Advanced Medical Solutions Group plc
Annual Report and Accounts 2005
developing 
and providing 
innovative technology
Advanced Medical Solutions Group plc   Annual Report and Accounts 2005 Advanced Medical Solutions is          
a UK based company developing
and providing leading edge technology
to the global woundcare market
Advanced Woundcare
AMS provides a full range of advanced woundcare 
products for sale in hospital, nursing home and 
community care markets. The main indications are for
chronic wounds such as ulcers and pressure sores.
These products pioneer the concept of moist wound healing
to allow wounds to heal faster and with less pain and scarring
if they remain moist. They protect the wound, deal with
tissue fluids and provide an optimal environment for healing
to occur.
Wound Closure
Our products based on medical adhesives technology allow
the closure of wounds following trauma or surgical incisions.
Tissue adhesives offer significant benefits over conventional
ways of closing wounds such as sutures, staples and
adhesive strips.
They are simple to use, non-invasive, help to reduce 
the risk of infection, minimise trauma to the patient 
and provide good clinical and cosmetic outcomes.
OUR PRODUCTS
Highlights 1
Chairman’s Statement 2
Chief Executive’s Review 6
Financial Review 12
Board of Directors 14
Committees and Advisers 15
Report of the Directors 16
Remuneration Report 19
Corporate Governance 22
Independent Auditor’s Report 25
Consolidated Profit and Loss Account 26
Statement of Total Recognised 
Gains and Losses 27
Balance Sheets 28
Consolidated Cash Flow Statement 29
Notes Forming Part of 
the Financial Statements 30
Five Year Summary 46
Notice of Meeting 47
CONTENTS
Designed and printed by Jones & Palmer Limited, Birmingham. tel: (0121) 236 9007 Turnover (£m)
1
Advanced Medical Solutions Group plc
HIGHLIGHTS
1
 Company reports maiden profits
 Positive EBITDA of £1.0 million (2004: break-even)
 Group turnover up 17% to £12.9 million (2004: £11.0
million)
 Gross margin further improved from 37% to 40%
 Positive total cash flow resulting in year-end cash of 
£3.4 million (2004: £3.2 million)
 New products launched and partnerships extended:
 Silver alginate launches in US and Europe
 LiquiBand Laparoscopic™ launched throughout Europe
 Global deal with Kimberly-Clark for skin sealant
 Group well positioned for future growth:
 US approval of LiquiBand™ range under way
 Products undergoing approval in Japan and in China
 NHS direct business building steadily
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
11.0
9.0
8.4
7.4
12.9
2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
17% sales growth 
1.5
1.0
0.0
-0.5
-1.0
-1.5
0.0
-1.3
-1.0 -1.0
1.0
£1 million positive
EBITDA (£m)
Cash generative 
Net Cash Flow (£m)
0.2
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-1.9
-0.4
-0.9 -0.9 2
CHAIRMAN’S STATEMENT
2
Overview
I am delighted to inform investors that
AMS has delivered maiden profits
following a profitable second half year. 
Group turnover was up 17% to £12.9
million for the full year, with growth
achieved across both business units,
advanced woundcare and wound
closure, and in all key markets. In
advanced woundcare, the branded and
private label partner business grew at
double the market rate, as the
Company strengthened its position in
the dynamic silver alginate market with
further launches in US and Europe
during 2005. Good progress was made
in the UK in establishing the
ActivHeal® generic woundcare range.
Independent technical and clinical
evaluations have shown that these
products offer equivalent performance
when compared with branded products
while still maintaining the quality of
patient care. The ActivHeal® range has
been shown to significantly reduce the
cost of treating wounds, offering real
and immediate savings to the NHS.
These savings are estimated to be of
the order of £25 million per year. In
wound closure, the Company
broadened its LiquiBand® product
range and is currently in the process of
obtaining approval for these products
in the US, Japan and China. Also it
strengthened its position in Europe
with the launch of LiquiBand
Laparoscopic™.
The turnover growth, together with
further improvement in gross margin
from 37% to 40% and continued
control of operating expenses, resulted
in a small pre-tax profit in 2005,
compared with a £1.0 million loss in
the prior year. A post-tax profit of 
£0.3 million was reported following
recognition of an R & D tax credit and
a deferred tax asset. EBITDA improved
from break-even to £1.0 million for the
period. The Group generated a total of
£0.2 million of cash in the year
resulting in cash of £3.4 million at 
the year-end. 
Good progress has been made during
2005 in positioning the Company for
major future growth opportunities in key
business areas and global markets. By
delivering its stated strategy of bringing
the existing business through to break-
even within current cash, management
has now provided a solid financial
platform for this future growth.
Operating Review
The Group’s core focus remains the
development and manufacture of
advanced woundcare and wound
closure products for sale in hospitals
and long-term care facilities.
Advanced woundcare products are
marketed and distributed into the 
The Group has delivered maiden
profits providing a solid financial
platform for future growth. 3
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2005
Advanced Medical Solutions Group plc
3
$2.6 billion global market through
either major woundcare companies
under their leading brands or through
private label distributors. Products
based upon cyanoacrylate technology
address the emerging tissue adhesives
segment of the $5 billion wound
closure market. This market is
currently accessed through a direct
sales force in the UK and through
distribution partners in Europe. The
direct UK sales force also carries a full
range of standard advanced woundcare
products for sale into the NHS hospital
and community care markets under the
ActivHeal® brand.
Progress continues to be made in
reducing the Group’s dependence on
the performance of its major branded
partners for delivering revenue growth
and profit. Its strategy of broadening
its routes to market, by complementing
these relationships with the provision
of private label standard products to
major distributors and by the expansion
of its direct sales presence in the UK
home market, continues to be
successful.
Advanced Woundcare
Advanced woundcare sales of £10.5
million were up 18% on the prior year,
which at double the market growth rate
reflects good progress made in gaining
market share.
The Company’s position in the dynamic
silver market was strengthened with the
introduction of its fibre based silver
alginate technology into Europe under a
leading brand and the launch by a
number of partners of alginate
dressings incorporating ionic silver
alginate in the US. Silver is a broad
spectrum antimicrobial that helps to
prevent infections such as MRSA. In
combination with alginate, a biopolymer
derived from seaweed, AMS can provide
products ideally suited to treatment of
a wide variety of chronic wounds.
Local MP Stephen O’Brien opens a new
manufacturing line at the AMS Winsford facility. 4 4
This transition to higher value products
fits with the Company’s route to market
strategy, whereby the Company licenses
its new technology to major branded
partners that are best placed to create
these markets on a global basis, whilst
the Company also addresses the cost
pressures on healthcare budgets by
providing a value range of products for
routine use. These products are sold
via private label distributors or direct to
the NHS under its ActivHeal® brand.
Further progress has been made with
the ActivHeal® offering during the
year. Independent technical and
clinical assessment has shown that
ActivHeal® products are equivalent to
or better than the branded versions
whilst offering significant savings,
typically 40%, against current spend.
This represents £25 million per year in
England and Scotland at a time of
severe funding pressure. Nine Trusts
are currently using ActivHeal® and
realising savings. Central decision
making bodies are now being targeted
to encourage early adoption and
savings throughout the NHS to
accelerate this programme.
Complementing this approach, the Group
continues to fund the development of
new differentiated products for licensing
to its major branded partners.
Progress continues to be made in
accessing the Far East market with a
number of products currently
undergoing regulatory approval in
Japan in collaboration with a marketing
partner, Nitto Medical.
Wound Closure
The wound closure business grew 11%
to £2.4 million in the year despite a
slow first quarter in the NHS due to
pressure on budgets. Although the core
Accident & Emergency (A&E) business
was affected, the Company maintained
its strong market leadership position.
The European partner base has been
broadened with the addition of Baxter
Healthcare Europe as a marketing and
distribution partner for the key markets
of France and Spain. This has now
provided the Company with a presence
in all the key markets in Europe for the
products to be used in both A&E and
the Operating Room (OR).
The launch of LiquiBand
Laparoscopic™ takes the Company into
an exciting new growth area. This
product was specifically designed to
target wound closure following
laparoscopic (keyhole) surgery, which is
an increasingly popular technique, with
more than 1 million procedures
currently performed in Europe each
year. Closure of keyhole incisions with
adhesives offers significant advantages
to both the surgeon and patient in
terms of clinical and cosmetic outcome.
This product is now on sale throughout
Europe. It forms an ideal complement
to the LiquiBand Surgical™ product
which is more suited to larger wounds,
such as those following Caesarean
sections or hip replacement.
Excellent progress is being made in
delivering a profitable, high value
medical technology business.
CHAIRMAN’S STATEMENT CONTINUED 5
Advanced Medical Solutions Group plc
5
The Company has also initiated the
regulatory approval of the LiquiBand™
product range by the Food & Drug
Administration (FDA) in the US.
Approval is anticipated in 2007, which
will provide access to the major part of
the global $100 million tissue
adhesives market. The Company is also
progressing regulatory approval of
wound closure products in Japan and
China. These approvals in the US and
Far East markets offer very exciting
growth opportunities for the Company
in the medium to long term.
Development activity continues with a
view to extending the use of
cyanoacrylate technology for closing
wounds and protecting skin against
breakdown. The strategic partnership
with Kimberly-Clark for a novel surgical
skin sealant announced in March
2006, offers a very exciting new
business opportunity. The Company
expects to make further major
announcements about technology
developments in 2006.
Outlook
The outlook for the Group is extremely
positive. Good progress has been made
during the year in growing market
share. The Group is well positioned for
continued organic growth in key global
markets with its major branded and
private label partners and through its
direct UK sales into the NHS.
The Group’s cash position and AIM
status provide it with the opportunity to
accelerate growth by making suitable
acquisitions which fit with the Group’s
stated strategy and technologies.
I would like to thank all AMS
employees for their efforts over the
past year, particularly in bringing the
business through to profitability.
The Group is making excellent progress in
delivering a profitable high value medical
technology business for its stakeholders.
Dr Geoffrey N Vernon
Chairman
13 March 2006
Advanced Medical Solutions Group plc
Picture Required
Three tier strategy to increase 
revenue and margins
Developer and Manufacturer:
AMS
Broadening routes to market
 ❘  ❘  ❘ Branded Partners Marketing New concepts
Private Label Partners Distributor Cost management
UK Direct End User 6
CHIEF EXECUTIVE’S REVIEW
6
Modern healthcare providers are faced
with the conflicting challenges of
controlling budgets whilst meeting the
demands of users for the latest
products and treatments. AMS is
ideally placed to help meet these
needs by offering both leading edge
technologies and value products to
help manage spiralling costs.
New technologies are taken to market
via major branded partners who have
the ability to commercialise these on a
global basis. This involves significant
marketing and promotional support to
train and educate users on the new
concepts. AMS is also well placed to
address the trend to private label in
advanced woundcare through provision
of own label ranges that deliver cost
benefits in treating routine wounds.
The Group continues to see real benefit
in selling direct into the NHS in its
home market. As a UK based company,
this allows it to interact directly with
end users which helps drive innovation
through R & D and manufacturing.
Technology Platforms
The Group has further strengthened its
range of material technologies covering
advanced woundcare dressings and
tissue adhesives and sealants.
These products are manufactured in
dedicated state of the art medical
device facilities in the UK that conform
to the very latest international quality
system ISO 13485: 2003. The Group’s
tissue adhesives facility in Plymouth
was approved to this standard in
December 2005 and the advanced
woundcare facility in Winsford followed
in March 2006.
In advanced woundcare, a full range of
materials are available covering alginate,
film, foam, hydrocolloid and hydrogel.
In September 2005, a new
manufacturing line was installed and
commissioned at Winsford that doubled
the output of packed dressings per shift
and a new dedicated hydrocolloid
process was installed to support the
launch of a new, improved product.
The market for silver dressings
continues to expand rapidly and AMS
is well placed to exploit this trend with
a number of silver products and
technologies. These products address
the growing concerns over wound
infection. The inclusion of silver in
wound dressings helps to prevent
infection from a wide range of micro-
organisms such as MRSA.
AMS is ideally placed to become a
new generation supplier balancing
demands for innovation and 
cost management.
Technology Platforms:
Advanced Woundcare
Film Foam Hydrocolloid Hydrogel Alginate Silver Alginate Advanced Medical Solutions Group plc
Silver Alginate
Silver alginate contains silver that has antimicrobial properties that help fight and kill micro-organisms
Advanced Medical Solutions Group plc
Silver is a broad spectrum
antimicrobial that helps to prevent
wound infections by a wide range of
commonly occurring micro-organisms. 
In combination with alginate, a
naturally occurring biopolymer derived
from seaweed, AMS can provide
products ideally suited to treatment of 
a wide variety of chronic wounds.
7
1 Growth of micro-organisms 
(stained green) is not inhibited by
normal alginate dressing.
2 Silver alginate dressing kills 
micro-organisms and creates zone 
of inhibition.
3 There is also no growth underneath
the dressing.
Silver is effective against a
wide range of micro-organisms:
 MRSA
 MRSE
 VRE
 Escherichia coli
 Staphylococcus
aureus
 Pseudomonas
aeruginosa
 Candida albicans 8
CHIEF EXECUTIVE’S REVIEW CONTINUED
8
A silver fibre based alginate range is
now on sale in most international
markets including US and Europe
through a major global partner under
the partner’s leading brand. Products
based on an alternative silver
technology have also been introduced
into the US market during 2005 and
will be introduced in Europe following
regulatory approval.
Based on feedback from its UK
customers and clinical advisers, AMS
developed and launched an improved
hydrocolloid dressing in February
2006. Hydrocolloid dressings have
been widely used for many years for
treating light to moderately exuding
wounds, such as pressure sores or
ulcers. The dressing absorbs fluid from
the wound and forms a soft gel,
providing an optimal environment for
healing and removal. The new product
is thinner, more conformable and more
integral, which aids intact removal
from the wound. The product is highly
breathable allowing moisture to pass
through thereby increasing the fluid
handling capability.
The Group strengthened its medical
grade cyanoacrylate tissue adhesives
and sealants technology platform
during 2005. A strong portfolio of
products are now available covering the
closure of small cuts and trauma
wounds through to large surgical
incisions. These products are approved
and sold throughout Europe under the
LiquiBand™ brand.
Many surgical procedures are now
conducted by laparoscopic or keyhole
surgery. These include many
gynaecological procedures and routine
general surgery operations, such as gall
bladder removal and hernia repair.
LiquiBand Laparoscopic™ was launched
in June 2005 and designed specifically
for closure of small surgical incisions up
to 5 cm long, resulting from laparoscopic
surgery. The product consists of a two-part
adhesive system that seals and protects
the wound resulting in reduced trauma,
reduced risk of infection, excellent
cosmetic outcomes with no sutures or
staples to remove.
The Group has also developed an
innovative new product for reducing
the risk of skin flora contamination
throughout a surgical procedure. Based
on patented cyanoacrylate technology,
the product consists of a film forming
Technology Platforms:
Wound Closure
SkinLink™ LiquiBand Flowcontrol™ LiquiBand™ LiquiBand Surgical™ LiquiBand Laparoscopic™ CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2005
Advanced Medical Solutions Group plc
LiquiBand Laparoscopic
TM
The surgical incision is first closed with the adhesive and then the wound coated
with a liquid film that seals and protects.
Many surgical procedures are now
conducted by laparoscopic or keyhole
surgery. These include many
gynaecological procedures and routine
general surgery operations such as gall
bladder removal and hernia repair.
9
LiquiBand Laparoscopic
TM
is designed for closure of small
surgical incisions.
Advanced Medical Solutions Group plc 10
CHIEF EXECUTIVE’S REVIEW CONTINUED
10
solution that bonds to the skin sealing
off spaces where bacteria can grow,
preventing infection of the surgical
site.
Surgical site infections occur in 2–5%
of all surgical procedures which can
lead to serious complications and
increased morbidity to the patient and
significant incremental costs to health
care providers. A novel applicator has
been developed that allows easy and
effective application of the solution
particularly to irregular and contoured
areas of the body, such as shoulders
and knees. This product has been
exclusively licensed to Kimberly-Clark
Healthcare on a global basis and
launched in Europe.
Growth Opportunities
The Group has a number of significant
opportunities for driving organic growth
of the business.
 Silver Alginate
The silver market continues to expand
rapidly and is estimated to be $100
million globally growing in excess of
25% with silver alginate the major part
of this. The Company is well positioned
in this dynamic market with products
and partners.
 NHS
Good progress has been made in
getting the ActivHeal® value range of
products adopted by the NHS. Of the
£100 million spend on advanced
woundcare in NHS Hospital and
Primary Care Trusts, the ActivHeal®
range addresses £60–70 million and
offers savings of the order of £25
million assuming full conversion.
Nine Trusts had been converted to
ActivHeal® by the end of 2005 and
many more are currently evaluating the
opportunity. A clinical study carried out
by several Tissue Viability Nurses at St
John’s Hospital, West Lothian
Healthcare NHS Trust, was published 
at the Wounds UK meeting in Harrogate
in November 2005. The study was
conducted in two medical wards over a
four week period to provide feedback to
Scottish Healthcare Supplies on how
the products work in clinical practice.
The study compared the ActivHeal®
range with branded products already in
use within the Trust. The ActivHeal®
range performed equally or better than
the branded products in all cases over a
range of wounds covering pressure
ulcers, pre-tibial lacerations and graft
donor sites. There were no problems
recorded with any of the products in
use. A cost benefit study, carried out
following St John’s Hospital’s changing
to the ActivHeal® range in August
2005, has shown a significant cost
saving in the use of the ActivHeal®
products. 
It was concluded in the reported study
that the products evaluated within the
ActivHeal® range have allowed the
cost of treating wounds within West
Lothian to be reduced whilst still
maintaining the quality of woundcare.
The recent addition of the Oxford
Radcliffe Trust is a major step forward
for the business. The ActivHeal® range
has been implemented across the four
hospitals in the Trust as first choice
dressings.
Implementation of the AMS
ActivHeal
®
value range allows
NHS Trusts to reduce costs
whilst maintaining the quality 
of woundcare. 11
Advanced Medical Solutions Group plc
 New Territories
Progress continues to be made in
getting US approval for the
LiquiBand™ range and this is expected
by the end of 2007. This will take the
Company into the major part of the
global $100 million tissue adhesives
market with a product that is well
proven in Europe.
Japan is the second largest advanced
woundcare market after the US at
$300 million. There is also a small
emerging market for tissue adhesives.
The collaboration with our strategic
partner, Nitto Medical, was broadened
with a further four products being
identified for market evaluation,
regulatory approval and subsequent
marketing in Japan. The first product is
expected to be approved and
introduced during 2006 with further
products following throughout 2007.
Good progress is also being made in
getting approval for LiquiBand™ tissue
adhesive in China. It is estimated that
around 7 million surgical procedures
are performed per year in large and
medium sized hospitals in China with
the vast majority of surgical incisions
being closed by sutures. We expect
approval to enter this existing emerging
market in 2007.
To support these growth opportunities,
the Group has strengthened its
commercial organisation.
In July 2005, Chris Meredith joined
AMS as Group Commercial Director
with the objective of integrating sales,
marketing, customer service and
business development across the
Group. This realignment has been
successfully completed and the
commercial resources have been
organised in line with the Company’s
market and partner focus. 
I am pleased that Chris has now been
appointed to the plc Board as a
Director and believe this will give the
Group a stronger commercial focus
moving forward.
Summary
A solid financial platform has been
established for the business. With a
strong technology portfolio, exciting
pipeline of new products, market
expansion opportunities and good
global reach through its partners, AMS
is well positioned for future growth.
Dr Don W Evans
Chief Executive Officer
12 April 2006
NEWSFLOW
CE Mark approval and
European introduction of
silver alginate by Johnson
& Johnson Wound
Management
Strategic partnership
with Kimberly-Clark
Healthcare for surgical
skin sealant
NHS Scotland
contract for
ActivHeal
®
range
Product
launched for
laparoscopic
wound closure
Lothian study
shows AMS
value range
reduces
spend
Commercial
organisation
strengthened
China product
approval
progressing
Oxford
Radcliffe NHS
Trust
implements
ActivHeal
®
Partner for
LiquiBand
TM
for USA
Baxter to sell
LiquiBand
TM
in France
and Spain
Nitto expands
product range
under review
Local MP opens
new manufacturing
line at Winsford
Improved
hydrocolloid
launched
March 2006 January 2005
Advanced Medical Solutions Group plc 12
FINANCIAL REVIEW
12
Sales
Turnover increased by 17% to 
£12.9 million (2004: £11.0 million)
with advanced woundcare sales
growing 18.5% to £10.5 million
(2004: £8.9 million) and wound
closure sales growing by 11% to £2.4
million (2004: £2.1 million). Growth
continues to be seen across all
territories but was particularly
significant in the UK, where sales grew
32% or £0.9 million from both sales to
branded partners and to the NHS, and
into Europe, where sales to branded
partners increased by 11% or 
£0.6 million.
Increasingly, the Group is seeing
seasonality in its sales, largely due to
the NHS, which is slow to order in the
first quarter of the year. As a result,
turnover was 20% higher in the second
half of the year compared with the first
six months.
Margin
The gross margin for the Group
improved to 40% (2004: 37%), with
the Company’s strategy of selling
higher value products, together with
improvements in manufacturing
efficiency and operational gearing,
proving successful. 
Operating Expenses
Net operating expenses were at a similar
level to last year at £5.2 million. Going
forward the Company anticipates that
further investment will be made in sales
and marketing. The Company continues
to develop new products including
LiquiBand Laparoscopic™ which was
launched in July 2005 and the new
formulation of hydrocolloid which was
launched in February 2006. Some of
this R&D expenditure qualifies for a tax
credit. As the Group moves into profit, it
will no longer be able to surrender this
tax relief for payable tax credits in cash.
Other operating income includes
development fees and milestone
payments received from partners for
ongoing projects.
Operating Profit 
The Group reported a small profit before
tax for the year compared with a prior
year loss of £1.0 million. EBITDA was
£1.0 million compared with break-even
in 2004. 
Interest and Taxation
Net interest received in the year was
unchanged at £0.1 million.
The Group recognised a tax credit of
£0.1 million which is payable in cash
together with a deferred tax asset of
£0.1 million (2004: £0.4 million).
The overall profit for the Group was
£0.3 million and the earnings per
share was 0.19p.
Balance Sheet and Cash Flow
Net working capital excluding cash was
£2.7 million which represents 21.1%
of sales. (2004: 21.6%).
Operating cash being the net of earnings
before interest, tax, depreciation and
amortisation and working capital
movements resulted in a cash inflow of
£0.5 million, compared with a cash
outflow of £0.6 million in 2004.
Capital expenditure increased to £0.6
million (2004: £0.3 million) with new
converting equipment commissioned in
the second half of the year and the
upgrade of the hydrocolloid plant.
These investments are already
delivering the efficiencies anticipated.
The Group has adequate funds
to meet ongoing needs and to
accelerate growth. 13
Advanced Medical Solutions Group plc
The Group ended the year with £3.4
million of cash (2004: £3.2 million)
and net funds of £3.1 million (£2.8
million).
The Group is confident that it has
adequate funds to meet on-going
working capital and internal investment
needs and will be looking to accelerate
growth of the business through
licensing and acquisition.
Treasury
The Group’s main exposure is to the US
dollar with around 20% of the Group’s
sales denominated in US dollars. The
Group’s policy is to hedge significant
transaction exposure to the dollar by
using forward contracts and options and
has both contracts and options in place
to the end of 2006. The Group does
not hedge the exposure arising from the
translation of overseas assets as they
are a small proportion of the Group’s
assets. The Group is able to mitigate its
exposure to the Euro by sourcing raw
materials from Europe.
The Group invests funds which are
surplus to short term requirements in
fixed rate deposits operating within
parameters for credit ratings and credit
limits for individual institutions that
are approved and monitored by the
Board.
International Financial Reporting
Standards (IFRS)
The Group will be required to report
under IFRS for the year ending 
31 December 2007. Work is
progressing to implement the new
international accounting standards.
Mary G Tavener
Finance Director
13 March 2006
Advanced Medical Solutions Group plc
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
USA Europe UK Rest of
World
Turnover Growth (£m)
£m
6
5
4
3
2
1
0
%
45
40
35
30
25
20
15
10
5
0
01 02 03 04 05
 Gross Profit (£m)      Gross Margin (%)
 2005 Sales Growth  2004 Sales
Gross Profit (£m) and Gross Margin (%)
01 02 03 04 05
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
 EBITDA  Working capital   Capex  Interest
 Taxation   Net
Net Cash Flow (£m) 14
Dr Vernon is a former Executive Director of Rothschild Asset
Management and partner of the venture capital group Advent
Limited. He joined AMS as a non-executive director in July
1998 and became Chairman in January 2001. He has over
20 years’ experience in healthcare and life sciences. He is a
non-executive chairman and director of a number of quoted
and privately owned companies. He is a Chartered Director of
the Institute of Directors.
BOARD OF DIRECTORS
14
Dr Geoffrey N Vernon BPharm, PhD, MBA, Ch.Dir. 
Non-Executive Chairman 
After completing a degree in Chemical Engineering at the
University of Queensland and a PhD in Biomedical
Engineering at the University of Toronto, Dr Evans joined
Johnson & Johnson UK where he worked for 19 years in
Research & Development and Manufacturing. He was
subsequently appointed as Vice-President of European
Operations for Johnson & Johnson Professional. Dr Evans
joined AMS in 1997 as Operations Director and was
appointed Managing Director of Advanced Woundcare in
January 1999. He became Group Chief Executive in January
2000.
Dr Don W Evans BChemEng, MASc, PhD 
Chief Executive Officer
Ms Tavener joined AMS as Finance Director in 1999. Prior to
this she was the Group Financial Controller at BTP plc during
a period of considerable corporate activity and was involved in
the acquisition and disposal of several businesses that
repositioned BTP plc as a fine chemical company. Her
experience has been gained in manufacturing and she has
held financial positions with Cadburys Ltd and Parker
Hannifin, a US Engineering Corporation. Prior to BTP plc, 
she was the Finance Director of Churchill Tableware Ltd.
Mary G Tavener ACMA, MCT, BA (Hons) Chem (Oxon)
Finance Director
Mr Harris was appointed as a non-executive director of AMS
in January 2001. His career has been in both prescription
and consumer healthcare sectors, with sales, marketing and
general management experience with MSD, Lilly, Boots and
Reckitt & Colman before becoming a main Board Director of
Medeva plc. He resigned as a director of Medeva in 1995 to
set up his own consultancy business. He now holds non-
executive appointments with a number of quoted and
privately owned healthcare companies.
R Stephen Harris BPharm, FRPharmS 
Non-Executive Director
Mr. Meredith joined AMS as Group Commercial Director in
July 2005. He began his career in sales for Beecham
Pharmaceuticals and has continued to hold commercial roles
within the healthcare industry ever since. His experience
covers contract manufacturing, product development, clinical
research and branded product sales all within the medical
device, pharmaceutical or consumer healthcare markets. 
Mr. Meredith has previously held senior commercial positions
at Cardinal Health, Banner Pharmacaps, Aster Ceplac and
Smiths Industries.
Chris Meredith BSc (Hons)
Group Commercial Director (appointed 11 April 2006) 15
Advanced Medical Solutions Group plc
Corporate Governance Standing Committees
Audit Committee
Dr G N Vernon, Chairman 
R S Harris
Remuneration Committee
R S Harris, Chairman 
Dr G N Vernon
Nominations Committee
Dr G N Vernon, Chairman 
R S Harris
Dr D W Evans
Company Secretary
M G Tavener
Registered Office
Road Three, Winsford Industrial Estate,
Winsford, Cheshire, CW7 3PD
Registered Number
2867684
Financial Adviser
Bridgewell Securities Limited,
Old Change House, 
128 Queen Victoria Street, 
London EC4V 4BJ
NOMAD
Bridgewell Securities Limited,
Old Change House, 
128 Queen Victoria Street, 
London EC4V 4BJ
Auditors
Baker Tilly
No. 1 Old Hall Street, Liverpool, L3 9SX
Solicitors
Wragge & Co, 55 Colmore Row,
Birmingham, B3 2AS
Registrars and Transfer Office
Capita IRG Plc, The Registry, 
34 Beckenham Road, Beckenham, 
Kent, BR3 4TU
Bankers
HSBC Bank plc, City Branch, 
4 Dale Street, Liverpool, L69 2BZ
Patent Attorneys
Marks & Clerk, Manchester Office, 
Sussex House, 83–85 Mosley Street,
Manchester, M2 3LG
Foley & Lardner, LLC, 
1530 Page Mill Road, 
Palo Alto, California, 94304–1125
Public Relations
Buchanan Communications, 
45 Moorfields, London, EC2Y 9AE
COMMITTEES AND ADVISERS
Advanced Medical Solutions Group plc 16
REPORT OF THE DIRECTORS
For the year ended 31 December 2005
The directors present their report and
the audited financial statements for
the year ended 31 December 2005.
The directors state that, so far as they
are aware, there is no relevant audit
information of which the auditors are
unaware and that they have taken all
reasonable steps to ascertain such
information and to establish that the
auditors are aware of it.
Principal Activities, Trading Review
and Future Developments
The principal activity of the Group
comprises the development and
manufacture of advanced woundcare
and wound closure products for sale
into hospitals and long-term care
facilities. A review of the operations for
the year and future developments is
contained within the Chief Executive’s
review on pages 6 to 11 and the
financial review on pages 12 and 13.
Dividends
The Group made a profit for the year to
31 December 2005 of £0.3 million.
The directors do not recommend the
payment of a dividend and the whole
of the profit will be transferred to
reserves.
Research and Development
The Group spent £1,147k (2004:
£1,220k) in the year ended 
31 December 2005 on research and
development, all of which has been
written off to the profit and loss
account. 
Creditors Payment Policy
The Group’s policy for the year to 
31 December 2005, for all suppliers,
is to fix terms of payment when
agreeing the terms of each business
transaction, to ensure the supplier is
aware of those terms, and to abide by
the agreed terms of payment provided
that the supplier performs its
obligations. Where terms have not been
specifically agreed, it is the Group’s
practice to settle invoices in line with
local and industry requirements. The
Group’s trade creditors at 31 December
2005 represented approximately 76
days of purchases (2004: 90 days).
Charitable and Political Contributions
The Group did not make any charitable
or political contributions during 
the year.
Post-Balance Sheet Events
Chris Meredith was appointed as a
director to the Main Board in April
2006. His details are shown on 
page 14.
Share Capital and Issue of Ordinary
Shares
The authorised and issued share
capital of the Company is set out in
Note 23 to the accounts on pages 42
and 43.
Substantial Shareholdings
The Company’s major shareholders at
29 March 2006 are:
Number of
Shares Per cent
Newton Investment Management 19,174,026 13.50
Invesco 14,574,938 10.26
Cavendish Asset Management 12,950,000 9.11
Framlington 10,127,300 7.13
Electra Investment Trust 5,882,352 4.14
Artemis 5,882,352 4.14
Aerion Fund Management 5,677,972 4.00 17
Advanced Medical Solutions Group plc
Employees
The Group’s policy is to consult and
discuss with employees, through
meetings, both formal and informal,
those matters likely to affect employees’
interests. The Employees’ Consultative
Committee, which comprises
representatives of employees and
management, meets regularly to discuss
business issues and areas of concern. 
Employees are encouraged directly
through share option schemes,
performance reviews, and training and
development opportunities. Each line
manager is responsible for
implementing this approach.
It is the Group’s policy to give full and
fair consideration to all applications for
employment from disabled persons
having regard to their particular
aptitudes and abilities and to encourage
the training and career development of
all personnel employed by the Group,
including disabled persons. Should an
employee become disabled, the Group
would, where practicable, seek to
continue the employment and arrange
appropriate training.
Health and Safety 
and the Environment
The Group is committed to high
standards in health, safety and
environmental performance. It is the
Group’s policy to abide by all laws,
directives and regulations pertinent to
its field of operations, and to act in a
manner so as to minimise the effects
of its operations on the environment.
Regular audits are undertaken to
evaluate compliance with Health &
Safety laws and Company policy. 
Directors and their Interests 
The directors of the Company at 
31 December 2005 and their interests,
all of which are beneficially held, in
the share capital of the Company were:
Ordinary shares Ordinary shares
of 5p each of 5p each
31 December 2005 31 December 2004
Shares Options LTIP Shares Options LTIP
G Vernon 800,000 — — 675,164 — —
D Evans 642,680 616,666 1,865,173 517,680 1,366,666 —
M Tavener 101,562 300,000 1,348,571 51,562 675,000 —
S Harris 197,857 — — 197,857 — —
There have been no changes in directors’ interests between the end of the financial year and 12 April 2006 being less than one
month prior to the date of notice of the Annual General Meeting. Chris Meredith, who was appointed to the Board on 11 April
2006, has an interest in 500,000 Ordinary Shares of 5p each under the Long Term Incentive Plan (LTIP). 18
Further details of the directors’
remuneration and benefits are included
in the Remuneration Report on pages
19 to 21.
Reappointment
At the forthcoming Annual General
Meeting, Steve Harris will retire by
rotation and, being eligible, will be
proposed for reappointment. Details of
the current directors of the Company
are shown on page 14.
Chris Meredith was appointed to the
Board on 11 April 2006 and offers
himself for reappointment at the
Annual General Meeting.
Auditors
Resolution 2 to reappoint Baker Tilly 
as auditors to the Company will be
proposed at the Annual General
Meeting and authorises the directors 
to agree payment for their services.
Special Business at 
the Annual General Meeting
Resolution 5 proposes the adoption of
a Deferred Share Bonus Plan by
Advanced Medical Solutions Group plc,
the details of which are set out in the
Chairman’s letter which accompanies
this Annual Report.
The effect of Resolution 6 to be
proposed at the meeting would be to
disapply the statutory pre-emption
rights conferred by Section 89 of the
Companies Act 1985 to a limited
extent, that is to say:
 in connection with generally 
pre-emptive issues; or
 in respect of shares having an
aggregate nominal value of
£710,412.68 representing
approximately 10 per cent of the
nominal value of the Company’s
current issued ordinary share
capital.
The resolution will cease to have an
effect at the conclusion of the
Company’s Annual General Meeting to
be held in 2007 or, if earlier, fifteen
months after the date of the passing of
this resolution.
Annual General Meeting
The Annual General Meeting will be
held at 11:00am on 31st May 2006 
at Oaklands Hotel, Millington Lane,
Gorstage, Weaverham, Northwich,
Cheshire CW8 2SU. Details of the
notice of the Annual General Meeting
are given on pages 47 and 48. The
Annual General Meeting provides an
opportunity for private shareholders to
question your Board and to meet
informally with the executive
management after the meeting.
M G Tavener
Company Secretary
12 April 2006
REPORT OF THE DIRECTORS CONTINUED
For the year ended 31 December 2005 19
Advanced Medical Solutions Group plc
REMUNERATION REPORT
The members of the Remuneration
Committee are all non-executive
directors of the Group and have no
personal financial interest arising from
cross-directorship and no day-to-day
involvement in running the business.
The Board has accepted the
Remuneration Committee’s
recommendations in full.
The Remuneration Committee, on behalf
of the Board and in consultation with the
Chief Executive, determines the Group’s
policy on executive remuneration,
employment conditions and the individual
remuneration packages of executive
directors and management earning in
excess of £50,000 per annum and
administers the Share Option Schemes. 
The Group has complied during the
year with Section 1B ‘Directors’
Remuneration’ of the provisions of the
Combined Code and the Schedules A &
B to the Combined Code. 
Remuneration Policy
The remuneration policy is based on
the need to offer competitive packages
to attract and retain senior executives
of the highest calibre. Regular reviews
of the policy are carried out, supported
by independent advice, to ensure that
the range and level of emoluments and
incentive schemes continue to match
current market practice.
Salary
Salaries are measured against
performance and market medians.
Annual Performance Bonus
The service agreements provide that
each executive director shall be
entitled to receive an annual bonus to
be determined by the Remuneration
Committee based on the Group’s
financial and operating performance.
Each participant may receive up to
40% of his or her salary dependent
upon performance measured against
targets resulting from the completion
of the Group’s business plan and the
performance of the Group as measured
by total shareholder return compared
with the FTSE Small Cap Index.
Long-Term Incentives
All employees, except for participants
in the Long Term Incentive Plan (LTIP),
can be granted options over shares in
the Company under the Company’s
Executive Share Option Schemes,
under which both Enterprise
Management Incentive (EMI) options
and Unapproved options may be
granted. Options granted under these
schemes are not offered at a discount.
The exercising of options under these
schemes is conditional on certain
performance conditions which are pre-
determined by the Remuneration
Committee and which accord with the
Joint Statement from the Investment
Committees of the Association of
British Insurers and the National
Association of Pension Funds.
Following feedback from shareholders,
proposals for the adoption of a LTIP were
introduced as the most appropriate
vehicle for long-term incentivisation for
executive directors and other key
employees. The Company’s LTIP was
approved by shareholders on 24 May
2005. Those individuals who are entitled
to awards under the LTIP are no longer
eligible to receive options under the
Company’s Executive Share Option
Schemes. Any options issued to those
employees prior to the introduction of the
LTIP will still be exercisable subject to the
relevant performance criteria being met.
The objectives of the LTIP are to align
the interests of executives with those
of shareholders by making a part of
remuneration dependent on the
success of management in delivering
superior returns to shareholders.
Awards under the LTIP are subject to
performance conditions determined by
the Remuneration Committee.
Participants may be awarded shares up
to a maximum value of 150% of their
basic annual salary in any year. The
shares will vest three years after the
date of award provided certain
performance conditions are met.
The release of shares to participants will
depend upon growth in AMS’s Total
Shareholder Return (TSR) over a three
year period relative to a comparator
group of companies at the start of the
period. TSR is a measure of the return
on an investment in the Company’s
shares based on both share price
improvement and dividends. No shares
will be released unless the company’s
TSR performance is ranked at least the
median performing company within the
comparator group. At this level 30% of
the award will vest at the end of the
performance period. If AMS achieves a
ranking in the top quartile of the
comparator group, 100% of the award
will vest. Where the Company achieves a
ranking between the median and the top
quartile the amount of the award will be
determined on a straight-line basis.
As with share options granted under
the Company’s share options plans,
awards will not vest if the company is
not profitable at the end of the
performance period. 20
REMUNERATION REPORT CONTINUED
TSR was selected by the Committee to be
the appropriate measure for this plan as it
believes it to be a long-term indication of
financial success and one which is
acceptable to the shareholders.
Deferred Share Bonus Plan
The Company is proposing the adoption
of a Deferred Share Bonus Plan (the
‘DSB’) which will be available to all
employees. The DSB allows for part
payment of any annual bonus to be in
the form of shares. It also allows for
the provision of additional matching
shares if the bonus shares are held for
a set period. The DSB encourages
employees to acquire shares in the
Company and retain those shares to
receive additional free shares from the
Company. It will act as a valuable
retention tool for the Company. Full
details of the DSB are included in 
the Remuneration Committee
Chairman’s letter which accompanies
this Annual Report.
Pension
Executive directors are entitled to
become a member of the Group
Pension and Life Assurance Scheme,
which was set up with effect from 
1 February 1999. This covers all
employees and requires a contribution
of 3% by the employee and 6% by the
Group. Executive directors may
contribute up to 10% and the Group
contributes 10%. The Pension Plan is
a money purchase scheme.
Service Agreements
The service agreements for Don Evans,
Mary Tavener and Chris Meredith are
terminable by either party giving not
less than 12 months’ notice in writing.
Private Healthcare
Executive directors are entitled to
private healthcare and permanent
health insurance.
Cars
The Company no longer considers it to be
market practice to offer company vehicles
to executive directors. Salaries now
include an amount to cover the cost 
of a car.
Non-Executive Directors
The fees of the non-executive directors
are determined by the executive
directors. Non-executive directors
receive travel expenses but do not
participate in any incentive
arrangements. The non-executive
directors have entered into terms of
appointment. Geoffrey Vernon’s
appointment is terminable by either
party upon six months’ notice in
writing. Steve Harris’s appointment is
terminable by either party upon three
months’ notice in writing.
Directors’ Detailed Emoluments
Total year Total year
Salary & Annual Paid to third ending ending
fees bonus Benefits Pension parties 2005 2004
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive
Don Evans 163 — 16 16 — 195 190
Mary Tavener 118 — 4 10 — 132 123
Non-Executive
Geoffrey Vernon ———— 45 45 44
Steve Harris ———— 26 26 26
281 — 20 26 71 398 383
The opening share price for the year was 8.25p and the closing price on the last trading day of 2005 (31 December) was 9.25p.
The range during the year was 10.75p (high) and 8.25p (low). (Source: daily official list of the London Stock Exchange.) 21
Advanced Medical Solutions Group plc
Directors’ Interests in Share Options
Unapproved Executive Share Option Scheme. 
Number of Ordinary shares under option
As at As at
31 December Lapsed in 31 December Exercise Price Date of
2004 the year 2005 (p) Grant
D W Evans 1,366,666 750,000 616,666 9.00 15 July 2004
M G Tavener 675,000 375,000 300,000 9.00 15 July 2004
These options are exercisable on or after the third anniversary of the date of the grant and will lapse on the tenth anniversary of
the date of the grant.
Directors Interests in the Long-Term Incentive Plan (LTIP)
The maximum number of shares to be allocated to the directors under the LTIP, in each case for an aggregate consideration of
£1, are as follows:
As at As at Market Price at First 
31 December Granted in 31 December date of grant vesting
2004 the year 2005 (p) date
D W Evans — 1,865,173 1,865,173 8.75 1 January 2008
M G Tavener — 1,348,571 1,348,571 8.75 1 January 2008
The entitlement to shares under the LTIP is subject to achieving the performance conditions referred to on pages 19 and 20. The
figures shown are maximum entitlements and the actual number of shares (if any) will depend on these performance conditions being
achieved. In addition C. Meredith was granted 500,000 shares under the LTIP. The market price at the date of grant was 8.75p and
the first vesting date is 1 January 2008.
Awards made have no performance retesting facility.
Share Performance
Since Advanced Medical Solutions Group plc announced the acquisition of MedLogic Global Holdings Ltd and associated
Intellectual Property Rights on 28 March 2002, its share price has outperformed FTSE Health by 16.2%, the FTSE Techmark
by 14.7% and the FTSE All Share by 3.6% and underperformed the AIM All Share by 21.2% and the FTSE Small Cap by
19.1%.
Mary Tavener
Company Secretary
12 April 2006 22
CORPORATE GOVERNANCE
The Board is committed to the
principles of corporate governance and
has continued to apply the Combined
Code in a manner which it considers
appropriate for the size of the Group.
In compliance with the Code, the
narrative below describes how the
Group applied the principles, any
details of non-compliance and the
reasons for this.
The Board of Directors
The Board retains full and effective
control of the Group and has a schedule
of matters specifically reserved for its
decision. The Board meets on a formal
basis regularly, and met eight times in
2005. All of the directors attended all
of the meetings. Prior to each Board
Meeting, directors are sent an agenda
including monthly management
accounts and accompanying reports
from the executive directors. The Board
is responsible for formulating the
Group’s corporate strategy, approval of
budgets, monitoring financial
performance, approval and review of
major capital expenditure and corporate
governance matters. Operational control
is delegated to the executive directors.
All directors have access to the advice
and services of the Company Secretary
and can take independent professional
advice, if necessary, at the Group’s
expense. The non-executive directors are
able to contact the executive directors
at any time for further information.
In 2005, the Board consisted of two
executive directors and two non-
executive directors. The Board
considered this adequate to deal with
the management of a Group of this
size. The Board now considers that the
Board should be strengthened. As a
result, Chris Meredith joined the Board
on 11 April 2006 as an executive
director. The composition of the Board
does not meet the Code requirements
that at least half of the Board
excluding the Chairman, should
comprise of non executive directors
and the Board will be appointing a
further non-executive director. While
this still does not meet the Code
requirements, the Board believes it is
appropriate for the size of the Group.
The Chairman is one of the non-
executive directors and there is a clear
division of responsibility between the
Chairman and Chief Executive. Both of
the non-executive directors are
considered to be independent and
independent of the executive
management. They are able to discuss
matters without the executive directors
present. Given the size of the Board,
the Board does not have a Senior
Independent Director. All directors are
required to stand for re-election at the
first annual general meeting following
their appointment and, as a minimum,
every three years, thereafter. 
Board Committees
The Board has delegated specific
authority to the Remuneration
Committee, Nominations Committee
and the Audit Committee. The non-
executives are the only members of the
Remuneration and Audit Committees.
The Audit Committee is chaired by
Geoffrey Vernon and met three times in
2005. The Committee considers the
appointment and fees of the auditors
and discusses the scope of the audit
and its findings. It is also responsible
for monitoring the Group’s accounting
policies, assessing the Group’s internal
controls and reviewing the annual and
interim statements prior to their
submission for approval by the Board.
The Committee has the right of access
to the external auditors without the
attendance of the executive directors.
The size of the Audit Committee is not
in strict compliance of the Combined
Code but is consistent with a Group of
this size.
The Audit Committee also undertakes a
formal assessment of the auditor’s
independence which includes:
 A review of non-audit services
provided to the Group and 
related fees.
 Discussion with the auditors of a
written report detailing all
relationships with the Company and
any other parties that could affect
independence or the perception of
independence. 
 A review of the auditor’s own
procedures for ensuring the
independence of the audit firm and
partners and staff involved in the
audit, including the regular rotation
of the audit partner.
 Obtaining written confirmation from
the auditors that, in their
professional judgement, they are
independent. 23
Advanced Medical Solutions Group plc
 An analysis of the fees payable to
the external audit firm in respect of
the both audit and non-audit
services during the year is set out
in note 4 of the financial
statements.
The lead external audit partner is
rotated on a five-year basis,
consequently a new lead partner has
taken over in respect of the financial
year ending 2005. For the year ended
31 December 2005 the Committee has
concluded that the external auditor
remains independent and is effective.
The Remuneration Committee is
chaired by Steve Harris and, in
consultation with the Chief Executive,
determines the Group’s policy on
executive remuneration, employment
conditions and the individual
remuneration packages of executive
directors and senior management
earning in excess of £50,000 
per annum. It approves all new
incentive schemes, the grants of
options under the Group’s Share Option
Schemes, and the grant of shares
under the Group’s Long Term Incentive
Plan (LTIP). The Remuneration
Committee met six times in 2005. Its
report is included on pages 19 to 21.
The Nominations Committee nominates
and recommends the appointment of
new directors to the Board. In making
recommendations, the Committee takes
into account the balance of skill,
knowledge and experience of the
Board. The Committee is chaired by
the Chairman of the Group and
comprises the non-executive directors
and the Chief Executive. The
Nominations Committee did not meet
in 2005. 
Investor Relations
The Group maintains a regular dialogue
with institutional shareholders, mainly
in the periods following the
announcement of the interim and final
results, but also at other times during
the year. The Board encourages the
participation of shareholders at its
Annual General Meeting, notice of
which is sent to shareholders at least
20 working days before the meeting.
The AMS website ‘www.admedsol.com’
is regularly updated and provides
additional information on the Group
including information of the Group’s
products and technology.
The Company proposes separate
resolutions for each separate issue and
specifically relating to the reports and
accounts. The Company ensures all
proxy votes are counted and indicates
the level of proxies on each resolution
along with the abstentions after it has
been dealt with on a show of hands.
Internal Control
The Board is responsible for the
Group’s system of internal control and
for reviewing its effectiveness. In the
context of the Group’s business any
such system can only reasonably be
expected to manage rather than
eliminate risks arising from its
operations. It can therefore only
provide reasonable and not absolute
assurance against material loss or
misstatement.
The Combined Code required directors
to review the effectiveness of the
Group’s system of internal control in
the wider sense, encompassing
operational and compliance matters in
addition to the traditional financial
issues.
Key features of the internal control
system are as follows:
 The Group has an organisational
structure with clearly established
responsibilities and lines of
accountability. The Group promotes
the values of integrity and
professionalism.
 The Board has a schedule of
matters expressly reserved for its
consideration. This schedule
includes acquisitions, major capital
projects, treasury, risk management
policies and approval of budgets.
 An ongoing risk management
process has been implemented
which identifies the key business
risks facing the Group including
both financial and operational risks.
 The controls in place to minimise
the occurrence of the risk are
documented and analysed for
effectiveness. These include
procedures for the approval of
major expenditure or commitment
of resources. 24
 The Board monitors the activities of
the Group through the management
accounts forecasts and other
reports on current activities and
plans. The executive management
regularly monitors financial and
operational performance in detail
and takes any necessary corrective
action.
 The Board specifically reserves an
item on the agenda to review areas
of the business in the light of the
results of the risk analysis.
The Board reviews and continues to
review the effectiveness of the Group’s
procedure in managing risk and,
therefore, believes it meets the
requirements of the Guidance.
The Board has considered the need for
internal audit. It is of the opinion that,
given the size and nature of the
Group’s operations and the other
controls in place, it would not be
appropriate at the present time. The
matter continues to be reviewed. The
Group does call on the services of
external bodies to review the controls
in certain areas of the Group. The
quality assurance systems are reviewed
by the Group’s notified bodies, the
British Standards Institute (BSI) and
TUV Product Service on a regular
basis. The British Safety Council also
reviews and reports on the Health and
Safety Systems in the Group each year.
Going Concern
The directors are of the opinion that the
Group has adequate resources to
continue in operational existence for the
foreseeable future. For this reason, they
continue to adopt the going concern
basis in preparing the accounts.
Compliance with the Combined Code.
During the year ended 31 December
2005, the Group has been in
compliance with the requirements of
the Combined Code, except in the
following areas:
 The Board believes that given its
size and complexity it is not
appropriate to specify a ‘senior’
non-executive director.
 The Group has only two non-
executives. Consequently the Audit
Committee does not comprise at
least three non-executive directors.
 Although the Board has evaluated
its performance and identified the
need for it to be strengthened, this
was not a formal process.
Statement of Directors’
Responsibilities
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and United
Kingdom Generally Accepted
Accounting Practice.
Company law requires that the
directors prepare financial statements
for each financial year which 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
profit or loss of the Group for that
period.
In preparing the financial statements
for the year ended 31 December 2005,
the directors confirm that:
 Suitable accounting policies have
been used and applied consistently.
 Judgements and estimates that are
reasonable and prudent have been
made.
 Applicable accounting standards
have been followed.
The directors are responsible for
keeping proper accounting records, for
safeguarding the assets of the
Company and of the Group and hence
for taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
By order of the Board
Mary G Tavener
Company Secretary
12 April 2006
CORPORATE GOVERNANCE CONTINUED 25
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ADVANCED MEDICAL SOLUTIONS GROUP plc
Advanced Medical Solutions Group plc
We have audited the financial
statements on pages 26 to 45. 
This report is made solely to the
Company’s members, as a body, in
accordance with section 235 of the
Companies Act 1985. Our audit work
has been undertaken so that we might
state to the Company’s members those
matters we are required to state to
them in an auditor’s report and for no
other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Respective Responsibilities of
Directors and Auditors
The directors’ responsibilities for
preparing the Annual Report and the
financial statements in accordance
with applicable law and United
Kingdom Accounting Standards
(United Kingdom Generally Accepted
Accounting Practice) are set out in the
Statement of Directors’
Responsibilities.
Our responsibility is to audit the
financial statements in accordance
with relevant legal and regulatory
requirements and International
Standards on Auditing (UK and
Ireland).
We report to you our opinion as to
whether the financial statements give a
true and fair view and are 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 other transactions is
not disclosed.
We read other information contained in
the Annual Report, and consider
whether it is consistent with the
audited financial statements. This
other information comprises only the
Directors’ Report, the Chairman’s
Statement, the Chief Executive’s
Review and the Financial Review. We
consider the implications for our report
if we become aware of any apparent
misstatements or material
inconsistencies with the financial
statements. Our responsibilities do not
extend to any other information.
Basis of Audit Opinion
We conducted our audit in accordance
with International Standards on
Auditing (UK and Ireland) issued by
the Auditing Practices Board. An audit
includes examination, on a test basis,
of evidence relevant to the amounts
and disclosures in the financial
statements. 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 Group’s and 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
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, in accordance
with United Kingdom Generally
Accepted Accounting Practice, of the
state of the Group’s and parent
company’s affairs as at 31 December
2005 and of the Group’s profit for the
year then ended and have been
properly prepared in accordance with
the Companies Act 1985.
Baker Tilly
Registered Auditor
Chartered Accountants
Liverpool
12 April 2006 26 26
Year ended Year ended
31 December 31 December
2005 2004
Note £’000 £’000
Turnover 2 12,892 11,019
Cost of sales (7,753) (6,913)
Gross profit 5,139 4,106
Distribution costs (123) (153)
Administration costs (5,604) (5,352)
Other operating income 3 546 328
Operating loss 4 (42) (1,071)
Interest receivable and similar income 7 101 114
Interest payable and similar charges 8 (32) (33)
Profit/(loss) on ordinary activities before taxation 27 (990)
Taxation 9 249 573
Profit/(loss) sustained for the year 10 276 (417)
Earnings/(loss) per share 
Basic 11 0.19p (0.3)p
Diluted 0.19p (0.3)p
The above results relate to continuing operations.
There is no difference between reported and historical profits and losses.
The notes on pages 30 to 45 form part of these financial statements.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2005 27
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2005
Advanced Medical Solutions Group plc
27
Group
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Profit/(loss) for the financial year 276 (417)
Currency translation differences on foreign currency net investments (3) (13)
Total profit/(losses) recognised since last annual report 273 (430)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
For the year ended 31 December 2005
Group Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Opening shareholders’ funds 11,574 12,004 12,454 12,758
Profit/(loss) for the financial year 276 (417) 196 (304)
Currency translation differences on
foreign currency net investments (3) (13) — —
Closing shareholders’ funds 11,847 11,574 12,650 12,454
The profit for the Company includes a reversal of an exceptional write-down in the value of investments of £101k (2004: £427k write-down).
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2005
Advanced Medical Solutions Group plc 28
Group Company
2005 2004 2005 2004
Note £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 12 1,902 2,070 — —
Tangible assets 13 3,403 3,706 — —
Investments 14 — — 9,570 9,589
5,305 5,776 9,570 9,589
Current assets
Stocks 15 1,669 1,506 — —
Debtors — due within one year 16 3,247 2,754 14 72
— due after more than one year 16 747 638 200 200
Cash at bank and in hand 3,388 3,160 2,989 2,755
9,051 8,058 3,203 3,027
Creditors: amounts falling due within one year 17 (2,193) (1,884) (123) (162)
Net current assets 6,858 6,174 3,080 2,865
Total assets less current liabilities 12,163 11,950 12,650 12,454
Creditors: amounts falling due after more than one year 18 (316) (376) — —
11,847 11,574 12,650 12,454
Capital and reserves
Called up share capital 23 11,782 11,782 11,782 11,782
Share premium account 24 37,978 37,978 37,978 37,978
Other reserve 24 1,531 1,531 — —
Profit and loss account 24 (39,444) (39,717) (37,110) (37,306)
Equity shareholders’ funds 11,847 11,574 12,650 12,454
These financial statements were approved by the Board and authorised for issue on 13 March 2006.
Dr D W Evans
Chief Executive Officer
The notes on pages 30 to 45 form part of these financial statements.
BALANCE SHEETS
At 31 December 2005 29
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2005
Advanced Medical Solutions Group plc
Year ended Year ended
31 December 31 December
2005 2004
Note £’000 £’000
Net cash inflow/(outflow) from operating activities 26 534 (595)
Returns on investments and servicing of finance
Interest received 131 102
Interest element of finance lease rental and hire purchase payments (2) (3)
Interest paid (30) (30)
Net cash inflow from returns on investments and servicing of finance 99 69
Taxation 189 389
Capital expenditure and financial investment
Purchase of tangible fixed assets (575) (284)
Net cash outflow for capital expenditure and financial investment (575) (284)
Cash inflow/(outflow) before use of liquid resources and financing 247 (421)
Management of liquid resources
(Purchase)/sale of term deposits (342) 203
Financing
Repayment of secured loan 28 (13) (11)
Net movement of capital element of finance lease rental
and hire purchase payments 28 (3) (3)
Net cash outflow from financing (16) (14)
Decrease in cash 27 (111) (232)
The notes on pages 30 to 45 form part of these financial statements. 30
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. Accounting policies
The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom and under
the historical cost convention. The Company has taken advantage of the exemption from presenting its own profit and loss account. 
A summary of the more important Group accounting policies, which have been applied consistently, is set out below.
Basis of consolidation
The consolidated accounts include the financial statements of Advanced Medical Solutions Group plc and all of its subsidiary
undertakings made up to 31 December 2005. The Group uses both the acquisition and the merger method of accounting to
consolidate the results of subsidiary undertakings. Intra-Group sales and profits are eliminated fully on consolidation.
Merger accounting
Where merger accounting is used, the investment is recorded in the Company’s balance sheet at the nominal value of the shares
issued together with the fair value of any additional consideration paid.
In the Group accounts, merged subsidiary undertakings are treated as if they had always been a member of the Group. The results of
such a subsidiary in the year it joins the Group are included for the whole period. Any difference between the nominal value of the
shares acquired by the Group and those issued by the Group to acquire them is taken to reserves. Share premium attributable to the
subsidiary is included as Other Reserve.
Acquisition accounting
The results of the subsidiary undertakings are included from the date control passes. On acquisition of a subsidiary, all of the
subsidiary’s assets and liabilities that exist at the date of acquisition are recorded at their fair values reflecting their condition at that
date. All changes to those assets and liabilities, and the resulting gains and losses that arise after the Group has gained control, are
charged to the post-acquisition profit and loss account. Goodwill arising on the acquisition of subsidiaries in previous years has been
written off immediately against reserves and has not been reinstated on the introduction of Financial Reporting Standard (FRS) 10.
Investments
Investments in subsidiary undertakings are stated at cost less provision for any loss in value considered permanent.
Goodwill
Goodwill arising on acquisitions made after 1 April 1998 is capitalised and amortised over the estimated useful economic life of 20
years. Goodwill previously eliminated against reserves has not been reinstated, but will be charged to the profit and loss account on
subsequent disposal of the businesses to which it relates. Negative goodwill, being the difference between the purchase consideration
in subsidiary undertakings and the Group’s share of the fair value of the net assets acquired is included on the balance sheet and is
credited to the profit and loss account in the periods in which the acquired non-monetary assets are recovered.
Turnover
Turnover represents invoiced sales and royalty income receivable under licence agreements from external customers at amounts less
value added tax.
Other operating income
Operating income represents non-refundable upfront licence payments received for the grant of rights for the development and marketing
of products, contributions received to research and development, Government grants of a revenue nature and other sundry income.
Tangible fixed assets
Depreciation is provided to write off the cost, less estimated residual values, of all tangible fixed assets, over their expected useful lives
from the date that the asset is brought into use. It is calculated at the following rates:
Freehold property — 4% per annum
Leasehold improvements — over the length of the lease
Motor vehicles — 25% per annum on cost
Plant and machinery — 6.67 to 33.3% per annum on cost
Fixtures and fittings — 6.67 to 20% per annum on cost
Computers — 33.3% per annum on cost
No depreciation is provided on freehold land. 31
Advanced Medical Solutions Group plc
Intangible fixed assets
Intangible fixed assets that are acquired and which can be separately identified and valued are capitalised and amortised over their
estimated useful economic lives, usually not exceeding 18 years. In determining the useful economic life each asset is reviewed
separately and consideration given to the period over which the Group expects to derive economic benefit from the asset.
Stock
Stocks are valued at the lower of cost or net realisable value. Cost is calculated as follows:
Raw materials — cost of purchase on first in, first out basis
Work in progress and
finished goods — cost of raw materials and labour and attributable overheads.
Net realisable value is based on estimated selling price less further costs to completion and disposal.
Research and development
Expenditure on pure and applied research is charged to the profit and loss account in the period in which it is incurred.
Development costs are also charged to the profit and loss account in the period of expenditure.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at
the balance sheet date. Timing differences are differences between the Group’s taxable profits and its results as stated in the financial
statements. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are
expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date.
Deferred tax assets are recognised, on a discounted basis, to the extent that they are regarded as recoverable, when on the basis of all
available evidence it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying
timing differences can be deducted.
Leases
Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as
if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the
term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant
assets is charged to the profit and loss account.
Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to the
profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments
outstanding. The capital part reduces the amounts payable to the lessor. All other leases are treated as operating leases. Their annual
rentals are charged to the profit and loss account on a straight-line basis over the term of the lease.
Pensions
The Group operates a money purchase pension scheme. The assets of the scheme are held separately from those of the Group in an
independently administered fund. The amount charged against the profit and loss account represents the contributions payable to the
scheme in respect of the accounting period.
Foreign currency
Assets, liabilities and transactions of subsidiaries in foreign currencies are translated into sterling at rates of exchange ruling at the end
of the financial year. Differences on exchange arising from the translation of the opening net investment in subsidiary companies are
taken to reserves and are reported in the statement of total recognised gains and losses. All other foreign exchange differences are
taken to the profit and loss account in the year in which they arise.
Liquid resources
Liquid resources comprise variable term deposits that are accessible with less than 12 months’ notice. 32
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
2. Segmental information
Turnover by geographical customers:
Turnover
2005 2004
£’000 £’000
United States of America 2,288 2,259
Rest of Europe 6,098 5,481
United Kingdom 3,731 2,810
Rest of World 775 469
12,892 11,019
Turnover by business unit:
Turnover
2005 2004
£’000 £’000
Advanced woundcare 10,535 8,893
Wound closure 2,357 2,126
12,892 11,019
It is not possible to identify profit/(loss) before taxation and net asset by business unit because of the use of common services. 
Turnover, profit/(loss) before tax and net assets by origin:
2005 2005 2005 2004 2004 2004
Turnover Profit/(loss) Net assets Turnover Loss Net assets
£’000 £’000 £’000 £’000 £’000 £’000
United Kingdom 12,892 137 11,845 11,019 (879) 11,576
United States — (110) 2 — (111) (2)
Group 12,892 27 11,847 11,019 (990) 11,574
The turnover and profit/(loss) before taxation is wholly attributable to the principal activity of the Group.
3. Other operating income
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Licence fees — 61
Development fees 546 267
546 328 33
Advanced Medical Solutions Group plc
4. Operating loss
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Operating loss arrived at after charging/(crediting):
Depreciation 877 953
Amortisation 168 168
Loss on disposal of fixed assets (1) —
Operating lease rentals — plant and machinery 90 89
— land and buildings 294 294
Auditors’ remuneration — statutory audit 33 29
— further assurance services 9 4
— tax compliance 15 7
— tax advisory 5 12
Research and development 1,147 1,220
Exchange (profit)/loss (47) 30
5. Employees
The average monthly number of employees of the Group during the year, including executive directors, was as follows:
Year ended Year ended
31 December 31 December
2005 2004
Number Number
Production 115 113
Research and development 21 19
Sales and marketing 24 24
Administration 20 21
180 177
Sales and marketing includes 1 person (2004: 1) employed in the United States.
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Staff costs for all employees, including executive directors, consist of:
Wages and salaries 4,441 4,360
Social Security costs 430 440
Pension costs 180 186
5,051 4,986 34
6. Directors’ emoluments
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Remuneration for management services 301 288
Pension 26 25
Amounts paid to third parties 71 70
398 383
Retirement benefits are accruing to the following number
of directors under money purchase schemes 2 2
The disclosures required in relation to the highest paid director are contained within the Remuneration Report on pages 19 to 21.
7. Interest receivable and similar income
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Bank interest 95 108
Rent deposit interest 6 6
101 114 
8. Interest payable and similar charges
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Finance leases and hire purchase contracts 2 3
Other loan interest 28 30
Bank Interest 2 —
32 33
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 35
Advanced Medical Solutions Group plc
9. Taxation on profit/(loss) on ordinary activities
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
a) Analysis of credit in the year
Current tax:
UK corporation tax 75 135
Adjustment in respect of previous period 70 —
Deferred tax (note 22) 104 438
Tax on profit/(loss) on ordinary activities 249 573
b) Factors affecting tax credit for the year
The tax assessed for the year is lower/(higher) than the standard
rate of corporation tax in the UK (30%) as explained below:
Profit/(loss) on ordinary activities before tax 27 (990)
Profit/(loss) on ordinary activities multiplied by the standard rate of corporation
tax in the UK of 30% (2004: 30%) 8 (297)
Effects of:
Expenses not deductible for tax purposes 2 38
Depreciation for period less than capital allowances (62) (72)
Expensive leased cars disallowed costs 3 2
Trading losses carried forward 70 127
Trading losses utilised 10 202
Research and development relief (116) (135)
Other 10 —
Current tax credit for the year (note 9a) (75) (135)
10. Profit/(loss) for the financial year
2005 2004
£’000 £’000 
Profit/(loss) dealt with in the accounts of the parent company 196 (304)
Profit/(loss) retained by subsidiary undertakings 113 (599)
Consolidation adjustment (33) 486
276 (417)
The Company has taken advantage of section 230 of the Companies Act 1985 not to publish its own profit and loss account. 36
11. Earnings/(loss) per share
The basic earnings/(loss) per share has been calculated on a weighted average number of ordinary shares in issue during the year,
namely 142,082,536 (2004: 142,082,536) and profit of £276k (2004: loss of £417k). 
The diluted earnings/(loss) per share has been calculated by adjusting the weighted average number of ordinary shares in issue to
assume conversion of all dilutive potential shares, namely 142,948,093 (2004: 142,082,536) and a profit of £276k (2004: loss 
of £417k). 
12. Intangible fixed assets
Intellectual
property
rights
£’000
Group
Cost
At beginning and end of year 2,518
Amortisation
At beginning of year 448
Charged in year 168
At end of year 616
Net book value
At 31 December 2005 1,902
At 31 December 2004 2,070
The intellectual property rights have been amortised over their useful economic lives which averages 15 years.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 37
Advanced Medical Solutions Group plc
13. Tangible assets
Freehold land, Short Fixtures
property and leasehold Plant and and Motor
improvements improvements machinery fittings vehicles Total
£’000 £’000 £’000 £’000 £’000 £’000
Group
Cost
At beginning of year 865 1,143 8,398 537 44 10,987
Additions — — 572 3 — 575
Disposals — (2) — — — (2)
At end of year 865 1,141 8,970 540 44 11,560
Depreciation
At beginning of year 55 642 6,093 448 43 7,281
Provided for the year 5 18 838 15 1 877
Disposals — (1) — — — (1)
At end of year 60 659 6,931 463 44 8,157
Net book value
At 31 December 2005 805 482 2,039 77 — 3,403
At 31 December 2004 810 501 2,305 89 1 3,706
The net book value of tangible fixed assets includes £Nil of motor vehicles (2004: £8k) and £174k of plant and machinery (2004:
£212k) held under finance leases and hire purchase contracts. The related depreciation charge for the year was £8k for motor vehicles
(2004: £11k) and £38k for plant and machinery (2004: £36k).
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Commitments for capital expenditure
Authorised for future capital expenditure 
and not provided in the financial statements 164 299 — — 38
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
14 Fixed asset investments
2005 2004
£’000 £’000
Company
Loans to Group undertakings 9,570 9,589
Shares in Group undertakings and loans to Group undertakings have been written down to recognise losses in subsidiary companies.
The following were subsidiary undertakings at the end of the year and have all been included in the consolidated accounts.
Proportion of
voting rights
and ordinary
Country of share capital
Name operation held Nature of business
Advanced Medical Solutions Limited England 100% Development and
manufacture of
medical products
Advanced Medical Solutions (UK) Limited England 100% Holding Company
Advanced Medical Solutions Trustee Company Limited England 100% Trustee Company
MedLogic Global Limited England 100% Development and
manufacture of
medical products
Advanced Healthcare Systems Limited England 100%* Dormant
Advanced Medical Solutions Group Inc. USA 100%† Holding Company
Advanced Medical Solutions (Delaware) Inc. USA 100%† Development and
manufacture of
medical products
Advanced Medical Solutions (US) Inc USA 100%§ Dormant
Advanced Medical Solutions Inc USA 100%† Dormant
MedLogic Global Holdings Limited England 100%¶ Holding Company
Innovative Technologies Limited England 100%‡ Dormant
* Held indirectly through Advanced Medical Solutions Limited.
‡ Held indirectly through MedLogic Global Holdings Limited.
† Held indirectly through Advanced Medical Solutions (UK) Limited.
§ Held indirectly through Advanced Medical Solutions Group Inc.
¶ Held indirectly through MedLogic Global Limited.
The above table reflects the situation at the year end.
15. Stocks
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Raw materials 649 698 — —
Work in progress 540 459 — —
Finished goods 480 349 — —
1,669 1,506 — —
There is no material difference between the replacement cost of stock and the amount at which it is stated in the financial statements.  39
Advanced Medical Solutions Group plc
16. Debtors
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Due within one year
Trade debtors 2,575 2,098 — —
Corporation tax 75 119 — —
Other debtors 179 203 — —
Prepayments and accrued income 418 334 14 72
3,247 2,754 14 72
Due after more than one year
Other debtors — leasehold rental deposit 200 200 200 200
Deferred tax asset 547 438 — —
747 638 200 200
17. Creditors: amounts falling due within one year
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Trade creditors 1,297 1,216 44 56
Taxation and social security 229 245 — —
Other loans 13 12 — —
Other creditors 113 4 — —
Obligations under finance leases
and hire purchase contracts 5 4 — —
Accruals and deferred income 536 403 79 106
2,193 1,884 123 162
18. Creditors: amounts falling due after more than one year
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Obligations under finance leases and hire purchase contracts 7 12 — —
Deferred income — 42 — —
Other loans 309 322 — —
316 376 — —
The maturity profile of the Group’s financial liabilities is described in note 20(a). 40
19. Analysis of borrowings
The maturity by currency of total borrowings comprised:
(i) Finance leases and hire purchase contracts
Less than 2–5 Total Less than 2–5 Total
1 year years 2005 1 year years 2004
£’000 £’000 £’000 £’000 £’000 £’000
Sterling 57 12 41216
(ii) Other loans
See note 20(a).
The loan is secured by a fixed charge on the freehold property. It is repayable in monthly instalments and interest is payable at 8
1/ 2%
fixed rate.
20. Derivatives and other financial instruments
Page 13 of the Financial Review provides an explanation of the financial risks faced by the Group and the objectives and policies for
managing those risks. The information below deals with the financial assets and liabilities. Short-term debtors and creditors have been
excluded from the analysis as permitted by FRS 13. The carrying value of the Group’s financial assets and liabilities equals their fair
value.
(a) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities, of which other loans and finance lease creditors and hire purchase contracts are 
at fixed rates and denominated in sterling, is as follows:
On demand Between Between Total Total
or within one one and two and Five years medium/ financial Interest
year two years five years or more long-term liabilities rate
£’000 £’000 £’000 £’000 £’000 £’000 %
Group
Other loans 13 14 50 245 309 322 8.5
Finance lease creditors and 
hire purchase contracts 5 6 1 — 7 12 15.5
At 31 December 2005 18 20 51 245 316 334 —
Other loans 12 13 46 263 322 334 8.5
Finance lease creditors and
hire purchase contracts 4 5 7 — 12 16 15.5
At 31 December 2004 16 18 53 263 334 350 —
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 41
Advanced Medical Solutions Group plc
20. Derivatives and other financial instruments continued
2005 2004
Financial Financial
liabilities on liabilities on
Fixed rate which no Fixed rate which no
financial interest financial interest
liabilities is paid liabilities is paid
Weighted Weighted
average Weighted average Weighted
period average period average
for which period until for which period until
rate is fixed maturity rate is fixed maturity
Years Years Years Years
Other loans 14 — 15 —
Finance lease creditors and hire purchase contracts 2— 3—
(b) Interest rate and currency of financial assets
The currency and interest rate profile of the financial assets of the Group is as follows:
Fixed rate
weighted
Non-interest average
Total Floating Fixed bearing interest rate
£’000 £’000 £’000 £’000 %
Currency
Sterling 3,127 141 2,986 — 4.6
US Dollar 158 — — 158 —
Euro 103 — — 103 —
At 31 December 2005 3,388 141 2,986 261 4.6
Sterling 3,175 77 2,863 235 3.9
US Dollar 344 344———
Euro 89 89———
At 31 December 2004 3,608 510 2,863 235 —
The floating rate financial assets comprise bank deposits bearing interest at commercial rates.
The financial assets all mature within one year.
(c) Currency exposures
At 31 December 2005 the Group had unhedged US Dollar currency exposures of £Nil (2004: £64k) and unhedged Euro currency
exposures of £119k (2004 : £137k). 42
21. Foreign exchange rates
Average rate Closing rate Percentage change
Average Closing
2005 2004 2005 2004 % %
Currency
US Dollar 1.819 1.832 1.717 1.920 (0.7) 10.6
Euro 1.463 1.474 1.455 1.413 (0.7) 3.0
22. Deferred tax 
2005 2004
£’000 £’000
Balance at 1 January 438 —
Profit and loss account — Deferred tax 104 438
Profit and loss account — Interest receivable 5 —
Balance at 31 December 547 438
Provision for deferred tax has been made as follows:
Provision
Excess of tax allowances over depreciation 62 44
Sundry timing differences (15) (3)
Un-utilised tax losses carried forward (47) (41)
— —
Asset
Tax losses 715 504
Discount (168) (66)
Discounted deferred tax asset 547 438
A discounted deferred tax asset of £547k (2004: £438k) has been recognised which is the extent to which recoverability can be 
foreseen with reasonable probability.
There is approximately a further £9.8 million (2004: £10.3 million) of tax losses at future rates of tax which have not been recognised.
23. Share capital
Group and Company
2005 2004
£’000 £’000
Authorised
300,000,000 (2004: 300,000,000) ordinary shares of 5p each 15,000 15,000
Group and Company
2005 2004
£’000 £’000
Allotted, called up and fully paid
142,082,536 (2004: 142,082,536) ordinary shares of 5p each
and 93,553,394 (2004: 93,553,394) deferred shares of 5p each 11,782 11,782
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 43
Advanced Medical Solutions Group plc
23. Share capital continued
Shares to be issued
Options have been granted over the following number of ordinary shares which were outstanding at 31 December 2005.
Number of options Number of options
Option At 1 At 31 
Date of price January December
grant (p) 2005 Issued Lapsed 2005
Unapproved Executive Share Option Scheme
21.05.02 8.75 75,000 — 75,000 —
14.04.03 8.75 30,000 — 30,000 —
15.07.04 9.00 279,842 — 45,120 234,722
12.09.05 9.25 — 100,000 — 100,000
Enterprise Management Incentive Scheme
21.05.02 8.75 1,823,000 — 1,823,000 —
09.10.02 8.75 461,000 — 461,000 —
14.04.03 8.75 460,000 — 370,000 90,000
07.10.03 11.50 190,000 — 110,000 80,000
07.04.04 10.00 92,000 — 16,000 76,000
15.07.04 9.00 1,161,427 — 37,883 1,123,544
16.07.04 9.00 9,824 — 2,500 7,324
16.09.04 9.00 62,000 — 17,000 45,000
21.03.05 10.20 — 16,000 — 16,000
12.09.05 9.25 — 502,000 — 502,000
4,644,093 618,000 2,987,503 2,274,590
In normal circumstances, the options granted under the Unapproved Executive Share Option Scheme and the Executive Share Option
Scheme are exercisable subject to the satisfaction of the relevant performance criteria, not earlier than 3 and not later than 7 years 
after the date of the grant. 
Long Term Incentive Plan 
Market price Number of Number of 
at date of of LTIPs LTIPS 
Date of grant at 1 at 31 December 
grant (p) January 2005 Issued Lapsed 2005
12.10.05 8.75 — 3,713,744 — 3,713,744
— 3,713,744 — 3,713,744
The entitlement to shares under the LTIP is subject to achieving the performance conditions referred to on pages 19 and 20. The
numbers shown are maximum entitlements and the actual number of shares (if any) will depend on these performance conditions
being achieved. 44
24. Share premium account and reserves
Share Profit
premium Other and loss
account reserve account
£’000 £’000 £’000
Group
As at 1 January 2005 37,978 1,531 (39,717)
Profit for the year — — 276
Currency translation differences on
foreign currency net investments — — (3)
As at 31 December 2005 37,978 1,531 (39,444)
Company
As at 1 January 2005 37,978 — (37,306)
Profit for the year — — 196
As at 31 December 2005 37,978 — (37,110)
The other reserve represents Advanced Medical Solutions Limited’s share premium account arising from merger accounting (see note 1).
The cumulative goodwill written off to reserves is £5,586k (2004: £5,586k).
25. Commitments under operating leases
As at 31 December 2005, the Group had annual commitments under non-cancellable operating leases as set out below:
2005 2005 2004 2004
Land and Land and
buildings Other buildings Other
£’000 £’000 £’000 £’000
Operating leases which expire:
Within one year —4 —13
In two to five years 290 45 259 30
Greater than five years —— ——
290 49 259 43
NOTES FORMING PART OF THE FINANCIAL STATEMENTS 45
Advanced Medical Solutions Group plc
26. Reconciliation of operating loss to net cash inflow/(outflow) from operating activities
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Operating loss (42) (1,071)
Depreciation 877 953
Amortisation of intangible fixed assets 168 168
Loss on sale of fixed assets 1 —
Increase in stocks (163) (227)
Increase in debtors (567) (203)
Increase/(decrease) in creditors 260 (215)
Net cash inflow/(outflow) from operating activities 534 (595)
27. Reconciliation of net cash flow to movement in net funds (note 28)
Year ended Year ended
31 December 31 December
2005 2004
£’000 £’000
Decrease in cash in the year (111) (232)
Cash outflow from reductions in debt and finance leases 16 14
Cash outflow/(inflow) from increase/(decrease) in liquid resources 342 (203)
Change in net funds resulting from cash flows 247 (421)
New finance leases — (2)
Translation difference (3) (13)
Movement in net funds in year 244 (436)
Net funds at 1 January 2005 2,810 3,246
Net funds at 31 December 2005 3,054 2,810
28. Analysis of net funds
1 January Cash Exchange 31 December
2005 flows movements 2005
£’000 £’000 £’000 £’000
Cash 516 (111) (3) 402
Term deposits 2,644 342 — 2,986
Cash at bank and in hand 3,160 231 (3) 3,388
Debt due within one year (12) (1) — (13)
Debt due after one year (322) 13 — (309)
Finance leases (16) 4 — (12)
Total 2,810 247 (3) 3,054 46
FIVE YEAR SUMMARY
2005 2004 2003 2002 2001
£m £m £m £m £m
Consolidated profit & loss account
Turnover 12.9 11.0 9.0 8.4 7.4
Operating loss (before exceptional items) 0 (1.1) (2.4) (1.7) (1.9)
Net interest receivable 0.1 0.1 0.1 0.2 0.3
Retained profit/(loss) 0.3 (0.4) (2.1) (1.4) (1.5)
Basic profit/(loss) per share 0.2p (0.3)p (1.5)p (1.1)p (1.6)p
Weighted average number on shares in issue 
after adjusting for rights issue 142.1m 142.1m 142.1m 126.1m 93.6m
Consolidated balance sheet
Net assets employed
Fixed assets 5.3 5.8 6.6 7.3 4.8
Cash and other net current assets 6.8 6.2 5.7 7.3 7.4
Creditors due after one year (0.3) (0.4) (0.3) (0.5) (0.2)
Net assets 11.8 11.6 12.0 14.1 12.0
Capital and reserves
Called up share capital 11.8 11.8 11.8 11.8 9.4
Share premium account 38.0 38.0 38.0 38.0 36.9
Other reserve 1.5 1.5 1.5 1.5 1.5
Profit and loss account (39.5) (39.7) (39.3) (37.2) (35.8)
Equity shareholders’ funds 11.8 11.6 12.0 14.1 12.0 47
NOTICE OF MEETING
Advanced Medical Solutions Group plc
Notice is hereby given that the twelfth
Annual General Meeting of the Company
will be held at 11:00 a.m. on 31 May
2006 at Oaklands Hotel, Millington Lane,
Gorstage, Weaverham, Northwich,
Cheshire, CW8 2SU.
As ordinary business:
1. To receive the Report of the
Directors and the Financial
Statements of the Company for the
year ended 31 December 2005
(together with the report of the
auditors thereon).
2. To reappoint Baker Tilly as auditors
and to authorise the directors to fix
their remuneration.
3. To re-elect R S Harris (who retires
by rotation in accordance with the
Articles of Association) as a director
of the Company.
4. To re-elect C Meredith as a director
of the Company.
As special business:
To consider and, if thought fit, to pass
Resolution 5, which will be proposed as
an ordinary resolution, and Resolution 6,
which will be proposed as a special
resolution.
5. That the rules of the proposed
Advanced Medical Solutions Group
plc Deferred Share Bonus Plan (the
“DSB”) (a draft of which is
produced to the meeting and
initialled by the Chairman of the
Remuneration Committee for the
purposes of identification) the
principal features of which are
summarised in the Chairman of the
Remuneration Committee’s letter
contained in the Circular dated 
12 April 2006, be and are hereby
approved and the directors be and
are hereby authorised to do all
things necessary or expedient to
carry the Plan into effect.
6. That the directors be empowered
pursuant to and in accordance with
Section 95 of the Companies Act
1985 (“Act”) to allot equity
securities pursuant to the authority
conferred by a special resolution of
the Company dated 24 May 2005
as if Section 89(1) of the Act did
not (insofar as it would otherwise
do) apply to any such allotment,
provided that:
i) this power shall expire on the date
fifteen months after the date of
passing of this resolution or at the
conclusion of the next Annual
General Meeting of the Company,
whichever is the earlier, save that
the Company may before such
expiry make any offer or agreement
which would or might require
equity securities to be allotted after
such expiry and the directors may
allot equity securities in pursuance
of such an offer or agreement as if
this power had not expired and
provided further that such
allotments would have fallen within
the limit hereinafter mentioned if
made before such expiry;
ii) equity securities allotted otherwise
than in connection with a “Pro
Rata Offer” (as defined below) or a
scrip dividend alternative offered in
accordance with Article 151 of the
Company’s Articles of Association
or pursuant to the terms of any
share option scheme for employees
approved by the members in
general meeting shall not exceed
an aggregate nominal value of
£710,412.68 and for this purpose
an issue of securities convertible
into ordinary shares shall be
deemed to be an allotment of the
number of shares which would be
required to satisfy the conversion
rights attached to those securities
in full at the initial conversion price
provided for in the terms and
conditions of the issue.
In this resolution:
(a) words and expressions shall be
construed in accordance with Part
IV of the Act; and
(b) the expression “Pro Rata Offer”
means an offer of equity securities
open for acceptance for a period
fixed by the directors to holders of
ordinary shares on the register on a
fixed record date in proportion (or
as nearly as may be) to their then
holdings of such ordinary shares
(but subject to such exclusions or
other arrangements as the directors
may consider necessary or
expedient in relation to fractional
entitlements or on account either of
legal problems under the laws of
any territory or the requirements of
any recognised regulatory body or
any other stock exchange).
By order of the Board
Mary G Tavener
Company Secretary
12 April 2006
Registered office:
Road Three
Winsford Industrial Estate
Winsford
Cheshire
CW7 3PD 48
NOTICE OF MEETING
Notes
1. A member entitled to attend and
vote at the Meeting is entitled to
appoint one or more proxies to
attend and, on a poll, vote instead
of him or her. A proxy need not be
a member of the Company. 
2. A form of proxy is enclosed for use
by members. To be effective, it
must be completed and deposited
at the offices of the Company’s
Registrars, Capita Registrars
(Proxies), PO Box 25, Beckenham,
Kent, BR3 4BR not less than 48
hours before the time fixed for the
Meeting.
3. The register of directors’ interests
in the shares of the Company will
be available for inspection at the
registered office of the Company
during usual business hours on any
weekday (public holidays excepted)
until the date of the Meeting and
also on that date and at the place
of the Meeting from 9.00 a.m. until
the conclusion of the Meeting.
4 The Company, pursuant to
Regulation 41 of the Uncertificated
Securities Regulations 2001,
specifies that only those
shareholders registered in the
Register of Members of the
Company as at 6.00 p.m. on 
29 May 2006 shall be entitled to
attend or vote at the aforesaid
general meeting in respect of the
number of shares registered in
their names at that time. Changes
in the entries in the relevant
register of Securities after 6.00
p.m. on 29 May 2006 shall be
disregarded in determining the
rights of any person to attend or
vote at the meeting. Advanced Medical Solutions is          
a UK based company developing
and providing leading edge technology
to the global woundcare market
Advanced Woundcare
AMS provides a full range of advanced woundcare 
products for sale in hospital, nursing home and 
community care markets. The main indications are for
chronic wounds such as ulcers and pressure sores.
These products pioneer the concept of moist wound healing
to allow wounds to heal faster and with less pain and scarring
if they remain moist. They protect the wound, deal with
tissue fluids and provide an optimal environment for healing
to occur.
Wound Closure
Our products based on medical adhesives technology allow
the closure of wounds following trauma or surgical incisions.
Tissue adhesives offer significant benefits over conventional
ways of closing wounds such as sutures, staples and
adhesive strips.
They are simple to use, non-invasive, help to reduce 
the risk of infection, minimise trauma to the patient 
and provide good clinical and cosmetic outcomes.
OUR PRODUCTS
Highlights 1
Chairman’s Statement 2
Chief Executive’s Review 6
Financial Review 12
Board of Directors 14
Committees and Advisers 15
Report of the Directors 16
Remuneration Report 19
Corporate Governance 22
Independent Auditor’s Report 25
Consolidated Profit and Loss Account 26
Statement of Total Recognised 
Gains and Losses 27
Balance Sheets 28
Consolidated Cash Flow Statement 29
Notes Forming Part of 
the Financial Statements 30
Five Year Summary 46
Notice of Meeting 47
CONTENTS
Designed and printed by Jones & Palmer Limited, Birmingham. tel: (0121) 236 9007 Advanced Medical Solutions Group plc
Annual Report and Accounts 2005
developing 
and providing 
innovative technology
Advanced Medical Solutions Group plc   Annual Report and Accounts 2005
Advanced Medical Solutions Group plc
Road 3, Winsford Industrial Estate
Winsford, Cheshire, CW7 3PD, UK
Tel: +44 (0)1606 863500  Fax: +44 (0)1606 863600
E-mail: info@admedsol.com  Web: www.admedsol.com