We develop innovative, proprietary 
in vitro diagnostic products which 
have substantial global market 
potential by meeting current and
future healthcare needs.
Axis-Shield plc
Annual Report and Accounts 2002
A i Shi ld l A l R t d A t 2002 This report has been broken down 
into the following categories to fully
communicate our activities;
Corporate Strategy page 5
Key Clinical Areas page 7
Research & Development page 9
Sales page 11
Partnerships page 13
1 Highlights
2 Chairman’s Statement
6 Chief Executive’s Report
14 Financial Review
16 Board of Directors
17 Corporate Directory
18 Remuneration Report
22 Corporate Governance
26 Directors’ Report 
29 Independent Auditors’ Report
30 Consolidated Profit and Loss Account
31 Statement of Total Recognised 
Gains and Losses
31 Reconciliation of Movement 
in Shareholders’ Funds 
32 Balance Sheets
33 Consolidated Cash Flow Statement
35 Accounting Policies
37 Notes to the Accounts
53 Glossary
Contents Axis-Shield plc
Annual Report and Accounts 2002
1
Highlights
Turnover 
up by 9.7% to £47.0m
010 20 30 40 50 60
Gross margin 
increased from 51.0% to 54.4%
010 20 30 40 50 60
Financial
"
Revenue increased by 9.7% to £47.0 million (2001: £42.8 million)
"
Gross profit margin increased to 54.4% (2001: 51.0%)
"
EBITDA before research and development (R&D) increased by 
18.5% to £10.7 million (2001: £9.0 million)
"
Investment in R&D increased to £9.9 million (2001: £6.7 million),
in line with management’s strategy to accelerate progress 
on point-of-care project (codename: COLIBRI)
"
Loss for the full year was £2.2 million (2001: loss of £0.4 million), reflecting the 
increased R&D spend
"
Net funds increased to £14.7 million (2001: £9.5 million), which includes 
£8.0 million (net of expenses) successfully raised through a share placing
Operational
"
Homocysteine test volumes increased by 57.5% to 6.3 million tests, producing 
revenues of £7.4 million, an increase of 18.1% over 2001
"
Agreements signed with Dade Behring GmbH and Instrumentation 
Laboratory Inc. to develop, manufacture and supply homocysteine assays 
on their respective platforms
"
£8.0 million (net) funds raised to accelerate development of COLIBRI project
"
Food and Drug Administration (FDA) marketing approval for new Rheumatoid 
Arthritis (RA) marker for early detection of disease
"
Wholly-owned subsidiary, Medinor ASA, acquired the business and 
certain assets of Samarit Engros, further strengthening Axis-Shield’s 
distribution capacity in Norway
"
In early 2003, development of the technology for the first automatable 
non-radioactive immunoassay for HoloTC, Axis-Shield’s patented new marker 
for the effective detection of vitamin B
12
deficiency 
"
Successful R&D day and site visit held in Oslo for analysts and investors
2002
2001
2002
2001 Overview
2002 revenues were £47.0 million compared
to £42.8 million in the previous year, an
increase of 9.7%. Gross profit margins
increased to 54.4% from 51.0% in 2001,
generating £25.6 million. Earnings before
interest, tax, depreciation and amortisation
(EBITDA) and before research and
development (R&D) were £10.7 million,
compared to £9.0 million in 2001. Overall
R&D spend was up by £3.2 million, from £6.7
million to £9.9 million, an increase of 48.6%
over the previous year. After taking account
of amortisation of intangibles arising from
acquisitions and of interest received, the loss
before tax in the second half of the year was
£2.0 million, with the full year showing a loss
of £2.2 million (2001: loss of £0.4 million). This
loss is in line with our expectations and is a
result of our forecast increased R&D spend.
The increase in R&D expenditure reflects our
stated objective to achieve significant
penetration in the growing point-of-care
(PoC) market with our new COLIBRI platform.
Cash flow remains strong and our net funds
at the year end were £14.7 million compared
to £9.5 million at the end of 2001.
Our strategic goals are to identify and patent
novel markers in key areas of medical need,
to demonstrate their clinical utility,
particularly in primary healthcare and
disease management, and to offer test
formats suitable for our partners with global
instrument platforms and ultimately for our
own PoC portfolio. We anticipate that the
growing demand for near patient testing will
create significant opportunity in the PoC
sector, which is currently not dominated by
any of the major multinational IVD 
companies. Our existing PoC platform
(NycoCard) does not offer sufficient flexibility
for menu extension, particularly for our own
unique markers and is not formatted for
mass acceptance in the US market. The new
COLIBRI platform, due for launch in 2004, will
be suitable for use in the USA and will 
have the capability to run a wide variety 
of different tests, using both chemical and
immunoassay technology. This new system,
together with our already strong position 
in the PoC testing market and our unique
patent protected markers, will give us the
opportunity to become a major supplier of
products to this high growth segment. It 
will also afford an opportunity to firmly
brand the Axis-Shield name in point-of-
care diagnostics.
A key difference between Axis-Shield and
other emerging healthcare companies is the
strong cash flow from our existing profitable
operations which allows us to fund our R&D at
levels which are substantial compared with our
turnover, without depleting our cash reserves.
Where we see attractive opportunities to make
additional investment which we cannot fund
from our recurring revenues, we finance these
separately to avoid weakening our strong
Balance Sheet. It is for this reason we
successfully completed a share placing to 
raise £8.0 million (net) in April 2002 which has
provided the incremental finance we needed
to accelerate the exceptional opportunity for
COLIBRI in near patient testing.
Operating Highlights
Laboratory Division
Homocysteine remains our key value driver.
Sales have continued to increase, and in
2002, they amounted to £7.4 million,
compared to £6.3 million in 2001, an increase
of 18.1%. However, volumes increased
substantially by 57.5% to 6.3 million tests and
this is partly as a result of one of our major
customers, Abbott, promoting the tests on its
high throughput AxSYM system, rather than
the higher cost IMx platform. The number of
companies now marketing our assays has
increased, and this has expanded the total
available market for our products. The utility
of homocysteine as a general marker for a
number of different conditions is still being
developed and consequently we expect
further significant market growth over the
coming years. Our strong patent protection
for homocysteine testing covers virtually all
modern laboratory detection technologies,
which puts us in a strong position to benefit
from this market development.
The increasing awareness of homocysteine
has been aided by the volume of new
publications (950 in PubMed 2002). This
included several major publications,
particularly in the prediction of risk of
cardiovascular and neurodegenerative
disease. One of the most important of these
was the meta-analysis of 72 homocysteine
trials by David Wald et al in Southampton
and St. Bartholomew’s Hospital, London,
published in the British Medical Journal in
November 2002, which concluded that a
raised homocysteine level was a cause of
heart disease. In February 2003, the 
2 Axis-Shield plc
Annual Report and Accounts 2002
Chairman’s Statement
2002 has been another positive year of
growth for Axis-Shield. The Company is
now recognised as a leading developer
and manufacturer of innovative in vitro
diagnostic (IVD) products, with the capability
to adapt them to run on major laboratory
analysers. We are also investing in novel
technology to meet the growing demand 
for rapid and effective testing at the 
point-of-care, facilitating earlier disease
diagnosis and better patient management.
Nigel Keen
Non-Executive Chairman Axis-Shield plc
Annual Report and Accounts 2002
3
International Task Force for the Prevention of
Cardiovascular Disease published new
guidelines, which for the first time, included
measurement of homocysteine as one of its
recommendations.
We continue to forge strong OEM
relationships, primarily driven by demand 
for homocysteine testing. Agreements 
were signed with Dade Behring GmbH and
Instrumentation Laboratory Inc. during the
year for homocysteine assays on major
platforms marketed by these companies.
In September 2002, Bayer launched our
homocysteine technology on the ACS-180
and Centaur systems, and sales have been
promising, particularly on the higher
throughput Centaur platform.
There is growing clinical interest in our
patented marker for more effective detection
of vitamin B
12
deficiency, HoloTC. An Axis-Shield
sponsored symposium at the recent 
American Society of Haematology meeting 
in Philadelphia was attended by a capacity
audience of 300, and it concluded that better
methods of determining B
12
malabsorption,
particularly in the elderly, are urgently required.
The fact that we have now developed the
technology for an easy-to-use ELISA test for
HoloTC should significantly enhance sales
prospects and OEM partner interest.
Progress on automation of our assay for
Activated Factor XII continues to be made,
and we have invested in a further clinical trial
and assay validation programme at the
principal hospital in Stavanger, Norway to
accelerate the process.
Our mature autoimmune portfolio has been
significantly enhanced by the launch of our
anti-CCP test for early detection of
rheumatoid arthritis (RA), and its market
approval by the US Food and Drug
Administration. RA occurs in 1% of the world
adult population. Currently over 60 million
laboratory tests are performed annually to
diagnose this condition. The key to the
successful management of RA lies in early
diagnosis, especially with the recent
availability of new sophisticated drugs which
can arrest disease progression. Rheumatoid
Factor, the present test of choice for RA,
suffers from lack of specificity, and this means
there is a higher level of false positive results.
From the mounting published evidence, the
anti-CCP test from Axis-Shield meets the
need for a specific and sensitive marker for
detection of early RA.
During the year we removed a patent-
infringing competitor from the market for
our CDT test for alcohol abuse. Sales in 2002
increased by 21.7% to £1.7 million and we
continue to seek to develop a non-column
automatable assay for this marker in order to
further develop this market.
Point-of-care (PoC) Division
Sales for the PoC Division showed a small
increase to £16.5 million, compared to £16.0
million in 2001. This low level of growth
reflected the limited product range available
on our ageing NycoCard system, together
with a lower incidence of flu in 2002
affecting sales of our lead product, NycoCard
CRP . However, sales of NycoCard HbA1c, one
of our newer, proprietary tests which is used
to monitor long-term glucose control in
diabetics, were encouraging, at £2.4 million,
a 60% increase on 2001 sales.
Within the business, we have made
considerable progress in the development 
of our new point-of-care system, and 
we undertook a successful fundraising of 
£8.0 million (net) to accelerate its
commercialisation. The funds were primarily
directed towards the one-off costs of external
instrument and cartridge development and
capital investment in assembly lines. As
outlined in the half year statement, the focus
on the PoC programme has increased the
Company’s R&D actual and projected costs 
for 2002 through 2004. However, we anticipate
strong revenues from the PoC system post
launch, with significant impact on overall
profitability in the medium term.
The PoC COLIBRI project remains on schedule
for launch in 2004. A laboratory prototype 
has demonstrated that the challenging
performance targets we have set ourselves
are achievable. We have reached agreement
with partners for the production of the
instrument and cartridges to our exacting
specifications, and believe both organisations
will deliver on schedule. The COLIBRI platform
will offer full automation as well as provide
the opportunity for a wide menu of tests
including those for which we hold a
proprietary position. The concept is designed
to meet the US CLIA-waiver requirements,
with an ease-of-use allowing us to target the
doctor’s office, our principal point-of-care
market in the USA. We are confident that our
new system will meet market expectations
and achieve commercial success in a global
marketplace estimated to be worth in excess
of $4 billion, and that we will have a branded
platform which will allow us to offer our
patented tests at the point-of-care. 4 Axis-Shield plc
Annual Report and Accounts 2002
Chairman’s Statement continued
Direct Distribution
Our direct distribution division sells both
Axis-Shield and third party products,
through Medinor in the Nordic Region and
Axis-Shield UK in the United Kingdom.
Medinor successfully integrated Samarit
Engros AS, a regional Norwegian distributor
acquired in September 2002. This has
strengthened our coverage in the south west
of the country. Medinor continued to improve
its gross margin in Norway and expanded its
product portfolio in the other Nordic
countries. Business in Norway and Finland
saw increasing turnover and market share.
In the UK, the team has been very successful
with the distribution of near patient markers
and there is a constant focus on expanding
and replacing the product portfolio with
more competitive products.
Research and Development
The restructuring of R&D has worked well.
The laboratory and PoC operating units have
taken responsibility for their own near-
market projects and Erling Sundrehagen
heads up an exploratory research group to
develop longer term projects for the Group.
A number of patents have been filed and
several new projects are now in the pipeline.
Additionally, we are working on a number of
external projects with organisations such as
Abbott and Dade Behring.
We announced a further agreement with
Glasgow University in September 2002 which
secured rights to patents held by the
University relating to homocysteine
measurement. This strengthens our position
in non-chromatographic homocysteine
detection and should allow us to offer a
wider menu of assays to potential licensees.
Our relationship with OEM partners
continues to grow as a result of the high
quality of our products. We are developing
testosterone and brain natriuretic peptide
(BNP) AxSYM kits for Abbott. We believe the
BNP assay, which is planned for launch later
in 2003, is likely to be particularly successful,
as a result of the considerable interest in the
use of BNP to diagnose heart failure.
Communication
As part of our objective to keep the
investment community informed of the
scope and opportunities for our business, we
held our third annual analyst teach-in during
January 2003, this time in Oslo. The event
was successful and we see this as an
important means of communicating our
message going forward. We are also mindful
of the power of the internet to facilitate both
professional and lay education and have
therefore sponsored the creation of separate
websites, under independent editorial
control, at www.homocysteine.net and
www.HoloTC.net.
Outlook
In the next financial year, we look forward to
continued growth in the Laboratory division
as the utility of our patented markers such as
homocysteine, HoloTC and anti-CCP becomes
increasingly recognised. We expect to build
further OEM relationships and strengthen
existing ties as we seek to ensure our
proprietary markers are available on the
widest possible range of instrumentation
platforms commonly in use.
We will continue to develop our new PoC
system in readiness for launch in 2004. As our
core operations are profitable, we have the
resources to make the investment necessary 
to achieve our launch plan for the COLIBRI
platform. In vitro diagnostic testing is
becoming increasingly recognised as a major
factor in efficient primary healthcare and the
ability to produce results at the time of
patient consultation is seen as an important
factor in the optimisation of patient and
disease management. We expect Axis-Shield
to achieve substantial prominence in this
vital and expanding sector, and as revenues
grow from this investment and our other
businesses we aim to deliver significant
increasing shareholder value.
Nigel Keen
Non-Executive Chairman,
31 March 2003 Our strategic goals remain to identify and patent
novel markers in key areas of medical need and 
to demonstrate their clinical utility, particularly in 
primary healthcare and disease management.
- Extensive portfolio of proprietary analytes
- Many patents filed for future products
- Leader in point-of-care technologies
- OEM alliances with major global companies
- Exploiting advances in genomics and proteomics
- Attracting many ideas from academia
- Driving consumer education via the internet
- Seeking synergies with therapeutics
Corporate Strategy
Axis-Shield plc
Annual Report and Accounts 2002
5 6 Axis-Shield plc
Annual Report and Accounts 2002
Chief Executive’s Report 
Introduction
I am pleased with the progress we achieved
in 2002, with generally good growth in all our
strategic business areas. We have recently
disclosed our plans for our new generation
point-of-care platform (code-name COLIBRI,
though this will not be its final brand name)
to potential partners and distributors, and we
have shown them a prototype display model.
The compact and elegant appearance has
impressed everyone and the proposed
performance characteristics and the menu of
markers appear to meet market needs. We
will also include our own proprietary markers
on this platform as their clinical utility
becomes accepted. This will be an important
element of the system as diagnostic testing
in general moves nearer the patient for more
efficient disease management.
Laboratory Diagnostics Division
The increasing utility of homocysteine and 
our strong patent protection covering virtually
all modern laboratory detection technology
continues to be reflected in growing demand
for our assays, aided during the year by several
major publications. We do not know the exact
number of scientific papers including
homocysteine that were published during
2002, but in the PubMed database alone 950
new publications are listed.
Major homocysteine studies published
include a report from O’Callaghan and
colleagues in Dublin showing multiplicative
risk of heart disease in smokers with raised
homocysteine levels and work from
Switzerland demonstrating improved
coronary blood flow when patient
homocysteine levels were reduced. Perhaps
the most significant publication was the
meta-analysis of 72 homocysteine trials by
David Wald et al in Southampton and St.
Bartholomew’s Hospital, London, published
in the British Medical Journal in November
2002, which concluded a raised 
homocysteine level was a cause of heart
disease. The authors state that “a modest
lowering of homocysteine concentrations by
3mmol/l, achievable by increasing folic acid
intake, would reduce the risk of ischaemic
heart disease by 16%, deep vein thrombosis
by 25% and stroke by 24%” .
In February 2003, the International Task
Force for the Prevention of Cardiovascular
Disease published new guidelines which,
for the first time, listed homocysteine as 
an important emerging risk factor,
recommending its routine measurement 
in certain groups, including smokers, and
those with a family history of CHD. This
group of international experts believe that
the cut-off for blood homocysteine should
be 12mmol/l, in contrast to the widely held
view that 15mmol/l should be the threshold
for mild hyperhomocysteinaemia, but in line
with new recognition of the insidious effects
of only slightly elevated homocysteine over
time. The recommendations also include a
treatment algorithm to lower raised levels
below the danger value. This task force
report will influence national guidelines
issued in each country which again should
lead to increased homocysteine testing.
Nearly all the current focus on homocysteine
testing is related to cardiovascular disease.
However, in February 2002, The New England
Journal of Medicine included an article by
Seshadri and colleagues from Boston
University School of Medicine, describing
data from the renowned Framingham study
indicating raised homocysteine was a strong
independent risk factor for the development
of dementia and Alzheimer’s Disease. This
represents an additional substantial
potential market for homocysteine testing.
We have endeavoured to increase physician
awareness of the utility of homocysteine 
using various means of communication and
promotion and this has certainly resulted in
increased press interest. At the same time 
we have recognised the drive for self
maintenance of health, particularly in the
“worried well” , so we have sponsored the
development of a separate website for
homocysteine at www.homocysteine.net
The site is under independent editorial
control and is designed to update both
professional and lay users on the latest 
news and publications on this increasingly
important marker.
Homocysteine sales in 2002 reached £7.4
million representing around 6.3 million 
tests. Although the number of companies
now marketing our assays has increased,
there has been little price erosion and
cannibalisation, but rather an increase in the
total available market. We believe the utility
of homocysteine is being recognised and
expect further significant market growth
over the coming years.
The demand for homocysteine as a disease
marker and our comprehensive patent
protection has led to some attempts 
to develop competitor test systems.
However, we are ready to re-inforce 
our patent position in the courts if it
becomes necessary.
One of the factors associated with elevated
homocysteine is a deficiency of vitamin B
12
.
However it is now well recognised that
conventional testing for total B
12
levels will
often not detect deficiency of the vitamin,
particularly the insidious malabsorption 
seen in many elderly individuals. This is
because only 20% of vitamin B
12
is actually
biologically available. Scientists are now
recognising that measurement of this
available fraction, called holo-transcobalamin,
or HoloTC, is likely to provide a much better 
Axis-Shield is now recognised in our
industry as a modern successful company
with innovative and high quality products
and the ability to invent, develop and sell
unique solutions on both near patient
platforms and large high-throughput
laboratory systems.
Svein W F Lien
Chief Executive Axis-Shield plc
Annual Report and Accounts 2002
7
Key Clinical Areas
Effective risk assessment, diagnosis and patient 
monitoring in key areas of medical need.
Cardiovascular disease
In cardiovascular disease,
Axis-Shield is involved with two
exciting potential risk markers
–Homocysteine and Activated 
Factor XII (AFT).
Neurodegenerative diseases 
The vast amount of clinical 
research into homocysteine 
has also expanded its utility into
neurodegenerative diseases such as
dementia and Alzheimer’s disease.
Autoimmune diseases 
The autoimmune basis of major
diseases such as diabetes, multiple
sclerosis and rheumatoid arthritis
(RA) is becoming increasingly
recognised. Axis-Shield’s new 
anti-CCP test is a real breakthrough
in the early identification of RA.
Alcohol-related disease
During the last few decades,
alcohol-related disease has
increased substantially and is
estimated that up to 10% of the
western total population is misusing
alcohol. The CDT test is of major
utility in the identification of
alcohol abuse.
Diabetes
Axis-Shield provides a patented
testing technology for
glycohaemoglobin (HbA1c),
a well established analyte for 
long-term evaluation of blood
sugar control.
Infectious disease
Axis-Shield’s biggest product,
NycoCard C-Reactive Protein (CRP)
is an important diagnostic tool,
enabling physicians to differentiate
between viral and bacterial
infections to decide whether 
or not to prescribe antibiotics.
Vitamin deficiency
Malabsorption of vitamin B
12
is a
real problem, particularly in the
elderly. Axis-Shield’s new HoloTC
test is achieving recognition as a
more definitive way of assessing
B
12
status. 8 Axis-Shield plc
Annual Report and Accounts 2002
Chief Executive’s Report continued
assessment of a patient’s B
12
status. Professor
David Smith and his group at Oxford
University have studied this area for 
many years and now believe around 
15% of the elderly may have metabolic B
12
deficiency. He considers insufficient B
12
leads to neuropathies, cognitive deficit and
depression, and that this is clinically very
significant, given that there are 150,000 
new cases of cognitive impairment
(dementia) each year in the UK alone.
Dementia is defined as the global
impairment of memory, intellect and
personality, and about 70% of dementia
cases are classified as Alzheimer’s disease.
The incidence of dementia doubles every 
five years over the age of 60, and it affects
about 6% of people over this age, with about
five million cases in Europe (1995). By 2030 it
is predicted there will be 110 million people
over 60 in Europe, and around 10 million 
will suffer from dementia. We believe that
our test for HoloTC will not only impact the
$85 million global B
12
market, initially as an
aid to the interpretation of conventional
total B
12
measurement, which often
produces indeterminate results, but also
become important in screening of the
elderly. The development of a separate
website has also been sponsored for this
marker at www.HoloTC.net. Homocysteine 
is now also showing utility in this area,
in addition to its relevance in CVD, and 
David Smith has shown that elevated
homocysteine in the normal elderly is
associated with lower cognitive scores and
thinner medial temporal lobes in the brain,
both classical precursors to dementia. We
look forward to continued evidence of the
usefulness of both homocysteine and
HoloTC in this major disease area.
Sales of our autoimmune product range
declined slightly during the year to 
£2.2 million against £2.4 million in 2001, a
decrease of 8.2%. As reported at the half year,
this is largely a consequence of our biggest
OEM customer acquiring an organisation
producing its own autoimmune test kits.
The introduction of our new test for
rheumatoid arthritis (detecting antibodies 
to cyclic citrullinated peptide, or anti-CCP),
with FDA marketing approval, should
produce increased revenues going forward.
Acceptance of this new assay has been 
very positive and the data being generated
confirm its superiority to the current test of
choice for rheumatoid arthritis, rheumatoid
factor, which is known to produce false
positive results.
Our test for alcohol abuse, %CDT, achieved
an increase of 21.7% on 2001 revenues, with
sales of £1.7 million. We believe the future
success of this product will be dependent on
the development of a non-column method
of detection, and we continue our efforts to
develop such a technology. First results 
from an ongoing US clinical trial from the
University of Wisconsin, examining how 
CDT might help to detect high risk drinking
in 799 primary care patients being treated
for type 2 diabetes and hypertension, have
shown that routine CDT testing will assist
clinicians in identifying patients who are
alcohol abusers, and to institute appropriate
treatment as soon as possible.
In August 2002, Sangui Biotech Inc agreed 
to stop selling a competitive CDT product,
which we believed infringed our patent.
COL1A1 is our genetic test for detection of
predisposition to osteoporosis and bone
fracture. The kit identifies a mutation in 
one of the genes governing the metabolism
of collagen, the building block of bone.
Progress in the USA has been delayed by the
need for an internal control for the US
market but this technical issue is nearing
resolution and we look forward to strong 
US demand for this assay, which represents
probably the strongest genetic link to
osteoporosis in the literature at this time.
Our infectious disease range is now
principally confined to syphilis OEM assays
as a result of our divestment of elements of
this non-core product area during 2001.
Point-of-care (PoC) Division
Sales for the Group as a whole showed
modest growth of 3.5% to £16.5 million.
This illustrates the need to build on our PoC
position and our current mature NycoCard
product range by the introduction of the
new COLIBRI system. Currently close to
10,000 NycoCard instruments have been
placed in more than 40 countries worldwide.
This strong market position will be
invaluable when we launch COLIBRI.
The COLIBRI project remains on schedule for
first phase launch in 2004. The development
programme has resulted in significant third
party development costs, relating
particularly to the engineering of the
instrument and cartridge.
This third party cost, which is additional to
our normal R&D spend, is estimated to be 
£6 million of which £2.4 million was paid in
2002, with slightly more expected for 2003.
All our R&D costs, including the COLIBRI 
R&D costs, are expensed in our Profit and
Loss account rather than being deferred.
This means that we have no capitalised 
R&D costs in our balance sheet.
Once the instrument and cartridge have
been developed, their manufacture will be
subcontracted; however, we will assemble
and fill the cartridges in-house, and of course
100
80
60
40
20
0
99 98 00 01 02 03 04 05 06 07
No. of tests (millions)
Year
Projected Homocysteine test volumes
Growth at 40%
Actual
Growth at 70%
1000
800
600
400
200
0
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
92 94 96 98 00 02
No. of PubMed Abstracts
No. of tests sold
Year
Homocysteine testing growth and published papers
PubMed Abstracts
Number of tests sold Research & Development
Our research & development comprises some 
70 scientists based in Dundee, Scotland and 
Oslo and Bodø, Norway.
Axis-Shield plc
Annual Report and Accounts 2002
9
Exploratory and 
Early Phase Research
This key group is headed by our
CSO, Erling Sundrehagen, and is
tasked with identifying and
patenting new markers and
technologies for the future.
Point-of-care
Our scientists in Oslo are working
hard on delivering the new COLIBRI
platform for 2004, together with the
first wave of analytes. The sense of
excitement is palpable as we near
the launch of what will be a real
breakthrough in diagnosis at the
point of care.
Laboratory Division
Work continues in Oslo and Dundee
to launch our new markers and
improved methods of detection 
of existing analytes. The division 
is particularly concerned with
adapting our novel analytes to the
automated laboratories analyses of
the large global IVD companies. 10 Axis-Shield plc
Annual Report and Accounts 2002
Chief Executive’s Report continued
manufacture the reagents required. This will
involve special purpose-built filling lines,
a semi-automated version which will be
delivered Q4 2003 and installed for production
to begin Q1 2004. This line will have a capacity
of up to three million cartridges per annum.
The planned automated filling line will have 
a capacity of around 20 million cartridges 
and delivery is scheduled for Q4 2004, with
validation for production use by Q1 2005. The
cost of the filling equipment will be capitalised
and written off over its useful life.
Laboratory prototypes of the COLIBRI system
have demonstrated that it is possible to
achieve the ambitious performance targets
we believe are necessary for commercial
success. The platform will offer full
automation as well as provide a wide menu
of tests, including tests for which we hold a
proprietary position. The concept is designed
to meet the US CLIA-waiver requirements,
which will enable us to penetrate the total
point-of-care market segment in the US,
including the doctor’s office.
The system will represent a breakthrough in
the field of point-of-care testing and offers:
• a compact, reasonably priced
instrument platform
• a wide menu of tests 
• very low volume whole blood samples
• quick results (3-5 minutes for most tests)
• automation, walk-away system
• a flexible user interface
• data connectivity
We believe the platform will generate much
interest in point-of-care sites throughout
the world.
Direct Distribution
Our direct distribution units are
independent arms-length units that not only
focus on selling our in-house products but
also on achieving individual profitability.
An important aspect of this is the selling of
third party products. At present two thirds 
of revenues are derived from distribution
agreements for non Axis-Shield products,
and this is therefore an important part of 
the business of these units. As a result both
Medinor and Axis-Shield UK can offer their
customers total solutions and in addition
build important business relationships with
other companies in the market.
Sales in the Nordic countries through our
Medinor subsidiary increased by 11.4%,
from £18.5 million in 2001 to £20.6 million 
in 2002. Distributed third party products
in these countries constituted £13.9 million
of this total, up from £11.8 million in the
previous year. This increase was helped 
by the acquisition of the business of the
regional Norwegian distributor Samarit
Engros in September 2002.
In the UK, we achieved total sales of 
£2.0 million, compared to £1.5 million 
in 2001. This included £1.0 million in sales 
of distributed third party products.
Our Plasmatec subsidiary, selling largely 
low technology IVD products to developing
countries, increased sales by 6% to
£1.6 million (2001: £1.5 million), with
particularly promising business from
Middle East tenders.
R&D Activities
By the start of the new millennium, medical
science had mapped out the human 
genome, which encodes for body proteins
and protein variants. These proteins and
protein variants control body function,
steering conception, growth, maturation,
disease, and ultimately the decline and end
of every human life. The science of protein
expression of the genes is today often called
proteomics. Axis-Shield embarked on
research in this area in the mid-1980s, and
2002 was the most successful year for our
R&D in this field to date.
The COLIBRI project brings protein testing 
to the point of care. Automated testing of
panels of protein and protein variants with
high quality, high speed and appropriate
ease-of-use is not readily available in PoC
markets such as the doctor’s office. Axis-
Shield’s unique position in protein variant
testing was the driving force behind our
strategic move into this emerging area.
Two inventions have facilitated this. The
discovery of the vertical filtration gold
colloid technology made in the former
Nycomed Diagnostics Division (acquired by
Axis-Shield in 1999) and the invention of 
a camera-chip monitored micro-fluidics
system. Both are now key elements of the
COLIBRI system.
The COLIBRI platform will bring current
PoC products to the market in upgraded
formats and also allow menu extensions
with additional new markers. Axis-Shield
holds patent positions and has developed
technologies enabling us to offer tests 
for prostate specific antigen (PSA),
homocysteine, high-sensitivity C-reactive
protein (hsCRP) and other novel markers in
addition to markers already available at the
point of care.
10
8
6
4
2
0
USA
1995
2030
EU Japan
Millions
UK
Estimated cases of dementia
5
4
3
2
1
0
Serum folate
RBC folate
Vitamin B 12
Odds ratio
Odds of developing Alzheimer's 
disease in the elderly
(associated with abnormal
levels of these markers)
Homocysteine Axis-Shield plc
Annual Report and Accounts 2002
11
Sales Divisions
We develop innovative, proprietary in vitro
diagnostic products and we deliver through 
our three sales divisions.
OEM’s
We have ongoing sales
or collaborations with 
all the major IVD
companies
Axis-Shield plc
Laboratory Division
Dundee
Oslo/Bodo
Plasmatec
PoC Division
Oslo
Direct Sales Divisions
Medinor
Axis-Shield UK
Laboratory Diagnostics
Direct Sales
Distributors
OEM’s
PoC Diagnostics
Direct Sales
Distributors
Own and third party
products sold in
Nordic countries and
the UK 12 Axis-Shield plc
Annual Report and Accounts 2002
Chief Executive’s Report continued
The breakthrough in our work to develop 
a specific HoloTc binder represents a
significant step for us – we anticipate that
we shall now need about two years before
market introduction of this non-radioactive
automatable immunoassay format.
During 2003 we will decide on which
instrument platform this product should
be launched initially.
Activated Factor Twelve (AFT) is a promising
marker for risk assessment in cardiovascular
disease. It has entered a new phase of
clinical research with a clinical trial in
Rogaland University Hospital in Stavanger 
in Norway, focusing on identifying the key
processes involving AFT in the development
of cardiovascular disease. Axis-Shield
commitment to AFT and its availability in
automated formats is unchanged, and we
expect to be able to report further progress
in this area during 2003.
Work on our marker for Carbohydrate
Deficient Transferrin (%CDT), used to
diagnose health-damaging alcohol
consumption, is focused on the creation of
an automated method which will enable us
to bring this marker out of highly specialised
laboratories to central routine labs and their
automated platforms. A new patent for this
technology was obtained in 2002 but so far
we have not been able to develop a working
prototype.
We continue to search for new markers of
cardiovascular disease. During the last five
years coronary heart disease has been
shown to have important inflammatory
components. Insufficient circulation of
blood leads to inflammation, and this is
often the first sign of disease. Axis-Shield
made discoveries in this area in 2002 and
filed a patent application involving testing
for impaired circulation, and has started 
to develop products for the management
of such disease.
Collaborations with our OEM partners on
new diagnostic products has always been 
a major part of our business. During 2002 
we worked with Dade-Behring and
Instrument Laboratories – two of the world’s
leading diagnostic companies – to develop
new homocysteine testing products to
increase our market penetration in this area.
We signed a new contract with Glasgow
University to strengthen our position in
homocysteine detection technology. With
Abbott Laboratories we are developing 
a product for measuring blood brain
natriuretic peptide (BNP), a new marker
for diagnosing pump failure in the heart,
and a kit for the detection of blood
testosterone.
Outlook
I believe that our unique combination 
of patented novel markers in key areas of
clinical need and our strategy of developing
a branded diagnostic system for the point 
of care represent a winning formula for 
the future prosperity of Axis-Shield. I also
consider that we have a strong management
team which will deliver our ambitious
objectives and by this time next year 
we will have seen further success with
homocysteine and our other laboratory
products, and that the COLIBRI platform 
will be close to launch. I look forward with
confidence to a challenging and profitable
future for our Company.
Svein W F Lien
Chief Executive,
31 March 2003
Clean room
2002 was a successful year of consolidation
and growth for Axis-Shield, with all divisions
performing well, and the PoC Division group
moving closer to the launch of COLIBRI.
‘COLIBRI’
Point-of-care system Axis-Shield plc
Annual Report and Accounts 2002
13
Partnerships
The laboratory market is dominated by a handful 
of major companies. We have developed relationships
with these key players in order to place our tests 
on their instrument platforms.
1  Roche/BMC  
    ($3,780 million)
4  Bayer/Chiron ($1,880 million)
5  Beckman/Coulter  
($1,535 million)
6  Dade/Behring ($1,250 million)
7  Beckton Dickinson ($1,000 million)
8  bioMérieux ($865 million)
9  Bio-Rad ($818 million)
2  Abbott  
    ($2,932 million)
3  J & J/Ortho 
    ($2,000 million)
The leading IVD companies in 2001(Revenue) 14 Axis-Shield plc
Annual Report and Accounts 2002
Financial Review
EBITDA before R & D increased by 
18.5% to £10.7 million.
EBITDA
Earnings before interest, tax, depreciation
and amortisation (EBITDA) before research
and development (R&D) have increased by
18.5%, from £9.0 million to £10.7 million.
R&D expenditure has increased substantially
to £9.9 million (2001: £6.7 million) including
expenditure of £5.4 million on our PoC
COLIBRI project, of which £2.4 million related
to external expenditure. EBITDA after this
increased R&D was £0.8 million (2001: £2.3
million). The continuing positive EBITDA was
achieved after a 48.6% increase in R&D
expenditure.
Cash Flow
The positive EBITDA also resulted in strong
cash flow from operations. In addition, in
April 2002, we raised £8.0 million in net
funds through the placing of 2.3 million
ordinary shares, to fund the non-recurring
expenditure associated with the
development of our new point-of-care
instrument platform. We also repaid the
vendor loan note, £0.9 million associated
with the acquisition of the point-of-care
Diagnostic Division from Nycomed in
February 2000. Taking these into account,
together with net interest received of £0.4
million (2001: £0.3 million), net capital
expenditure of £2.2 million (2001: £1.1
million), acquisition expenditure of £1.0
million (2001: £nil) and increased working
capital requirements, we have increased our
net funds by £5.3 million since 31 December
2001. At 31 December 2002, our net funds
position was £14.7 million.
Turnover 
Turnover increased by 9.7% to £47.0 million
(2001: £42.8 million). In the Laboratory
Division, revenues from homocysteine
continued to increase to £7.4 million 
(2001: £6.3 million). This 18.1% jump in
revenues reflects increasing demand for
homocysteine testing in the marketplace
with a 58% rise in end user tests during the
year. Sales increased by 21.7% to £1.7 million
(2001: £1.4 million) in our alcohol-related
disease marker, CDT, and the newly launched
Abbott thyroid markers Anti-Tg and TPO
contributed revenues of £1.1 million (2001:
£nil). In addition, our PoC Division returned a
small increase in sales to £16.5 million (2001:
£16.0 million). This was lower than expected
due mainly to lack of demand for the CRP
test, reflecting the lower incidence of flu in
Europe over the last year. Our infectious
disease and autoimmune ranges suffered a
slight decline in revenues due to increased
competition. Finally, we increased our Group
sales in Europe by 4.7%, in Rest of World by
7.2% and in North America by 36.1% where
sales were £9.4 million compared to £6.9
million in 2001.
Gross Margin
The gross margin increased significantly to
54.4% with a gross profit of £25.6 million
(2001: gross margin 51.0%; gross profit: £21.8
million). This increase reflects the efficiency
of higher volumes of products passing
through our production process and the
growth in the revenue stream from higher
margin products.
Research & Development
As predicted, we continued to invest heavily
in R&D and our spending in 2002 rose to
£9.9 million from £6.7 million the previous
year – an increase of 48.6%. R&D
expenditure comprises all development
costs, internal and external, of new projects
both in the Laboratory division and in the
PoC division. However, as a result of the
acceleration of the COLIBRI programme
within PoC, the majority of the increased
Turnover by Product Area
2002 2001
Total Total Change
£000 £000 %
1 Point-of-Care 16,531 15,970 +3.5
2 Homocysteine 7,396 6,262 +18.1
3 Alcohol Related Diseases 1,685 1,385 +21.7
4 Cardiovascular 220 219 +0.5
5 Infectious Disease 2,710 2,855 -5.1
6 Autoimmune 2,158 2,350 -8.2
7 Anti-Tg and TPO 1,082 – –
8 Other 277 767 -63.9
32,059 29,808 +7.6
Distribution of third
party products 14,906 12,985 +14.8
46,965 42,793 9.7
1 Point-of-Care  
   (£16.5 million)
2 Homocysteine (£7.4 million)
3 Alcohol Related Disease  
(£1.7 million)
4 Cardiovascular (£0.2 million)
5 Infectious Disease (£2.7 million)
6 Autoimmune (£2.2 million)
7 Anti-Tg and TPO (£1.1 million)
8 Other (£0.3 million)
Axis-Shield Products Axis-Shield plc
Annual Report and Accounts 2002
15
R&D spend for the full year was in this 
area. There were significant third party
development costs specifically relating to the
engineering of the instrument and cartridge.
All these costs were expensed to the profit
and loss account. The third party costs which
relate to COLIBRI instrumentation and
cartridge development and which are
additional to our normal R&D spend,
amounted to £2.4 million (2001:
£0.4 million).
Operating Expenses
Other operating expenses increased to 
£14.9 million (2001: £12.8 million).
Depreciation and amortisation of intangibles,
including goodwill, increased to £3.4 million
(2001: £3.1 million) and net interest received
increased from £0.3 million to £0.4 million,
leaving an increased loss before taxation of
£2.2 million compared to £0.4 million in 2001.
Balance Sheet
The Group’s fixed assets at 31 December 2002
were £24.5 million (2001: £21.8 million), which
consisted of tangible assets of £6.8 million,
intangible assets of £17.2 million and other
investments of £0.5 million (primarily relating
to our investment in A/C Diagnostics LLC).
The intangible assets principally relate to the
patents, trademarks and goodwill acquired
when the PoC division was purchased in
February 2000. Stocks and debtors have
increased to £9.4 million (2001: £7.5 million)
and £9.3 million (2001: £7.4 million)
respectively, while current creditors, which 
no longer include the Nycomed vendor loan
note, have increased to £10.0 million (2001:
£9.7 million). Cash increased to £14.8 million
(2001: £10.4 million) which includes the £8.0
million (net) raised by placing 2.3 million
ordinary shares. Our shareholders’ funds now
stand at £47.5 million (2001: £36.7 million).
Capital Structure
Axis-Shield plc has a simple capital structure
and the only borrowings within the Group
arise from assets acquired under hire
purchase finance. At the end of the year, the
Group’s cash balances were held by the banks
in the UK and Norway. The main exposure of
the Group to foreign currency transactions
lies in the US dollar income stream arising
from product sales and royalties. There is also
an exposure in terms of Scandinavian based
operations and net assets located there. The
net effect of the changes in currency
exchange rates during the year resulted in 
a net charge to the Profit & Loss Account 
of £474,000 (2001:£36,000). The profit on
translation of movements in the Balance
Sheet items together with the difference
between year end and average exchange
rates on the Profit & Loss Account has
resulted in a £4,977,000 credit being taken 
to reserves (2001: £64,000).
Shareholder Structure
The principal shareholders of the Group
reside in the UK and Norway. The table 
below gives a geographical breakdown 
of shareholders by location.
The Company has a broad range of
shareholders, both private and institutional.
Both large and small shareholders are
represented in the 9,629 total of shareholders
in Axis-Shield plc. The table gives an
indication of the numbers of shareholders
and the range of shares which they hold.
Paul Garvey
Finance Director
31 March 2003
Analysis of Shareholders at 28 February 2003
Size of shareholding No. of shareholders No. of shares
Range UK Norway Total % UK Norway Total %
1 - 2,500 6,796 1,620 8,416 87.40 3,049,951 1,336,271 4,386,222 9.04
2,501 - 10,000 345 499 844 8.77 1,584,689 2,658,154 4,242,843 8.74
10,001 - 50,000 118 117 235 2.44 2,439,201 2,287,186 4,726,387 9.74
50,001 - 100,000 40 15 55 0.57 2,981,154 1,098,149 4,079,303 8.41
100,001 - 200,000 20 12 32 0.33 2,915,351 1,992,471 4,907,822 10.11
200,001 - 500,000 17 12 29 0.30 4,707,491 3,921,273 8,628,764 17.78
500,001 - 1,000,000 10 1 11 0.11 6,932,317 697,163 7,629,480 15.72
1,000,001 - 1,387,085 5 0 5 0.05 5,485,538 0 5,485,538 11.30
over 1,387,085 1 1 2 0.02 1,847,016 2,599,500 4,446,516 9.16
7,352 2,277 9,629 100.00 31,942,708 16,590,167 48,532,875 100.00
Europe
North America
Rest of World
2002
2001 0
5
10
15
20
25
30
35
£m
Geographical Breakdown of Turnover 
2002 2001
Total Total
£000 £000
Europe 33,329 31,846
North America 9,365 6,879
Rest of World 4,361 4,068
Total 46,965 42,793
Total Turnover
£47m 16 Axis-Shield plc
Annual Report and Accounts 2002
Board of Directors
Nigel has over twenty years’ experience of 
bio-tech involvement working with both listed
and unlisted companies. He is Chairman of the
Compensation and Nomination Committees
and is a member of the Audit Committee.
Nigel is Chairman of The Laird Group plc,
Oxford Instruments plc and Deltex Medical
Group plc.
Nigel J Keen (56) MA, FCA
Non-Executive Chairman
(Independent)
Svein is a Master of General Business from 
the Norwegian School of Management,
(Siviløkonom) BI. From 1990 to 1993, he was
Director of Teknoinvest, a Norwegian venture
company whose shareholders were major
shareholders in Axis. He became a director of
Axis in 1990 but stood down from the board
when appointed President of Axis in June
1993. He became Joint Managing Director of
Axis-Shield plc when the companies merged
in May 1999 and was appointed Chief
Executive Officer in November 1999. Svein 
is a member of the Nomination Committee.
Svein W F Lien (48) MBA
Chief Executive Officer
Paul is a Chartered Accountant who has
spent the majority of his working life in
industry. He also has a BBS from Trinity
College Dublin. Paul took up the position of
Finance Director with Axis-Shield plc in July
2000 having left Lindsay Holdings Ltd, a
business service group based in Kilmarnock,
Scotland, where he was Group Managing
Director from 1995. Prior to that Paul held
positions as Finance Director and Managing
Director of two other industrial groups.
Erling is a medical doctor, a Master of Science
in nuclear chemistry and has a PhD in
Immunology. He founded Axis in 1985 and
has twenty years of experience within clinical
chemistry and biochemistry. He has received
various international awards for his research
in clinical chemistry and is experienced in
international patenting.
Paul M Garvey (50) BBS FCA
Finance Director and 
Company Secretary
Erling M H Sundrehagen (51)  
MD, MSc PhD
Chief Scientific Officer
Ian joined Axis-Shield from GlaxoSmithKline
(GSK) where he was Vice President –
Pharmacogenetics and Applied Diagnostics.
At GSK, he was responsible for the delivery 
of pharmacogenetic tests, as well as novel
diagnostic, prognostic and surrogate marker
tests used in targeting GSK’s medicines.
Prior to joining GSK, he held management,
marketing, business development and R&D
positions with Abbott Laboratories, Celltech
and Amersham, at each of which he gained
significant experience in the field of
diagnostics.
Ian D Gilham (43) BSc, PhD
Group Managing Director,
Laboratory Division
As a Dundee based director involved in Shield
since its formation in 1982, Gordon provides
on-the-ground support. He has considerable
experience of the small and medium-sized
sector, particularly in Scotland where he is
currently non-executive chairman of DC Heat
Ltd, Justcreek Ltd, Librae Ltd and WL Ventures
Group Ltd. Gordon is Chairman of the Audit
Committee and a member of the
Compensation and Nomination Committees.
Gordon McAndrew (62) BSc, MBA
Non-Executive Director
Erik joined the Shield Board in 1997. He was
formerly also Chairman of Axis. He was
previously Divisional Vice President and
General Manager of Europe, Africa and
Middle East of Abbott Diagnostic Division.
He also serves as a non-executive director 
of ALPharma Inc., Qiagen NV, Radiometer AS,
Epicept Inc and Meditron A/S. Erik is the
senior non-executive director and serves
on the Audit, Compensation and Nomination
Committees.
Tarald is the Chairman of Glastad Holdings
Ltd, a private investment company and also 
a shareholder in Axis-Shield. He has more
than 30 years experience in investing in
private equity technology companies. He 
is a director in Bergshav Holding A/S and
several private investment companies.
Tarald serves on the Compensation and
Nomination Committees.
Erik Hornnaess (65) BA, MBA, PMD
Senior Non-Executive Director 
(independent)
Tarald A Glastad (60) BSc
Non-Executive Director Axis-Shield plc
Annual Report and Accounts 2002
17
Chairman (Non-Executive)
Nigel J Keen
Chief Executive Officer
Svein W F Lien
Finance Director
Paul M Garvey
Chief Scientific Officer
Erling M H Sundrehagen
Group Managing Director,
Laboratory Division
Ian D Gilham
Non-Executive Director
Tarald A Glastad
Non-Executive Director
Erik Hornnaess
Non-Executive Director
G Gordon McAndrew
Principal Place of Business and 
Registered Office
The Technology Park, Dundee DD2 1XA
Corporate Financial
Advisers/Stockbrokers
Nomura, Nomura House,
1 St Martin’s-Le-Grand,
London EC1A 9NP
Carnegie ASA, Stranden 1, Aker Byrgge,
Postboks 684 Sentrum
NO-0106 Oslo, Norway 
Corporate Legal Advisers
Shepherd & Wedderburn WS, 155 St
Vincent Street, Glasgow, G2 5NR 
Thommessen Krefting Greve Lund AS,
Haakon VII’s g 10, PO Box 1484 Vika,
0116 Oslo, Norway
Registered Auditors
PricewaterhouseCoopers LLP ,
Kintyre House, 209 West George Street,
Glasgow G2 2LW
Bankers
Bank of Scotland, 2 West Marketgait,
Dundee DD1 1QN
Registrars and Transfer Office
Lloyds TSB Registrars Scotland,
PO Box 28448, Finance House,
Orchard Brae, Edinburgh EH4 1WQ
Norwegian VPS
Nordea Bank Norge ASA
VPS-Utsteder
Postboks 1166 Sentrum,
N-0107 Oslo, Norway 
Registered in Scotland
Number 145200
Corporate Directory 18 Axis-Shield plc
Annual Report and Accounts 2002
Remuneration Report
Introduction
All matters relating to executive remuneration are determined by the Compensation Committee, a sub-committee of the Board
of Directors. However, the directors believe that the concept of a unitary board is important, and hence include this report on
Executive Remuneration as an integral element of the overall Report and Accounts.
This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 which introduced new
statutory requirements for the disclosure of directors’ remuneration in respect of periods ending on or after 31 December 2002.
The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the
Board has applied the Principles of Good Governance relating to directors’ remuneration. As required by the Regulations, a
resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial
statements will be approved. The Company has voluntarily adopted the same practice for the last three years.
Compensation Committee
The Compensation Committee, which consists of the Chairman and the other three non-executive directors of the Company,
Gordon McAndrew, Tarald Glastad, and Erik Hornnaess, meets several times per year. As appropriate, the Committee may 
invite the Chief Executive Officer to participate in some of its discussions. The Company Secretary acts as secretary to the
Committee. No director plays a part in any discussion about his or her own remuneration. The Committee is responsible for
determining the terms and conditions of employment of executive directors. It is also responsible for considering management
recommendations for remuneration and employment terms of the Company’s staff, including incentive arrangements for bonus
payments and grant of share options.
The Compensation Committee’s decisions are made on the basis of rewarding individuals for the nature of jobs they undertake
and their performance therein. Proper regard is given to the need to attract and retain high quality, well-motivated staff at all
levels, to the remuneration being paid by similar companies, and to the fact that as a Scottish-Norwegian organisation there are
additional factors to be taken into account. The Committee receives advice from independent remuneration consultants and
takes into account the remuneration paid by companies of similar size, by other companies in the life-sciences sector and by
other locally based companies. In 2002 the Committee appointed New Bridge Street Consultants to provide advice on
structuring directors’ remuneration packages. New Bridge Consultants did not provide any other services to the Company
in 2002.
Details of Remuneration
The remuneration of directors is set out in detail in the table below. The Company’s Compensation Committee decides the
remuneration policy that applies to executive directors and the Group’s other senior management.
Each of the executive directors has a one-year rolling contract. In the event the Company is acquired all of the executive
directors’ contracts can be terminated in the following 12 months by the Company giving them not less than 24 months notice.
The most recent executed contracts for each executive director are as follows: Mr S W F Lien – 27 May 1999, Mr P M Garvey – 
6 May 2000, Mr E M H Sundrehagen – 18 May 1999 and Mr I D Gilham – 1 November 2001. In the event of termination the
executive directors would be entitled to loss of salary, benefits and pensionable service for the notice periods. The appointments
of non-executive directors of the Company are terminable with three months notice.
The Company’s policy is that a significant proportion of the remuneration of the executive directors should be performance
related. As described below, executive directors may earn annual incentive payments together with the benefits of participation
in Share Option Schemes.
Constituent Elements of Remuneration Package
In applying the above principles to the determination of executive director remuneration, the Compensation Committee gives
consideration to several components which together comprise the total remuneration package; these consist of the following:
• Basic Salary is determined by the Committee at the beginning of each year and when an individual changes position or
responsibility. In deciding appropriate levels, the Committee considers the position in the Group, personal and Company
performance and relies on objective research which gives up-to-date information on a comparable group of companies.
Basic salaries were last reviewed in January 2003, with increases taking effect from 1 January 2003. The next review will take
place in January 2004. Executive directors’ contracts of service, which include details of remuneration, will be available for
inspection at the Annual General Meeting. Axis-Shield plc
Annual Report and Accounts 2002
19
Remuneration Report continued
• Annual Bonus is paid provided that objectives established by the Committee are met for each financial year. The objectives in
2002 included superior performance against budgeted group EBITDA and cash flow, the Company’s performance against the
FTSE Techmark Mediscience Index and progress against business development and research and development objectives. The
bonus payable was subject to a maximum of 50%. For 2003 the objectives are similar but have more emphasis on the areas
which each of the executive directors can directly influence. The bonus payment is subject to a maximum of 60%. An
additional special bonus, subject to a maximum of £35,000, is payable to the Chief Executive Officer, Mr Lien, based upon
achievement of specific objectives. In 2002 these objectives related to research and development investment and additional
revenue generators. The objectives for 2003 are similar.
• Benefits in Kind which comprise company car and running costs, private healthcare and critical illness/death in service cover
and ex-patriate packages where appropriate.
• Pension Contribution. The Group operates a contracted-out defined contribution scheme for executive directors whereby
the Group contributes 12% of a director’s gross salary or, should the director so elect, the contributions can be made into a
director’s personal pension scheme. Under a flexible benefits policy, individual directors can forego other benefits in return for
equivalent increases in Company contribution. No pension contribution is payable on the annual bonus. During the year, four
of the directors had personal pensions to which the Company contributed.
• Share Options. The Group believes there is benefit to be gained from aligning executive directors’ interests (and other
employee interests) with those of shareholders by means of share options. Axis-Shield operates four option schemes - the
Approved Scheme, the Medium Term Share Option Scheme, the Matching Shares Scheme and the Sharesave Scheme – details
of which are given in the Directors’ Report. The award of options is wholly at the discretion of the Compensation Committee.
Non-Executive Remuneration
The remuneration of the non-executive directors is agreed by the Group Board taking into account a number of factors
pertinent to their position and role as non-executive directors.
Directors Remuneration
Year to 31 December 2002
Fees & 2002 2001 
Basic Year to Year to Pension Pension 
Salary Bonus Other Benefits Dec 02 Dec 01 Contributions Contributions
Chairman
N J Keen 44,583–––44,583 65,000 – –
Executive directors
S W F Lien 186,666 48,444 12,814 – 247,924 234,262 22,400 18,540
E M H Sundrehagen 150,000 22,500 – – 172,500 169,000 27,120 19,810
P M Garvey 150,000 22,500 – 15,059 187,559 180,616 19,920 12,637
I D Gilham 150,000 22,500 – 16,855 189,355 177,621 18,000 3,000
Non-executive directors
G G McAndrew 18,750–––18,750 15,000 – –
E Hornnaess 17,500–––17,500 15,000 – –
T A Glastad 10,000 ––– 10,000 – – –
727,499 115,944 12,814 31,914 888,171 856,499 87,440 53,987
Notes to the table:
• Included in the table is £44,583 paid to Imperialise Limited for making available the services of N J Keen.
• S W F Lien’s ‘other’ remuneration is car and fuel allowance taken as salary.
• Included in S W F Lien’s 2002 benefits is Nil (2001:£45,795) in respect of an ex-patriate package.
• E M H Sundrehagen’s pension includes £9,120 car and fuel allowance taken as pension contributions.
• P M Garvey’s pension includes £1,920 car allowance taken as pension contributions.
• The table does not reflect a payment of £5,368 to G G McAndrew for additional management consultancy services (2001: Nil).
• T A Glastad waived entitlement to his fees in respect of his non-executive directorship for the six months to June 2002.
• No directors had pension benefits accruing under the Group’s money purchase scheme during the year (2001: nil). S W F Lien,
P M Garvey, I D Gilham and E M H Sundrehagen had individual personal pension schemes to which the Group contributed. 20 Axis-Shield plc
Annual Report and Accounts 2002
Remuneration Report continued
Directors’ Interests
Shares Held
According to the register maintained under the Companies Act 1985, the beneficial interests of the directors in the Share Capital
of the Company at 31 December 2002 were as follows:
At 31 Dec 2002 At 31 Dec 2001
Number of Share Number of Share
Ordinary Options Ordinary Options
35p Shares Medium Term 35p Shares Medium Term
S W F Lien 102,567 270,000 68,567 180,000
P M Garvey 26,835 240,000 1,035 160,000
E M H Sundrehagen 479,645 240,000 519,645 160,000
I D Gilham 3,000 160,000 – 80,000
N J Keen 10,000 – 10,000 –
T A Glastad 650,000 – 650,000 –
E Hornnaess 5,961 – 5,961 –
G G McAndrew 10,000 – 10,000 –
T A Glastad is a director of Glastad Holding Limited which holds 650,000 ordinary shares of 35p each.
The market price of the shares at 31 December 2002 was 132.5p (31 December 2001: 330p) and the range throughout the year
was 90p to 387.5p.
There has been no change in interests set out above and 31 March 2003.
Share Options Granted to Directors
The Company operates an Inland Revenue approved and an unapproved share option scheme to reward employees’
performance and to incentivise at all levels. Exercise is subject to performance conditions. For all options granted under the
Medium Term Scheme to date, the exercise criterion has been that earnings before interest, tax, depreciation and amortisation
(EBITDA) must be positive for at least the two financial years immediately prior to exercise and EBITDA per share, once positive,
should achieve growth which exceeds the percentage growth in the Retail Price Index by 4% or more. In addition, the growth 
in the Company’s share price between date of grant and at least one day during the option period must put it in the top third 
of companies which comprise the All Share Health Index. The rules of the schemes conform to institutional investor guidelines
on dilution.
The performance criterion, which applies to all executive directors to whom options have been granted under the Scheme, was
chosen as it requires significant improvement in financial performance. Axis-Shield plc
Annual Report and Accounts 2002
21
Remuneration Report continued
Performance Graph
The following graph shows the Company’s performance measured by the total shareholders return, compared with the
performance of the FTSE All Share Health Index and for 2002 only, the FTSE Techmark Mediscience Index, also measured by total
shareholder return. The FTSE All Share Health Index has been selected for this comparison because up until 2002 it provided the
best measure of performance of companies operating in the same sector as the Group. Since 2002 the Techmark Mediscience
Index provided a more appropriate measure of that performance. The FTSE Techmark Mediscience Index only commenced in
November 2001. Until we have five years of comparative performance for this index we will show performance against it and the
FTSE All Share Health Index.
Options to acquire shares in the Company, granted to directors under the Medium Term Scheme, but not exercised,
as at 31st December 2002 are:
Market
GrantedLapsedExercised price Earliest date
At 01 Jan during during during At 31 Dec Exercise on date Date of from which Expiry 
2002 year year year 2002 price exercised Grant exercisable date
S W F Lien
22,500 – – – 22,500 397p – 20 June 2000 Mar 2003 Mar 2010
67,500 – – – 67,500 702p – 20 June 2000 Mar 2003 Mar 2010
90,000 – – – 90,000 394p – 22 Mar 2001 Mar 2004 Mar 2011
– 90,000 – – 90,000 357p – 3 May 2002 May 2005 May 2012
180,000 90,000 – – 270,000
P M Garvey
80,000 – – – 80,000 702p – 20 June 2000 Mar 2003 Mar 2010
80,000 – – – 80,000 394p – 22 Mar 2001 Mar 2004 Mar 2011
– 80,000 – – 80,000 357p – 3 May 2002 May 2005 May 2012
160,000 80,000 – – 240,000
E M H Sundrehagen
22,500 – – – 22,500 397p – 20 June 2000 Mar 2003 Mar 2010
57,500 – – – 57,500 702p – 20 June 2000 Mar 2003 Mar 2010
80,000 – – – 80,000 394p – 22 Mar 2001 Mar 2004 Mar 2011
– 80,000 – – 80,000 357p – 3 May 2002 May 2005 May 2012
160,000 80,000 – – 240,000
I D Gilham
80,000 – – – 80,000 305p – 31 Oct 2001 Mar 2004 Oct 2011
– 80,000 – – 80,000 357p – 3 May 2002 May 2005 May 2012
80,000 80,000 – – 160,000
On behalf of the Board
Nigel Keen
Chairman of the Compensation Committee
31 March 2003
FTSE All Share Health Index
Axis-Shield
Techmark Mediscience
Performance Graph
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02 01 00 99 98 22 Axis-Shield plc
Annual Report and Accounts 2002
Corporate Governance
The Combined Code
The Board is committed to the highest standards of corporate governance and is accountable to shareholders for the good
governance of the affairs of the Group. In accordance with the combined code on Principles of Good Governance and Code of
Best Practice (“the Combined Code”) the Board must report to shareholders:
• how the principles of good governance set out in the Combined Code are applied; and
• that the Group complies with the best practice provisions set out in the Combined Code.
The Board of Directors
The Board of Directors, currently consisting of four executive directors and four non-executive directors, bring a wide range of
expertise and experience to the Board. The biographical details are shown on page 16.
The Board meets on a regular basis to discuss and agree matters which are specifically reserved to it for decision. There is also
frequent contact between meetings as is required to further the Group’s business. Specific powers and authorities are also
delegated to an Executive Management Group and to the various other Board Committees set out below.
All matters to be discussed at Board Meetings are formally advised to Board members in advance thereby ensuring that the
Board is properly informed to enable it to discharge its duties. Each of the directors has an important and personal input into
the forward strategy of the Company.
Chairman and Chief Executive Officer
The offices of Chairman and Chief Executive Officer are held separately.
The Chairman, Nigel Keen is responsible for the running of the Board and the Chief Executive Officer, Svein Lien is responsible
for running the business and chairs the Executive Management Group.
Erik Hornnaess is the nominated senior independent non-executive director.
Board Balance
The Board comprises four executive and four non-executive directors.
All directors bring independent judgment to bear on matters of strategy, resources, performance and standards of conduct.
The Chairman ensures that Board discussions are conducted taking all views into account, so that no individual director or small
group of directors dominates proceedings.
Non-Executive Directors
The non-executive members of the Board comprise the whole of the Audit and the Compensation Committees. The Nomination
Committee includes a majority of non-executives directors. The Company’s non-executive directors have significant input to the
control environment, the corporate governance regime and the overall strategy of the business. The independent judgements
and assessments that the non-executive directors bring to the Board are considered by the Company to be a major strength.
The non-executive directors have a particular responsibility to ensure that actions proposed by the executive directors are
critically examined and thoroughly discussed. The Board considers that all of the non-executive directors are independent of
management and free from any business or other relationships which could materially interfere with the exercise of
independent judgement.
Directors’ Re-election and Appointment
Each of the executive and non-executive directors are required to stand for re-election at the first Annual General Meeting
following their appointment and thereafter at three yearly intervals.
Board Committees 
Compensation Committee
The Company’s Compensation Committee, consisting of Nigel Keen and the other non-executive directors of the Company,
namely: Gordon McAndrew, Erik Hornnaess and Tarald Glastad meets several times each year to discuss and agree the terms and
conditions of the contracts of employment of the executive directors and senior managers. It is also responsible for considering
management recommendations for remuneration (including incentive arrangements covering bonus payments and share option
grants) and employment terms of the Company’s staff.
The Report of the Remuneration Committee appears on pages 18 to 21 which gives details of each director’s remuneration and
includes further explanation as to how relevant principles of the Combined Code are applied and the extent to which relevant  Corporate Governance continued
Axis-Shield plc
Annual Report and Accounts 2002
23
provisions are complied with. Furthermore, the Committee takes cognisance of location specific remuneration levels and those of
other life science companies of similar size, together with the requirement to attract, retain and motivate staff at all levels, when
determining remuneration policy.
The remuneration of the non-executive directors is agreed by the Board after taking into account factors pertinent to their
position and roles as non-executive directors.
Audit Committee
The Audit Committee consists of the Chairman of the Committee Gordon McAndrew, and the three other non-executive
directors, namely, Nigel Keen, Tarald Glastad and Erik Hornnaess.
The Committee meets as appropriate (but not less than twice a year) to:
• monitor and make recommendations on the relationship with the external auditors including the nature and scope of the
audit and any matters arising;
• review and consider the scope of the internal audit function;
• review the annual report and interim financial statement before submission to the Board, including a consideration of the
accounting policies adopted and any significant areas of judgement.
• monitor compliance with statutory and Financial Services Authority requirements for financial reporting; and
• monitor the system of internal control maintained by the Group to safeguard shareholders’ investments and the Group’s assets.
Provision is made for the Committee to meet at least once a year with the external auditors in the absence of the Group’s
executive management.
Nomination Committee
The Nomination Committee consists of the Chairman of the Committee, Nigel Keen, the Company’s Chief Executive Officer,
Svein Lien and the other non-executive directors, namely Gordon McAndrew, Tarald Glastad and Erik Hornnaess. The Nomination
Committee meets to approve the selection of new senior executives including executive director positions. A sub-group of the
Committee will involve themselves in the actual selection process.
Accountability and Audit
Financial Reporting
The Board has ultimate responsibility for the preparation of accounts and for the monitoring of systems of internal financial control.
The Board strives to present a balanced and understandable assessment of the Company’s position and its prospects and
endeavours to present scientific and other price sensitive information in a balanced way.
The Executive Management Group receives reports setting out key performance and risk indicators and considers possible
control issues brought to their attention by early warning mechanisms which are embedded within the operational units and
reinforced by risk awareness training. The Executive Management Group and the Audit Committee also receive regular reports
from the internal audit function in the UK which includes recommendations for improvement.
The Audit Committee’s role in this area is confined to a high-level review of the arrangements for internal financial control. The
Board’s agenda includes a regular item for consideration of risk and control and receives reports thereon from the executive
management group and the Audit Committee. The emphasis is on obtaining the relevant degree of assurance and not merely
reporting by exception.
Audit Committee and Auditors
On behalf of the Board, the Audit Committee examines the effectiveness of systems of internal control on a regular basis. Any
significant findings or identified risks are closely examined and are reported to the Board with recommendations for action.
The Audit Committee reviews the scope and results of the audit and non-audit services, the cost effectiveness and the
independence and objectivity of the auditors.
Internal Control
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed
to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Board is of the view that there is an ongoing process for identifying, evaluating and managing the Group’s significant risks,
that it has been in place for the year ended 31 December 2002 and up to the date of approval of the annual report and 24 Axis-Shield plc
Annual Report and Accounts 2002
Corporate Governance continued
accounts, that it is regularly reviewed by the Board and that it accords with the internal control guidance for directors on the
Combined Code.
The Control Environment
The Board of Directors has established an appropriate control environment through the systems and procedures outlined above
and as follows:
• manuals of policies and procedures applicable to all aspects of the organisation, with procedures in place for reporting
weaknesses and for monitoring corrective action;
• a budgetary control system;
• the appointment of qualified experienced and professional staff of the necessary ability to fulfil their allotted responsibilities;
and
• a process of systematic internal auditing which covered UK operations.
As a result of these systems and procedures, the Board has reviewed the Group’s internal financial controls and considers them
to be effective.
Social, Environmental and Ethical Matters
The Board takes regular account of the significance of social, environmental and ethical (SEE) matters to the business of the Group.
The Board has identified and assessed the significant risks to the company’s short and long term value arising from SEE matters
as well as the opportunities to enhance value that may arise from an appropriate response.
In 2002, procedures for managing risks to short and long term value arising specifically from SEE matters have been integrated
into existing management structures and systems.
Our Environmental Policy Statement is summarised as follows:-
The prime objective of the Group is to provide customers with product that meets their requirements in terms of fitness for use,
delivery, reliability and value for money through both ISO9001 (2000) and ISO14001 (1996), in particular:-
• Axis-Shield is committed to the development and the sustainability of its business, whilst minimising any adverse impact of 
its operations on the environment.
• Axis-Shield will promote good practices to ensure that the organisation, as a minimum standard, will comply with all
regulatory and legislative requirements. Axis-Shield will also wherever possible work toward industry best practice in
environmental performance.
• Axis-Shield will endeavour to achieve continual improvement in environmental performance.
• Nominated personnel will be allocated resources to monitor and report directly to senior management on issues concerning
the environment. This nominated group will carry out regular reviews of procedures and trends, identify significant impacts
and set objectives and targets to effectively control waste and the consumption of materials, fuel and energy.
• Axis-Shield is committed to minimising adverse environmental effects and pollution associated with both present and future
business activities.
• Axis-Shield will promote, in its staff training programmes and notice boards, the implementation of good environmental
awareness and practices.
As a Group, which is part of the in vitro diagnostic (IVD) testing industry we provide test kits for hospital laboratories and clinics.
Most of our tests, which are conducted on human blood or urine samples, are immunoassays, involving the antibody-antigen
reaction, and use antibodies and other common reagents which have been around for many years and not subject to animal
testing. Our industry is not regulated like the pharmaceutical business and we do not have to undertake toxicology work
because our reagents do not come into contact with the body – in vitro is literally translated as “in glass” or in reality a test tube.
We are transparent in the way we operate and conduct our research and development. Our reagents are chemical or biological
and are normally off the shelf. Any material of potential concern is sourced from the highest quality manufacturers and handled
according to any relevant instructions or legislation. We do not conduct any animal experiments and the raising of antibodies is
undertaken out-of-house by specialist contractors. IVD regulations do not involve animal toxicology, and clinical trials are
performed on patient samples obtained through informed consent procedures. All blood samples received in-house are tested
for standard pathogens such as HIV, HTLV and hepatitis viruses. “Normal” samples are largely obtained through voluntary
donations in-house using a trained phlebotomist. In the validation of our assays we compare performance with an established
product or procedure on samples from patients with the disease in question and from normals without evidence of the disease,
working out sensitivity and specificity. All human biological materials used at our premises are treated as hazardous waste
which is collected regularly by specialist contractors. Axis-Shield plc
Annual Report and Accounts 2002
25
Corporate Governance continued
We have a Health and Safety Officer who undertakes regular audits and we are also inspected by the local HSE representative.
We also produce to the highest levels of Good Manufacturing Practice (GMP) as demanded by the FDA and the European IVD
Directive. Our premises allow manufacture to almost aseptic or sterile levels with positive pressure and high level air filtration and
airlocks/gowning in the key areas. Our safety records demonstrate that there have been no incidents of note since the inception of
the Company in the mid-80’s.
The Identification of Major Business Risks
The composition of the Board and of senior management is aimed at providing an appropriate range of knowledge, skill 
and experience in scientific, medical and commercial matters. Key risk areas are reviewed regularly by executive management
and the Board.
Information Systems
The information produced by the Company is designed to be sufficient and timely and allows management to monitor 
the actual performance of the Company relative to budget and other forward plans and to take decisions based thereon.
The Company will continue to invest to improve its information systems.
Financial Control Procedures
Control procedures take three broad forms:
• checks over individual transactions;
• checks over groups of transactions (e.g. reconciliations) and
• procedures to mitigate risk (e.g. insurance).
The Company has control procedures in place that cover each of the areas mentioned above and also has in place procedures to
monitor the effectiveness of each control procedure. The internal control systems have been designed to take account of the
Company’s particular needs including the needs of the market place and its customers; its current and prospective shareholder
base; the cultural and regulatory climate of the IVD industry; and the operation of an effective and efficient business.
Communication with Shareholders
The Company maintains an open policy of dialogue with all shareholders to ensure that the objectives of the Company are
understood. Institutional shareholders are regularly briefed on any current relevant matters and future developments.
The Company encourages communication with the large number of private investors which it has and endeavours to
communicate effectively through the publication of its comprehensive Annual Report and Accounts, an unaudited Interim
Report and various forms of written correspondence throughout the year. The Board seeks to encourage shareholders to attend
its Annual General Meeting. It uses the Annual General Meeting to communicate with private investors and encourages their
participation. As part of our objective to keep the investment community informed of the scope and opportunities for our
business,we held our third annual analyst teach-in during January 2003, this time in Oslo. In addition, the Company enables
shareholders and the general public to access all press releases and general information on the Company via its website,
www.axis-shield.com.
Statement of Compliance
Having considered the provisions of the Combined Code, the Board believes that the Company has complied with the best
practice provisions of the Combined Code.
Going Concern
The directors having made enquiries have reasonable expectation that the Company and the Group have adequate resources to
continue in operational existence for the foreseeable future, and that therefore it is appropriate to continue to adopt the going
concern basis in preparing the accounts.
By Order of the Board
Paul M Garvey
Company Secretary
31 March 2003 26 Axis-Shield plc
Annual Report and Accounts 2002
Directors’ Report
Principal Activities
The Directors’ Report should be read in conjunction with the Chairman’s Statement, Chief Executive’s Report and Financial Review
which contain details of the principal activities of the Group during the year and an indication of likely future developments.
Financial results and Dividend
The Group’s consolidated net loss for the year after taxation was £2.2m (2001: loss of £0.4m). The directors do not recommend
the payment of a dividend and therefore, the loss for the year has been transferred to the reserves.
For the figures included in the profit and loss account an exchange rate of 11.98 NOK = £1 was used which was the average
exchange rate during the year ended 31 December 2002 (2001: 12.99 NOK = £1). At 31 December 2002 the exchange rate was
11.20 NOK = £1 and this figure was used in the balance sheets (2001:13.05 NOK = £1).
Research and Development
The Group continues to invest in research and development. Details of expenditure on research and development are set out in 
Note 2 to the accounts.
Share Capital
The changes to the Group’s share capital during the year are detailed in Notes17 and 18 to the accounts.
Substantial Interests
The Company has been notified of the following interests in three per cent or more of the voting capital of the Company at 
21 March 2003.
Number of Percentage of Issued
Ordinary Shares Ordinary Shares
Framlington Investment Mgt Ltd 4,001,966 8.25%
Folketrygdfondet 2,599,500 5.36%
Deutsche Asset Mgt Ltd 2,567,050 5.29%
Hermes Pensions Management 2,046,182 4.22%
Fidelity Investments Mgt Ltd 1,962,691 4.04%
Legal & General Investment Management 1,563,113 3.17%
Directors
There were no changes to the composition of the Board during the year.
In accordance with the provisions of the Articles of Association, S W F Lien, T A Glastad and G G McAndrew retire and, being
eligible, offer themselves for re-appointment at the Annual General Meeting. Details of S W F Lien’s service contract is given in
the report from the Compensation Committee. T A Glastad and G G McAndrew do not have service contracts.
Directors’ interests in the shares of the Company are detailed in the Remuneration Report on pages 18 - 21.
Directors’ and Officers’ Liability Insurance
During the year the Company maintained liability insurance for its directors and officers.
Material Contracts
None of the directors had any material interest in any contract of significance with the Company and its subsidiaries. Axis-Shield plc
Annual Report and Accounts 2002
27
Directors’ Report continued
Employee Share Option Schemes
The Approved Share Option Scheme
Number Outstanding Outstanding
Date of Grant Option Price Granted at 1 Jan 2002 Granted Lapsed Exercised at 31 Dec 2002 Exercisable
21 December 1998 501p 36,000 36,000 – 9,250 – 26,750 2001-2008
UK Sharesave Scheme
Option Price Number Outstanding Outstanding
Date of Grant Option Price after RIA Granted at 1 Jan 2002 Granted Lapsed Exercised at 31 Dec 2002 Exercisable
12 August 1998 466.5p 461.4p 19,866 19,866 – 19,866 – 0
17 April 2001 355p 355p 44,828 44,828 – 20,814 – 24,014 Apr 2004
64,694 – 40,680 – 24,014
(after RIA)
The options are exercisable in accordance with the Scheme Rules three years after the anniversary of grant.
Application was made to the Inland Revenue during 2000 to adjust the number of options and the option price as a result of the
rights issue in 1999. The Rights Issue Adjustment factor (RIA) was 1.011. The price factor is 0.989
Scandinavian Sharesave Scheme
Number Outstanding Outstanding
Date of Grant Option Price Granted at 1 Jan 2002 Granted Lapsed Exercised at 31 Dec 2002 Exercisable
20 January 2001 NOK 59 127,775 127,775 – 56,803 – 70,972 Jan 2004
The options are exercisable in accordance with the Scheme Rules three years after the anniversary of grant.
Medium Term Share Option Scheme
Number Outstanding Outstanding
Date of Grant Option Price Granted at 1 Jan 2002 Granted Lapsed Exercised at 31 Dec 2002 Exercisable
20 June 2000 397p 169,500 137,000 –– – 137,000 2003-2010
20 June 2000 702p 830,500 697,000 –– – 697,000 2003-2010
22 March 2001 394p 855,600 823,400 –– – 823,400 2004-2011
31 October 2001 305p 80,000 80,000 –– – 80,000 2004-2011
3 May 2002 357p 982,400 – 982,400 – – 982,400 2005-2012
1,737,400 982,400 – – 2,719,800
The options are all performance related based on the achievement of corporate targets, which are outlined 
in the Remuneration Report.
Directors Authority to Allot Shares
By law, directors are not permitted to allot new shares (or to grant rights over shares) unless authorised to do so by
Shareholders. In addition, directors require the specific authority from Shareholders mentioned below before allotting new
shares (or granting rights over shares) for cash without first offering them to existing Shareholders in proportion to their
holdings. A resolution was passed at the Annual General Meeting of the Company held in 2002 renewing the directors’
authority, for the period until 20 May 2007; however, the directors consider it advantageous to adopt the practice of renewing
the authority each year. A resolution is proposed to authorise allotment of securities up to an aggregate nominal amount of
£4,713,494 which represents 27.75% of the issued share capital of the Company, and is in line with current best practice. The
general authority to allot shares will provide flexibility for the Company to take advantage of business opportunities as they
arise. The authority will expire on 14 May 2008.
Disapplication of Statutory Pre-emption Rights
At the Annual General Meeting held on 21 May 2002, the directors were empowered to allot new shares for cash without having
regard to the statutory rights of pre-emption. Resolution 10 empowers the directors to renew the power to allot new shares for cash
otherwise than pro-rata to existing shareholders. This power is limited to an aggregate nominal amount of £405,768 being 2.39% of
issued ordinary share capital of the Company. This authority will last until the conclusion of the next Annual General Meeting. 28 Axis-Shield plc
Annual Report and Accounts 2002
Directors’ Report continued
Employees
Axis-Shield recognises the contributions made by its employees to achieve corporate goals and objectives and is committed to
operating in a way that rewards and recognises the contributions made by its staff. In recent years many of the Group’s staff
have enjoyed the benefits of equity participation arrangements such as the first employee Sharesave Scheme which matured in
February 2000. A second batch of savings contracts under the Sharesave Scheme matured in 2001 and offers to participate in
further savings contracts under this scheme were made to our UK employees in March 2001. A Scandinavian Sharesave Scheme
was introduced for our Nordic employees in January 2001. Axis-Shield will continue to recognise the efforts of its employees to
achieve corporate and personal goals and objectives and is committed to ensuring that these benefits continue 
to be available to all of our employees.
The Group continues to maintain close attention to the wages and conditions of employment of all employees within the Group.
Axis-Shield is an equal opportunity employer committed to promoting equal opportunities in employment regardless of an
individual’s sex, marital status, creed, colour, race, ethnic origin or disability. It is the policy of the Group where practicably possible to
offer retraining and continued employment to employees who become disabled during their period of employment with the Group.
The Group operates in several locations and its employment policies are varied to meet local conditions and requirements but are
established on the basis of best practice. The importance of good communications and working relationships is recognised and the
Group’s policy is to keep employees informed on matters relating to their employment and the Group’s financial and business activities.
Creditor Payment Policy
The Group is committed to maintaining sound commercial relationships with all its suppliers. It is the policy of the Group to
negotiate and agree terms and conditions with its suppliers either directly or through its operating subsidiaries by applying
local best practices. The Group had 59 days’ purchases (2001: 52) outstanding at 31 December 2002 based on the average daily
amount invoiced by suppliers during the year.
Charitable and Political Contributions
The Group made £2,510 charitable donations in the year to 31 December 2002 (2001: £1,200). No political donations were made
(2001: £nil).
Directors’ Responsibilities
The directors are required by UK company law to prepare accounts for each financial year that give a true and fair view of the
state of affairs of the Company and the Group as at the end of the financial year and of the results of the Group for the year.
The directors confirm that suitable accounting policies have been used and applied consistently and reasonable and prudent
judgements and estimates have been made in the preparation of the accounts for the year ended 31 December 2002. The
directors also confirm that applicable accounting standards have been followed and that the financial statements have been
prepared on the going concern basis.
The directors are responsible for keeping proper accounting records and for taking reasonable steps to safeguard the assets of
the Company and the Group. They should use reasonable endeavours to prevent and detect fraud and other irregularities.
The maintenance and integrity of the Axis-Shield plc website is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes
that may have occurred to the accounts since they were initially presented on the website. Legislation in the United Kingdom
governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
Auditors
Following the conversion of our auditors PricewaterhouseCoopers to a Limited Liability Partnership (LLP) from 1 January 2003,
PricewaterhouseCoopers resigned on 27 February 2003 and the directors appointed their successor, PricewaterhouseCoopers LLP ,
as auditors. A resolution to reappoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the Annual
General Meeting.
By order of the Board
P M Garvey
Company Secretary
31 March 2003 Axis-Shield plc
Annual Report and Accounts 2002
29
Independent Auditors’ Report to the members 
of Axis-Shield plc
We have audited the financial statements which comprise the Profit and Loss Account, the Balance Sheet, the Cash Flow
Statement, the Statement of Total Recognised Gains and Losses and the related notes which have been prepared under the
historical cost convention and the accounting policies set out in the statement of accounting policies. We have also audited 
the disclosures required by Part 3 of Schedule 7A to the Companies Act 1985 contained in the Directors’ Remuneration Report 
(“the auditable part”).
Respective Responsibilities of Directors and Auditors
The directors’ responsibilities for preparing the annual report, the Directors’ Remuneration Report and the financial statements 
in accordance with applicable United Kingdom law and accounting standards are set out in the statement of directors’
responsibilities.
Our responsibility is to audit the financial statements and the auditable part of the Directors’ Remuneration Report in
accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards issued by the Auditing
Practices Board. This report, including the opinion, has been prepared for and only for the Company’s members as a body in
accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial
statements and the auditable part of the Directors’ Remuneration Report have been properly prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements,
if the Company has not kept proper accounting records, if we have not received all the information and explanations we require
for our audit, or if information specified by law regarding Directors’ Remuneration and transactions is not disclosed.
We read the other information contained in the annual report and consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the financial statements. The other information comprises only
the Directors’ Report, the unaudited part of the Directors’ Remuneration Report, the Chairman’s Statement, the Chief Executive’s
Report, the Financial Review and the Corporate Governance Statement.
We review whether the corporate governance statement reflects the Company’s compliance with the seven provisions of the
Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not.
We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or to form an
opinion on the effectiveness of the Company’s or Group’s corporate governance procedures or its risk and control procedures.
Basis of Audit Opinion
We conducted our audit in accordance with auditing standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the auditable
part of the Directors’ Remuneration Report. It also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the
company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements and the auditable part of
the Directors’ Remuneration Report are free from material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group at 31 December 2002
and of the loss and cash flows of the group for the year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and
• those parts of the Directors’ Remuneration Report required by Part 3 of Schedule 7A to the Companies Act 1985 have been
properly prepared in accordance with the Companies Act 1985.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Glasgow
31 March 2003 30 Axis-Shield plc
Annual Report and Accounts 2002
Consolidated Profit and Loss Account
For the year ended 31 December 2002
2002 2001
Notes £000 £000
Turnover – Continuing Operations 1 46,965 42,793
Cost of Sales 21,396 20,953
Gross Profit 25,569 21,840
Other operating expenses 14,906 12,844
EBITDA before Research & Development 10,663 8,996
Research & Development
Point-of-care (internal) 2,974 2,348
Point-of-care (external) 2,412 385
Lab Division (internal) 4,235 3,614
Lab Division (external) 276 9,897 315 6,662
EBITDA 766 2,334
Depreciation 1,737 1,616
Goodwill amortisation 446 374
Intangible asset amortisation 1,208 1,100
Operating Loss – Continuing Operations (2,625) (756)
Total Operating Expenses 2 28,194 22,596
Operating Loss – Continuing Operations (2,625) (756)
Net interest receivable 3 448 321
Loss on Ordinary Activities before Taxation 4 (2,177) (435)
Taxation 61 4
Loss for the Financial Year after Taxation 18 (2,176) (431)
Loss per ordinary 35p share 7
Basic (4.55p) (0.93p)
Fully diluted (4.55p) (0.93p) Axis-Shield plc
Annual Report and Accounts 2002
31
Statement of Total Recognised Gains and Losses 
for the year ended 31 December 2002
2002 2001
£000 £000
Total recognised losses after tax for the financial year (2,176) (431)
Exchange gain on retranslation of subsidiary results and balances 4,977 64
Total recognised gain/(loss) relating to the financial year 2,801 (367)
Reconciliation of Movement in Shareholders’ Funds 
for the year ended 31 December 2002
2002 2001
£000 £000
Loss for the financial year (2,176) (431)
Nominal value of share capital issued 805 –
Premium on shares issued 7,475 –
Expenses relating to share issues (320) –
Foreign exchange gains 4,977 64
Other movements – (31)
Net movement 10,761 (398)
Opening shareholders’ funds 36,726 37,124
Closing shareholders’ funds 47,487 36,726
Note of Historical Cost Losses 
for the year ended 31 December 2002
There is no material difference between the loss on ordinary activities before taxation and the retained loss for the financial year
stated above, and their historical cost equivalents. 32 Axis-Shield plc
Annual Report and Accounts 2002
Balance Sheets
At 31 December 2002
Group Group Company Company
2002 2001 2002 2001
Notes £000 £000 £000 £000
Fixed Assets
Intangible 8 17,141 14,917 – –
Tangible 9 6,827 6,392 – –
Other investments 10(a) 524 450 – –
Investments in subsidiary undertakings 10(b) – – 62,933 53,933
24,492 21,759 62,933 53,933
Current Assets
Stocks 11 9,396 7,524 – –
Debtors 12 9,320 7,406 6,583 8,537
Cash at bank 13 14,774 10,446 420 406
33,490 25,376 7,003 8,943
Creditors: Due within one year 14 10,041 9,742 – 959
Net Current Assets 23,449 15,634 7,003 7,984
Total Assets Less Current Liabilities 47,941 37,393 69,936 61,917
Creditors: Due after one year 14 48 285 – 63
Provision for Liabilities and Charges 16 406 382 – –
Net Assets 47,487 36,726 69,936 61,854
Capital and Reserves
Called up share capital 17 16,987 16,182 16,987 16,182
Share premium account 18 49,189 42,034 49,189 42,034
Capital redemption reserve 18 244 244 244 244
Merger reserve 18 17,922 17,922 4,005 4,005
Profit and loss account 18 (36,855) (39,656) (489) (611)
Equity Shareholders’ Funds 47,487 36,726 69,936 61,854
The accounts on pages 30 to 52 were approved by the Board of Directors on 31 March 2003 and signed on its behalf by:
S W F Lien P M Garvey Axis-Shield plc
Annual Report and Accounts 2002
33
Consolidated Cash Flow Statement
For the year ended 31 December 2002
2002 2001
Notes £000 £000
Net Cash (outflow)/inflow from Operating Activities A (790) 1,477
Returns on Investment and Servicing of Finance
Interest received 511 415
Interest paid (63) (94)
Net Cash inflow from Returns on Investment and Servicing of Finance 448 321
Taxation 1 4
Capital Expenditure and Financial Investment
Purchase of tangible fixed assets (1,270) (1,048)
Purchase of intangible fixed assets (903) (87)
Proceeds of sale of tangible fixed assets 6 59
Net Cash outflow from Capital Expenditure and Financial Investment (2,167) (1,076)
Acquisitions 23
Purchase of subsidiary business/undertakings (968) –
Net Cash (outflow)/inflow before use of liquid Resources and Financing (3,476) 726
Financing
Proceeds of share issue 7,960 –
Repayment of vendor loan note (937) –
Hire purchase repayments D (42) (71)
Net Cash inflow/(outlfow) from Financing 6,981 (71)
Increase in Cash C 3,505 655 34 Axis-Shield plc
Annual Report and Accounts 2002
Notes to Consolidated Cash Flow Statement
For the year ended 31 December 2002
A. Reconciliation of Operating Loss to Net Cash from Operations
2002 2001
£000 £000
Operating loss (2,625) (756)
Depreciation of tangible fixed assets 1,737 1,616
Amortisation of intangible fixed assets 1,654 1,474
Reverse lease premium amortised in period (88) (88)
Discount on share options issued – (31)
Gain on disposal of fixed assets – (8)
(Decrease) in provisions (37) (185)
Increase in stock (392) (335)
Increase in debtors (905) (912)
(Decrease)/increase in creditors (134) 702
Net Cash (outflow)/inflow (790) 1,477
B. Analysis of Net Funds 
Exchange 
2001 Cash flow Movements 2002
£000 £000 £000 £000
Cash at bank 10,446 3,505 823 14,774
Bank overdraft (18) –– (18)
Net Cash 10,428 3,505 823 14,756
Vendor loan note (887) 937 (50) –
Hire Purchase < 1 year (42) 19 – (23)
Hire Purchase > 1 year (23) 23 ––
Net funds 9,476 4,484 773 14,733
C. Reconciliation of Net Cash Flow to Movement in Net Funds
2002 2001
£000 £000
Increase in cash in the period 3,505 655
Cash outflow from decrease in debt and hire purchase 42 71
Change in net funds resulting from cash flows 3,547 726
Repayment of vendor loan note 937 –
Movement in net funds for the period 4,484 726
Opening balance 9,476 8,807
Foreign exchange adjustment on retranslation of opening balance 773 (57)
Closing balance 14,733 9,476
D. Analysis of Hire Purchase Movement
2002 2001
£000 £000
Opening balance 65 136
Repayments made (42) (71)
Closing balance 23 65 Axis-Shield plc
Annual Report and Accounts 2002
35
Accounting Policies
The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom.
A summary of the more important Group accounting policies, which have been applied consistently is set out below.
A. Basis of Accounting
The financial statements are prepared in accordance with the historical cost convention. In accordance with the exemption
allowed by section 230 of the Companies Act 1985, the Company has not prepared its own Profit and Loss account.
B. Basis of Consolidation
(I) Subsidiary Companies
The consolidated accounts include the results of the parent company and all of its subsidiaries. In the period of
acquisition, the results of the company acquired are included from the effective date of acquisition. Intragroup sales 
and profits are eliminated fully on consolidation.
(II) Interests in Associated Undertakings
Interests in associated undertakings are accounted for by the equity method and are stated in the consolidated balance
sheet at the investing company’s share of their tangible net assets. The investing company’s share of the results of the
associated undertaking is included in the consolidated Profit and Loss account. These amounts are taken from 
co-terminous management accounts.
C. Turnover
Turnover represents the value of goods supplied and services rendered to external customers during the period and excludes
value-added tax.
D. Research and Development
Expenditure on new product development and commercialisation is written off as incurred.
E. Pension Costs
The Group operates pension schemes for the benefit of its UK and overseas employees. The cost of providing benefits under
defined benefit schemes is assessed by independent professionally qualified actuaries and is recognised on a systematic basis
over employees’ service lives. Contributions to defined contribution pension schemes are recognised in the Profit and Loss
account when payable. Under the transitional arrangements permitted by FRS 17 ‘Retirement Benefits’ , the Group is required to
disclose the information contained in note 19, regarding the pension schemes and the figures that would have been disclosed
under FRS 17 in the Profit and Loss account and Balance Sheet had FRS 17 been fully implemented.
F. Fixed Assets
Depreciation is provided on all fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset
evenly over its expected useful life, as follows:
Leasehold improvements – over the shorter of the lease term or useful life
Plant and machinery – 3 – 10 years
Fixtures and fittings – 5 years
Motor vehicles – 3 – 5 years
Leased assets – the shorter of the lease term or useful life.
No depreciation is charged on assets under construction.
Provisions are made where necessary to reflect any impairment in value of fixed assets.
G. Goodwill
Goodwill arising on consolidation represents the excess of the fair value of the consideration given over the fair value of the
identifiable net assets acquired. Purchased goodwill is eliminated by amortisation through the Profit and Loss account over a
period of 5 to 20 years. These are the periods over which the directors estimate that the values of the underlying businesses
acquired are expected to exceed the value of the underlying assets.
In years prior to 2000, goodwill arising on acquisitions, was written off to the Goodwill Reserve in the period of acquisition and
was amortised to the Profit and Loss account reserve over 20 years or its economic useful life, whichever was shorter. Following
the introduction of FRS 10, Goodwill previously carried in this Goodwill Reserve has been written off against the Profit and Loss
account reserve and will be taken to the Profit and Loss account on subsequent disposal of the related assets. 36 Axis-Shield plc
Annual Report and Accounts 2002
Accounting Policies continued
H. Intangibie Assets
Acquired research and development projects, patents and trademarks are capitalised. Patents are written off over the period for
which they are valid. Other intangible assets are written off over their expected useful lives through the Profit and Loss account
over a period of 5 to 12 years.
I. Financial Instruments
The Group enters into forward contracts for the purchase and/or sale of foreign currencies in order to manage its exposure to
fluctuations in currency rates.
The Group generally hedges foreign exchange transaction exposures up to one year forward. Hedges are put in place using
forward contracts at the time that the forecast exposure becomes reasonably certain. Gains and losses resulting from changes in
exchange rates on contracts designated as hedges of forecast foreign exchange transactions are deferred and included in the
measurement of the related foreign currency transaction in the period they occur.
J. Foreign Currencies
Assets and liabilities expressed in foreign currencies are translated into sterling at exchange rates ruling at the balance sheet
date. Transactions in foreign currencies are translated at the rate of exchange ruling on the date of the transaction.
The financial statements of the overseas subsidiaries are translated into sterling at the exchange rates ruling at the balance
sheet date. Exchange differences arising from the translation of opening balances are taken to reserves. The profits are
translated using the average exchange rate for the year and differences are taken to the Profit and Loss account reserve.
K. Grants
Capital grants received are treated as deferred income. A proportion is amortised to the Profit and Loss account annually so that
the grant is written off evenly over the expected useful life of the asset to which it relates. Grants of a revenue nature are
credited to income in the period to which they relate.
L. Stocks
Stocks are stated at the lower of cost and net realisable value. Provision is made for obsolete and slow-moving items.
M. Leases and Hire Purchase Contracts
Operating lease rentals are expensed as incurred.
Assets acquired under hire purchase contracts are included in fixed assets and the capital element of the hire purchase contract
is included in creditors. Hire purchase repayments are allocated between capital and interest and the interest is charged to the
Profit and Loss account.
N. Deferred Taxation
The charge for ordinary taxation is based on the loss for the year and takes into account full provision for deferred tax, using the
approach set out in FRS 19 ‘Deferred Tax’ in respect of timing differences on a non discounted basis. The introduction of this
standard has had no impact on the results or net assets of the Group. Deferred tax assets are recognised in the financial
statements only to the extent that it is more likely than not that they will crystallise in the immediate future. Axis-Shield plc
Annual Report and Accounts 2002
37
Notes to the Accounts
1. Segmental Analysis
a) Geographically by origin – 2002
EBITDA
Before
R&D R&D Operating Net
Turnover Costs Costs EBITDA Loss Assets
£000 £000 £000 £000 £000 £000
United Kingdom 8,022 1,930 2,184 (254) (545) 12,573
Nordic Region 38,943 10,323 7,713 2,610 (490) 34,914
46,965 12,253 9,897 2,356 (1,035) 47,487
Corporate Costs – (1,590) – (1,590) (1,590) –
46,965 10,663 9,897 766 (2,625) 47,487
Geographically by origin – 2001
EBITDA
Before EBITDA Operating
R&D R&D Exceptional profit Net
Turnover Costs Costs items (Loss) Assets
£000 £000 £000 £000 £000 £000
United Kingdom 7,262 757 2,072 (1,315) (1,595) 6,183
Nordic Region 35,531 9,731 4,590 5,141 2,331 30,543
42,793 10,488 6,662 3,826 736 36,726
Corporate Costs – (1,492) – (1,492) (1,492) –
42,793 8,996 6,662 2,334 (756) 36,726
b) Turnover geographically by destination
2002 2001
Total Total
£000 £000
Europe 33,239 31,846
North America 9,365 6,879
Rest of World 4,361 4,068
46,965 42,793
c) Turnover by product area
2002 2001
£000 £000
Point-of-care 16,531 15,970
Alcohol Related Diseases 1,685 1,385
Homocysteine 7,396 6,262
Cardiovascular 220 219
Infectious Disease 2,710 2,855
Autoimmune 2,158 2,350
Anti-Tg/TPO 1,082 –
Other 277 767
32,059 29,808
Distribution of third party products 14,906 12,985
46,965 42,793 38 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
2. Analysis of Total Operating expenses
2002 2001
£000 £000
Research and Development 9,897 6,662
Marketing 9,423 8,199
Administration 8,874 7,735
28,194 22,596
The operating expenses include depreciation and amortisation including goodwill amortisation.
3. Interest
2002 2001
£000 £000
Interest payable
On bank overdraft 7 –
Other interest 45 78
On hire purchase contracts 11 16
63 94
Interest receivable 
On short term bank deposits 511 415
Net interest receivable 448 321
4. Loss on Ordinary Activities before Taxation
2002 2001
£000 £000
The loss for the year is stated after charging/(crediting):
Depreciation charge for the period:
– Tangible owned fixed assets 1,701 1,537
– Tangible fixed assets held under finance leases 36 79
Amortisation charge for the period:
– Intangible fixed assets 1,208 1,100
– Goodwill 446 374
Hire of plant and equipment – operating leases 68 32
Hire of motor vehicles – operating leases 314 208
Property rentals 1,763 1,581
Auditors remuneration:
– Group audit fees (excluding parent) 104 91
– Parent company audit fees 24 24
– Non-audit fees – UK 17 23
– Non-audit fees – Norway 10 12
Exchange losses 474 36
Other grants (224) (61)
Gain on sale of fixed assets – (8)
Amortisation of reverse lease premium (88) (88) Axis-Shield plc
Annual Report and Accounts 2002
39
Notes to the Accounts continued
5. Directors and Employees
2002 2001
£000 £000
Employee costs:
Wages and salaries 12,210 10,737
Social security costs 2,054 1,702
Other pension costs 1,058 770
15,322 13,209
The average number of persons employed during the year was as follows:
2002 2001
Sales and Marketing 132 122
Research and Development 71 72
Production 169 160
Administration 65 57
437 411
The above tabulation excludes the non-executive directors.
The total emoluments of the directors including pension contributions were as follows:
2002 2001
£000 £000
Fees 91 95
Other emoluments 798 761
Pension contributions 87 54
976 910
Four of the directors at 31 December 2002 have individual personal pensions to which the Group contributes.
The emoluments of the highest paid director were as follows:
2002 2001
£000 £000
Aggregate emoluments 248 234
Pension contributions 22 19
270 253
Details of the fees, emoluments and pension contributions attributable to each director during the year are given in the table
headed ‘Directors Remuneration’ in the Remuneration Report on page 19.
6. Taxation
2002 2001
£000 £000
United Kingdom taxation credit/(charge) 1 4 40 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
7. Loss per Ordinary Share
Loss per ordinary 35p share is calculated on the loss for the year divided by the weighted average number of shares in issue
during the year 47,820,820 (2001: 46,232,875). The effect of the potential conversions of share options into ordinary shares is 
not reflected in the diluted loss per share calculation as it would not have been beneficial for holders of share options to have
converted those given the average market price of ordinary shares during the year. The weighted average number of shares 
in issue on this basis is 47,820,820 (2001: 46,233,361).
2002 2001
Weighted Weighted 
Average Average 
No of Loss No of Loss
Loss Shares per share Loss Shares per share 
£000 000 pence £000 000 pence
Basic loss per share (2,176) 47,821 (4.55) (431) 46,233 (0.93)
Fully diluted loss per share (2,176) 47,821 (4.55) (431) 46,233 (0.93)
8. Intangible Fixed Assets
Intellectual
Property and
Know how Goodwill Total
£000 £000 £000
Group
Cost
At 1 January 2002 16,384 7,244 23,628
Additions 846 57 903
Acquisitions – 570 570
Exchange adjustment 2,771 1,131 3,902
At 31 December 2002 20,001 9,002 29,003
Accumulated amortisation
At 1 January 2002 7,637 1,074 8,711
Amortisation in year 1,208 446 1,654
Exchange adjustment 1,348 149 1,497
At 31 December 2002 10,193 1,669 11,862
Net book value
At 31 December 2002 9,808 7,333 17,141
At 31 December 2001 8,747 6,170 14,917
The intellectual property and technical know-how (including patents and trademarks) were acquired from Pharmacia & Upjohn
in 1998 and from Glasgow University in 2002 by Axis-Shield ASA.
The goodwill acquired during the year relates to the acquisition in Norway of certain assets of Samarit Engros AS as described in
Note 23. Axis-Shield plc
Annual Report and Accounts 2002
41
Notes to the Accounts continued
9. Tangible Fixed Assets
Leasehold Plant & Fixtures & Motor 
Improvements Machinery Fittings Vehicles Total
£000 £000 £000 £000 £000
Group
Cost
At 1 January 2002 3,013 6,435 1,736 20 11,204
Additions 43 664 563 – 1,270
Acquisitions –– 10 – 10
Transfers 1,256 (793) (463) ––
Disposals – (648) (43) – (691)
Exchange adjustment 548 685 312 – 1,545
At 31 December 2002 4,860 6,343 2,115 20 13,338
Depreciation
At 1 January 2002 677 3,423 712 – 4,812
Charge for year 507 853 373 4 1,737
Transfers 595 (533) (62) ––
Disposals – (645) (40) – (685)
Exchange adjustment 170 343 134 – 647
At 31 December 2002 1,949 3,441 1,117 4 6,511
Net book value 
At 31 December 2002 2,911 2,902 998 16 6,827
At 31 December 2001 2,336 3,012 1,024 20 6,392
During 2002 the fixed asset categories were reviewed and as a result certain assets were transferred between categories.
Included in plant and equipment are assets purchased under hire purchase agreements with a cost of £254,460 (2001: £375,723)
and accumulated depreciation of £222,522 (2001: £277,239). Also included in plant and equipment are assets under
construction to the value of £223,000 (2001: Nil) which were not depreciated during the year. Motor vehicles, other than those
under contract hire (Note 20) have been purchased under hire purchase agreements. 42 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
10. Investments
a) Group
Other 
Associate Investments Total
£000 £000 £000
Cost or valuation
At 1 January 2002 25 1,346 1,371
Exchange adjustments 3 220 223
At 31 December 2002 28 1,566 1,594
Provisions
At 1 January 2002 – 921 921
Exchange adjustments – 149 149
At 31 December 2002 – 1,070 1,070
Net book value
At 31 December 2002 28 496 524
At 31 December 2001 25 425 450
b) Company
£000
At 1 January 2002 53,933
Additional investment in Axis-Shield Diagnostics Ltd 9,000
At 31 December 2002 62,933
During the year the company capitalised a portion of the intercompany loan due from Axis-Shield Diagnostics Limited. This
resulted in the company increasing its investment in that subsidiary.
c) Investments in subsidiary undertakings
Proportion of nominal
value shares held by Country of 
Description of Issued Shares Group Company Incorporation
Axis-Shield Diagnostics Limited Ordinary shares of 9p 100% United Kingdom
Plasmatec Laboratory Products Limited Ordinary shares of £1 100% United Kingdom
Axis-Shield ASA Ordinary shares of 0.5 NOK 100% Norway
Axis-Shield Development AS Ordinary shares of 1,000 NOK 100% Norway
Axis-Shield R&D AS Ordinary shares of 1,000 NOK 100% Norway
Axis-Shield Dia AS Ordinary shares of 1,000 NOK 100% Norway
Axis-Shield Nord AS Ordinary shares of 100 NOK 100% Norway
Point-of-Care AS Ordinary shares of 1,000 NOK 100% Norway
Medinor ASA Ordinary shares of 1.5 NOK 100% Norway
ScanAx AS Ordinary shares of 50 NOK 100% Norway
TTP Limited (non-trading) Ordinary shares of US$ 1 100% Barbados
Porton Cambridge Limited (non-trading) Ordinary shares of 10p 100% United Kingdom
Guardian Laboratory Products Limited 
(non-trading) Ordinary shares of £1 100% United Kingdom
Shield Immunologicals Limited (non-trading) Ordinary shares of £1 100% United Kingdom
Invitech Limited (non-trading) Ordinary shares of £1 100% United Kingdom
All of the non-dormant companies listed above are involved with medical diagnostic products. Axis-Shield plc
Annual Report and Accounts 2002
43
Notes to the Accounts continued
d) Associate
Proportion of
Country of Description of nominal value Accounting 
Incorporation shares held of shares held Year End
Kolnes & Hammer ASA Norway Ordinary shares of 1,000 NOK 30% 31 December
Kolnes & Hammer ASA is a company engaged in the distribution of opthalmic products.
e) Other Investments
Other investments relate to investments in Jenka Electronics AS, A/C Diagnostics LLC and Alcodia AB, Sweden.
The Group holds 25% of the ordinary share capital in Jenka Electronics AS, a Company incorporated in Denmark at a cost of
£50,000. The Group does not have significant influence over its operating and financial policies and therefore this investment
has not been equity accounted. In the period to 31 December 2002 Jenka made a profit of £27,400 after tax and had net assets
at that date of £300,500.
The Group has provided against 50% of the initial investment of £689,000 in A/C Diagnostics together with all the additional
monies advanced due to the high risk associated with this investment.
The Group holds a 32% interest in Alcodia AB, a company incorporated in Sweden. The Group does not have significant
influence over its operating and financial policies and therefore this investment has not been equity accounted. The Company
did not trade during the year.
11. Stocks
Group Group
2002 2001
£000 £000
Raw materials and consumables 2,015 1,803
Work in progress 604 375
Finished goods 6,777 5,346
9,396 7,524
12. Debtors
Group Group Company Company
2002 2001 2002 2001
£000 £000 £000 £000
Due after one year 
Amount due from subsidiaries – – 6,583 8,537
Due by associates – 51 – –
Other debtors 73 83 – –
73 134 6,583 8,537
Due within one year
Trade debtors 7,610 6,085 – –
Due by associates 106 115 – –
Other debtors 637 652 – –
Prepayments 894 420 – –
9,247 7,272 – –
Total debtors 9,320 7,406 6,583 8,537
13. Cash at Bank
Of the balances held at the bank, the sum of £419,959 (2001: £405,531) has been specifically pledged in respect of a guarantee
entered into with the landlord of the head office property in Dundee and the Bank of Scotland. This guarantee is in relation to
the rental guarantee for the property lease. 44 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
14. Creditors
Group Group Company Company
2002 2001 2002 2001
£000 £000 £000 £000
Amount falling due within one year
Bank overdrafts 18 18 – –
Trade creditors 5,547 4,281 – –
Amounts due to subsidiary undertakings – – – 959
Other taxation and social security payable 1,287 1,282 – –
Accruals 3,150 3,037 – –
Vendor loan note – 887 – –
Pension contributions – 109 – –
Deferred income – reverse lease premium 16 86 – –
Hire Purchase creditor 23 42 – –
10,041 9,742 – 959
Amount falling due after more than one year
Other creditors 48 79 – –
Deferred income – reverse lease premium – 18 – –
Hire Purchase creditor – 23 – –
Repayable between one and two years 48 120 – –
Other creditors – 165 – 63
Repayable between two and five years – 165 – 63
Total 48 285 – 63
The vendor loan note relates to a promissory note paid to Nycomed Pharma AS on 31 January 2002. This promissory note formed
part of the net assets of the companies acquired. Interest was payable quarterly in arrears at 3 monthly NIBOR rate plus 2%.
15. Deferred Tax
In accordance with Group accounting policy, the following potential deferred tax assets have not been recognised:
2002 2001
£000 £000
Accelerated capital allowances 26 20
Other short term timing differences 2,684 1,675
Tax losses carried forward 11,016 10,301
13,726 11,996
16. Provisions for Liabilities and Charges
The amount of £406,000 (2001: £382,000) represents actuarial valuations of pension scheme deficits in respect of Medinor ASA
employees and of Nycomed Pharma AS employees who transferred to Axis-Shield PoC.
2002
£000
Pension Scheme Provision
At 31 December 2001 382
Service cost, net of other financial increase and actuarial gain 541
Contributions in the year (517)
At 31 December 2002 406 Axis-Shield plc
Annual Report and Accounts 2002
45
Notes to the Accounts continued
17. Called up Share Capital
The allotted and fully paid share capital at 31 December 2002 was as follows
Group and Company Group and Company
2002 2001
Equity share capital Number £000 Number £000
Authorised
Ordinary Shares of 35p each 62,000,000 21,700 62,000,000 21,700
Allotted, called up and fully paid
Ordinary Shares of 35p each 48,532,875 16,987 46,232,875 16,182
Issued share capital of the Group
Nominal Share Issue 
Value Premium Expenses
Number £ £ £
At 1 January 2002 46,232,875 16,181,505 42,034,341 –
Shares issued 2,300,000 805,000 7,475,000 (319,842)
At 31 December 2002 48,532,875 16,986,505 49,509,341 (319,842)
The shares issued on 29 April 2002 were for the purpose of funding the development of the next generation Point-of-Care
instrument and tests.
At 31 December 2002 options under the Company’s Approved, Medium Term and Employee Sharesave Schemes, exercisable
between 2003 and 2012 at prices ranging from 305p to 702p, were outstanding in respect of 2,841,536 ordinary shares. Details
of the share option plans are given in the Directors’ Report on page 26. Directors’ entitlement to share options is given in the
Remuneration Report on page 18.
At 31 December 2002, the Company had commitments in respect of 2,000 Ordinary Shares in relation to agreements with
Glasgow University.
18. Share Capital and Reserves Attributable to Equity Shareholders
a) Group
Share Share Profit Capital Merger
Capital Premium & Loss Redemption Reserve Total
£000 £000 £000 £000 £000 £000
At 1 January 2002 16,182 42,034 (39,656) 244 17,922 36,726
Shares issued during year 805 –– – – 805
Premiums on shares issued during year (net of expenses) – 7,155 –– – 7,155
Retained loss –– (2,176) –– (2,176)
Foreign exchange gains –– 4,977 –– 4,977
At 31 December 2002 16,987 49,189 (36,855) 244 17,922 47,487
The cumulative amount of goodwill relating to acquisitions made prior to 31 March 1998 and which has been eliminated
against Profit and Loss reserves is £7,473,800 (2001: £7,473,800).
b) Company
Share Share Profit Capital Merger
Capital Premium & Loss Redemption Reserve Total
£000 £000 £000 £000 £000 £000
At 1 January 2002 16,182 42,034 (611) 244 4,005 61,854
Shares issued during year 805 –– – – 805
Premiums on shares issued during year (net of expenses) – 7,155 –– – 7,155
Retained profit –– 122 –– 122
At 31 December 2002 16,987 49,189 (489) 244 4,005 69,936 46 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
19. Pension Scheme Arrangements
Axis-Shield Diagnostics Limited, Medinor ASA, Axis-Shield ASA and Axis-Shield PoC AS operate pension schemes for their employees.
The Group has continued to account for pensions in accordance with SSAP 24 “Accounting for Pension Costs” and has continued
to account for the overseas pension schemes under Norwegian GAAP , as the directors do not consider there to be a significant
difference in the accounting treatment. The disclosures given in (a) below are those required under SSAP24. FRS 17 Retirement
Benefits was issued in November 2000 but will not be mandatory for the Group until the year ending 31 December 2005 at the
earliest. The additional disclosures required under the transitional arrangements are set out in (b) below.
a) SSAP 24 Accounting for pension costs 
Defined Contribution Schemes
The assets of the Axis-Shield Diagnostics Limited Scheme are held separately from those of the Group in an independently
administered fund and contribution costs for the year are charged to the Profit and Loss account. The contributions for the year
amounted to £192,000 (2001: £148,000). Outstanding pension contributions for the year amounted to £Nil (2001: £ Nil)
Defined Benefit Schemes
The Axis-Shield ASA, Medinor ASA and Axis-Shield PoC AS schemes give the rights to defined future benefits. These are mainly
dependent on the number of earning years, salary level at pension age, and the amount of benefits from the National Insurance
Scheme. The commitments are covered through an insurance company and are compliant with the requirements of Norwegian
securities laws. Axis-Shield PoC AS also operates an insured pensions scheme. This includes an agreed early retirement scheme
which is part of the national wage negotiation. Pension costs relating to each scheme operating in the Nordic countries are
charged in accordance with Norwegian accounting standards. Formal valuations of each scheme have been carried out by 
Vesta Aktuartjenester AS, who are independent, professionally qualified actuaries, on 31 December 2002 using the following
assumptions:
2002 2001
Rate of increase in salaries 2.5% 2.5%
Rate of increase in pensions in payment 2.5% 2.5%
Discount rate 6.0% 6.0%
Inflation assumption 2.5% 2.5%
Contributions for the year for all the Nordic region pension schemes totalled £516,800 (2001: £486,000). Outstanding pension
contributions for the year amounted to £Nil (2001: £109,000).
b) FRS 17 Retirement Benefits
The amounts charged to operating profit, credited to other finance income and the amount recognised in the statement of total
recognised gain and losses which would have been required under FRS 17 are set out below:
i) Analysis of amount charged to operating profit
2002
£000
Current Service Cost 540
Past Service Cost 13
Total Operating Charge 553
ii) Analysis of amount charged to other finance costs
2002
£000
Expected return on pension scheme assets 228
Interest on pension scheme liabilities (240)
Net Cost (12) Axis-Shield plc
Annual Report and Accounts 2002
47
Notes to the Accounts continued
iii) Analysis of amount recognised in the statement of total recognised gains and losses
2002
£000
Actual return less expected return on pension scheme assets (178)
Experience gains and losses arising on the scheme liabilities (334)
Actuarial loss recognised in statement of total recognised gains and losses (512)
iv) The assets of the scheme and the expected rate of return were:
2002 2002 2001 2001
% £000 % £000
Equities 8 294 796
Bonds 6 2,942 1,807
Property 8 714 276
Cash 6 210 184
Other 642 –
Total market value of assets 4,202 7* 3,063
Present value of scheme liabilities (5,137) (3,404)
Deficit of the scheme (935) (341)
Related deferred tax asset/(liability) – –
Net pension liability (935) (341)
The assumptions of the scheme are the same as those detailed in Note 19a.
*No comparative long-term rates of return for each asset category are available for December 2001.
The Group Net Assets and Reserves and the adjustment for the net pensions liability which would have been required under
FRS 17 are set out below:
v) Group Net Assets
2002 2001
£000 £000
Net assets excluding pension liability 47,487 36,726
Pension liability (935) (341)
Net assets including pension liability 46,552 36,385
vi) Group Reserves
2002 2001
£000 £000
Profit and Loss reserve excluding pension liability (36,855) (39,656)
Pension liability (935) (341)
Profit and Loss reserve (37,790) (39,997) 48 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
vii) Movement in deficit during the year
2002
£000
Deficit in schemes at beginning of the year (341)
Movement in year:
Current service cost (540)
Past service costs (13)
Contributions 517
Other finance costs (12)
Actuarial loss (512)
Exchange loss (34)
Deficit in schemes at end of the year (935)
The Group has agreed to increase the premiums payable into the pension schemes between 2003 and 2008 to address the
deficit in the schemes.
viii) History of experience gains and losses
2002
Difference between the actual and expected return on scheme assets:
Amount (£000) (178)
Percentage of scheme assets 4.2%
Experience gains and losses on scheme liabilities:
Amount (£000) (334)
Percentage of the present value of the scheme liabilities 6.5%
Total amount recognised in statement of total recognised gains and losses
Amount (£000) (512)
Percentage of the present value of the scheme liabilities 10.0%
20. Operating Lease Commitments
At 31 December 2002, the Group had annual commitments under non-cancellable operating leases as follows:
Land and Plant and Motor
Buildings Equipment Vehicles Total
£000 £000 £000 £000
Where the lease expires:
Within one year 50 3 47 100
In the second to the fifth year 140 57 180 377
After the fifth year 1,448 –– 1,448
1,638 60 227 1,925 Axis-Shield plc
Annual Report and Accounts 2002
49
Notes to the Accounts continued
21. Capital Commitments
The following commitments existed at the balance sheet dates
2002 2001
Group £000 £000
Contracted but not provided for in the accounts 383 130
22. Related Party Transactions
At 31 December 2002 Medinor ASA had a debtor balance of £106,000 (2001: £166,000) due from its associate, Kolnes & Hammer
ASA. During 2002 Medinor ASA had sales to Kolnes & Hammer ASA of £11,000 (2001: Nil) and received interest from them of
£8,400 (2001: Nil).
In addition to the fees received by G G McAndrew in respect of his position as non-executive director, he received an additional
£5,368 (2001: Nil) for management consultancy during the year.
23. Acquisitions
On 1 September 2002 the Group’s wholly owned subsidiary, Medinor ASA, acquired the business and certain assets of Samarit
Engros AS (Samarit) for a total cash consideration of £968,000. The total adjustments required to the book values of the assets
and liabilities acquired in order to present the net assets at fair values in accordance with the group accounting policies was
(£64,000), details of which are set out below, together with the resultant goodwill arising. This purchase has been accounted for
as an acquisition.
From the date of acquisition to 31 December 2002 Samarit contributed £909,000 to turnover, and made an operating profit of
£46,000. Samarit contributed £36,000 to the Group’s net operating cash flows and paid £18,000 in respect of interest. There was
no capital expenditure between the date of acquisition and 31 December 2002.
For the year ended 31 December 2001 Samarit had attributable profits of £34,000.
For the period from 1 January 2002 to the date of acquisition Samarit financial statements show turnover of £1,898,000 and a
loss before taxation of £84,500.
The table below shows the effect of fair value and other adjustments on the balance sheet of Samarit at the date of acquisition.
The book value amounts are reported in accordance with UK accounting principles as stated in the accounting records of the
Company acquired.
Book Fair 
Value Adjustments Value
£000 £000 £000
Tangible fixed assets 10 – 10
Stock 452 (64) 388
Net Assets acquired 462 (64) 398
Goodwill 570
Consideration 968
The adjustment to the book value of stock reflects the provision for slow moving items.
24 Financial Instruments
The Group’s financial instruments comprised borrowings, some cash and liquid resources and various items such as trade
debtors and trade creditors that arise directly from its operations. It is and has been throughout the year, the Group’s policy that
no trading in financial instruments should be undertaken.
Short-term debtors and creditors have been excluded where permitted by FRS 13.
The main risks arising from the Group’s financial instruments are foreign currency and interest rate risks. 50 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
a) Foreign currency risk
At 31 December 2002, the Group had three significant overseas subsidiaries, Axis-Shield ASA, Medinor ASA, and Axis-Shield PoC
which operate in the Nordic Region and whose turnover and expenses are denominated in Norwegian Kroner, Swedish Kroner,
Danish Kroner and Finnish Mark. As a result, the Group’s Sterling balance sheet can be affected by the exchange rates ruling at
31 December. The Group also has transactional currency exposures arising from sales or purchases by an operating unit in
currencies other than the unit’s functional currency (defined as the net amount of trade and inter-company debtors less trade
and inter-company creditors).
The table below details the extent to which Group Companies have monetary assets and liabilities in currencies other than their
local currency. Foreign exchange differences on retransalation of these balances are taken to the Profit and Loss account of
Group Companies and the Group.
Functional Currencies
2002 2001
Norwegian Norwegian 
Sterling Kroner Total Sterling Kroner Total
Net foreign currency monetary assets/liabilities £000 £000 £000 £000 £000 £000
Sterling – (1,837) (1,837) – (1,536) (1,536)
US Dollars 436 263 699 101 293 394
Norwegian Kroner (5) – (5) (926) – (926)
Euro (62) 631 569 (13) (514) (527)
Japanese Yen (8) 189 181 – 71 71
French Francs ––– – 18 18
German Deutschemarks ––– – 140 140
Swiss Francs – 445 445 – 582 582
Swedish Kroner – (106) (106) – 217 217
Danish Kroner – (209) (209) – 20 20
Finnish Mark ––– – 240 240
Austrian Schilling ––– – 102 102
Total 361 (624) (263) (838) (367) (1,205)
The above tabulation includes a Sterling inter-company amount of £1,623,750 held in Norway.
b) Interest rate risk of financial liabilities
The Group does not have a formal policy to manage the exposures of financial liabilities but seeks to minimise levels of
borrowing and take advantage of fixed rates of interest where possible.
The interest rate risk profile of the Group’s financial liabilities at 31 December 2002 was as follows:
Fixed Rate
Financial
Liabilities
Currency £000
Sterling 23
23 Axis-Shield plc
Annual Report and Accounts 2002
51
Notes to the Accounts continued
The interest rate risk profile of the Group’s financial liabilities at 31 December 2001 was as follows:
Floating Rate Fixed rate
Financial Financial Total
Liabilities Liabilities Borrowings
Currency £000 £000 £000
Sterling – 65 65
Norwegian Kroner 887 – 887
887 65 952
All of the Group’s other creditors are excluded from the above table due to the exclusion of the short-term items.
The fixed rate financial liabilities bear interest at rates from approximately 10.15% to 10.29% (2001: 10.99% to 27.50%). These
rates are fixed for the remaining term of the agreements which expire in 2003.
c) Interest rate risk of financial assets
The Group places surplus funds on short term fixed rate deposits. The Group does not have a formal policy to manage the
exposures of these deposits to the movements in the interest rate. However, the Group does take advantage of the best
available rates to it while retaining flexibility for working capital needs.
2002 2001
Cash at Bank Fixed Rate Cash at Bank Fixed Rate 
and In Hand Deposits Total and In Hand Deposits Total
£000 £000 £000 £000 £000 £000
Sterling 578 7,616 8,194 298 3,814 4,112
Norwegian Kroner 4,462 – 4,462 4,208 4,208
Danish Kroner 51 – 51 64 64
Swedish Kroner 662 – 662 467 467
Finnish Mark 31 – 31 109 109
Japanese Yen 134 – 134 174 174
Swiss Franc –– – 17 17
US Dollar 746 – 746 853 853
Euro 476 – 476 424 424
Total 7,140 7,616 14,756 6,614 3,814 10,428
The fixed rate deposits in Sterling are placed with banks for up to 12 months and earn interest at a fixed rate up to 4.3125%.
Cash at bank earns interest in Norway at a rate of 6.05% to 6.20% and in the United Kingdom 1.75% to 3.70%.
d) Maturity of financial liabilities 
The maturity profile of the carrying amount of the Group’s financial liabilities, other than short-term creditors and
accruals at 31 December 2002 were as follows:
2002 2001
Finance Finance
Debt Leases Total Debt Leases Total
£000 £000 £000 £000 £000 £000
Within one year, or on demand – 23 23 887 42 929
Between one year and two years –– – – 23 23
Between two and five years –– – –––
– 23 23 887 65 952 52 Axis-Shield plc
Annual Report and Accounts 2002
Notes to the Accounts continued
e) Borrowing facilities
The Group has no borrowing facilities at year end.
f) Fair values of financial assets and financial liabilities
The Group does not consider there to be any material differences between the stated book value and the fair value of financial
assets and financial liabilities other than those disclosed in Note 24g.
g) Hedges
As explained in the Financial Review on pages 14 and 15, the Group’s policy is to hedge currency risk using forward foreign
currency contracts for foreign currency debtors and creditors.
The table below shows the extent to which the Group has off-balance sheet (unrecognised) gains and losses in respect of
financial instruments used as hedges at the beginning and end of the year. It also shows the amount of such gains and losses
which have been included in the Profit and Loss account for the year and those gains and losses which are expected to be
included in the next year’s or later Profit and Loss accounts.
All the gains and losses on maturity of the hedging instruments are expected to be matched by losses and gains on the hedged
transactions or positions.
Total Net
Gains and
Gains Losses Losses
£000 £000 £000
Unrecognised gains on hedges at 1 January 2002 18 – 18
Gains arising in 2001 that were recognised in 2002 (18) – (18)
Gains arising before 1 January 2002 not recognised in 2002 –––
Losses arising in 2002 that were not recognised in 2002 – (31) (31)
Unrecognised losses on hedges at 31 December 2002 – (31) (31)
The above unrecognised losses are expected to be included in 2003 income. Glossary
Activated Factor XII (AFT)
A factor in the clotting process which is
important in the production of fibrin, the 
key component of a clot.
Anaemia
A deficiency in red blood cells or
haemoglobin, the oxygen-carrying molecule
found in such cells, which are also known as
erythrocytes.
Analyte
The substance being measured in an assay.
In the present context this will be in a sample
taken from a patient, such as blood or urine,
and its measurement will aid the diagnosis or
monitoring of a disease or its treatment.
Antibody
A biological entity produced by the body’s
immune system in response to the
introduction of an antigen. This is part of 
the body’s normal mechanism for protecting
itself against infection.
Assay
A test to determine the concentration 
of a substance.
Atherosclerosis
The hardening of arteries and the narrowing
of the space available for blood flow, by
deposit formation on the inside walls of the
blood vessels.
Autommune Disease
A disease where the body’s immune system
is targetted against its own tissues.
Carbohydrate deficient transferrin
A modified form of transferrin, which is 
a substance concerned with binding and
transport of iron in the blood. Identified 
as a marker of harmful alcohol consumption.
CE marking
The process of identifying compliance 
with the EC IVD Directive, by displaying 
the CE mark on product packaging.
Cobalamin
The vitamin B12 molecule, which cannot 
be synthesised by animals or plants and 
thus has to come from the diet or
supplementation.
Cognitive Score
A system of defining the mental capacity 
and functioning of the brain.
C-reactive Protein
Analyte which distinguishes a viral from 
a bacterial infection. This is an acute phase
protein associated with the inflammatory
process. It is released into the bloodstream in
adverse situations and binds to toxins 
and bacteria.
EIA
Enzyme immunoassay
ELISA
Enzyme-linked immunosorbent assay.
Enzyme
A molecule, generally a protein, that
facilitates or speeds up a specific biological
reaction.
FDA
Food & Drug Administration, the regulatory
body in the USA for in-vitro diagnostics.
Glycated Haemoglobin
A marker of diabetic control, reflecting the
blood glucose concentrations over a 2-3
month period (associated with the
haemoglobin in red blood cells, which 
have a life of about 120 days).
HoloTC
Analyte which is the active part of the B12
molecule, cobalamin, as it is transported in
the bloodstream.
Homocysteine
An amino acid, one of the building blocks of
protein. High levels are associated with
increased risk of cardiovascular and
neurodegenerative disease.
Human Genome
The genetic make-up of the human body.
Hyperhomocysteinaemia
The condition of elevated homocysteine
levels in the blood.
Immunoassay
A kit which uses antigen-antibody reactions
as part of the measurement procedure.
In-Vitro
Used to designate a test performed outside
the body (literally in-glass).
Marker
Any substance whose presence or level of
body fluids is measured for diagnostic or
monitoring purposes.
Neurodegenerative Disease
A condition where brain function is
compromised, including dementia and
Alzheimer’s disease.
Non-chromatographic 
An analytical technique that does not involve
chromatography, which is a process of
separating a mixture of substances by
passing them over a porous surface, using
one or more liquid or gaseous solvents.
OEM
Original equipment manufacturer. This is
used to describe an arrangement where one
company manufactures products for another
under the latter’s label.
Osteoporosis
Brittle bone disease seen particularly in the
elderly and postmenopausal women.
Point of Care
Testing performed in the presence or close
proximity of a patient, allowing a health care
professional to obtain quick results to
facilitate a better informed decision on
patient management.
Polymorphism
A difference between individuals in their
genetic configuration, as identified in a
particular gene sequence.
Rheumatoid Arthritis
A chronic inflammatory disease of
autommune origin that causes pain, stiffness
and swelling around the joints, with joint
destruction and functional disability.
Sensitivity
The accuracy of a test in terms of its ability to
detect a positive result or the likelihood of a
negative result being correct.
Specificity
The accuracy of a test in terms of the number
of false positives, or the likelihood of a
positive result being correct.
Treatment algorithm
A guideline for therapy linked to information
on a number of parameters and a decision
tree.
Vascular endothelium
The inside wall of blood vessels, closest to the
blood itself.
Axis-Shield plc
Annual Report and Accounts 2002
53 Axis-Shield Diagnostics Limited
Luna Place
Technology Park
Dundee DD2 1XA
Scotland
Tel: +44 (0) 1382 422000
Fax: +44 (0) 1382 422088
e-mail: shield@uk.axis-shield.com
Website: www.axis-shield.com
Axis-Shield Diagnostics Limited
UK Sales Division
Leewood Business Park
Upton
Huntingdon
Cambs PE28 5YQ
England
Tel: +44 (0) 1480 896 118
Fax: +44 (0) 1480 896 119
e-mail: shield@uk.axis-shield.com
Website: www.axis-shield.com
Axis-Shield ASA
Ulvenveien 87
PO Box 206 Økern
N-0510 Oslo
Norway
Tel: +47 22 70 06 00
Fax: +47 22 70 07 70
e-mail: axis@no.axis-shield.com
Website: www.axis-shield.com
Plasmatec Laboratory Products Limited
Unit 29, Dreadnought Trading Estate
Bridport,
Dorset DT6 5BU
England
Tel: +44 (0) 1308 421829
Fax: +44 (0) 1308 421846
e-mail: martinshaw@plasmatec.demon.co.uk
Axis-Shield PoC AS
Marstrandgata 6
PO Box 6863 Rodeløkka
N-0504 Oslo
Norway
Tel: +47 22 04 20 00
Fax: +47 22 04 20 01
Website: www.axis-shield-poc.com
Medinor ASA
Nils Hansens vei 4
PO Box 94, Bryn
N-0611 Oslo
Norway
Tel: +47 22 07 65 00
Fax: +47 22 07 65 05
e-mail: medinor@medinor.no
Website: www.medinor.no
Medinor Sweden AB
Tryffelslingan 14
PO Box 1215
SE-181 24 Lidingo
Sweden
Tel: +46 8 544 812 00
Fax: +46 8 767 75 75
e-mail: hakan.jansson@medinor.se 
Website: www.medinor.se
Medinor Denmark AS
Langebjerg 35B
PO Box 321
DK – 4000 Roskilde
Denmark
Tel: +45 70 15 1041
Fax: +45 70 15 5262
e-mail: peter.albeck@medinor.dk
Medinor Finland Oy Ab
Rajatorpantie 41 B
FIN-01640 Vantaa
Finland
Tel: +358 9 8520 2400
Fax: +358 9 8520 2410
e-mail: anne.vaari@medinorfinland.fi
Axis Shield plc Annual Report and Accounts 2002
Axis-Shield plc
Luna Place
Technology Park
Dundee DD2 1XA
Scotland
Tel: +44 (0)1382 422000
Fax: +44 (0)1382 561201
e-mail: shield@uk.axis-shield.com
Website: www.axis-shield.com