating profit

3.0

2.4

(8.0)

(11.7)(26.3)(15.6)

Increase in inventories

27

Increase in receivables

27

(2.7)

(19.6)(Decrease)/increase in payables and provisions

27

(2.8)

17.4

Increase in customer deposits

27

7.1

9.2

Cash generated from operations

59.4

72.9

Interest paid

(0.9)

(0.7)

Income taxes paid

(16.1)(5.7)

Net cash from operating activities

42.4

66.5

0.5

0.2

(27.0)(32.3)(13.4)(4.8)

Capitalised development expenditure

(0.7)

(0.6)

Interest received

3.1

1.1

(37.5)(36.4)Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of subsidiaries, net of cash acquired11

Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital

–

0.1
(0.5)

Interest paid on lease liabilities

14

(0.8)

Payment of capital element of leases

14

(4.0)

(5.1)

Repayment of borrowings

(1.8)

(0.5)

Dividends paid

(11.4)(10.6)Net cash used in financing activities(18.0)(16.6)

Change in cash and cash equivalents(13.1)

13.5

Cash and cash equivalents at beginning of the year

101.5

87.7

Effect of exchange rate fluctuations on cash held

(2.9)

0.3

85.5

101.5

Cash and cash equivalents at end of the year

18

Comprised of:Cash and cash equivalents as per the Consolidated Statement of Financial Position

18

97.8

112.7

Bank overdrafts

23(12.3)(11.2)

85.5

101.5

www.oxinst.com

Oxford Instruments plc (the ‘Company’) is a company
incorporated and domiciled in the UK.
The Group Financial Statements have been prepared inaccordance with UK adopted International AccountingStandards (IAS) in conformity with the requirements of theCompanies Act 2006 and interpretations issued by the IFRSInterpretations Committee (IFRIC) applicable to companies
reporting under UK adopted IFRS.
The accounting policies set out below have, unlessotherwise stated, been applied consistently to all periods
presented in these Group Financial Statements.
The Financial Statements have been prepared on agoing concern basis based on the Directors’ opinion, after
making reasonable enquiries, that the Group has adequate
resources to continue in operational existence for theforeseeable future.
The Group’s business activities and factors that areconsidered likely to affect its performance and position in the
future are set out in the Strategic Report on pages 10 to 33.
The Finance Review on pages 58 to 69 discloses information
relevant to the Group’s financial position, its cash flows,borrowing facilities and liquidity.
The directors have considered the appropriateness of thegoing concern basis of preparation following a detailed
assessment of the risks to the Group as outlined above, up
to 30 June 2025, being a period of at least 12 months fromapproval of the Report and Financial Statements.
On 19 March 2024 the Group entered into a new multicurrency revolving facility agreement, which is committed
until March 2028 with 15-month and 12-month extension
options at the end of the first and second years respectively.
The facility has been entered into with four banks andcomprises a Euro-denominated multi-currency facility of€95m and a US Dollar denominated multi-currency facilityof $150m. Debt covenants are net debt to EBITDA less than
3.0 times and EBITDA to interest greater than 4.0 times. At
the date of approving these financial statements, the facility
remains undrawn.

Financial Statements(a) Changes in accounting standards
IFRS 17 Insurance Contracts provides consistent principles
for all aspects of accounting for insurance contracts within
the scope of the standard. The standard is effective for years
beginning on or after 1 January 2023 with a requirement torestate comparatives.
The Group has reviewed whether its arrangements meet theaccounting definition of an insurance contract. While some
contracts may transfer an element of insurance risk, they
relate to warranty and service type agreements that areissued in connection with the Group’s sales of its goods orservices and therefore will continue to be measured under
IFRS 15 Revenue from Contracts with Customers and IAS 37
Provisions, Contingent Liabilities and Contingent Assets.
The Directors are not aware of any other contracts where
IFRS 17 would have a material impact on the Consolidated
Financial Statements.
There are no other new standards or interpretations
issued by the IASB that had a significant impact on theConsolidated Financial Statements.
There are no standards or amendments that are not yet
effective and that would be expected to have a material
impact on the Group in the current or future reporting periods
and on foreseeable future transactions.

(b) Significant estimates and judgements
The preparation of Financial Statements requires
management to make judgements, estimates andassumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ fromthese estimates.

Significant judgements
In the opinion of the Group there is one key judgement madein the preparation of the Financial Statements in respect ofwhich taking a different view would have a material impact
on the Financial Statements:

The relatively diverse nature of the Group together with
its current financial strength provides a solid foundation.
In its going concern assessment, the directors consideredseveral scenarios, including base case and downside
scenarios. The assessment is based on Board-approved
budget, incorporating severe but plausible scenarios in
the forecast. These scenarios reflected a 25% reductionin the Group’s performance, a 25% increase in working
capital and a third scenario of incorporating both. In eachscenario the Group’s cash balances remained positive andthe facility remains undrawn throughout the going concern
period to 30 June 2025.

Provision for inventory

Based on this assessment, incorporating a review of current
position, the scenarios, the principal risks and mitigation, theDirectors have a reasonable expectation that the group will
be able to continue operating and meet its liabilities as thefall due over the period to 30 June 2025 and there are nomaterial uncertainties which may cast significant doubt over
its ability to continue as a going concern.

Significant estimates

Provision is made for obsolete, slow moving and defective
stock where there is evidence of impairment, to reducethe carrying value to its net realisable value. This requiresconsideration of several factors including but not limited
to recent usage, expected future demand, new productintroduction plans and likely realisable values to estimate
the excess quantities and net realisable value. The levelof provisioning requires certain estimates regarding future
demand and possible design changes to identify excess
quantities. Amounts provided represent in aggregate theGroup’s best estimate of the levels of provisioning required.

Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Two key areas where estimates have been used andassumptions applied have been identified as follows:

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Overview

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Governance

Financial Statements

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024
Measurement of defined benefit scheme liabilities(d) Consideration of climate change(f) Property, plant and equipment(iii) Acquired intangible assets

The Group recognises and measures costs relating todefined benefit pension schemes in accordance with IAS 19(Revised) Employee Benefits. In applying IAS 19 (Revised)
the costs are assessed in accordance with the adviceof independent qualified actuaries. This requires certain
estimates and assumptions in relation to future changes insalaries and inflation, as well as mortality rates, expected
returns on plan assets and the selection of suitable discountrates. The factors affecting these assumptions are influenced
by wider macroeconomic factors that are largely outside of
the Group’s control. Sensitivity analysis is set out in Note 24.

In preparing the Financial Statements, the Directors haveconsidered the impact of climate change, particularly inthe context of the risks identified in the TCFD disclosure,see pages 40 to 50. There has been no material impact
identified on the financial reporting judgements andestimates. In particular, the Directors considered the impact
of climate change in respect of the following areas:

Property, plant and equipment is stated at historical costless provisions for impairment (see accounting policy k)
and depreciation which, with the exception of freehold land
which is not depreciated and rental assets (see below), is
provided on a straight-line basis over each asset’s estimatedeconomic life. Depreciation is provided based on historicalcost less estimated residual value. The principal estimatedeconomic lives used for this purpose are: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 its
useful economic life.

Provisions for IP-related claims
Provisions for IP-related claims 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 of judgement to existing facts andcircumstances which can be subject to change. Amounts
provided represent the Group’s best estimate of exposure
based on currently available information.
Key assumptions surrounding estimation uncertainty
relate to estimating potential royalty or profit sharing rates
surrounding any product-related intellectual property claims(see Note 21).

Acquisition of First Light Imaging SAS(First Light Imaging)On the acquisition of a business in order to comply with IFRS
3 (Revised) Business Combinations it is necessary to reflect
the assets and liabilities acquired at their fair value. Thisrequires certain estimates and assumptions in relation to,inter alia, the forecast performance of the acquired business,the expected life of certain intangible assets and the likely
future customer base of the business. In order to assist inundertaking this Fair Value exercise, the Group appointed an
external firm of advisors. The exercise is incomplete as at thedate of this report so the fair value adjustments are reported
on a provisional basis. The provisional fair value adjustments
arising from this review are set out in Note 11 on page 171.

(c) Basis of preparation and consolidation
The Financial Statements are presented in Sterling, rounded
to the nearest £0.1m and are prepared on the historical costbasis except as described below under the heading ‘(e)Financial instruments’.
The Group Financial Statements include the accountsof Oxford Instruments plc and its subsidiary companies
adjusted to eliminate intra-Group 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 is exposed to or has rights to variable returns
from its investment with the investee and has the ability toaffect those returns through its power over the investee. In
assessing control, potential voting rights that are currently
exercisable or convertible are taken into account. The resultsof subsidiary companies are included in the Consolidated
Financial Statements from the date that control commences
until the date that control ceases. The acquisition method isused to account for the acquisition of subsidiaries.

www.oxinst.com•

going concern and viability of the Group;•

cash flow forecasts used in the impairment assessmentsof non-current assets including goodwill; andFreehold buildings, longleasehold land and buildings

50 years•

carrying value and useful economic lives of property,
plant and equipment.

Furniture and fittings

10 years

Machinery and other equipment

5 to 10 years

Computer equipment

4 years

Vehicles4 years

Whilst there is currently no medium-term impact expectedfrom climate change, the Directors are aware of the everchanging risks attached to climate change and will regularly
assess these risks against judgements and estimates madein preparation of the Group’s Financial Statements.

(e) Financial instruments
Financial assets and liabilities are recognised in the Group’s
Consolidated Statement of Financial Position when theGroup becomes a party to the contractual provisions of the
instrument. Forward foreign exchange contracts (derivative
financial instruments) of the Group are used to hedge its
exposure to foreign currency risks arising from operational,
financing and investment activities. The Group does not holdor issue derivative financial instruments for trading purposes.
The Group has chosen not to apply hedge accounting
in respect of these exposures. All derivatives are initiallyrecognised at fair value; attributable transaction costs arerecognised in profit or loss as incurred. Foreign exchange
contracts are classified as ‘fair value through profit and loss’
under IFRS 9. 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 thechange in fair value are recognised as an adjusting item
in operating expenses.
The fair value of forward exchange contracts is their market
price at the Consolidated Statement of Financial Positiondate, being the present value of the forward price. The gainor loss on remeasurement to fair value of forward exchange
contracts is recognised immediately in the Consolidated
Statement of Income.
Contingent purchase consideration is measured at fair value
at the date of acquisition and subsequently carried at fairvalue, with movements recognised in the Consolidated
Statement of Income.
Interest-bearing borrowings are recognised initially at fairvalue less attributable transaction costs. Subsequent toinitial recognition, interest-bearing borrowings are stated
at amortised cost with any difference between cost andredemption value being recognised in the Consolidated
Statement of Income over the period of the borrowing on
an effective interest basis.

Machinery and other equipment, computer equipment
and vehicles are included within the ‘Plant and equipment’subheading in Note 12.
For leasehold improvements, where the length of the leaseis less than the principal estimated economic lives noted
above, the length of the lease is used.

(g) Intangible assets(i) Goodwill
All business combinations are accounted for by applying theacquisition method. Goodwill represents amounts arising on
acquisition of subsidiaries. In respect of business acquisitions
that have occurred since 31 March 2004, goodwill represents
the difference between the cost of the acquisition and thefair value of the 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 Group expenses transaction costs associated with
its acquisitions and movements in liabilities relating tocontingent consideration within the Consolidated Statementof Income in conformity with IFRS 3.
Goodwill arising on acquisitions is stated at cost less any
accumulated impairment losses and allocated to cash
generating units that are anticipated to benefit from the
combination. It is not amortised but is tested annually for
impairment (see accounting policy k), or more frequently
when there is an indicator that the unit may be impaired.

(ii) Development costs
Research & Development costs are charged to theConsolidated Statement of Income in the year in which they
are incurred unless development expenditure is applied toa plan or design for the production of new or substantially
improved products, in which case they are capitalised.
The criteria for capitalisation include demonstration of
the technical 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 arecapitalised and amortised through the Consolidated
Statement of Income over their useful economic lives.

(iv) Amortisation
Amortisation of intangible assets is charged to theConsolidated Statement of Income on a systematic basis
in proportion to the use of the assets over their estimateduseful economic lives as follows:
Capitalised development costs

3 to 5 years

Technology-related acquired intangibles

5 to 14 years

Customer-related acquired intangibles

6 months
to 15 years

Development costs acquired intangibles

10 years

Software10 years

Customer-related acquired intangible assets include anumber of different types of asset. For example, the shorterend of the useful economic life relates to the order book of
acquired businesses, whilst the longer useful economic life
relates to assets such as trademarks.

(h) Trade and other receivables
Trade and other receivables are initially recognised at fairvalue and subsequently stated at their amortised costless appropriate provision for impairment. The provision for
impairment of receivables is based on lifetime expectedcredit losses, which is then updated for any reasonable andsupportable forward-looking information and expectations.
Lifetime expected credit losses are calculated by assessing
historic credit loss experience. The movement in the provision
is recognised in the Consolidated Statement of Income.

(i) Inventories
Inventories are stated at the lower of cost and net realisablevalue. Cost includes materials, direct labour, an attributableproportion of production overheads based on normal
operating capacity and all other expenditure incurred inacquiring the inventories and bringing them to their existing
location and condition. Net realisable value is the estimatedselling price in the ordinary course of business, less theestimated costs of completion and selling expenses.
Provision is made for obsolete, slow moving and defective
stock where appropriate in light of recent usage, expected
future requirements, new product introduction plans andlikely realisable values.
As outlined in Note (r) below, the revenue associated withboth the sale and installation of certain complex products is
recognised at the time that the installation is completed. The
net realisable value associated with complex products is
included in finished goods inventories where the installation
has not yet been completed.

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Overview

Strategic Report

Governance

Financial Statements

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024(j) Cash and cash equivalents
Cash and cash equivalents are carried in the Statement of
Financial Position at amortised cost.
Cash and cash equivalents comprise cash balances and calldeposits 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 componentof cash and cash equivalents for the purpose of theStatement of Cash Flows.

(k) 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 anannual 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 independentof the cash inflows from other groups of assets.
An impairment loss is recognised in the Consolidated
Statement of Income under the administration and sharedservices heading, to the extent that an asset’s carrying
value, or a cash generating unit’s carrying value, exceeds
its recoverable amount, which represents the higher of its
net realisable value and its value in use. Value in use is thepresent value of the future cash flows expected to be derived
from the asset or from the cash generating unit to which it
relates. The present value is calculated using a discount ratethat reflects the current market assessment of the time valueof 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 beena change in estimates 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 respect of goodwill are
not reversed.
Impairment losses recognised in respect of cash generating
units are allocated first to reduce the carrying amount ofany goodwill allocated to cash generating units and then to
reduce the carrying amount of the other assets in the unit.

(l) 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
Statement of Income as incurred.

(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 priorperiods. That benefit is discounted to determine its present
value and is deducted from the fair value of any plan assets.

www.oxinst.com

Surpluses in schemes are recognised as assets only if they
represent economic benefits available to the Group in the
future. The calculation is performed by a qualified actuaryusing 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 interest expense or income iscalculated on the net defined benefit asset by applying thediscount rate to the net defined benefit asset, and is included
within financial expenditure or financial income in theConsolidated Statement of Income respectively.

(iii) Share-based payment transactions
The fair value of equity settled share option programmes ismeasured at grant date and charged to the Consolidated
Statement of Income, with a corresponding increase inequity, on a straight-line basis over the period during which
the employees become unconditionally entitled to theoptions. The fair value of the options granted is measured
using an option valuation model, taking into account theterms 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 market performance conditions not
being met.

(m) Provisions
A provision is recognised in the Consolidated Statementof Financial Position when the Group has a present legal
or constructive obligation as a result of a past event andit is probable that an outflow of economic benefits will be
required to settle the obligation. A provision for warranty
and product-related liability is recognised when theunderlying products are sold. A provision for restructuring is
recognised when the Group has approved a detailed andformal restructuring plan and the restructuring has either
commenced or has been announced publicly.
A provision for onerous contracts is recognised whenthe expected benefits to be derived by the Group from acontract are lower than the unavoidable cost of meeting
its obligations under the contract. A provision for a claim
or dispute is made when it is considered probable that anadverse outcome will occur and the amount of the loss
can be reasonably estimated.
Contractual and other provisions represent the Directors’
best estimate of the cost of settling future obligations
where the Directors, taking into account professional advice
received, assess that it is more likely than not that suchproceedings may be successful.
If the effect is material, provisions are determined bydiscounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the timevalue of money and, where appropriate, the risks specificto the liabilities.

(n) Customer deposits
Customer deposits are classified as contract liabilities andincluded within trade and other payables in the Statement of
Financial Position.
Customer deposits represent the cash payments received
or consideration due from customers prior to the recognitionof revenue in respect of product sales; for example, deposits
received on order (and shipment in the case of complex
products where revenue is not recognised until installation).

(o) Government grants
Grants from governments are recognised at their fairvalue where there is a reasonable assurance that the
grant will be received and the Group will comply with all
attached conditions.
Government grants relating to costs are deferred andrecognised in the Consolidated Statement of Income
over the period necessary to match them with the costs
they are intended to compensate. Government grants
relating to property, plant and equipment are deductedfrom the carrying amount of the asset and are credited
to the Consolidated Statement of Income on a straightline basis over the expected useful economic lives of therelated assets.

(p) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fairvalue less attributable transaction costs. Subsequent toinitial recognition, interest-bearing borrowings are stated
at amortised cost with any difference between cost andredemption value being recognised in the Consolidated
Statement of Income over the period of the borrowings
on an effective interest basis.

(q) Revenue
Revenue is recognised in the Consolidated Statement of
Income when the performance conditions in the contract
with the customer are met.
In most cases where the contract includes the sale of botha product and installation then the sale of the productand the related installation are treated as two separate
performance conditions. This is because the Group considers
that the customer is able to benefit from the product even
if the Group does not supply installation, i.e. it would bepossible for them to arrange installation by a third party.
In such situations, revenue in respect of the product isrecognised when control passes to the customer which isnormally upon shipment of the product. Revenue in respectof the installation is recognised when the customer confirms
acceptance of the installation. Revenue in respect of bothproduct and installation is recognised at a point when it isconsidered the performance conditions are met.
Revenue is allocated between the product and installation
based on the relative standalone selling prices of those
products and installation activities. Where it is difficult toestablish a standalone selling price by market comparator,
the standalone selling price is estimated, where required,by applying the cost plus margin approach.

A receivable is recognised for products when control passes
over to customer, and for installation when the customer
confirms acceptance of the installation, since this is the point
in time that the consideration is unconditional because only
the passage of time is required before the payment is due.
In the case of fixed-price contracts, the customer pays
the fixed amount based on a payment schedule. If theperformance obligations met by the Group exceed thepayment, a contract asset is recognised. If the payments
exceed the performance obligation, a contract liability
is recognised.
In the NanoScience business, which is part of the Research& Discovery segment, certain contracts for the sale ofmore complex systems are deemed to comprise just one
performance condition as customers are unable to realise
the economic benefit from having received the equipment
without the specialist installation. Given the highlyinterdependent nature of the product and installation, thisperformance condition is met, and the revenue recognised,
when the customer confirms acceptance of the installed
product at their premises.
In the Service & Healthcare segment, revenue for fixed term
maintenance and support contracts is recognised over timeusing the output method by determining the proportion of
the elapsed time relative to the contract period. Where theService & Healthcare segment makes asset sales, similar
considerations as those set out for the other segments asoutlined above are applied.
Revenue excludes value added tax and similar sales-basedtaxes and is stated before commission payable to agents
which is recognised in cost of sales.

(r) Income taxes
Income tax on the profit or loss for the year comprises
current and deferred tax. Income tax is recognised in profit orloss 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.
Tax positions are reviewed to assess whether a provision
should be made based on prevailing circumstances.
Tax provisions are included within current taxation
liabilities. Deferred tax positions are measured on an
undiscounted basis.
Additional income taxes that arise from the distribution ofdividends are recognised at the same time as the liability
to pay the related dividend.
Where there is uncertainty surrounding an income tax
position, consideration is given to whether the tax authority(with full knowledge of the facts) would probably bemore or less likely to accept the uncertain tax position. If
the conclusion reached is that it is probable that the tax
authority would not accept a tax position a provision is
calculated either as the most likely outcome (where thepossible outcomes are binary or concentrated on one value)or as the expected value (where there is a range of possible
outcomes) depending on which method would provide thebetter prediction for the resolution of the uncertainty.

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Annual Report 2024

Overview

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(s) Leases(t) Segment reporting

1 Segment information

The Group recognises a right-of-use asset and a leaseliability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises theinitial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs todismantle and remove the underlying asset or to restore theunderlying asset or the site on which it is located, less anylease incentives received.

An operating segment is a distinguishable component of
the Group that engages in business activities from which
it may earn revenues and incur expenses, including any
revenues and expenses that relate to transactions with anyof the Group’s other components. Operating components are
combined into aggregated operating segments to the extent
that they have similar economic characteristics. Aggregatedoperating segments’ operating results are reviewed regularly
by the Group’s Board of Directors to make decisions about
resources to be allocated to the segment and to assess
its performance, for which discrete financial information isavailable. Segment results that are reported to the Board
include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.

The Group has nine operating segments. These operating segments have been combined into three aggregated operating
segments to the extent that they have similar economic characteristics, with relevance to products and services, type andclass of customer, methods of sale and distribution and the regulatory environment in which they operate. Each of these threeaggregated operating segments is a reportable segment. The aggregated operating segments are as follows:

The right-of-use asset is subsequently depreciated using thestraight-line method from the commencement date to theearlier of the end of the useful life of the right-of-use asset orthe end of the lease term. The estimated useful lives of rightof-use assets are determined on the same basis as those ofproperty and equipment. In addition, the right-of-use asset
is periodically reduced by impairment losses, if any, andadjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value ofthe lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the leaseor, if that rate cannot be readily determined, the lessee’s
incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the leaseliability comprise fixed payments.
The lease liability is measured at amortised cost using theeffective interest method. It is remeasured when there is achange in future lease payments arising from a change in
an index or rate, if there is a change in the Group’s estimateof the amount expected to be payable under a residual
value guarantee, or if the Group changes its assessment of
whether it will exercise a purchase, extension or termination
option. If such remeasurement is required, it is performed
using the original incremental borrowing rate, unless there
is a change in estimated lease term; in which case it isperformed using a new incremental borrowing rate.
When the lease liability is remeasured in this way, acorresponding adjustment is made to the carrying amountof the right-of-use asset, or is recorded in profit or loss if thecarrying amount of the right-of-use asset has been reduced
to zero.

Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases of machinery thathave a lease term of 12 months or less and leases of lowvalue assets, including IT equipment. The Group recognises
the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.

www.oxinst.com

A reportable segment is an aggregated operating segment
in respect of which revenue or profit exceeds 10% of theGroup total. Discrete financial information is disclosed foreach reportable segment.

•

the Materials & Characterisation segment comprises a group of businesses focusing on applied R&D and commercial
customers, enabling the fabrication and characterisation of materials and devices down to the atomic scale;•the Research & Discovery segment comprises a group of businesses providing advanced solutions that create uniqueenvironments and enable measurements down to the molecular and atomic level which are used in fundamental
research; and•the Service & Healthcare segment provides customer service and support for the Group’s products and the service of thirdparty healthcare imaging systems.

The Group’s internal management structure and financial reporting systems differentiate the three aggregated operating
segments based on the economic characteristics discussed above.
Reportable segment results include items directly attributable to a segment as well as those which can be allocated ona reasonable basis. The operating results of each are regularly reviewed by the Chief Operating Decision Maker, which isdeemed to be the Executive Directors. Discrete financial information is available for each segment and used by the Executive
Directors for decisions on resource allocation and to assess performance. No asset information is presented below as thisinformation is not presented in reporting to the Group’s Executive Directors.
On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging which has been integrated into
the Research & Discovery segment. Further information can be found in Note 11.

Results
Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

252.2

142.1

76.1

470.4

Segment adjusted operating profit

46.4

13.6

20.3

80.3

Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

234.5

139.4

70.8

444.7

Segment adjusted operating profit

40.5

18.0

22.0

80.5

2024

2023

Revenue in the Materials & Characterisation and Research & Discovery segments represents the sale of products. Revenue in
the Service & Healthcare segment relates to service income. No individual customer accounts for more than 10% of revenue.
As at 31 March 2024, the Group had unfulfilled performance obligations under IFRS 15 of £301.5m (2023: £319.6m). It is
anticipated that £277.3m (2023: £303.0m) of this balance will be satisfied within one year. The remainder is anticipated to besatisfied in the following financial year.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
1 Segment information continued

The Group’s revenue by destination of the end user is as follows:

Reconciliation of reportable segment profit
Revenue

2024
£m

2023
£m

UK

30.4

29.4

China

127.4

107.4

Japan

43.5

46.7

USA

111.6

121.2

Germany

35.5

32.1

Rest of Europe

50.3

43.4

Rest of Asia

50.6

47.1

Rest of World

21.1

17.4

470.4

444.7

2024
£m

2023
£m

UK

191.0

189.6

Germany

32.1

34.8

USA

12.5

13.9

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

46.4

13.6

20.3

–

80.3

Intellectual property litigation settlement

–

3.3

–

–

3.3

Adjustments relating to defined benefit pension schemes

–

–

–

(0.4)

(0.4)

Transaction-related costs

–

(1.0)

–

–

(1.0)

(1.7)

–

–

(2.0)

(3.7)

–

(0.4)

–

–

(0.4)

(3.0)

(6.1)

–

–

(9.1)

Fair value movement on financial derivatives

–

–

–

(0.7)

(0.7)

Financial income

–

–

–

4.7

4.7

Non-current assets (excluding deferred tax)

Financial expenditure

–

–

–

(1.7)

(1.7)

41.7

9.4

20.3

(0.1)

71.3

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

2024

Segment adjusted operating profit

Restructuring costs and charges associated withmanagement changes
Intellectual property litigation costs
Amortisation and impairment of acquired intangibles

Profit/(loss) before income tax

2023

Segment adjusted operating profit

40.5

18.0

22.0

–

80.5

Restructuring costs

(0.4)

–

–

–

(0.4)

Release of provision on disposal

–

–

0.4

–

0.4

Intellectual property litigation

–

(0.5)

–

–

(0.5)

Impairment of capitalised development costs

(0.8)

–

–

–

(0.8)

WITec post-acquisition gross margin adjustment

(0.5)

–

–

–

(0.5)

Amortisation and impairment of acquired intangibles

(3.1)

(6.2)

–

–

(9.3)

Fair value movement on financial derivatives

–

–

–

3.0

3.0

Financial income

–

–

–

2.7

2.7

Financial expenditure

–

–

–

(1.6)

(1.6)

Profit before income tax

35.7

11.3

22.4

4.1

73.5

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

Capital expenditure(18.0)

(6.6)

(0.1)

(2.3)

(27.0)

Depreciation of property, plant and equipment

(3.3)

(1.5)

–

(0.5)

(5.3)

Amortisation of right-of-use assets

(2.4)

(0.4)

–

(2.2)

(5.0)

2024

Amortisation and impairment of acquired intangibles

(3.5)

(6.3)

–

–

(9.8)

Capitalised development expenditure

(0.1)

(0.6)

–

–

(0.7)

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

Capital expenditure(28.6)

(2.7)

–

(1.0)

(32.3)

Depreciation of property, plant and equipment

(3.0)

(1.2)

–

(0.6)

(4.8)

Amortisation of right-of-use assets

(2.1)

(0.5)

–

(2.0)

(4.6)

Amortisation and impairment of acquired intangibles

(6.0)

(6.3)

–

–

(12.3)

Capitalised development expenditure

(0.4)

(0.2)

–

–

(0.6)

2023

www.oxinst.com

Japan

6.2

1.9

China

4.0

2.9

Rest of Europe

22.1

6.5

Rest of Asia

0.2

0.2

Rest of World

0.3

0.3

268.4

250.1

2 Adjusting items
In the preparation of adjusted numbers, the Directors exclude certain items in order to assist with comparability between
peers and to give what they consider to be a better indication of the underlying performance of the business. In determining
whether an event or transaction is an adjusting item, the Directors consider quantitative as well as qualitative factors such as
the frequency or predictability of occurrence. Examples of exceptional items include acquisition-related costs, one-time past
service costs on defined benefit pension schemes, and one-time intellectual property litigation costs.
These adjusting items are excluded in the calculation of adjusted operating profit, adjusted profit before tax, adjusted profit for
the year, adjusted EBITDA, adjusted EPS, adjusted cash conversion and adjusted effective tax rate. Details of adjusting items
are given below.
Adjusted EBITDA is calculated by adding back depreciation of property, plant and equipment, amortisation of right-of-use
assets and amortisation of intangible assets to adjusted operating profit, and can be found in the Consolidated Statement of
Cash Flows. The calculation of adjusted EPS can be found in Note 10. Adjusted effective tax rate is calculated by dividing theshare of tax attributable to adjusted profit before tax by adjusted profit before tax. The definition of cash conversion is set out
in the Finance Review.

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 Adjusting items continued

Intellectual property litigation costs

Reconciliation between operating profit and profit before income tax and adjusted profit

These represent one-off legal costs to defend our intellectual property.

2024

Impairment of capitalised development costs

2023

Operatingprofit£m

Profit before
income tax£mOperatingprofit£m

Profit before
income tax£mStatutory measure

68.3

71.3

72.4

73.5

Intellectual property litigation settlement

(3.3)

(3.3)

–

–

–

–

(0.4)

(0.4)

Adjustments relating to defined benefit pension schemes

0.4

0.4

–

–

Transaction-related costs

1.0

1.0

–

–

WITec post-acquisition gross margin adjustment

–

–

0.5

0.5

Restructuring costs and charges associated withmanagement changes

3.7

3.7

0.4

0.4

Intellectual property litigation costs

0.4

0.4

0.5

0.5

–

–

0.8

0.8

Amortisation and impairment of acquired intangibles

9.1

9.1

9.3

9.3

Fair value movement on financial derivatives

0.7

0.7

(3.0)

(3.0)

–

–

–

0.4

Total adjusting items

12.0

12.0

8.1

8.5

Adjusted measure

80.3

83.3

80.5

82.0

Release of provision on disposal

Impairment of capitalised development costs

Unwind of discount in respect of contingent consideration

Adjusted income tax expense
Adjusted profit
Adjusted effective tax rates

63.0

Amortisation and impairment of acquired intangibles
Adjusted profit excludes the non-cash amortisation and impairment of acquired intangible assets and goodwill.

Fair value movement on financial derivatives
Under IFRS 9, 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 IFRS 9 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. To the extent that instruments are hedges of future transactions, adjusted profit for the year
is stated before changes in the valuation of these instruments so that the underlying performance of the Group can be moreclearly seen.

Unwind of discount in respect of contingent consideration
Adjusted profit in the prior year excluded the unwind of the discount in respect of the contingent consideration on theacquisition of WITec.

Adjusted income tax expense
Statutory income tax is adjusted for the income tax impact on the adjusting items described above. In the current year,
adjusted income tax also includes a prior year adjustment in relation to deferred tax recognised on the Asylum intangibles.

Reconciliation of changes in cash and cash equivalents to movement in net cash after borrowings(17.0)(20.3)
80.3

During the prior year, the Group reviewed the capitalised development costs to ensure they remained directly related totargeted product or software developments. The one-off non-cash impairment relates to delays in market launch of specificdevelopment projects within the Materials & Characterisation segment.

80.5

24.4%

2024
£m

2023
£m

65.0

Net (decrease)/increase in cash and cash equivalents(13.1)

13.5

20.7%

Effect of exchange rate fluctuations on cash held

(2.9)

0.3

Movement in net cash in the year

(16.0)

13.8

Bank loans at First Light Imaging acquired

(2.2)

–

Repayment of borrowings

1.8

0.5

Intellectual property litigation settlement
This represents one-off settlement income in the Research & Discovery segment from defending our intellectual property.

Release of provision on disposal
The costs in the prior year represent the release of the provision on disposal of the OI Healthcare business in the US in 2020.

Net cash after borrowings at the start of the year

100.2

85.9

Adjustments relating to defined benefit pension schemes

Net cash after borrowings at the end of the year

83.8

100.2

During the year, the Group recognised a one-off charge of £0.4m in respect of removing the pension increase exchange atretirement option for deferred members. This past service cost is reflected in the retirement benefit obligations as shown in
Note 24.

Reconciliation of net cash after borrowings to Statement of Financial Position
2024
£m

2023
£m

Bank loans at First Light Imaging

(0.8)

–

Covid-19 loan at WiTec

(0.9)

(1.3)

Overdrafts(12.3)(11.2)Cash and cash equivalents

97.8

112.7

Net cash after borrowings at the end of the year

83.8

100.2

Transaction-related costs
These represent the costs of one-off charges incurred at the balance sheet date relating to transactional work.

WITec post-acquisition gross margin adjustment
The finished goods and work-in-progress inventories were revalued to fair value, based on selling price less costs to sell.
The adjustments in the prior period relate to the gross margin which would have been earned on post-acquisition sales to
31 March 2023, but which has been absorbed into the acquisition date fair value. This has not occurred, as all such inventory
at the acquisition date had been delivered to customers by 31 March 2023.

Restructuring costs and charges associated with management changes
In the current year, these represent £1.7m of costs associated with the relocation of production facilities within thesemiconductor business and charges of £2.0m incurred in respect of the recruitment of the new CEO and one-off dual-runningcosts associated with this appointment. In the prior year, these represent the costs of one-off restructuring charges within the
Materials & Characterisation segment.

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The average monthly number of people employed by the Group (including Directors and temporary employees) during theyear was as follows:

3 Research and development (R&D)
The total research and development spend by the Group is as follows:

2024
Number

2023
NumberProduction

894

796

Sales and Marketing

555

495

Materials &Characterisation£mResearch &Discovery
£m

Total
£m

28.0

11.1

39.1

–

(0.2)

(0.2)

Research and Development

487

456

Add: amounts capitalised as fixed assets

0.2

–

0.2

Administration and Shared Services

308

280

Less: amortisation and impairment of R&D costs
previously capitalised as intangibles

(0.5)

(0.1)

(0.6)

2,244

2,027

Add: amounts capitalised as intangible assets

0.1

0.6

0.7

Total cash spent on R&D during the year

27.8

11.4

39.2

2024
£’000

2023
£’000

345

250

2024

R&D expense charged to the Consolidated Statement of Income
Less: depreciation of R&D-related fixed assets

5 Auditor’s remuneration

Materials &Characterisation£mResearch &Discovery
£m

Total
£m

26.5

10.2

36.7

– Audit of Financial Statement of subsidiaries pursuant to legislation

757

542

Less: depreciation of R&D-related fixed assets

–

(0.3)

(0.3)

– Audit-related assurance services

50

47

Add: amounts capitalised as fixed assets

–

–

–

– Other assurance services88

Less: amortisation of R&D costs previously capitalised as intangibles

(2.1)

(0.1)

(2.2)

1,160

847

Add: amounts capitalised as intangible assets

0.4

0.2

0.6

Total cash spent on R&D during the year

24.8

10.0

34.8

2024
£m

2023
£m

3.2

1.1

2023

R&D expense charged to the Consolidated Statement of Income

Audit of these Financial Statements
Amounts received by the auditor and its associates in respect of:

Total fees payable to the auditor and its associates

6 Financial income

4 Employee information
Interest receivable

Personnel costs incurred during the year were as follows:
2024
£m

2023
£m

Wages and salaries

131.5

121.9

Social security costs

15.5

17.1

Contributions to defined contribution plans (Note 24)

6.4

6.1

Defined benefit income (Note 24)

(1.0)

(1.1)

Charge in respect of employee share options

3.0

2.4

155.4

146.4

Directors’ emoluments are disclosed in the Remuneration Report on pages 120 to 143 of this Report and Financial Statements.

www.oxinst.com

Interest credit on pension scheme net assets

1.5

1.6

4.7

2.7

2024
£m

2023
£m

7 Financial expenditure

Bank interest payable

0.9

0.7

Interest on lease liabilities

0.8

0.5

–

0.4

1.7

1.6

Unwind of discount on contingent consideration

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Deferred tax

8 Taxation
Income tax expense
2024
£m

2023
£m

Property,plant andequipment£m

Recognised in the Consolidated Statement of Income
Current tax expense
Current year

17.1

10.2

Adjustment in respect of prior years

1.1

0.3

18.2

10.5

Origination and reversal of temporary differences

1.6

5.1

Adjustment in respect of prior years

0.8

(0.7)

2.4

4.4

20.6

14.9

Deferred tax expense

Total tax expense
Reconciliation of effective tax rate
Profit before income tax

71.3

73.5

Income tax using the weighted average statutory tax rate of 25% (2023: 21%)

17.8

15.4

Change in rate at which deferred tax recognised

Tax losses
£m

Other
£m

Total
£m

Balance at 1 April 2022

(0.9)

3.2

(7.8)

(7.0)

6.7

4.1

(1.7)

Recognised in income

(3.1)

0.4

(2.5)

2.0

(1.5)

0.3

(4.4)

Recognised in other comprehensive income

–

–

9.7

–

–

–

9.7

Recognised directly in equity

–

–

0.7

–

–

–

0.7

Effect of movements in foreign exchange rates

–

0.1

–

–

0.3

–

0.4

Balance at 31 March 2023

(4.0)

3.7

0.1

(5.0)

5.5

4.4

4.7

Recognised in income

(3.4)

0.7

1.0

1.4

(2.1)

–

(2.4)

Recognised in other comprehensive income

–

–

2.7

–

–

–

2.7

Recognised directly in equity

–

–

(1.1)

–

–

–

(1.1)

Acquired on business combination

–

–

–

(2.5)

–

–

(2.5)

Effect of movements in foreign exchange rates

(0.1)

(0.1)

(0.3)

–

–

(0.1)

(0.6)

Balance at 31 March 2024

(7.5)

4.3

2.4

(6.1)

3.4

4.3

0.8

0.3

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

–

1.0

0.4

–

Non-taxable income and expenses

0.7

(1.4)

Adjustment in respect of prior years

1.9

(0.4)

20.6

14.9

Taxation credit recognised directly in other comprehensive income
Current tax – relating to employee benefits

(2.1)

–

Deferred tax – relating to employee benefits

(2.7)

(9.7)

AssetsCurrent tax – relating to share options

(0.6)

–

Deferred tax – relating to share options

1.1

(0.7)

The rate of UK corporation tax increased to 25% from 1 April 2023. The UK deferred tax assets and liabilities have been
calculated based on the enacted rate of 25%.
The Group carries tax provisions in relation to uncertain tax positions arising from the possible outcome of negotiations with
tax authorities. The provision is calculated using the expected value method from a range of possibilities and assumes thatthe tax authorities have full knowledge of the facts. Such provisions reflect the geographical spread of the Group’s operations
and the variety of jurisdictions in which it carries out its activities.

Liabilities

Net

2024
£m

2023
£m

2024
£m

2023
£m

2024
£m

2023
£m

Gross assets/(liabilities)

15.6

15.6

(14.8)(10.9)

0.8

4.7

Offset

(1.9)

(3.1)

1.9

3.1

–

–

Net assets/(liabilities)

13.7

12.5

(12.9)

(7.8)

0.8

4.7

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

Taxation (credit)/charge recognised directly in equity

www.oxinst.com

Intangible
assets£m(0.2)

Transaction costs, deferred consideration and impairments not deductible for tax

Total tax expense

Employeebenefits£m

The deferred tax category of ‘Other’ includes deferred tax recognised on accounting general liability accruals/provisions,deferred revenue and bad debts. Deferred tax is recognised on provisions made against inventory on which tax relief has not
yet been granted.

Effect of:Tax rates other than the weighted average statutory rate

Inventory£m

Tax losses

2024
£m

2023
£m

0.5

0.3

The tax losses and the deductible temporary differences do not expire under current tax legislation. Deferred tax assets
recognised on tax losses relate to gross unrecognised losses of £2.3m (2023: £1.1m). Deferred tax assets have not beenrecognised 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 £59.2m (2023: £50.6m) 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.

169

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
9 Dividends

11 Acquisitions
Acquisition of First Light Imaging

The following dividends per share were paid by the Group:
2024
pence

2023
pence

Previous period final dividend

14.9

13.7

Current period interim dividend

4.9

4.6

19.8

18.3

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

Interim dividend
Final dividend

2024
pence

2023
pence

4.9

4.6

15.9

14.9

20.8

19.5

On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging SAS (‘First Light Imaging’)
on a cash-free, debt-free basis for consideration of €18.7m (£16.0m), of which €3.0m (£2.5m) was conditional on trading
performance over a period of 12 months from the acquisition. The conditions for the deferred consideration were meetingcertain revenue, order and margin thresholds. In the calculations below, it has been assumed that these thresholds havebeen met.
The book and provisional fair value of the assets and liabilities acquired is given in the table below. Provisional values havebeen used for all assets and liabilities, including deferred tax, because the initial acquisition accounting is incomplete at thedate of this report. Fair value adjustments have been made to better align the accounting policies of the acquired businesswith the Group accounting policies and to reflect the fair value of assets and liabilities acquired.
Book value£mProvisional
adjustments£mProvisional fair
value
£m

Intangible assets

0.1

10.3

10.4

Property, plant and equipment

0.5

–

0.5

The final dividend for the year to 31 March 2023 of 14.9 pence per share was approved by shareholders at the Annual General
Meeting on 19 September 2023 and was paid on 12 October 2023. The interim dividend for the year to 31 March 2024 of 4.9
pence was approved by a sub-committee of the Board on 13 November 2023 and was paid on 12 January 2024.

Right-of-use assets

0.7

–

0.7

Inventories

1.7

–

1.7

The proposed final dividend for the year ended 31 March 2024 of 15.9 pence per share was not provided at the year end andis subject to shareholder approval at the Annual General Meeting on 25 July 2024. It is expected to be paid on 20 August
2024, to shareholders on the register on the record date of 12 July 2024, with an ex-dividend date of 11 July 2024 and with thelast date of election for the Dividend Reinvestment Plan (DRIP) being 30 July 2024.

Trade and other receivables

2.9

–

2.9

–

(2.6)

(2.6)

Trade and other payables

(2.1)

–

(2.1)

Lease liabilities

(0.7)

–

(0.7)

Bank loans

(2.2)

–

(2.2)

Cash

0.6

–

0.6

Net assets acquired

1.5

7.7

9.2

10 Earnings per share
Basic earnings per ordinary share (EPS) is calculated by dividing the profit attributable to equity shareholders of the parent
by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares held by the Employee
Benefit Trust, which have been treated as if they had been cancelled.

Deferred tax

For the purposes of calculating diluted and diluted adjusted EPS, the weighted average number of ordinary shares is adjusted
to include the weighted average number of ordinary shares that would be issued on the conversion of all potentially dilutive
ordinary shares expected to vest, relating to the company’s share-based payment plans. Potential ordinary shares are only
treated as dilutive when their conversion to ordinary shares would decrease EPS.

Goodwill

5.4

Total consideration

14.6

Net debt acquired

1.6

The following table shows the weight average number of shares used in the calculation and the effect of share options on thecalculation of diluted earnings per share:

Deferred consideration after discounting to transaction date

(2.8)

Net cash outflow relating to the acquisition

13.4

2024
Shares million

2023
Shares million

Weighted average number of shares outstanding

57.9

57.7

Less: weighted average number of shares held by Employee Benefit Trust

(0.1)

–

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

57.8

57.7

Effect of shares under option

0.8

0.7

Number of ordinary shares per diluted earnings per share calculations

58.6

58.4

Basic and diluted EPS are based on the profit for the period attributable to equity shareholders of the parent, as reported
in the Consolidated Statement of Income. Adjusted and diluted adjusted EPS are based on adjusted profit for the period,
as reported in Note 2:2024

Acquisition-related costs in the year of £0.7m were expensed to the Consolidated Statement of Income as an adjusting item in
the administration and shared services cost line. There were no acquisition-related costs in the prior year.
The acquisition contributed revenue of £0.6m, adjusted operating loss of £0.6m and a statutory loss before tax of £0.6m to theGroup’s profit for the prior year.
If the acquisition had occurred on the first day of the year the acquisition would have contributed revenue of £5.7m, adjusted
operating profit of £0.3m and a statutory result before tax of £0.3m in the year.

Acquisition of WITec

2023

£m

Pence

£m

Pence

Profit attributable to equity shareholders of the parent/Basic EPS

50.7

87.7

58.6

101.6

Total underlying adjustments to profit before tax (Note 2)

12.0

20.8

8.5

14.7

Related tax effects

0.3

0.5

(2.1)

(3.6)

Adjusted profit attributable to equity shareholdersof the parent/adjusted EPS

63.0

109.0

65.0

112.7

Diluted basic EPS

86.5

100.3

Diluted adjusted EPS

107.5

111.3

www.oxinst.com

The goodwill arising is considered to represent the value of the acquired workforce and the value of technology that has notbeen individually fair valued.

On 31 August 2021, the Group acquired 100% of the issued share capital of WITec Wissenschaftliche Instrumente undTechnologie GmbH (‘WITec’) on a cash-free, debt-free basis for consideration of €42m (£36.0m), of which €5m (£4.3m)
was conditional on trading performance over a period of 12 months from the acquisition. The conditions for the deferredconsideration were meeting certain revenue, order and margin thresholds.
In the prior year, contingent consideration of £4.8m was paid based on the performance of the Oxford Instruments WITec
business in the year to 31 August 2022. The difference of £0.5m between contingent consideration provided at acquisition
and that paid in January 2023 was due to an adjustment to the net assets purchased.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
12 Property, plant and equipment

13 Intangible assets
Land andbuildings£mPlant andequipment£mFixtures andfittings£m

Goodwill£m

Customerrelatedacquiredintangibles£mTechnologyrelatedacquiredintangibles£m

Development
costs
acquiredintangibles£m

Development
costsinternallygenerated£m

Software
£m

Total
£m

Total
£m

Cost
Balance at 1 April 2022

21.8

40.4

8.3

70.5

Cost

Additions

24.2

6.0

2.1

32.3

Balance at 1 April 2022

122.6

33.1

98.2

1.8

49.2

4.3

309.2

–

–

–

–

0.6

–

0.6

–

–

–

–

(12.5)–(12.5)

2.0

1.0

2.8

–

–

–

5.8

124.6

34.1

101.0

1.8

37.3

4.3

303.1

Additions – business combinations

5.4

0.2

10.1

–

–

0.1

15.8

Additions – internally generated

–

–

–

–

0.7

0.2

0.9

Disposals

–

–

–

–

(2.8)

–

(2.8)

(0.8)

(0.4)

(1.3)

–

–

–

(2.5)

129.2

33.9

109.8

1.8

35.2

4.6

314.5

22.2

24.8

71.9

1.5

45.2

2.9

168.5

Amortisation and impairment charged

–

1.4

7.8

0.1

2.2

–

11.5

Disposals – other

–

–

–

–

(12.5)–(12.5)

Effect of movements in foreignexchange rates

0.7

0.8

1.9

–

–

0.1

3.5

Balance at 31 March 2023
and 1 April 2023

22.9

27.0

81.6

1.6

34.9

3.0

171.0

Amortisation and impairment charged

–

1.2

7.9

–

0.6

0.1

9.8

Disposals

(0.1)

(3.7)

(0.3)

(4.1)

Additions – internally generated

–

0.4

0.1

0.5

Disposals

Balance at 31 March 2023 and 1 April 2023

45.9

43.1

10.2

99.2

Effect of movements in foreignexchange rates

Additions – business combinations

0.1

0.3

0.1

0.5

Balance at 31 March 2023
and 1 April 2023

Additions

15.8

9.7

1.5

27.0

Disposals

(0.6)

(0.5)

(0.1)

(1.2)

Exchange differences

0.3

0.4

(0.2)

0.5

Balance at 31 March 2024

61.5

53.0

11.5

126.0

Disposals
Exchange differences

Effect of movements in foreignexchange rates

Depreciation and impairment losses
Balance at 1 April 2022

5.5

27.4

5.9

38.8

Depreciation charge for the year

0.4

4.0

0.4

4.8

Disposals

–

(3.7)

(0.3)

(4.0)

Exchange differences

–

0.3

–

0.3

Balance at 31 March 2023 and 1 April 2023

5.9

28.0

6.0

39.9

Depreciation charge for the year

0.5

4.2

0.6

5.3

Disposals

(0.5)

(0.5)

(0.1)

(1.1)

–

1.4

–

1.4

5.9

33.1

6.5

45.5

Exchange differences
Balance at 31 March 2024
Carrying amounts

Balance at 31 March 2024
Amortisation and impairment losses
Balance at 1 April 2022

–

–

–

–

(2.8)

–

(2.8)

59.3

Effect of movements in foreignexchange rates

(0.3)

(0.4)

(0.6)

(0.3)

0.1

0.1

(1.4)

80.5

Balance at 31 March 2024

22.6

27.8

88.9

1.3

32.8

3.2

176.6

Balance at 1 April 2022

100.4

8.3

26.3

0.3

4.0

1.4

140.7

Balance at 31 March 2023
and 1 April 2023

101.7

7.1

19.4

0.2

2.4

1.3

132.1

Balance at 31 March 2024

106.6

6.1

20.9

0.5

2.4

1.4

137.9

Balance at 1 April 2022

16.3

13.0

2.4

31.7

Balance at 31 March 2023 and 1 April 2023

40.0

15.1

4.2

Balance at 31 March 2024

55.6

19.9

5.0

Included within land and buildings are assets under construction with additions in the year of £12.2m and a carrying amountof £33.2m (2023: £31.3m).

Carrying amounts

During the year the Group made impairments of £nil (2023: £0.8m) in respect of capitalised development costs. Further
information can be found in Note 1.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
13 Intangible assets continued

Key assumptions

The following intangible assets are considered material by the Directors as they represent 98% (2023: 97%) of total acquired
intangible assets:

The key assumptions are those regarding discount rates and growth rates.

2024

The growth rates are at or below the Group’s view on long-term trends within its markets. Changes in selling prices and direct
costs are based on past practices and expectations of future changes in the market.

2023

£m

Amortisation
period years

Remainingamortisation
period years

£m

3.9

15.0

4.8

4.7

– Product related

7.3

12.0

1.8

11.9

– Software related

–

10.0

–

0.9

Trademarks – WITec

2.0

10.0

7.6

2.3

Technology, know–how and patents – WITec

2.4

5.0

2.6

3.6

Trademarks – First Light Imaging

0.2

2.0

1.8

–

– OCAM

0.3

12.0

11.8

–

– C-RED

9.3

14.0

13.8

–

Technology, know–how and patents – Asylum

1.0

12.0

0.7

2.4

Trademarks – Andor
Technology, know–how and patents – Andor:

Technology, know–how and patents – First Light Imaging:

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 CGUs as follows:
2024
£m

2023
£m

Materials & Characterisation
NanoAnalysis

9.9

The post-tax weighted average costs of capital used for Materials & Characterisation and Research & Discovery inimpairment testing are 13.1%-13.6% (2023: 12.8%-13.3%) and 13.1%-13.6% (2023: 12.8%-13.3%) respectively, in line with therisk associated with each of the business segments. Management has estimated these discount rates by reference to pastexperience 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 changes in the discount rate and forecast growth rate. Sensitivity
analysis has been carried out by reference to both of these assumptions. This demonstrated that a 460 basis point increasein the discount rate would be required in order to eliminate the headroom of £27.1m in the recently acquired WITec business– along with a 20% deterioration from the five-year forecast. Similarly, a reduction in the growth rate to -6.2% – again, alongwith a 20% deterioration from the five-year forecast, would be required in order to result in an impairment in that business. No
reasonably possible change in assumptions would result in an impairment in the other businesses.

14 Leases
The Group leases a number of properties in the jurisdictions from which it operates. In some jurisdictions it is customary forlease contracts to provide for payments to increase each year by inflation and in others to be reset periodically to market
rental rates. In some jurisdictions’ property leases, the periodic rent is fixed over the lease term.
The Group also leases certain items of plant and equipment. In some contracts for services with distributors, those contracts
contain a lease of vehicles. Leases of plant, equipment and vehicles comprise only fixed payments over the lease terms.
The Group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the Group will consider
whether the absence of a break clause would expose the Group to excessive risk. Typically factors considered in deciding tonegotiate a break clause include:•

the length of the lease term;

10.0

•

the economic stability of the environment in which the property is located; andwhether the location represents a new area of operations for the Group.

Magnetic Resonance

2.3

2.3

•

WITec

21.0

21.5

The Group leases assets including land and buildings, vehicles and machinery. Information about leases for which the Groupis a lessee is presented below.

Andor

66.7

61.2

NanoScience

6.7

6.7

106.6

101.7

Research & Discovery

Right-of-use assets

In the current year, Andor includes a provisional goodwill amount of £5.4m relating to the acquisition of First Light Imaging as
shown in Note 11. All other movements in the year relate to changes in exchange rates.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
Accounting standards require an impairment test to be carried out by determining the recoverable amount of each CGU whichcontains goodwill. The recoverable amount is calculated as the higher of the fair value less costs to sell or the value in use of the
CGU. In the Group’s case, the recoverable amount is based on value in use calculations. Value in use is calculated by discounting
expected future cash flows and in particular Board-approved five-year cash flow forecasts, prepared by the management ofeach CGU and reviewed and amended by Group management as necessary, together with 2.5% per annum growth for thesubsequent 20 years. This rate was considered to be at or below long-term market trends for the Group’s businesses.

www.oxinst.com

Property leases£mOther leases
£m

Total
£m

Cost
Balance at 1 April 2022

25.0

2.6

27.6

Additions

17.4

0.8

18.2

Modifications

(1.0)

–

(1.0)

Disposals

–

(0.5)

(0.5)

Exchange differences

1.1

0.1

1.2

Balance at 31 March 2023

42.5

3.0

45.5

Additions – business combinations

0.7

–

0.7

Additions

5.8

0.2

6.0

Disposals

(1.1)

(0.2)

(1.3)

Exchange differences

(1.5)

(0.1)

(1.6)

Balance at 31 March 2024

46.4

2.9

49.3

175

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
14 Leases continued

15 Inventories
Property leases£mOther leases
£m

Total
£m

Balance at 1 April 2022

8.4

1.3

9.7

Amortisation charge for the year

4.1

0.5

4.6

Disposals

–

(0.5)

(0.5)

Exchange differences

0.3

–

0.3

Balance at 31 March 2023

12.8

1.3

14.1

Amortisation and impairment losses

2024
£m

2023
£m

Raw materials and consumables

59.0

39.8

Work in progress

27.3

23.5

Finished goods

22.1

18.1

108.4

81.4

Amortisation charge for the year

4.5

0.5

5.0

Disposals

(1.6)

(0.1)

(1.7)

The amount of inventory recognised as an expense was £182.4m (2023: £172.8m). In the ordinary course of business, theGroup makes impairment provisions for slow-moving, excess and obsolete inventory as appropriate. Inventory is stated after
charging impairments of £1.2m in the current period (2023: £1.3m). In the current year, £nil (2023: £nil) was reversed relating toprevious impairments. Impairments are included within gross profit.

Exchange differences

(0.5)

–

(0.5)

Inventory carried at net realisable value is £0.2m (2023: £1.7m).

Balance at 31 March 2024

15.2

1.7

16.9

16 Trade and other receivables

Carrying amounts
Balance at 1 April 2022

16.6

1.3

17.9

Balance at 31 March 2023 and 1 April 2023

29.7

1.7

31.4

Balance at 31 March 2024

31.2

1.2

32.4

Lease payables

Trade receivables

2024
£m

2023 as restated1
£m

88.5

91.3

Less provision for impairment of receivables

(3.6)

(3.5)

Net trade receivables

84.9

87.8

Accrued income

11.7

9.4

Prepayments

9.9

6.6

Other receivables

8.2

9.4

114.7

113.2

2024
£m

2023
£m

Balance at beginning of year

31.4

18.4

Additions – business combinations

0.7–

Additions

6.0

18.1

–

(1.0)

Payments made (cash flows from financing activities)

(4.8)

(5.6)

Interest charge

0.8

0.5

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.

Effect of movements in foreign exchange rates

(0.7)

1.0

The maximum exposure to credit risk for trade and other receivables plus accrued income, by geographic region, was:

33.4

31.4

Amounts falling due after more than one year

28.6

26.2

Amounts falling due in less than one year

4.8

5.2

Modifications

Amounts recognised in Consolidated Statement of Income

1.	The trade receivable and accrued income amounts in the table above have been restated to correct an amount recognised within revenue
which had not been invoiced to the customer. As a result, at 31st March 2023 trade receivables have reduced by £4.6m, and accrued income
has increased by £4.6m.

2024
£m

2023
3m

UK

11.6

17.5

China

16.1

16.2

Japan

15.5

15.8

USA

24.3

29.8

Germany

6.4

7.4

2024
£m

2023
£m

Interest on lease liabilities

(0.8)

(0.5)

Rest of Europe

16.1

10.6

Amortisation of right-of-use assets

(5.0)

(4.6)

Rest of Asia

10.4

6.3

Rest of World

4.4

3.0

104.8

106.6

Amounts recognised in Consolidated Statement of Cash FlowsThe total cash outflow for leases in the year ended 31 March 2024 was £4.8m (2023: £5.6m).

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
16 Trade and other receivables continued

18 Cash and cash equivalents

The ageing of financial assets comprising net trade receivables and other receivables plus accrued income at the reporting
date was:
2024
£m

2023
£m

Current (not overdue)

54.7

63.1

Less than 31 days overdue

20.5

18.8

More than 30 but less than 91 days overdue

15.2

10.8

More than 90 days overdue

14.4

13.9

104.8

106.6

2024
£m

2023
£m

3.5

3.6

Increase/(decrease) in loss allowance recognised in theConsolidated Statement of Income during the year

0.1

(0.1)

Balance at end of year

3.6

3.5

The loss allowance is recognised in the administration and shared services line in the Consolidated Statement of Income.

17 Contract assets and liabilities
Contract
asset

2023 as restated1
Contract
asset

Contract liability

Cash balances

97.8

112.7

Bank overdrafts (Note 19)(12.3)(11.2)Cash and cash equivalents in the Consolidated Statement of Cash Flows

85.5

101.5

2024
£m

2023
£m

0.4

–

19 Borrowings

Bank loans at First Light Imaging

The movement of the Group’s expected credit losses provision in respect of trade receivables and other receivables plus
accrued income are as follows:

2024

2023
£m

Current

In the current year £0.2m (2023: nil) of the provision against trade receivables and other receivables plus accrued income
relates to balances less than 90 days overdue. The remaining balance relates to balances more than 90 days overdue.

Balance at start of year

2024
£m

Contract liability

Covid-19 loan at WITec

0.4

0.4

Bank overdrafts

12.3

11.2

At the end of the year

13.1

11.6

2024
£m

2023
£m

Bank loans at First Light Imaging

0.4–

Covid-19 loan at WITec

0.5

0.9

At the end of the year

0.9

0.9

Non-current

On 19 March 2024, the Group entered into a new multi-currency revolving facility agreement, which is committed until March2028 with 15-month and 12-month extension options at the end of the first and second years respectively. The facility has
been entered into with four banks and comprises a euro-denominated multi-currency facility of €95m and a US dollar
denominated multi-currency facility of $150m. Debt covenants are net debt to EBITDA less than 3.0 times and EBITDA tointerest greater than 4.0 times.

Accruedincome£m

Customer
deposits£m

Deferredincome£mAccruedincome£m

Customer
deposits£m

Deferredincome£mBalance at 1 April

9.4(52.1)(21.3)

4.2(41.3)(21.2)

Acquired balances

–

(0.4)

(0.7)

–

–

–

Transfers in the period from contract assets
to trade receivables

Bank overdrafts reflect the aggregated overdrawn balances of Group companies (even if those companies have otherpositive cash balances). The overdrafts are held with the Group’s relationship banks.

(9.4)

–

–

(4.2)

–

–

The Group’s uncommitted overdraft facilities at 31 March 2024 were £18.3m (2023: £18.8m).

Amounts included in contract liabilities thatwere recognised as revenue during the period

–

48.5

21.3

–

38.6

21.2

11.7

–

–

9.4

–

–

Excess of revenue recognised over cash (or rights
to cash) being recognised during the period
Cash received in advance of performance andnot recognised as revenue during the period
Balance at 31 March

A reconciliation of the Group’s borrowings balances is shown below.
2024
£m

2023
£m

Balance at the beginning of the year

12.5

10.5

–

(54.4)(22.2)–(49.4)(21.3)

Increase in borrowings (from acquisition of First Light Imaging)

2.2

–

11.7

(58.4)(22.9)

9.4(52.1)(21.3)

Repayment of borrowings (cash flow from financing activities)

(1.8)

(0.5)

1. Details of restatement of prior year numbers can be found in note 16.

Contract assets and contract liabilities are included within trade and other receivables and trade and other payables
respectively on the face of the Consolidated Statement of Financial Position.
Payment terms for the sale of large goods typically require payment of a deposit on order, with the remaining payments dueon shipment, and in some cases installation. For lower value goods, payment is typically required at shipment. Maintenanceand service contracts are generally paid in full at inception. There is no financing component in the arrangements, andcontracts are for specified, pre-agreed amounts with no variable element.

www.oxinst.com

The Group’s undrawn committed facilities available at 31 March 2024 were £200.2m, comprising the undrawn portion of theGroup’s £200.2m revolving credit facilities.

Increase/(decrease) in bank overdrafts

1.1

2.5

Interest charged

0.9

0.7

Interest paid

(0.9)

(0.7)

At the end of the year

14.0

12.5

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
20 Trade and other payables

22 Financial instruments
2024
£m

2023
£m

Trade payables

32.6

30.3

Customer deposits

58.4

52.1

Social security and other taxes

6.3

6.1

Accrued expenses

39.3

44.9

Deferred income

22.9

21.3

Other payables

6.7

4.7

166.2

159.4

Fair values of financial assets and liabilities
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including theirlevels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities notmeasured at fair value if the carrying amount is a reasonable approximation of fair value.
2024
Carrying
amount£m

2

2.5

2023 as restated1, 2
Fair value£m

Carrying
amount£m

Fair value
£m

2.5

2.0

2.0

Financial assets measured at fair value
Derivative financial assets:– Foreign currency contracts
Financial assets measured at amortised cost

21 Provisions for other liabilities and charges

Long-term receivables

1.3

0.5

Trade receivables

84.9

87.8

Other receivables and accrued income

15.1

13.0

Cash and cash equivalents

97.8

112.7

Warranties£mIP-related claims
£m

Other
£m

Total
£m

Balance as at 1 April 2023

3.6

0.6

3.4

7.6

Provisions made during the year

3.5

–

1.3

4.8

Provisions used during the year

(1.8)

–

(1.3)

(3.1)

Provisions released during the year

(2.1)

–

(0.7)

(2.8)

Financial liabilities measured at fair value

–

–

(0.1)

(0.1)

Derivative financial liabilities:

Balance as at 31 March 2024

3.2

0.6

2.6

6.4

– Foreign currency contracts

Amounts falling due before one year

3.2

0.6

2.6

6.4

–

–

–

–

Exchange differences

Fair value
hierarchy
£m

2

(0.1)

(0.1)

(1.2)

(1.2)

Financial liabilities measured at amortised cost
Trade and other payables(78.6)(79.9)

Bank overdrafts(12.3)(11.2)

Warranty provisions

Borrowings

(1.7)

(1.3)

Product warranty provisions reflect commitments made to customers on the sale of goods in the ordinary course of businessand included within the Group companies’ standard terms and conditions. Warranty commitments typically apply for a
12-month period. The provision represents the Directors’ best estimate of the Group’s liability based on past experience.

Lease payables(33.4)(31.4)

Amounts falling due after more than one year

Intellectual property-related claims

1.	The other receivables and accrued income and trade and other payables balances in the table above, as at 31 March 2023, have been restated toremove the tax-related balances which do not meet the accounting definition of financial assets and liabilities. As a result, at 31 March 2023, otherreceivables and accrued income were reduced by £5.8m, while trade and other payables were reduced by £6.1m.

The company has on occasion been required to take legal or other actions to defend itself against proceedings brought byother parties. Provisions are made for the expected costs associated with such matters, based on past experience of similar
items and other known factors, taking into account professional advice received, and represent the Directors’ best estimate of
the likely outcome. The timing of utilisation of these provisions is frequently uncertain, reflecting the complexity of issues andthe outcome of various court proceedings and negotiations. Contractual and other provisions represent the Directors’ best
estimate of the future cost of settling obligations arising from past activity and reflect the Directors’ assessment of the likely
settlement method, which may change over time. However, no provision is made for proceedings which have been brought byother parties against Group companies unless the Directors, taking into account professional advice received, assess that it
is more likely than not that such proceedings may be successful. In respect of the provision for IP-related claims the range ofpossible outcomes is between £nil and £0.6m.

2. Details of restatements of prior period numbers for trade receivables and other receivables and accrued income can be found in note 16.

Other provisions

Trade and other receivables/payables

Other provisions relate to various obligations including obligations in respect of onerous contracts, product-related liabilities,
dilapidation provisions and provisions for other claims.

For receivables/payables with a remaining life of less than one year, the carrying amount is deemed to reflect the fair value.
All other receivables/payables are discounted to determine their fair value. Advances received are excluded from otherpayables above as these are not considered to be financial liabilities. Tax-related receivables and payables are excluded
from the above table as these are not considered to be financial assets and liabilities.

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 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.

Lease payables
The lease liability is measured at amortised cost using the effective interest method.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
22 Financial instruments continued

Credit risk

Fair value hierarchy

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, accrued income, trade and other receivables. The Group’s
credit risk is primarily attributable to its trade receivables and cash balances. The amounts recognised in the Consolidated
Statement of Financial Position are net of expected credit losses, which are estimated by the Group’s management basedon the Group’s historical experience of losses, along with consideration of any reasonably and supportable forward-looking
information and expectations. Due to its wide geographic base and large number of customers, the Group is not exposed
to material concentrations of credit risk on its trade receivables. The Group’s experience of credit loss is minimal, which has
and continues to be mitigated through receiving payment in advance of delivery or using trade guarantees provided by theGroup’s relationship banks. In the unusual event of a particular issue with a particular customer, a specific provision will bemade if appropriate. Trade receivables are subject to credit limits and control and approval procedures in the operatingcompanies. There has been no material change in the Group’s experience of credit losses over the reporting period.

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.
There have been no transfers between levels during the year.

23 Financial risk management
The 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 policies are set by the Board of Directors. These policies are implemented by a central treasury function thathas formal procedures to manage foreign exchange risk, interest rate risk and liquidity risk, including, where appropriate, theuse 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.

Credit risk associated with cash balances and derivative financial instruments is managed by transacting with financial
institutions with high-quality credit rating. In particular, a Board-approved policy sets out guidelines for which categories of
institutions may be used and the maximum amount which may be invested with each institution within a particular category.
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 represents the maximum credit exposure. The maximum exposure to credit risk by
type of asset at 31 March 2024 is as shown below:2024£m2023 as restated1£mLong-term receivables

1.3

0.5

Trade receivables

84.9

87.8

Other receivables and accrued income

15.1

13.0

Cash and cash equivalents

97.8

112.7

The Group uses derivative financial instruments to hedge its exposure to fluctuations in foreign exchange rates. In
common with a number of other companies, the Group has decided that the additional costs of meeting the extensive
documentation requirements of IFRS 9 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 for such 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 of forward
contracts equivalent to 80% (2023: 80%) of the exposure expected to arise over the following 12 months. The remaining 20%
is sold on the spot market. The fair value of outstanding currency contracts recognised as a liability as at 31 March 2024
amount to £0.1m (2023: £1.2m) and those recognised as an asset amount to £2.5m (2023: £2.0m).

Derivative financial instruments

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,
the elements of these movements that relate to hedges in respect of future sales are treated as an adjusting item in thecalculation of adjusted earnings (Note 2).
The Group’s translational exposures to foreign currency risks can relate both to the Consolidated Statement of Income andnet assets of overseas subsidiaries. The Group’s policy is not to hedge the translational exposure that arises on consolidationof the Consolidated 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. The Group’s policy is to use a mixture of revolving shortand medium-term floating rate debt underpinned by longer-term fixed rate debt. The short and medium-term floating rate
debt provides flexibility to reduce debt levels as appropriate. The longer-term fixed rate debt provides stability and costcertainty to the Group’s financing structure.

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 theGroup’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 2024 are set out in Note 19.

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2.5

2.0

201.6

216.0

1. Details of restatements of prior period numbers for trade receivables and other receivables and accrued income can be found in note 16.

The maximum exposure to credit risk for trade receivables is discussed in Note 16.
Other receivables include £4.8m (2023: £5.8m) in respect of VAT and similar taxes which are not past due date.

Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order toprovide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce thecost of capital.
The Board’s long-term objective is to have an efficient capital structure by maintaining a balance between the higher returns
that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
This is monitored by reference to the ratio of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA)
and the Board has set itself internal limits, which are well inside any covenants the Group has with lenders. The Group
maintains the right to purchase its own shares in the market; the timing of these purchases would depend on market prices.
Buy and sell decisions are made on a specific transaction basis by the Board.
Each year the Board carefully considers the appropriate level of dividend payments. In doing this, the Board looks toincrease dividends in line with underlying earnings, although the Board will also take into account other considerations in
its decision-making process. The Board does not have a policy to pay a fixed dividend yield or to maintain a fixed rate ofdividend cover but assesses both of these metrics in line with sustained earnings growth.
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 26), 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 £1,800 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.
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.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 Financial risk management continued
Maturity of financial liabilities

2024
Carrying
amount£m

Contractual
cash flows£m

Due within
one year£m

Due one to
five years£m

Due more than
five years£mForeign exchange contracts

(0.1)

0.1

0.1

–

–

Trade and other payables(78.6)

78.6

78.6

–

–

Bank overdrafts(12.3)

12.3

12.3

–

–

Borrowings

(1.7)

1.7

1.2

0.5

–

Lease payables(33.4)

36.8

5.3

17.3

14.2

(126.1)

129.5

97.5

17.8

14.2

2024

1% increase ininterest rates£m

10% weakening
in Sterling£m

10% strengthening
in Sterling£m

Impact on adjusted profit (Note 2)

0.9(15.4)

15.5

Impact on reported profit

0.9(12.2)

12.2

Impact on equity

0.7(11.6)

11.6

1% increase ininterest rates£m

10% weakening
in Sterling£m

10% strengthening
in Sterling£m

Impact on adjusted profit (Note 2)

0.9(10.2)

10.2

Impact on reported profit

0.9

(7.5)

7.5

Impact on equity

0.8

(6.1)

6.1

2023

Carrying
amount£m

Contractual
cash flows£m

Due within
one year£m

Due one to
five years£m

Due more than
five years£mForeign exchange contracts

(1.2)

1.2

1.2

–

–

Trade and other payables(79.9)

79.9

79.9

–

–

The Group operates a defined benefit plan in the UK. The plan offers pensions in retirement and death in service benefit tomembers. Pension benefits are related to members’ final salary at retirement and their length of service. The scheme has
been closed to new members since 2001 and closed to future accrual since 2010.

Bank overdrafts(11.2)

11.2

11.2

–

–

The amounts recognised in the Consolidated Statement of Financial Position are:Borrowings

(1.3)

1.3

0.4

0.9

–

Lease payables(31.4)

31.4

4.5

13.8

13.0

(125.0)

125.0

97.2

14.7

13.0

2023

Carrying amount2024£m

Carrying amount2023£m

24 Retirement benefit obligations

2024
£m

2023
£m

Present value of funded obligations

223.6

225.1

Fair value of plan assets(239.7)(251.5)(16.1)(26.4)

Recognised asset for defined benefit obligations

The reconciliation of the opening and closing balances of the present value of the defined benefit obligation is as follows:

Variable rate instruments
Cash and cash equivalents

97.8

112.7

Bank overdrafts(12.3)(11.2)

–

–

(1.7)

(1.3)

Fixed rate instruments

Benefit obligation at the beginning of the year

2024
£m

2023
£m

225.1

300.0

Past service cost

0.4–

Interest on defined benefit obligation

10.5

8.2

Benefits paid

(11.0)(12.3)

Sensitivity analysis

Remeasurement (gain)/loss on obligation(1.4)(70.8)The Group has estimated the impact on the Consolidated Statement of Income and on equity of the following changes inmarket conditions at the balance sheet date:

Benefit obligation at the end of the year

223.6

225.1

Financial assets
Bank loans•

one percentage point increase in interest rates;•

ten percentage point weakening in the value of Sterling against all currencies; and•ten percentage point strengthening in the value of Sterling against all currencies.

The sensitivities above represent the Directors’ view of reasonably possible changes in each risk variable, not worst-casescenarios or stress tests. The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the
specified changes occur at the year end and are applied to the risk exposures at that date. Accordingly, they show the impact
on the balance sheet of an instantaneous shock. The calculations include all hedges in place at the year end.
Actual results in the future may differ materially from these estimates due to commercial 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 a projection of likely future
gains and losses.

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The reconciliation of the opening and closing balances of the present value of the fair value of plan assets is as follows:
2024
£m

2023
£m

Fair value of plan assets at the beginning of the year

251.5

351.7

Interest on plan assets

12.0

9.8

Contributions by employer

8.5

12.2

Benefits paid

(11.0)(12.3)

Administrative expenses

(0.5)

(0.5)

Actual return on assets excluding interest income(20.8)(109.4)

Fair value of plan assets at the end of the year

239.7

251.5

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24 Retirement benefit obligations continued

The table below shows the sensitivity of the Consolidated Statement of Financial Position to changes in the significant
pension assumptions: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 US. Details of pension schemes contributions made in respect of Directors can be foundin the Remuneration Report.
The expense recognised in the Consolidated Statement of Income is:

2024
£m

Discount rate(-0.1% p.a.)£m

Inflation rate(+0.1% p.a.)£mLife expectancy(+one year)£m

Present value of funded obligations

223.6

226.5

225.9

231.0

Fair value of plan assets(239.7)(239.7)(239.7)(239.7)(16.1)(13.2)(13.8)(8.7)

Surplus
2024
£m

2023
£m

Total defined benefit income

(1.0)

(1.1)

Contributions to defined contribution schemes

6.5

6.2

5.5

5.1

The valuation of defined benefit liabilities is most sensitive to changes in the discount rate, inflation rate and mortality
rate. The sensitivities have been calculated by running the liability calculations in full using the alternative assumptions.
In each case, only the indicated assumption has changed by the amount stated. For the inflation sensitivity, the impact
on the assumptions that are based on RPI inflation, such as CPI inflation and the inflation-linked pension increases, hasbeen included.

Defined benefit scheme – UK
Pension costs are recorded in the following lines in the Consolidated Statement of Income:
2024
£m

2023
£m

Cost of sales

2.1

1.7

Research and development

1.6

1.5

Selling and marketing costs

1.3

1.4

Administration and shared services

2.0

Financial income

A full actuarial valuation of the UK plan was carried out as at 31 March 2021 which, for reporting purposes, has been updated
to 31 March 2024 by a qualified independent actuary.
The major assumptions used by the actuary for the purposes of IAS 19 were (in nominal terms):
2024
%

2023
%

Discount Rate

4.8

4.8

2.1

Rate of increase in pensions in payment (‘3LPI’)

2.2

2.3

(1.5)

(1.6)

Rate of increase in pensions in payment (‘5LPI’)

2.9

3.0

5.5

5.1

Rate of inflation (‘CPI’)

2.3

2.4

Rate of inflation (‘RPI’)

3.0

3.2

91% of S2PA tables(93% for females) future
improvement in line with CMI
2022 with 1.25% long-term trend

97% of S2PA tables(99% for females) future
improvement in line with CMI
2021 with 1.25% long-term trend

The Group has agreed a basis for deficit recovery payments with the trustees of the UK pension scheme. The deficit
recovery payments are payable through to and including 2026 and will rise by approximately 3% per annum. The annual
deficit recovery payment was £8.5m (2023: £8.2m) for the financial year. In the prior year, the Directors decided to make an
additional one-off payment of £4.0m to the UK pension scheme to reduce the Group’s exposure.
In 2018 the trustees of the UK defined benefit scheme, in consultation with the company, reduced its exposure to on-risk
assets (a portfolio of market-focused asset classes, the majority being equities) with a corresponding increase in its liabilitydriven investments, with the objective of steering a more stable journey to being fully funded. The pension fund’s gross
exposure to on-risk assets fell from 85% to 45%; the majority of transactions required to make this change were completed
in February 2018. As a result, the level of risk inherent in the investment strategy is now significantly lower than previously, in
addition to a substantial reduction in funding level volatility. Following investment outperformance and contributions made by
the Group in the year to 31 March 2022 the allocation to on-risk assets has been further reduced to 35%, with a view to further
reduction in funding level volatility.
The Group has considered the requirements of IFRIC 14. The terms of the scheme give the Group the right to recover any
surplus assets on the scheme upon wind-up and therefore management has concluded that there is no impact on theamounts recognised in respect of retirement benefit obligations, i.e. there is no need to apply the ‘asset ceiling’.

Mortality – pre and post-retirement

As at 31 March 2024 the weighted average duration of the defined benefit obligations was 13 years (2023: 13.5 years).
The mortality assumptions imply the following expected future lifetime from age 65:
2024
years

2023
years

Pre-retirement – males

23.2

23.2

Pre-retirement – females

25.3

25.3

Post-retirement – males

21.8

21.9

Post-retirement – females

23.8

23.8

The Group expects to contribute approximately £8.7m to the UK defined benefit plan in the next financial year.
The assumptions have been chosen by the Directors from a range of possible actuarial assumptions, which, due to thetimescales covered, may not be borne out in practice.

Remeasurement gains and losses shown in the Consolidated Statement of Comprehensive Income:
2024
£m

2023
£m

(20.8)(109.4)(5.4)(10.3)– Financial

3.1

78.3

– Demographic

3.7

2.8

(19.4)(38.6)

Actual return on assets excluding interest income
Experience loss on scheme obligations
Changes in assumptions underlying the present value of scheme obligations:

Actuarial losses recorded in the Statement of Comprehensive Income

www.oxinst.com

187

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24 Retirement benefit obligations continued

26 Share option schemes

The assets in the plan were:

Share Incentive Plan (SIP)
2024
£m

2023
£m

7.5

62.9

Corporate and Emerging Market Bonds

22.9

22.1

Gilts

174.3

113.5

–

5.4

Insurance-linked funds

5.8

12.2

Credit and global loan funds

0.1

0.1

Hedge funds

24.3

25.5

Cash

4.8

9.8

239.7

251.5

Equities

Property

Where assets have no observable market price a valuation will be provided by the fund manager. The scheme’s investment
manager will accept that valuation if it is within the expected range of performance. Otherwise, the investment manager willquery the valuation with the fund manager. Complex financial instruments are valued by the scheme’s investment manager
who uses financial models which take as their input the characteristics of the instrument and observable market data suchas swap rates.
The UK pension scheme implements a liability hedge strategy which is designed to protect the scheme’s funding level fromchanges in gilt yields and inflation expectations. The liability hedge strategy consists of a portfolio of gilts, gilt derivatives,interest rate and inflation swaps. At 31 March 2019, the liability hedge strategy fully covered the scheme’s liabilities fromchanges in gilt yields and inflation expectations. However, this is not a precise match for the IAS 19 defined benefit obligation,
which is based on corporate bond yields rather than gilt yields.

Long-Term Incentive Plan (LTIP)
Under the LTIP awards of nominally priced options of £0.05, conditional share awards or cash conditional awards may bemade annually to certain senior managers.
Subject to vesting based on the achievement of performance targets and the rules of the LTIP, options granted under theplan may have a life of ten years, including a vesting period of three years. Subject to vesting based on performance and therules of the LTIP, conditional share awards and cash conditional awards will vest appropriately three years after the award
date. Awards were valued using the Black-Scholes option pricing models with the exception of options relating to the total
shareholder return tranche which were valued using Stochastic option-pricing models. Under the LTIP, Richard Tyson was
granted two awards of nominally priced options of £0.05, which comprised part of the buy-out arrangements to replace the2021 and 2022 LTIP awards from his previous employer, TT Electronics plc, which lapsed in connection with his joining thecompany. Further information can be found in the Directors’ Remuneration Report on page 136.
Share option schemes that have been discontinued but for which options were outstanding at the year end include the following:

Performance Share Plan (PSP)
Under the PSP, awards of nominally priced options of £0.05 were made annually to certain senior managers. The last grants
were made under this scheme in 2022. Awards to persons other than the Executive Directors may also be referred to as
Medium Term Incentive Plan awards (‘MTIP’). Subject to vesting based on the achievement of performance targets and therules of the PSP, awards may have a life of ten years, including a vesting period of a minimum of three years. Options werevalued using the Black-Scholes option-pricing models.

Executive Share Option Scheme (ESO)

25 Capital and reserves
Issued and fully paid ordinary shares:

At the beginning of the year
Issued for cash
At the end of the year
2024
Number of shares

2024
Numberof shares

2023
Numberof shares

57,712,508

57,654,455

201,284

58,053

57,913,792

57,712,508

2023
£m

Number of shares£m

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

UK employees may be eligible to participate in the Group’s HM Revenue and Customs-approved SIP. Participating employees
may make a cash contribution to the SIP of up to £1,800 each year. The Group contributes a further amount equal to 20% of
the employee’s contribution. Independent trustees then purchase partnership and matching shares in the market on behalfof the employees. Subject to the rules of the SIP, matching shares may be withdrawn without forfeiture after they have been
held for three years’, provided the participant has remained an employee. On a similar basis, shares can be withdrawn taxfree after five years’ service.

57,913,792

2.9

57,712,508

2.9

Under the ESO awards of approved options, unapproved options and share appreciation rights were made annually to certain
senior managers. The last grants were made under this scheme in 2016. The exercise prices were determined according
to the mid-market closing share price on the day before the date of grant. Subject to vesting based on the achievement of
performance targets and the rules of the ESO, awards may have a life of ten years, including a vesting period of a minimum of
three years. Options were valued using the Black-Scholes option-pricing models.

Performance conditions
Awards under the ESO, PSP and LTIP schemes may be or may have been subject to the achievement of certain performance
conditions. The performance conditions applicable for the Executive Directors of Oxford Instruments plc, can be found in the
Directors’ Remuneration Report on pages 120 to 143.
Administrative expenses include a charge of £3.0m (2023: £2.4m) in respect of the cost of providing share-based
remuneration. The cost of share awards is calculated by estimating the fair value of the award at grant date and spreadingthat amount over the vesting period after adjusting for an expectation of non-vesting.
For awards granted in the years ended 31 March 2024 and 2023, the fair value and the assumptions used in the calculation
are as follows:

The holders of the ordinary shares are entitled to receive dividends as declared, a proportionate amount of capital on awinding up of the company and one vote per share at meetings of the company.
Other reserves comprise the capital redemption reserve, which represents the nominal value of shares repurchased and thencancelled during the year ended 31 March 1999.
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.

LTIP: CEO
November
2023

LTIP CFO
September
2023

LTIP: Options
September
2023

LTIP:
Conditional
Shares
September
2023

PSP: MTIP
June 2022

PSP June
2022

Weighted average fairvalue of options granted£16.99£11.04£13.38£18.19£19.09£21.16£18.86£18.86

Share price at grant date

£20.55£20.55£20.55£21.75£21.75£21.75£19.40£15.80Exercise price

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

Expected volatility

41.3%

31.5%

30.9%

40.5%

40.5%

n/a

47.3%

47.3%

Expected option life

3 years

0.5 years

1.5 years

3 years

3 years

3 years

3 years

3 years

–

–

–

–

0.9%

0.9%

0.9%

0.9%

4.4%

5.3%

4.9%

4.4%

4.4%

n/a

2.1%

2.1%

Expected dividend yieldRisk-free interest ratewww.oxinst.com

LTIP CEOLTIP CEObuy-out 2021 buy-out 2022
NovemberNovember
2023
2023

189

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
26 Share option schemes continued

28 Commitments and contingencies

Movements in the share option schemes during the year were as follows:

The Group has entered into agreements in respect of the new Severn Beach site for its Plasma Technology business. At 31
March 2024 commitments for future expenditure are £8.0m (2023: £5.6m) and include capital expenditure, fit-out costs, plantand machinery, furniture and computer equipment.

Executive Share
Option Scheme

Performance
Share Plan

Long-Term
Incentive Plan

In an international group of companies, a variety of legal claims arise from time to time. The Board, having taken legal advice,
is of the opinion that any ongoing actions and investigations will not have a material impact on the Group’s financial position.

Numberof shares

Weighted
average
exercise price

Numberof shares

Weighted
average
exercise price

Numberof shares

Weighted
average
exercise price

137,278£8.83

741,768

£0.05

–

–

29 Related parties

Granted––163,687

£0.05

–

–

Forfeited––(4,989)

£0.05

–

–

All transactions with related parties are conducted on an arm’s length basis and in accordance with normal business terms.
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.

Exercised(8,163)£8.80(52,260)

£0.05

–

–

Lapsed(3,446)£9.44(19,830)

£0.05

–

–

125,669£8.82

828,376

£0.05

–

–

Granted

–

–

–

–

216,207£0.05

Forfeited––(25,533)

£0.05

–

–

Exercised(18,623)£8.93(180,018)

£0.05

–

–

Lapsed(8,317)£10.28

(318)

£0.05

(15,635)£0.05

Outstanding at 31 March 2024

98,729£8.68

622,507£0.05

200,572£0.05

Exercisable at 31 March 2024

98,729£8.68

362,419£0.05

12,237£0.05

Exercisable at 31 March 2023

125,669£8.82

402,140

£0.05

–

–

Outstanding at 1 April 2022

Outstanding at 31 March 2023

The weighted average remaining contractual life for the share options as at 31 March 2024 was one year (2023: one year).
The total consideration received from exercise of options in the year was £0.0m (2023: £0.1m).

27 Working capital movements
Reconciliation of movements in working capital
Inventories£mReceivables1£m

Payables andprovisions1£m

Customer
Deposits
£m

Total
£m

As at 1 April 2022

65.3

95.8

(107.5)(41.3)

12.3

Working capital movement

15.6

19.6

(16.9)(9.2)

9.1

WITec-related flows

–

–

5.3

–

5.3

Exchange differences

0.5

0.3

–

(1.6)

(0.8)

FV movement on financial derivatives

–

–

3.0

–

3.0

As at 31 March 2023 and 1 April 2023

81.4

115.7

(116.1)(52.1)

28.9

Working capital movement

26.3

2.7

2.8

(7.1)

24.7

First Light Imaging-related flows

1.9

2.9

(5.0)

(0.4)

(0.6)

Exchange differences

(1.2)

(2.8)

4.7

1.2

1.9

–

–

(0.7)

–

(0.7)

108.4

118.5

(114.3)(58.4)

54.2

1. Receivables and payables include derivative financial instruments.

www.oxinst.com

2023
£m

Short-term employee benefits

4.8

4.2

Post-employment benefits

0.2

0.1

Share-based payment charges

2.6

1.8

Total

7.6

6.1

Key management personnel include the Executive Directors and the Management Board.
Short-term employee benefits comprise salary and benefits earned during the year and bonuses awarded for the year.

Acquisition of FemtoTools AG

The weighted average share price at the time of exercise of the options was £23.42 (2023: £22.03).

As at 31 March 2024

2024
£m

30 Subsequent events

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

FV movement on financial derivatives

The remuneration of key management personnel is as follows:

On 7 June 2024, the Group agreed to purchase 100% of the share capital of FemtoTools AG for an initial consideration of
CHF 17m, subject to certain closing conditions which are expected to be satisfied within four weeks of signing these financial
statements. Additional consideration of up to CHF 7m is conditional on trading performance over a period of 33 months.

191

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

PARENT COMPANY STATEMENT OF FINANCIAL POSITIONPARENT COMPANY STATEMENT OF CHANGES IN EQUITY

As at 31 March 2024

Year ended 31 March 2024

Notes

2024
£m

2023
£m

AssetsNon-current assets

As at 1 April 2023

Intangible assets

d

1.2

1.3

Profit for the year

Tangible assets

c

0.6

0.4

Other comprehensive expense:

0.1

0.1

Right-of-use assets
Investments in subsidiary undertakings

e

356.9

324.6

Trade and other receivables

f

3.0

41.8

Derivative financial instruments

0.2

0.4

Retirement benefit asset

3.7

6.0

2.1

2.3

367.8

376.9

Deferred tax assetsi

Current assets
Trade and other receivables

f

48.3

20.2

Derivative financial instruments

2.5

7.8

Cash and cash equivalents

34.1

62.4

84.9

90.4

452.7

467.3

Total assets
EquityCapital and reserves attributable to the company’s equity shareholders

Sharecapital£mSharepremium
account£m

CapitalRedemption
Reserve£m

Otherreserves£m

Retainedearnings£m

Total
shareholders’equity
£m

2.9

62.6

0.1

7.6

286.4

359.6

1.8

1.8

(3.3)

(3.3)

–

–

–

–

– Remeasurement of defined benefit liability, net of tax
Total comprehensive expense for the year

–

–

–

–

(1.5)

(1.5)

– Share options awarded to employees

–

–

–

–

1.9

1.9

– Share options awarded to employees of subsidiaries

–

–

–

–

1.1

1.1

– Tax charge in respect of share options

–

–

–

–

(0.3)

(0.3)

– Proceeds from shares issued

–

–

–

–

–

–

– Dividends paid

–

–

–

–

(11.5)(11.5)

As at 31 March 2024

2.9

62.6

0.1

7.6

276.1

349.3

As at 1 April 2022

2.9

62.5

0.1

7.6

271.7

344.8

29.1

29.1

(6.6)

(6.6)

Profit for the year
Other comprehensive income:

–

–

–

–

– Remeasurement of defined benefit liability, net of tax
Total comprehensive income for the year

–

–

–

–

22.5

22.5

1.4

1.4

– Share options awarded to employees

–

–

–

–

Share capital

2.9

2.9

– Share options awarded to employees of subsidiaries

–

–

–

–

1.0

1.0

Share premium

62.6

62.6

– Tax credit in respect of share options

–

–

–

–

0.4

0.4

Capital redemption reserve

0.1

0.1

– Proceeds from shares issued

–

0.1

–

–

–

0.1

Other reserves

7.6

7.6

– Dividends paid

–

–

–

–

(10.6)(10.6)

276.1

286.4

2.9

62.6

0.1

7.6

286.4

359.6

349.3

359.6

Retained earnings

As at 31 March 2023

Details of issued, authorised and allotted share capital are included in Note 25 to the Group Financial Statements.
Liabilities

Details of the Group’s share option schemes are included in Note 26 to the Group Financial Statements.

Non-current liabilities
Derivative financial instruments

–

–

–

–

2.6

0.2

–

0.4

Current liabilities
Bank overdraftshCorporation tax
Derivative financial instruments
Trade and other payables

g

2.3

7.2

98.5

99.9

103.4

107.7

Total liabilities

103.4

107.7

Total liabilities and equity

452.7

467.3

The company’s profit for the financial year was £1.8m (2023: £29.1m). Other comprehensive expense in the year was £3.3m(2023: expense of £6.6m). The expense will not subsequently be reclassified to statement of income.
The Financial Statements were approved by the Board of Directors on 10 June 2024 and signed on its behalf by:

RICHARD TYSON		GAVIN HILL

Director			Director
Company number: 775598

www.oxinst.com

Details of the Group’s defined benefit pension scheme are included in Note 24 to the Group Financial Statements.
Details of dividends paid are included in Note 9 to the Group Financial Statements.
Other reserves relates to premium on shares issued as part of acquisitions made in the year to 31 March 1987.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
Year ended 31 March 2024(a) Accounting policies

Non-derivative financial instruments

Basis of preparation

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings,
and trade and other payables. Trade and other receivables are recognised initially at fair value. Subsequent to initialrecognition they are measured at amortised cost using the effective interest method, less any impairment losses.

Oxford Instruments plc is a company incorporated and domiciled in the UK. These Financial Statements have been preparedin accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) on the historical cost basis,
except that derivative financial instrument are stated at their fair value.

Trade and other payables

In preparing these Financial Statements, the company applied the recognition, measurement and disclosure requirements
of international accounting standards in conformity with the requirements of the Companies Act 2006.

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured atamortised cost using the effective interest method.

In these Financial Statements, the company has applied the exemptions available under FRS 101 in respect of thefollowing disclosures:

Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.

•

a cash flow statement and related notes;

Interest-bearing borrowings•

comparative period reconciliations for share capital, tangible fixed assets, intangible assets and investment properties;•

disclosures in respect of transactions with wholly owned subsidiaries;•

disclosures in respect of capital management;Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initialrecognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment
losses. Details of the Group’s interest-bearing borrowings are included in Note 19 to the Group Financial Statements.

•

the effects of new, but not yet effective, accounting standards; andIntra-Group lending•

disclosures in respect of the compensation of key management personnel.

The company has lent funds to and from its UK subsidiaries on interest-free terms. These amounts are repayable on demand.
They are stated at cost less any impairment losses.

As the consolidated Financial Statements of Oxford Instruments plc include the equivalent disclosures, the company has also
taken the exemptions under FRS 101 available in respect of the following disclosures:•

IFRS 2 Share-based Payments in respect of Group settled share-based payments; and•certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument
Disclosures.

As permitted by Section 408 of the Companies Act 2006, a separate statement of income for the company has not been
included in these Financial Statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented inthese Financial Statements.

Going concern
The Financial Statements have been prepared on a going concern basis, based on the Directors’ opinion, after making
reasonable enquiries, that the company has adequate resources to continue in operational existence for the foreseeable
future. The going concern of the parent company is intrinsically linked with the Group, which it heads. Further details on theGroup’s going concern can be found on pages 69 and 79 to 81.

Taxation
Income tax on the statement of income for the year comprises current and deferred tax. Income tax is recognised instatement of income except to the extent that it relates to items recognised directly in equity, in which case it is recognisedin 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. The following temporary differences are notprovided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting
nor taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the future.
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. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax
benefit will be realised. Deferred tax assets are measured on an undiscounted basis.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend.

www.oxinst.com

Derivative financial instruments
The company’s accounting policies for financial instruments are the same as the Group’s accounting policies under IFRS,
namely IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.
These policies are set out in accounting policy ‘(e) Financial instruments’ in the Group accounting policies, on page 156.

Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts ofan item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets.
Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part of an
item of tangible fixed assets. The estimated useful lives are as follows:•

Computer equipment– 4 years•

Furniture and fittings– 4 years

Depreciation methods, useful lives and residual values are reviewed at each statement of financial position date.

Intangible assets
Intangible assets represents internally developed software. Amortisation is charged to the statement of income on a straightline basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets are amortisedfrom the date they are available for use. The estimated useful lives are as follows:
Software – 10 years

Impairment excluding deferred tax assets
Financial assets (including trade and other receivables)
Trade and other receivables are initially recognised at fair value and subsequently stated at their amortised cost lessappropriate provision for impairment. The provision for impairment of debtors is based on lifetime expected credit losses,
which is then updated for any reasonable and supportable forward-looking information and expectations. Lifetime expectedcredit losses are calculated by assessing historic credit loss experience. The movement in the provision is recognised in thecompany’s statement of income.

195

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(a) Accounting policies continued

Termination benefits

Non-financial assets

Termination benefits are recognised as an expense when the company is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, orto provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits forvoluntary redundancies are recognised as an expense if the company has made an offer of voluntary redundancy, it isprobable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable
more than 12 months after the reporting date, then they are discounted to their present value.

The carrying amounts of the company’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs tosell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposeof impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets thatgenerates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups ofassets (the ‘cash generating unit’ or CGU).
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in statement of income. Impairment losses recognised in respect of CGUs are allocated firstto reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the otherassets in the unit (group of units) on a pro-rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does notexceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss
had been recognised.

Employee benefits
Defined contribution plans
A defined contribution plan is a post employment benefit plan under which the company pays fixed contributions into aseparate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions todefined contribution pension plans are recognised as an expense in the statement of income in the periods during which
services are rendered by employees.

Defined benefit plans
A defined benefit plan is a post employment benefit plan other than a defined contribution plan. The company’s net obligationin respect of defined benefit pension plans is calculated by estimating the amount of future benefit that employees haveearned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, andthe fair value of any plan assets (at bid price) is deducted. The company determines the net interest on the net defined benefit
liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of
the annual period to the net defined benefit liability/(asset).
The discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA that have maturity dates
approximating the terms of the company’s obligations and that are denominated in the currency in which the benefits are
expected to be paid. Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return onplan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The company recognises them
immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit
expenses in statement of income. The calculation of the defined benefit obligations is performed by a qualified actuary using
the projected unit credit method. When the calculation results in a benefit to the company, the recognised asset is limited tothe present value of benefits available in the form of any future refunds from the plan or reductions in future contributions andtakes into account the adverse effect of any minimum funding requirements.
The company is the sponsoring employer of a Group-wide defined benefit pension plan. The net defined benefit cost of theplan is charged to participating entities on the basis of the proportion of scheme membership attributable to each legal entity
at the reporting date. The contributions payable by the participating entities are determined using an agreed ratio which has
been in place for approximately ten years.

Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans
if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by theemployee and the obligation can be estimated reliably.

www.oxinst.com

Share-based payment transactions
The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense,with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to theawards. The fair value of the awards granted is measured using an option valuation model, taking into account the terms
and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual
number of awards for which the related service and non-market vesting conditions are expected to be met, such that theamount ultimately recognised as an expense is based on the number of awards that do meet the related service and nonmarket performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
Where the company grants options over its own shares to the employees of its subsidiaries, it recognises, in its individual
Financial Statements, an increase in the cost of investment in its subsidiaries equivalent to the equity settled share-based
payment charge recognised in its consolidated Financial Statements with the corresponding credit being recognised directlyin equity. Amounts recharged to the subsidiary are recognised as a reduction in the cost of investment in subsidiary. If theamount recharged exceeds the increase in the cost of investment, the excess is recognised as a dividend.

Short-term leases and leases of low-value assets
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery thathave a lease term of 12 months or less and leases of low-value assets, including IT equipment. The company recognises thelease payments associated with these leases as an expense on a straight-line basis over the lease term.

Foreign currencies
The company enters into forward exchange contracts and options to mitigate the currency exposures that arise on sales andpurchases denominated in foreign currencies. Transactions in foreign currencies are converted into Sterling at the rate rulingon the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates
ruling at the statement of financial position date. Exchange profits and losses arising from the above are dealt with in thestatement of income.

Investments
Investments in subsidiaries are stated at cost, less any provision for impairment, where appropriate.

Dividends on shares presented within Shareholders’ funds
Dividends unpaid at the statement of financial position date are only recognised as a liability at that date to the extent thatthey are appropriately authorised and are no longer at the discretion of the company. Unpaid dividends that do not meetthese criteria are disclosed in the notes to the Financial Statements.

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Overview

Strategic Report

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Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(b) Profit for the year(d) Intangible assets
Software£m

The company’s profit for the financial year was £1.8m (2023: £29.1m). Other comprehensive expense in the year was £3.3m(2023: expense of £6.6m). The expense will not subsequently be reclassified to statement of income.
Cost

The auditor’s remuneration comprised £345,000 (2023: £250,000) for the statutory audit.
The average number of people employed by the company (including Directors) during the year was 84 (2023: 79). All these
individuals were involved in administration.
The aggregate payroll costs (including Directors) of these people were as follows:

Balance at 1 April 2023 and 31 March 2024
Depreciation and impairment losses
Balance at 1 April 2023

1.8

Charge for year

0.1

Balance at 31 March 2024

1.9

2024
£m

2023
£m

Wages and salaries

9.3

7.3

Social security costs

1.4

1.5

Net book value

Other pension costs

0.4

0.3

Balance at 1 April 2023 and 31 March 2024

11.1

9.1

The share-based payment charge was £1.9m (2023: £1.4m). Details of the Group’s share option schemes are included in Note
26 to the Group Financial Statements.

3.1

1.2

(e) Investments
Investments
in subsidiary
undertakings£m

Full details of the emoluments paid to Directors can be found in the Remuneration Report on pages 120 to 143.
Cost or valuation(c) Tangible fixed assets

Balance at 1 April 2023
Furnitureand fittings£mComputerequipment
£m

Total
£m

Balance at 1 April 2023

0.1

1.7

1.8

Additions

0.1

0.3

0.4

Impairment

Disposals

0.0

0.0

0.0

Balance at 1 April 2023 and 31 March 2024

Balance at 31 March 2024

0.2

2.0

2.2

Cost

Depreciation

Expense in respect of share options transferred to subsidiary undertakings

1.1

Additions

31.2

Balance at 31 March 2024

375.6

18.7

Net book value
Balance at 31 March 2023

324.6

Balance at 31 March 2024

356.9

Balance at 1 April 2023

0.0

1.4

1.4

Charge for year

0.1

0.1

0.2

Disposals

0.0

0.0

0.0

During the year the company contributed intercompany receivable balances in exchange for an issue of shares in its
subsidiary, Oxford Instruments Overseas Holdings Limited.

Balance at 31 March 2024

0.1

1.5

1.6

Related undertakings of the GroupThe following disclosure is provided in accordance with Section 409 of the Companies Act 2006.

Net book value
Balance at 31 March 2023

0.1

0.3

0.4

Balance at 31 March 2024

0.1

0.5

0.6

As of 31 March 2024, the companies listed below and on the following pages are indirectly held by Oxford Instruments plc
except for Oxford Instruments Industrial Products Holdings Limited, Oxford Instruments Nanotechnology Tools Holdings
Limited and Oxford Instruments Overseas Holdings Limited, which are all 100% directly owned by Oxford Instruments plc.
The financial year end of each company is 31 March unless otherwise indicated.
All subsidiary undertakings are controlled by the Group and their results are fully consolidated in the Group’s
financial statements.

www.oxinst.com

343.3

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(e) Investments continued
Subsidiaries
Address

Ownership interest% ofclass held

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares100

Oxford Instruments Nanotechnology Tools
LimitedTubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

100

Oxford Instruments Nordiska AB

C/o TMF Sweden AB, Sergels Torg 12, 111 57,
Stockholm, Sweden

Shares100

Address

Ownership interest% ofclass heldAndor Technology Limited

7 Millennium Way, Springvale Business Park,
Belfast, NI, BT12 7AL

Ordinary shares100

Oxford Instruments Nanotechnology Tools
Holdings LimitedAndor Technology, Inc.

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Bitplane AG

Zurcherstrasse 6, 8952 Schlieren, Switzerland

Ordinary sharesCompany name

Note

Company name

Note

4

Preference sharesFirst Light Imaging Corporation

51209 Orange Street, Wilmington DE 19801,
United States

Common stock100

Oxford Instruments Overseas Holdings 2008
Limited4

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

First Light Imaging Pte. Ltd.

5, 6

541 Orchard Road, #09-01 Liat Towers,
238881, Singapore

Ordinary shares100

Oxford Instruments Overseas Holdings
Limited4

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Europarc Sainte Victoire Bâtiment 5, Route deValbrillant Le Canet, 13590 Meyreuil France

Ordinary shares100

Oxford Instruments Overseas MarketingGmbH

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Ordinary shares

100

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
England100

Ordinary shares

Oxford Instruments Overseas Marketing
LimitedOrdinary shares

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOxford Instruments Private Limited

100

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Messrs Tan Rajah & Cheah, 80 Raffles Place,#58-01 UOB Plaza 1, 048624, Singapore

Ordinary shares

Oxford Instruments America Inc

Oxford Instruments SAS

1007416 Hollister Avenue, Santa Barbara, CA 93117,
United States

Common stock100

9 Avenue du Canada, Immeuble ‘Le Méridien’,
91940 Les Ulis, France

Ordinary shares

Oxford Instruments Asylum Research Inc

Ordinary shares

100

Technopolis Innopoli 1, Tekniikantie 12, Espoo,
02150, Finland

100

C/O ECOVIS, Suite 7, 13 Hickson Road, Dawes
Point, New South Wales, Australia

Oxford Instruments
Technologies Oy

Ordinary shares

Oxford Instruments Australia Pty Limited

100

Floor 1, Building 60, 461 Hongcao Road, Xuhui
District, Shanghai, China

100

Ordinary shares

Oxford Instruments Technology (Shanghai)
Co. Ltd

Registered capital

PO Box 175, Frances House, Sir William Place,
St Peter Port, GY1 4HQ, Guernsey

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
England100

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Oxford Instruments
UK 2013 Limited

Ordinary shares

Oxford Instruments GmbH
Oxford Instruments Holdings 2013 Inc

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Oxford Instruments X-Ray Technology Inc

360 El Pueblo Road, Scotts Valley CA 95066,
United States

Common stock

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Spectral Applied Research Inc

199 Bay Street, Suite 5300, Commerce Court
West, Toronto ON M5L 1B9, Canada

Common shares100

Oxford Instruments Holdings GmbH

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Ordinary shares

100

WITec (Beijing) Scientific Technology Co. Ltd.

3

Registered capital

100

Oxford Instruments India
Private Limited

Plot No. A-279, Ground Floor Road No. 16A,
Ambica Nagar, Wagle Industrial Estate, Thane(West), Thane, MH, 400604, India

Equity shares

100

Unit 1307A, Air China Plaza Tower 1, No. 36
Xiaoyun Road, Chaoyang District, 100027, Beijing,
China

WITec Pte. Ltd.

3

25 International Business Park, #03-59A German
Centre, 609916, Singapore

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Lise-Meitner-Str. 6, D-89081 Ulm, Germany

Ordinary shares100

Oxford Instruments Industrial Products
LimitedTubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares100

Oxford Instruments Italia s.r.l.,Via Della Chiusa 15, 20123, Milan, Italy

Capital stock100

Oxford Instruments KK

Sumitomo Fudosan Osaki Twin Building East,
5-1-18 Kita-Shinagawa, Shinagawa-ku, Tokyo,
141-0001, Japan

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary sharesFirst Light Imaging SAS

Oxford Instruments AFM Limited

Oxford Instruments Funding Limited

Oxford Instruments Holdings Europe Limited

Oxford Instruments Industrial Products
Holdings Limited

4

1

4

4

Preference shares

WITec Wissenschaftliche Instrumente undTechnologie GmbH

1. UK tax resident.
2. Dormant entity.
3. Financial year end is 31 August.
4.	Entity to take advantage of s479A Companies Act 2006 (S479A) audit exemption for the year ending 31 March 2024. Oxford Instruments plc will
issue a guarantee pursuant to S479A in relation the liabilities of the entity.
5. Financial year end is 31 December.
6. Voluntary strike-off in progress

Oxford Instruments Molecular Biotools
Limitedwww.oxinst.com

2

4

100

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(f) Trade and other receivables(i) Deferred tax asset
2024
£m

2023
£m

Amounts falling due after one year:
Amounts owed by subsidiary undertaking

3.0

41.8

Amounts falling due within one year:
Amounts owed by subsidiary undertaking

43.1

18.5

Other receivables

1.1

0.3

Prepayment and accrued income

4.1

1.4

48.3

20.2

2024
£m

2023
£m

Balance at 1 April

2.3

0.1

Statement of income debit

0.1

(0.8)

Other comprehensive income credit

(0.3)

3.0

Balance at 31 March

2.1

2.3

The amounts of deferred tax assets are as follows:
Recognised
2024
£m

2023
£m

Amounts owed by subsidiary undertakings are interest-free, unsecured and repayable on demand.

Excess of depreciation over corresponding capital allowance

0.2

0.4

The company has no immediate intention to recall £3.0m (2023: £41.8m) of these balances in the short term and so theseamounts are classified as amounts falling due after more than one year.

Employee benefits – pension and share scheme

1.9

1.9

2.1

2.3

(g) Trade and other payables
2024
£m

2023
£m

Trade payables

3.0

0.3

Amounts owed to subsidiary undertaking

82.5

85.7

Tax, social security and sales-related taxes

2.3

1.7

Accruals and deferred income

10.7

12.2

98.5

99.9

Amounts falling due within one year:

Amounts owed to subsidiary undertakings are interest-free and repayable on demand.

(h) Bank overdraft
2024
£m

2023
£m

Current
Bank overdraft

2.6

0.2

At the end of the year

2.6

0.2

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.
The rate of UK corporation tax increased to 25% from 1 April 2023. The UK deferred tax assets and liabilities have been
calculated based on the enacted rate of 25%.

(j) Pension commitments
The company and its employees contribute to the Oxford Instruments Pension Scheme (‘the Scheme’), a defined benefit
pension scheme, which offers pensions in retirement and death in service benefit to members. Pension benefits are related tomembers’ final salary at retirement and their length of service.
The 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 Scheme is also closed to future accrual.
The Oxford Instruments Group policy for charging net defined benefit costs to participating entities states that member costs
are charged directly to a participating company if that member is also an employee of said participating company. The costsof scheme members that are no longer employees of any participating company or directly affiliated with a Group company
are allocated on the basis of the participating company’s scheme members as a percentage of the total scheme membersthat are also employees of participating companies.
The policy for determining contributions to be paid by participating companies is the same as that for charging net defined
benefit costs.
Details of the scheme, its most recent actuarial valuation and its funding can be found in Note 24 to the Group Financial
Statements. The contributions paid by the company to the Oxford Instruments Pension Scheme were £2.0m (2023: £2.8m). The
company’s share of the retirement benefit asset was £3.7m (2023: £6.0m).

(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. The guarantee is for the excess of 105% of the liabilities of the scheme, calculated on the basis of Section 179 of thePensions Act 2004, over the assets of the scheme.
The company and its UK subsidiaries have entered into a cross-guarantee for £10.0m (2023: £10.0m) in respect of bankoverdraft facilities, of which £nil (2023: £nil) was drawn at the year end.

(l) Commitments
At 31 March 2024, capital commitments contracted were £nil (2023: £nil) and authorised were £nil (2023: £nil).

(m) Related party transactions
The company has a related party relationship with its Directors and Executive Officers and with its wholly owned
subsidiary companies.
Transactions with key management personnel are disclosed in the Remuneration Report on pages 120 to 143. There wereno other significant transactions with key management personnel in either the current or preceding year.

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203