who we are
2008
fusion IP plc
annual report and accounts
In fields as varied as alternative energy, 
drug discovery and engineering, Fusion IP 
(formerly known as Biofusion) has the 
exclusive rights to an amazing depth and 
quality of research from two of the UK’s 
leading research intensive universities, the 
University of Sheffield and Cardiff University.
Our exclusive partnerships with these universities enable 
us to invest in some of the world’s most advanced and 
exciting research and turn it into business.
We are fully integrated with the universities’ technology 
transfer system and are responsible for the formation 
of new spin-out companies from all areas of research 
within the two universities. 
our partnership model
turning world class
research into business
(formerly bIofusIon)
IP creatIon commercIalIsatIon
UnIverSIty teCh tranSFer
PortF olIo 
ComPany
Long-term 
pipeline 
agreements 
with universities. 
Directly align 
university 
interest with 
equity position 
in Fusion IP
Existing tech 
transfer offices 
use their 
relationships 
with academics 
to mine for and 
protect IP with 
commercial 
potential
Fusion IP 
selects IP 
with most 
commercial 
potential and 
transfers it to 
a new Portfolio 
Company, 
initially 100% 
owned by 
Fusion IP
Fusion IP makes 
investment in 
the Portfolio 
Company and 
aligns academic 
with an equity 
participation 
in the Portfolio 
Company
ShEFFIELD OFFICE
The Sheffield Bioincubator 
40 leavygreave road 
Sheffield S3 7RD 
 
www.fusionip.co.uk
CarDIFF OFFICE
8th Floor 
eastgate house 
35–43 Newport Road 
Cardiff CF24 0AB
fusion IP plc annual report and accounts 2008
_0_FIP_ar08_Covers.indd   1 21/10/2008   16:00:52 who we are
2008
fusion IP plc
annual report and accounts
In fields as varied as alternative energy, 
drug discovery and engineering, Fusion IP 
(formerly known as Biofusion) has the 
exclusive rights to an amazing depth and 
quality of research from two of the UK’s 
leading research intensive universities, the 
University of Sheffield and Cardiff University.
Our exclusive partnerships with these universities enable 
us to invest in some of the world’s most advanced and 
exciting research and turn it into business.
We are fully integrated with the universities’ technology 
transfer system and are responsible for the formation 
of new spin-out companies from all areas of research 
within the two universities. 
our partnership model
turning world class
research into business
(formerly bIofusIon)
IP creatIon commercIalIsatIon
UnIverSIty teCh tranSFer
PortF olIo 
ComPany
Long-term 
pipeline 
agreements 
with universities. 
Directly align 
university 
interest with 
equity position 
in Fusion IP
Existing tech 
transfer offices 
use their 
relationships 
with academics 
to mine for and 
protect IP with 
commercial 
potential
Fusion IP 
selects IP 
with most 
commercial 
potential and 
transfers it to 
a new Portfolio 
Company, 
initially 100% 
owned by 
Fusion IP
Fusion IP makes 
investment in 
the Portfolio 
Company and 
aligns academic 
with an equity 
participation 
in the Portfolio 
Company
ShEFFIELD OFFICE
The Sheffield Bioincubator 
40 leavygreave road 
Sheffield S3 7RD 
 
www.fusionip.co.uk
CarDIFF OFFICE
8th Floor 
eastgate house 
35–43 Newport Road 
Cardiff CF24 0AB
fusion IP plc annual report and accounts 2008
_0_FIP_ar08_Covers.indd   1 21/10/2008   16:00:52 Crea TING CoMP aNIeS, DeLIVerING reSULTS
oUr F oCUS IS to tUrn 
oUr ex Cl USIve IP PIPelIne 
agreement S Into real val Ue 
throUgh the CreatIon oF 
SPIn‑oUt ComP anIeS and 
lICenSeS that oFFer the 
PotentIal F or SIgnIFIC ant 
Commer CIal ret Urn S to all 
StaKe holderS.
our partnership model allows 
everyone to play to their strengths – 
the university focuses on encouraging 
leading edge research and innovation, 
whilst we help identify and then 
develop the most appropriate 
commercial strategy.
We have dedicated teams based 
in both Sheffield and Cardiff, with 
the expertise and money to set up 
and assist companies in their early 
stage growth. We have a network 
of industry-specific specialists and 
consultants and have the proven 
skills of being able to turn blue sky 
research into world class business.
Cell transplantation technology.
www.abcellute.co.uk
Developing a range of improved prophylactic 
and therapeutic vaccines.
www.adjuvantix.com
Art of Xen holds a number of patents 
for developing Xenon gas for use as 
an anaesthetic.
Developing cures for transplant rejection 
and degenerative blindness.
www.axordia.com
Vaccines and antibodies to treat MRSA.
www.absynthbiologics.co.uk
Develops drugs that mimic the patient’s 
natural circadian rhythm.
www.diurnal.co.uk
Developing third-generation therapeutic 
proteins that mimic the body’s natural 
hormones to treat a number of diseases.
www.asterion.co.uk
Fertility based test for women.
www.planaheadtest.com
Developing a device to detect pre-cancerous 
cells in the cervix.
www.zilico.co.uk
Provides worldwide pesticide manufacturers 
with product testing and development services.
www.i2lresearch.com
Developing a metabolically engineered 
microbial production method to produce 
hydrogen from fermentable sugars.
www.biohydrogen.co.uk
Magnetic gear and novel electrical 
machine technology.
www.magnomatics.com
Computational based drug discovery.
Online and portable ultrasound training.
www.medaphor.co.uk
Radical microscopy technology that 
removes the need for a lens.
www.phasefocus.com
Pharmacokinetic modelling.
www.simcyp.com
Developing new monoclonal antibody 
drugs to treat cancerous tumours.
www.medellatherapeutics.co.uk
Precision loaded polymer 
microspheres technology.
www.q-chip.com
Developing novel cancer therapies.
www.morvus.com
Advanced bone and soft tissue imaging 
from x-rays.
www.demasq.com
_0_FIP_ar08_Covers.indd   2 21/10/2008   16:00:57 01
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
Business HigHligHts:
	 Expanded 	exclusive	ten 	year	agreement	with	the	 University	of	Sheffield
 Placing with institutional investors which raised £2.1m
	 	 Change	of	name	to	F usion	IP	to	reflect	nature	of	e nlarged	multi-sector	
iP portfolio
 	 	 Co-investment 	 Memorandum 	 of 	 Understanding 	 signed 	 with 	 Finance 	 W ales	
Portfolio HigHligHts:
  launch of Demasq ltd – developing a range of innovative bone and 
soft tissue imaging products. f usion iP holds a 47.5% shareholding 
by virtue of its agreement with Cardiff university and has loaned the 
company £450,000 during the period
  £600,000 invested by f usion iP and third parties in imaging company, 
Phase f ocus ltd
 £350,000 investment into biotechnology company, Asterion ltd
  sale of Company’s 50% stakes in each of Cardiff Protides ltd and 
Cardiff Biologicals ltd 
finAnCiAl HigHligHts:
  Cash balances at 31 July 2008 of £6.4m (prior to the receipt 
of the additional £2.1m investment funds in early August 2008) 
(fY July 2007: £10.6m)
	 Cash	inves ted	in	spin-o ut	companies	of	£2.8m	(F Y	July	2007:	£1.7m)
  l oss for the period, excluding the cost of subsidiary spin outs and 
amortisation, only increased marginally to £1.6m (f Y July 2007: £1.4m). 
l oss for the period, including the cost of subsidiary spin outs and 
amortisation increased to £5.0m (fY July 2007: £3.1m)
Post PerioD enD HigHligHts:
	 	 £565,000	investment	in 	engineering	company ,	M agnomatics	Ltd,	
in	a	round	led	by	White	Rose	Seedcorn	T echnology	F und
  Additional £250,000 investment in imaging company, Phase f ocus ltd, 
in a round led by the Viking f und
  Asterion ltd signs research agreement with genzyme Corp
highlights 01 highlights 
02 chairman’s statement 
04 chief executive’s review
12 financial review 
16 board of directors 18 directors’ report
20 report on the directors’ remuneration 
23 corporate governance 
25 independent auditors’ report 
26 consolidated income statement 27 consolidated balance sheet 
28 consolidated cash flow statement 
29 consolidated statement of changes in equity
30 notes to the consolidated financial statements 
46 company balance sheet
 47 notes to the company financial statements 49 notice of annual general meeting
50 notes to the notice of annual general meeting
 51 form of proxy IBC company information and advisors _0_FIP_ar08_Front.indd   1 21/10/2008   15:46:56 02
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
I am pleased to present the results for the year ended 31 July 2008, 
a year of further growth for the Company, which has seen us expand 
our ten year exclusive agreement with the University of Sheffield 
and consolidate our position as one of the UK’s leading university, 
intellectual property (IP), commercialisation businesses.
We now have exclusive IP pipeline agreements with two of the 
UK’s top ten universities, the University of Sheffield (Sheffield) 
and Cardiff University (Cardiff) and own rights to more than 
£167m per annum of world class research in areas such as 
engineering, energy, medical technology (medtech), drug 
development, IT and electronics. As a result of this expansion, 
in July 2008, we changed our name from Biofusion to Fusion IP 
to reflect the nature of the Group’s expanded business and 
portfolio, which is increasingly moving to a more balanced split 
between medtech, engineering, energy, electronics and software.
In a difficult financial market we raised £2.1m (£1.7m net of 
expenses) through a Placing with institutional investors for our 
Fusion IP Sheffield investment fund and we remain confident that 
there is continued opportunity for expansion of our model in the 
UK at the appropriate time.
chairman’s statement doug liversidge cbe chairman We no W have a strong ip pipeline from 
Which the focus of our business is 
better balanced betWeen the longer 
term drug development companies and 
the quicker to market medtech, energy, 
engineering and electronics companies. 
“”
_0_FIP_ar08_Front.indd   2 21/10/2008   15:47:00 03
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
The financials for the year, which were broadly in line with budget, 
are as follows:
  Losses increased to £5.0m (2007: £3.1m), which reflect the 
impact of a full year of operating activity in the Cardiff operation 
(2007 figures only included six months of operating costs in 
Cardiff) and an increase in the operating costs of our growing 
portfolio of spin-out companies, which due to our shareholdings 
in the majority of these being over 50%, are classified as 
subsidiaries with all their operating costs therefore taken 
through the Group’s income statement. Removing the operating 
costs of the subsidiary spin-out companies and the amortisation 
of the Cardiff IP rights, underlying losses increased marginally 
to £1.6m (2007: £1.4m). 
 Cash outflow before financing activities in the year was 
£4.2m (2007: £2.3m), of which approximately half was invested 
in portfolio companies, leaving cash balances of £6.4m as at 
31 July 2008, prior to the receipt of the additional £2.1m 
investment funds in early August 2008. 
Portfolio activity throughout the year was significant, with two 
equity-based exits, one exciting new portfolio company created 
and £2.8m invested (2007: £1.7m) in 17 of our portfolio companies. 
One portfolio company, CellTran, was put into administration due 
to the poor funding climate.
The Company’s latest portfolio company, Demasq, formed through 
the Cardiff agreement, is particularly exciting, demonstrating the 
quality of research at the university and how quickly this type of 
research can be brought to market. Demasq’s proprietary X-ray 
imaging software will enable clinicians to visualise the soft tissue 
in the knee from a digital X-ray and help the clinician to identify 
if a patient’s pain is caused by degeneration of their cartilage 
(osteoarthritis). In the US alone some 20m people visit their 
physician with knee pain, of which it is estimated 60% is due 
to osteoarthritis. 
Demasq’s KIS (Knee Imaging Software) product is on schedule 
for submission to the European and US regulatory authorities by 
the end of this year, with a projected UK and US launch in 2009.
During the year we signed a Memorandum of Understanding (MoU) 
with Finance Wales, the investment arm of the Welsh Assembly 
government, which has more than £130m of investment funds under 
its control. Under the MoU we undertake to show Finance Wales 
all of our potential opportunities that originate at Cardiff and 
they have subsequently taken part in three portfolio company 
funding rounds.
We continue to have a co-investment agreement with NPI Ventures, 
which in 2007 was taken over by Citi. The Directors do not expect 
NPI Ventures to be investing in the portfolio companies for the 
foreseeable future. 
During the year Simon Oakland, the Non-executive Director 
representing NPI Ventures, left the Board and we would like 
to thank Simon for his support and excellent contribution to 
the running of the Company during his time with the Board.
We continue to have strong support from both our university 
partners and this support was strengthened in July 2008 when 
Bob Rabone, the Finance Director from the University of Sheffield, 
joined the Board as a Non-executive Director.
The year has been both a challenging and an exciting one for 
the Company and I would like to thank our shareholders for their 
continued support during this period. We remain totally focussed 
on creating value from our portfolio of companies and have 
now balanced the focus of our business between longer term 
drug development companies and quicker to market medtech, 
energy, engineering and electronics companies. We are confident 
that this rebalancing will generate exciting and fruitful results in the 
next financial year.
doug liversidge cbe chairman
8 october 2008
_0_FIP_ar08_Front.indd   3 21/10/2008   15:47:00 www.fusionip.co.uk
04
Fusion IP plc
annual report and accounts
chief executive’s review d avid baynes chief executive During the year we have focussed on expanding our exclusive 
university pipeline agreements into new non-life science based 
research such as energy, engineering and electronics as well 
as generating value out of our existing portfolio of companies.
new university agreements In July 2008 we successfully raised £2.1m in very challenging 
financial markets, which enabled us to expand our exclusive 
agreement with the University of Sheffield and secure ten year rights 
over all their non-life science IP to include the commercialisation of 
all non-life science, research-generated IP .
When combined with our Cardiff agreement and our existing 
life science agreement with Sheffield, we now own the rights 
to more than £167m of world class research per annum. This is 
a considerable achievement and one that cements our drive to 
refocus the business, such that we have a spread of portfolio 
companies in all investment areas. 
Drug development now only makes up 30% of our portfolio, 
as we have focussed on expanding our portfolio into the quicker 
to market sectors that include medtech, energy, engineering, 
IT and electronics. Areas in which both Cardiff and Sheffield 
are generating significant world class research.
portfolio exits during the year
In October 2007 we achieved two portfolio exits from our 
Cardiff agreement – Cardiff Protides and Cardiff Biologicals, 
which were sold to Morvus, a privately owned pharmaceutical 
company specialising in the discovery and development of novel 
oncology therapies, in return for an 18% shareholding in Morvus.
In the opinion of the Board of Fusion IP , Morvus’ management 
team, with its business model and expertise in pharmaceutical 
development, has the capability to build a successful company in 
the provision of specialist oncology drugs. The Board believed that 
the sale provided the best opportunity for bringing Cardiff Protides’ 
and Cardiff Biologicals’ exciting lead compounds to market.
COMPANY DETAILS:
Name:  Asterion Limited
Year FouNded:  2003
uNIversItY PartNer:  Sheffield
FusIoN IP shareholdINg:  38%
WeB sIte:  www.asterion.co.uk
_0_FIP_ar08_Front.indd   4 21/10/2008   15:47:13 05
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
portfolio uplifts during the year
As a result of the transaction with Morvus, we have been able to 
recognise a fair value uplift in the carrying value of our investment 
of £0.5m. During the year there have also been smaller uplifts 
following funding rounds in our portfolio companies Medaphor 
and Zilico (formerly Aperio Diagnostics).
portfolio write downs during the year
In May 2008 CellTran, the advanced wound care business in 
which we had a 16% shareholding, confirmed that it had been 
unable to raise the significant funds in the market that were 
required to progress the business.
CellTran went into administration on 30 May 2008. The value of 
CellTran had already been fully written down by the Fusion IP 
Board in previous financial periods, reflecting our policy of taking 
a rigorous approach to our investments in our portfolio companies 
and that where appropriate, withdrawing funding support where 
it is considered that financial returns do not justify it.
new portfolio companies created during the year
In February 2008 we announced the formation of Demasq, 
our first new spin-out company from our pipeline agreement 
with Cardiff.
Demasq is developing proprietary software that has the potential to 
revolutionise X-ray visualisation. Based on research carried out by 
Prof Hechmi Toumi, a specialist in the muscle-bone-tendon unit at 
Cardiff University School of Biosciences, Demasq’s first product 
will be its Knee Imaging Software (KIS) system. 
KIS has the potential to enable surgeons, radiologists, 
physiotherapists and GPs to visualise the soft tissue detail of the 
knee joint from a digital X-ray, detail which is currently only visible 
with MRI techniques or surgery. Demasq plans to file for US FDA 
approval of its KIS software via a 510K procedure by the end of 
2008 with an expected launch of the product in 2009. 
Knee pain is one of the most common medical complaints. In the 
US alone, there are over 20m physician visits due to knee pain 
each year. With at least an estimated 7m knee X-rays performed 
in Europe and the US annually, the market for KIS is potentially 
very large.
Fusion IP has a 47.5% shareholding in Demasq.
CASE STUDy:
AsterIon lImIted Asterion is a company which applies its core technologies to 
generate and develop long-acting biopharmaceutical products 
that can be administered less frequently than existing marketed 
drugs. Founded by Prof Richard Ross, Prof Jon Sayers and 
Prof Peter Artymiuk as a spin-out company from the 
University of Sheffield. 
Asterion’s technology is being applied to improve 
existing products in established markets. The company 
is focusing on developing third-generation therapeutic 
products that address unmet clinical and commercial 
needs in large markets where the targets are validated, 
the clinical development path is known and the commercial 
opportunity is clear.
The first generation biopharmaceuticals such as insulin and 
EPO were native, recombinantly-derived proteins needing 
frequent injections. The second generation products such 
as depot preparations and chemically modified (PEGylated) 
proteins require more complex manufacture but offer less 
frequent injections. Asterion’s third generation products have 
the advantages of simple manufacture, potent bioactivity 
and the potential for significantly less frequent injection.
If developed successfully, Asterion’s future products 
have the potential to be used to treat diseases such as 
anaemia, neutropenia, multiple sclerosis, growth disorders 
and autoimmune disorders. Asterion’s lead candidates, 
long acting (AFT™) growth hormone protein candidates, 
are partnered with the international specialty pharmaceutical 
group, Ipsen and are being developed for conditions 
including short stature and acromegaly, a disorder 
caused by excess production of growth hormone.
demasq is developing proprietary 
softW are that has the potential 
to revolutionise the global x-ray 
visualisation market. 
“”
_0_FIP_ar08_Front.indd   5 21/10/2008   15:47:14 _0_FIP_ar08_Front.indd   6 21/10/2008   15:47:27 07
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
summary of key portfolio company events 
during the year
magnoma tics Fusion IP shareholding
48%
Magnomatics, which is developing proprietary magnetic gear 
and novel electrical machine technology for the renewable 
energy, hybrid vehicle, aerospace and other markets, continues 
to attract significant interest from a number of key manufacturers 
in those sectors. The company is currently working on the design 
of pre-production demonstrators which have the potential to be 
lighter, smaller and more energy efficient than current motors 
and generators.
The company led a successful bid to the T echnology Strategy Board 
for a £600,000 project to investigate the use of its technology within 
hybrid vehicles which commenced in July 2008. The company’s 
activity is funded at 60% and the project includes Volvo Powertrain 
as a key partner.
In September 2008, the company successfully completed 
a £565,000 funding round involving White Rose Seedcorn 
T echnology Fund (£350,000) and Fusion IP (£215,000). 
The investment will enable the company to bring its novel technology 
closer to market.
Fusion IP has a 48% (50% prior to the September 2008 funding round) 
shareholding in Magnomatics.
phase f ocus Fusion IP shareholding
61%
Phase Focus, which is developing the world’s first “lensless” optical 
microscope, completed its first working prototype in July 2008. 
Prior to this in February 2008, the company completed a £600,000 
funding round involving White Rose Seedcorn Technology Fund 
(£200,000) and Fusion IP (£400,000). The company’s next milestone 
is the full proof of principle of the electron microscope technology, 
expected to be completed by December 2008. 
In September 2008, the company completed a further funding round 
of £250,000 involving Riding Early Growth Investment Company 
(Viking Fund) (£100,000), White Rose Seedcorn Technology Fund 
(£25,000) and Fusion IP (£125,000).
Fusion IP has a 61% (63% prior to the September funding round) 
shareholding in Phase Focus.
CASE STUDy:
BIohydrogen lImIted Biohydrogen was created in March 2007 from 
technology created by Prof Phillip Wright and his team 
in the Department of Chemical and Process Engineering 
at the University of Sheffield. 
Biohydrogen aims to develop an efficient, robust 
and economical method of producing biohydrogen 
via microbial fermentation without the classical technical 
barriers of needing light sources, a constant absolute 
anaerobic environment and slow microbial growth.
_0_FIP_ar08_Front.indd   7 21/10/2008   15:47:29 08
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
summary of key portfolio company events 
during the year CONTINuED
biohydrogen Fusion IP shareholding
60%
Biohydrogen continues to develop its novel methods of 
producing commercial quantities of industrial hydrogen from 
waste sugars using genetically modified e-coli. The company 
has expanded its IP base and expects to reach its first target 
milestone of 3.1 mols of hydrogen per mol of glucose by the 
end of the 2008. 
During the year, Fusion IP committed to invest a further £175,000 in the 
company. In addition to this the company won a Yorkshire Forward 
grant of £75,000.
asterion Fusion IP shareholding
38%
Asterion is developing a range of third-generation therapeutic 
proteins with the aim of administering lower doses, less frequently 
resulting in fewer side effects than existing marketed drugs. 
The company has seven products under development including 
growth hormone (partnered with Ipsen who continue to invest in 
two programmes), erythropoietin (a treatment for anaemia), 
and granulocyte colony stimulating factor (needed to boost 
white blood cells e.g. after chemotherapy).
In September 2007, the results from the company were 
published in the peer-reviewed journal Nature Medicine. The 
article demonstrated that, in studies the new molecule developed 
by Asterion, promotes growth after a single injection and that 
growth continues over a minimum of ten days. Asterion believes 
that this data will allow the development of a long acting version 
of growth hormone. Current treatment for growth hormone 
deficiency requires daily injections of growth hormone to promote 
growth. The Asterion technology has the added attraction of a 
simple manufacturing process and applicability to other 
cytokine hormones. 
During the year, Fusion IP invested £350,000 in Asterion to 
accelerate a number of internal development programmes 
to extend the utility of the company’s platform technology.
In September 2008, Asterion announced that it had signed a 
Research and Option Agreement with Genzyme Corp., one of the 
world’s leading biotechnology companies, to develop a long-acting 
form of a non-cytokine protein. Under the terms of the Agreement, 
Genzyme will gain access to elements of Asterion’s IP portfolio 
surrounding a specific protein target and will perform research 
work designed to look at the creation of a long-acting and potent 
version of an undisclosed protein of mutual commercial interest. 
chief executive’s review contInued
COMPANY DETAILS:
Name:  Phase Focus Limited
Year FouNded:  2006
uNIversItY PartNer:  Sheffield
FusIoN IP shareholdINg:  61%
WeB sIte:  www.phasefocus.com
_0_FIP_ar08_Front.indd   8 21/10/2008   15:47:32 09
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
axordia Fusion IP shareholding
49%
Axordia, one of the UK’s leading stem cell companies, 
continues to work in collaboration with the University of Sheffield 
and Lombard Medical Technologies, supported by a £0.9m grant 
from the T echnology Strategy Board, for the development of a new 
generation regenerative stent for cardiovascular disease that 
reduces restenosis and local inflammation. 
In addition, Axordia is a major partner in a project to cure Age 
Related Macular Degeneration (AMD), to which Axordia will be 
supplying clinical grade human embryonic stem cells in order to 
produce therapeutic “retinal” RPE cells. This project has funding 
of over £5m and plans to move into human trials in 2010. 
Axordia continues to generate new intellectual property, 
participating in the €12m European Commission “ESTOOLS” 
stem cell research programme and filing two new patent 
applications. During the year, Fusion IP invested a further 
£195,000 in Axordia.
simcyp Fusion IP shareholding
23%
Simcyp, a profitable pharmacokinetic modelling and simulation 
business, has continued to grow its share of the market with strong 
sales performance to the major pharmaceutical companies. Its 
results during the year confirmed this with the company recording 
a 53% increase in turnover to £3.1m and continued growth in 
profits. Simcyp is confident that this growth will continue during 
2009 as it expands sales of its simulation platform and consultancy 
services that enable pharmaceutical companies to model the 
fate of drugs in the human body before undertaking clinical 
testing programmes.
Predicting outcomes in virtual patient populations allows 
individuals at extreme risk from adverse drug reaction to 
be identified, and unnecessary drug exposure to human 
volunteers and animals to be minimised. The limitations of 
candidate compounds, including potential drug-drug interactions, 
can be assessed and managed prior to human clinical studies, 
allowing better focus of drug development resources. Simcyp’s 
clients form a Consortium which guides the company’s scientific 
development. This ensures that Simcyp’s products and services 
continue to meet, and exceed, industry need. Currently, 14 of 
the top 20 pharmaceutical companies worldwide are members 
of the Consortium.
CASE STUDy:
PhAse Focus lImIted Phase Focus was formed in 2006 to exploit the technology 
invented by Prof John Rodenburg, Prof of Semiconductor 
Materials and Devices in the University of Sheffield’s 
Department of Electronic and Electrical Engineering.
Phase Focus has developed a proprietary process that 
can generate high definition images of an object without 
the need for high quality lenses. The technique uses a 
novel iterative phase retrieval algorithm to generate both 
amplitude and phase images of an object and has 
applications in optical, X-ray and electron microscopy, 
amongst others.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
summary of key portfolio company events 
during the year CONTINuED
diurnal Fusion IP shareholding
60%
Diurnal uses its knowledge of human physiology combined 
with advanced proprietary formulations using approved drugs 
to provide novel treatments in endocrinology e.g. testosterone 
replacement. Diurnal’s product pipeline is based on optimising 
the drug delivery profile and treatment regimes of well established 
small molecule drugs that have known safety data and proven 
clinical efficacy rationales. This enables Diurnal to rapidly progress 
its products to critical clinical proof-of-concept milestones without 
the need for substantial pre-clinical development. 
Following the decision by Phoqus Pharmaceuticals plc on 
16 July 2008, to put its principal trading subsidiary Phoqus 
Pharmaceuticals Ltd (Phoqus) into administration, Diurnal 
terminated its licence to Phoqus for the commercialisation of 
its hydrocortisone product “Chronocort”. Subsequent to this 
event the licensed IP will be returned to Diurnal together with 
significant clinical data. 
The company is now in discussion with alternative development 
partners for the commercialisation of the hydrocortisone platform 
and to continue development of its testosterone and thyroid 
hormone programmes.
lifestyle choices Fusion IP shareholding
51%
Lifestyle Choices sells a female fertility test that helps give women an 
early warning of whether they are potentially at risk of having too few 
eggs to conceive a child. In November 2007, Lifestyle Choices signed 
an exclusive agreement with Repromedix, a leading independent 
fertility diagnostic laboratory based in Boston, to distribute the test 
in North America. 
In December 2007, South Yorkshire Investment Fund invested 
£150,000 in Lifestyle Choices. In January 2008, Repromedix 
announced that they had commenced the beta launch of the 
product and that they expected to complete the national launch 
by the summer. 
chief executive’s review contInued
COMPANY DETAILS:
Name:  Demasq Limited
Year FouNded:  2008
uNIversItY PartNer:  Cardiff
FusIoN IP shareholdINg:  48%
WeB sIte:  www.demasq.com
_0_FIP_ar08_Front.indd   10 21/10/2008   15:47:34 11
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
In June 2008 Repromedix announced that is was in financial 
difficulties and that they were engaged in selling elements of their 
business to ReproSource, a new US fertility diagnostics company. 
Lifestyle Choices has been in negotiation with ReproSource since 
this time to agree a new distribution agreement for the product. 
In early October 2008 it became clear that these negotiations 
were likely to terminate and as a result the Directors believe that 
the likelihood of the product, continuing to be sold in the US is 
limited. With the low level of sales in the UK, the company is 
reviewing its options on developing its IVF Predictor test for 
the European market.
medaphor Fusion IP shareholding
35%
Medaphor produces innovative training products for postgraduate 
medical professionals including advanced tutorials for learning or 
improving ultrasound examination technique. The company has 
developed a prototype portable ultrasound simulator that enables 
ultrasound training of physicians to take place without utilising 
ultrasound machines, which are in heavy demand, or volunteer 
patients. The ultrasound simulator will enable trainees to perform 
virtual reality gynaecological ultrasound examinations, using a 
virtual probe that conveys the realistic sensation of contact 
with a live body. This technology has the potential to reduce the 
hands-on patient contact required to achieve full competence. 
In July 2008 Fusion IP and Finance Wales co-invested £75,000 each 
in Medaphor, which when combined with Medaphor’s £100,000 
grant from SMART Wales, the Welsh Assembly Government’s Award 
scheme to boost innovative or exploratory ways of solving practical 
problems, brought the total investment into Medaphor to £250,000. 
This funding will be used to further develop the simulator prototype 
for a planned commercial launch by the end of 2009.
d avid baynes chief executive
8 october 2008
CASE STUDy:
demAsq lImIted Demasq is a new company specialising in medical 
imaging software. Founded as a result of research 
carried out by Prof Hechmi Toumi, a specialist in the 
Muscle-bone-tendon Unit at Cardiff University School 
of Biosciences, Demasq’s first product is the Knee 
Imaging Software (KIS) system. 
KIS has the potential to provide surgeons, radiologists, 
sports medicine physicians and GPs with soft tissue 
detail of the knee joint, at less cost than conventional 
knee imaging technologies. It does so by providing the 
soft tissue detail, which is normally visualised only with 
MRI techniques, using plain digital X-rays.
The potential benefits of the KIS system are:
 earlier disease intervention;
 reduction in time to treat;
 cost reduction;
 improved accessibility to non-invasive diagnosis;
 risk-reduction;
 improved characterisation of disease progression.
_0_FIP_ar08_Front.indd   11 21/10/2008   15:47:34 12
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
results The Group’s reported loss for the year increased to £4,964,000 
(2007: £3,075,000 loss), but was broadly in line with budget. 
The losses reflect the impact of a full year of amortisation charges 
from the Cardiff agreement as opposed to only six months in the 
prior period results and an increase in the operating costs of 
portfolio companies classified as subsidiaries as they expand 
their operations.
revenues and operating costs
Revenue is comparable with the prior year at £359,000 (2007: 
£351,000) and represents the amounts charged to spin-out 
companies for management services provided and the revenue 
of consolidated portfolio companies. 
Operating expenses have been broken down into three categories 
within the income statement to reflect their varying nature:
  Corporate operating expenses at £1,975,000 (2007: £1,580,000) 
reflect the cost of running the Parent Company together with 
the Sheffield and Cardiff operations. The increases are due 
to a full year of costs from the Cardiff operation compared 
to six months in the prior period.
  Subsidiary spin-out operating expenses of £1,653,000 
(2007: £797,000) reflects the growth in the number of 
spin out subsidiaries and their continued progression 
through strategic milestones.
  Amortisation of intangible assets of £1,679,000 (2007: £898,000) 
reflects a full year’s charge over the Cardiff IP rights which 
are being amortised on a straight line basis over the ten year 
pipeline agreement. The prior period only reflected a six month 
charge as the pipeline agreement commenced in January 2007.
financial review COMPANY DETAILS:
Name:  Magnomatics Limited
Year FouNded:  2006
uNIversItY PartNer:  Sheffield
FusIoN IP shareholdINg:  48%
WeB sIte:  www.magnomatics.com
_0_FIP_ar08_Front.indd   12 21/10/2008   15:47:36 13
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
change in fair values The Group reported a reduction in the fair value of investments 
in spin-out companies of £385,000 (2007: £557,000). The gains 
arising from increased valuations in unquoted funding rounds 
have been offset by unrealised losses against certain unquoted 
portfolio companies. 
   2008 2007 
   £000 £000
Fair value gains  551 96
Fair value losses  (936) (653)
   (385) (557)
net interest income
Net interest income reduced to £325,000 (2007: £340,000) as a 
result of lower Group cash balances in the year. Interest payable 
relates to interest accrued on the loan notes used to purchase 
the Group’s shareholding in portfolio companies acquired as part 
of the Sheffield and Cardiff agreements. These amounts are only 
payable in the event of an exit, and are not considered to be a 
current liability.
investments During the year investments in spin-out companies increased to 
£6,426,000 (2007: £5,091,000). Additions in the year amounting to 
£1,720,000 consist of equity investments, convertible loan investments 
and accrued interest to a number of portfolio companies.
The investments are all classified as financial assets and are 
held at fair value through profit and loss. The Group uses the 
British Venture Capital Association (BVCA) guidelines to establish 
the fair value of unlisted securities. The valuation method most 
commonly used is the “price of recent investment” contained in 
the BVCA guidelines, based on the valuations agreed at funding 
rounds involving third party investors.
Realised and unrealised gains and losses amounting to a 
net loss of £385,000 (2007: £557,000) were included in the 
income statement in the period.
CASE STUDy:
mAgnomA tIcs lImIted Magnomatics was incorporated in July 2006 to exploit 
technology developed by Dr Kais Atallah and his research 
associates from the Electrical Machines and Drives Group 
within the Department of Electronic and Electrical Engineering 
at the University of Sheffield.
Magnomatics is developing a large patent portfolio 
of magnetic gear technologies and ground-breaking 
electrical machines that feature integral magnetic gearing. 
These technologies are being developed with strategic 
industry cooperation for application within a wide range 
of market sectors, including renewable energy, aerospace, 
automotive and marine. 
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
non-current liabilities
Amounts totalling £3,270,000 (2007: £3,293,000) owed to 
Cardiff University and the University of Sheffield relate to loan 
notes and accrued interest arising from the purchase of the 
Group’s interest in its portfolio of spin-out companies. 
c ash balances
Cash balances of the Group as at 31 July 2008 were £6,363,000 
(2007: £10,600,000). Cash balances are separately maintained to 
fund spin-out investments from Sheffield and Cardiff Universities 
respectively. These cash balances amounted to £285,000 and 
£5,909,000 respectively (2007: £2,660,000 and £7,630,000 
respectively) and are also used to fund corporate operating 
costs on an equivalent basis. The remaining cash balances 
relate to cash held within consolidated spin-out subsidiaries.
The cash outflow in the year amounted to £4,237,000 and can 
be summarised as follows:
   2008 2007 
   £000 £000
Net cash used in operating activities  (2,856) (2,279)
Net cash used in investing activities  (1,381) (44)
Financing activities  — 7,040
   (4,237) 4,717
post year end
In July 2008, the Company announced that it had signed a new 
ten year agreement with the University of Sheffield for all non-life 
science IP . The consideration for the agreement could be up to 
4.35m Ordinary shares with an initial issue of 3.14m Ordinary shares.
financial review contInued
COMPANY DETAILS:
Name:  Simcyp Limited
Year FouNded:  2001
uNIversItY PartNer:  Sheffield
FusIoN IP shareholdINg:  23%
WeB sIte:  www.simcyp.com
_0_FIP_ar08_Front.indd   14 21/10/2008   15:47:50 15
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
In conjunction with the agreement, on 1 August 2008, the 
Company placed 2.35m Ordinary shares with institutional 
investors raising £2,115,000 (£1,675,000 net of expenses) 
which will be used to fund further spin-out investments 
from Sheffield. Cash balances after this transaction amount 
to £8,038,000, which the Directors believe is sufficient to 
support the current portfolio of companies, planned creation 
of new portfolio companies and corporate operating expenses 
beyond the next twelve months, as detailed in note 1 to the 
consolidated financial statements.
adoption of international financial reporting 
standards (ifrs)
This year is the Group’s first year of reporting under IFRS as 
adopted by the European Union. The Group’s transition date 
to IFRS is 1 August 2006 with the first financial statements 
complying with IFRS being the year ended 31 July 2008. 
The most significant change from the adoption of IFRS is 
the way the Group accounts for its financial assets being 
investments in associates and other equity investments, which 
are not consolidated. The Group now measures its investments 
at fair value in accordance with IAS 39 “Financial Instruments: 
Recognition and Measurement”. Realised and unrealised gains 
on financial assets at fair value are included in the income 
statement in the period they arise. 
The increase to equity arising from the introduction of IFRS 
is £490,000 (as at 1 August 2006) rising to £615,000 as at 
31 July 2007.
david baynes 
chief executive
8 october 2008
CASE STUDy:
sImcyP lImIted Simcyp is a company providing predictive pharmacokinetic 
tools, workshops and consultancy services. Founded by 
Prof Geoff Tucker (Chairman), Prof Amin Rostami-Hodjegan 
(Director of Scientific Development) and Mr John Evans 
(Managing Director) as a spin-out company from the 
University of Sheffield. 
Simcyp’s user-friendly simulator and databases 
predict drug absorption, clearance, distribution and 
metabolic drug-drug interactions from in vitro data. 
By simulating pharmacokinetics in virtual patient 
populations and identifying individuals at extreme 
risk, the Simcyp Simulator is able to accelerate 
drug discovery and development.
Simcyp’s clients include many of the major global 
pharmaceutical and bioscience companies, leading 
academic institutes and regulatory authorities. These 
clients form the Simcyp Consortium, which together with 
an independent International Scientific Advisory Board, 
guide scientific development at Simcyp.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
The Directors present their report and the audited financial statements for the year ended 31July 2008.
Results and dividend
Group loss for the year after taxation amounted to £4,964,000 (2007: loss £3,075,000). The Directors do not recommend the payment 
of a dividend (2007: £nil).
PRinciP al activity The Company acts as a holding company for the Group and is incorporated by shares in England and Wales. The Company’s 
subsidiary undertakings are detailed in note 2 to the financial statements. The Group’s principal activity is the commercialisation 
of intellectual property (IP) that is developed at universities and similar establishments. 
Business Review The information which is required to fulfil the requirements of the Business Review as set out in the Companies Act 1985 is 
incorporated within the Chairman’s Statement and Chief Executive’s Review.
diRectoRs The names of the Directors who held office during the financial year are as follows:
executive D Baynes 
P Grant 
S Gall
non-executive
D Liversidge CBE (Chairman) 
E Moses 
T Atkinson 
D Catton 
S Oakland (resigned 11 June 2008) 
M Davies 
B Rabone (appointed 31 July 2008)
Details of the interests of Directors in the share capital of the Company, together with details of share options granted to them, are set 
out in the Report on the Directors’ Remuneration.
The Company Secretary is R Birtles.
Financial instRuments and Risk management The Group’s financial risk management objectives and policies, including those relating to interest rate risk, liquidity risk and market 
price risk, are provided in note 3 to the financial statements, along with further information on the Group’s use of financial instruments.
Post Balance sheet events
Subsequent to the year end on 1 August 2008, the Company announced that it had signed a ten year agreement with 
the University of Sheffield for all non-life science IP . Consideration for the agreement was up to 4,347,826 Ordinary shares with 
an initial issue of 3,140,000 Ordinary shares. In conjunction with the expanded Sheffield agreement, the Company placed 
2,349,999 Ordinary shares at 90p per share with institutional investors raising £2,115,000.
Also on 1 August 2008 the Company changed its name from Biofusion plc to Fusion IP plc to reflect more accurately the Group’s 
enlarged business.
diRectoRs’ RePoRt Full
Half
_0_FIP_ar08_Back.indd   1 21/10/2008   16:01:11 19
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
majoR inteRest in shaRes As at 8 October 2008, according to the Company’s register, the following shareholders each held 3% or more of the Company’s 
issued share capital:
Name    Ordinary 1p shares % Holding
The University of Sheffield     12,473,324 29.6
Cardiff University     10,997,541 26.1
Vidacos Nominees + Chase Nominees (Invesco)     4,090,363 9.7
HSBC Nominees (AXA Framlington)     3,216,397 7.6
Barclayshare Nominees (NPI Ventures)     2,668,858 6.3
Schroder Investment Management     1,871,911 4.4
D Baynes     1,333,332 3.2
S Gall     1,333,332 3.2
P Grant     1,333,332 3.2
cReditoR P ayment Policy The Group’s policy is to:
(a) establish the payment terms with suppliers when agreeing the terms of supply;
(b) ensure that suppliers are aware of the terms of payment; and 
(c) adhere to the agreed terms.
The Group’s average creditor payment period at 31 July 2008 was 59 days (2007: 41 days). The Company has no trade creditors.
chaRitaBle donations During the year the Group has made charitable donations of £500 to Hole in the Wall (2007: £nil).
PRovision oF inF oRmation to auditoRs So far as each of the Directors is aware, there is no relevant audit information of which the Group’s auditors are unaware. 
Each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant 
audit information and to establish that the Group’s auditors are aware of that information.
auditoRs A resolution for the re-appointment of KPMG Audit Plc will be proposed at the forthcoming Annual General Meeting.
By order of the Board
david Baynes Chief exeCutive
8 October 2008
_0_FIP_ar08_Back.indd   2 21/10/2008   16:01:12 20
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
This Report on the Directors’ Remuneration sets out the Company’s policy on the remuneration of Executive and Non-executive 
Directors, together with details of Directors’ remuneration packages and service contracts.
RemuneRation committee For the financial year ended 31 July 2008, remuneration policy for Executive and Non-executive Directors and the determination of 
individual Executive Directors’ remuneration packages have been delegated to the Board’s Remuneration Committee comprising 
three Non-executive Directors, one of which is the Non-executive Chairman.
In setting the remuneration policy, the Remuneration Committee considers a number of factors including:
 the basic salaries and benefits available to Executive Directors of comparable companies;
 the need to attract and retain Directors of an appropriate calibre; 
 the need to ensure Executive Directors’ commitment to the continued success of the Company by means of incentive schemes; and
 the need for the remuneration awarded to reflect performance.
RemuneRation oF the non-executive diRectoRs All the Non-executive Directors, except for S Oakland, who represents NPI Ventures, M Davies, who represents Cardiff University and 
B Rabone, who represents the University of Sheffield received a fee for their services. The fee is agreed by the Board following 
recommendation by the Chairman with a view to rates paid in comparable organisations and appointments. The Non-executive 
Directors did not receive any pension or other benefits from the Company, nor did they participate in any bonus or incentive schemes 
other than share options. The Non-executive Directors each have a three year service contract with the Company with three months’ 
notice either side. After this time their appointment is reviewed annually. 
RemuneRation Policy F oR executive diRectoRs The Company’s remuneration policy for Executive Directors is to:
  have regard to the Directors’ experience and the nature and complexity of their work in order to pay a competitive salary that 
attracts and retains management of the highest quality;
  link individual remuneration packages to the Group’s long term performance through the award of discretionary bonus 
schemes; and
 provide employment-related benefits including life assurance, insurance relating to the Directors’ duties and medical insurance. 
salaRies and BeneFits The Remuneration Committee meets at least once a year to consider and set the annual salaries for Executive Directors having 
regard to personal performance and information regarding the remuneration practices of companies of similar size and of industry 
competitors. Executive Directors’ salaries were last reviewed in July 2008.
diRectoRs’ seRvice contRacts The service contracts of the Executive Directors provide for six months’ notice of termination. Other than the notice periods 
afforded to the Executive and Non-executive Directors, there are no special provisions for compensation in the event of loss of office. 
The Remuneration Committee considers the circumstances of individual cases of early termination and determines compensation 
payments accordingly.
Details of individual Directors’ service contracts are as follows:
        
    Effective  Unexpired Notice 
     contract date term at 31July period
D Liversidge CBE* (Chairman)   01 December 2004  n/a  3 months
D Baynes   26 January 2005  n/a  6 months
P Grant   26 January 2005  n/a  6 months
S Gall   1 April 2005  n/a  6 months
E Moses   01 December 2004  n/a  3 months
T Atkinson   01 December 2004  n/a  3 months
D Catton   01 December 2004  n/a  3 months
* Service contract is via an agreement with Quest Investments Limited.
The Directors are required to retire by rotation once every three years. No Director is required to retire by rotation at the forthcoming 
Annual General Meeting. 
B Rabone, having been appointed since the last general meeting, is subject to re-election by shareholders and being eligible, 
will seek re-election.
RePoRt on the diRectoRs’ RemuneRation _0_FIP_ar08_Back.indd   3 21/10/2008   16:01:12 21
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
non-executive diRectoRshiPs With the permission of the Chairman, the Executive Directors may accept appointments as Non-executive Directors. Where an 
Executive Director accepts an appointment to the Board of a company in which the Group is a shareholder, the Group retains the 
Directors’ fees. Fees earned for Directorships of companies in which the Group does not have a shareholding will be retained by 
the Directors.
diRectoRs’ detailed emoluments Details of individual Directors’ emoluments for the year are as follows:
  Salary  Pension   Total  Total 
  and fees  Bonuses  contributions Benefits  2008  2007 
   £ £  £ £  £  £
ExEcuTivE
D Baynes 154,000  — 15,400 2,156 171,556 173,934
P Grant 132,000  — 13,200 2,156 147,356 150,460
S Gall 132,000  — 13,200 2,156 147,356 150,460
NoN-ExEcuTivE
D Liversidge CBE (Chairman) 36,000 —  — — 36,000 33,500
E Moses 25,750 —  — — 25,750 24,250
T Atkinson 25,750 —  — — 25,750 24,250
D Catton 12,875 —  — — 12,875 12,125
S Oakland  — —  — —  —  —
M Davies  — —  — —  —  —
B Rabone*  — —  — —  —  —
   518,375  — 41,800  6,468 566,643 568,979
* Joined Board on 31 July 2008, as part of the expanded Sheffield Agreement and is an unpaid Non-executive Director. 
The pension contributions are paid into private pension plans nominated by the related Directors or can be included with the basic 
salary. During the year D Baynes chose to have accrued pension contributions amounting to £40,900 paid as basic salary. At the 
year end an amount of £9,800 was accrued but unpaid. 
No Director waived emoluments in the year (2007: nil). 
di RectoRs’ inteRests in shaRe oPtions Details of options held by Directors over the Company’s Ordinary shares of 1p are set out below:
   As at As at  Earliest  
   31 July 31 July Exercise exercise  
The scheme  2007 2008 price date Expiry date
E Moses  33,333 33,333 150p 28.01.08 28.01.15
T Atkinson  33,333 33,333 150p 28.01.08 28.01.15
D Catton  33,333 33,333 150p 28.01.08 28.01.15
The market price of the Company’s shares at the end of the financial year was 86.5p (2007: 150.0p) and the range of market prices 
during the year was 150.0p to 86.5p (2007: 160.0p to 147.5p).
Each option will vest monthly as to 1/36
th
 of the Ordinary shares under option on the expiry of each month following the date of the 
grant until the third anniversary of the date of the grant when the option shall become fully vested. Any vested portion of the options 
will normally be exercisable between the expiry of the third month after the date of the grant and the tenth anniversary of the date 
of the grant. No performance conditions are required to be met. Options will become immediately exercisable in full on the death 
of the option-holder for a period of twelve months from the date of death. If an option-holder ceases to be a Non-executive Director 
of the Company for any reason other than death, his option (to the extent unexercised and unvested) will lapse. On a change of 
control or a voluntary winding-up of the Company, options may be exercised in full for a fixed period. Options will lapse on the 
expiry of ten years from their date of grant.
Until options are exercised, the option-holders have no voting or other rights in respect of the Ordinary shares under their options. 
Ordinary shares issued pursuant to the Share Option Agreements shall rank pari passu in all respects with the Ordinary shares 
already in issue except that they will not rank for any dividend or other distribution announced prior to the date of the exercise. 
Options are not transferable nor are they pensionable.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
diRectoRs’ inteRests in shaRes The Directors at 31 July 2008 and their interests in the share capital of the Company, other than in respect of options to acquire 
Ordinary shares, were as follows:
       31 July 
The Company – ordinary 1p shares      2008 
D Baynes       1,333,332
P Grant       1,333,332
S Gall       1,333,332
D Liversidge CBE (Chairman)      —
E Moses      —
T Atkinson      —
D Catton       —
M Davies      —
B Rabone      —
On 27 January 2005, D Baynes, P Grant and S Gall granted an option to D Liversidge CBE entitling him to acquire 97,756 Ordinary shares 
from each of them at an aggregate exercise price of £44,000. The options can be exercised at any time prior to 27 January 2015. 
Mr Liversidge CBE has undertaken to the Company to indemnify it from any PAYE and employers’ national insurance contributions 
payable by the Group as a result of the exercise of any or all of these options.
Apart from the interests disclosed above, no Directors held interests at any time in the year in the share capital or loan stock of the 
Company or other Group companies.
t otal shaReholdeR RetuRn The following line graph shows, for the financial year ended 31 July 2008, the total cumulative shareholder return on a holding of the 
Company’s Ordinary shares compared with a hypothetical holding of shares made up of companies in the FTSE AIM all share index, 
which the Directors believe reflects the most appropriate benchmark for the Company’s performance.
The Company has never paid a dividend and so the total shareholder return has been calculated as the weekly movement in the 
share price by reference to a base point of 31 July 2008.
doug liveRsidge cBe Chairman
8 October 2008
RePoRt on the diRectoRs’ RemuneRation 
contInued
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_0_FIP_ar08_Back.indd   5 21/10/2008   16:01:13 23
Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
The Company is committed to high standards of corporate governance. The revised Combined Code on Corporate Governance 
(Combined Code) was published in 2006. While the Group is not required to report on compliance with the Combined Code since its 
shares are traded on AIM, we make every effort to comply. The statement below describes how principles of corporate governance 
are applied to the Group.
the woRkings oF the BoaRd and its committees
the BoaRd The Board currently comprises six Non-executive Directors and three Executive Directors and is responsible for the management 
of the Group. As disclosed on page 21 Dr E Moses, Prof T Atkinson and D Catton have some share options in the Company, 
however the Board considers them to be independent because the number of share options are not considered to be material. 
S Oakland, as a representative of NPI Ventures, prior to his resignation on 11 June 2008 was not considered to be independent. 
Following the completion of the expanded Sheffield Agreement on 31 July 2008, B Rabone, Director of Finance and Resources of 
the University of Sheffield was appointed a Non-executive Director. The other Non-executive Directors are considered by the Board 
to be independent. The Board meets at least six times a year, setting and monitoring Group strategy, reviewing trading performance, 
reviewing and agreeing on investments in spin-out companies and formulating policy on key issues. Day to day operational decisions 
are delegated to the Executive Directors. Key issues reserved for the Board include the consideration of potential investments, share 
issues and fund raising and the setting of Group strategy, City public relations and the review and evaluation of significant risks facing 
the business. Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice 
and services of the Company Secretary who is responsible for ensuring that Board procedures are followed and that applicable rules 
and regulations are complied with. The appointment and removal of the Company Secretary is a matter for the Board as a whole. 
In addition, procedures are in place to enable Directors to obtain independent professional advice in the furtherance of their duties 
if necessary, at the Company’s expense.
Biographies of the Directors including details of their experience and role within the Group are set out on pages 16 and 17.
a ttendance at meetings
The full Board met six times in the financial year ended 31 July 2008 and all of the Directors in office at that time were in attendance 
at these meetings, with the exception of Prof T Atkinson and S Oakland who were unable to attend two meetings and M Davies 
who was unable to attend three meetings.
the audit committee The Audit Committee comprises the Non-executive Chairman, D Liversidge CBE, and two of the Non-executive Directors, Dr E Moses 
and Prof T Atkinson. The Audit Committee’s remit is set out in its terms of reference and meets with the auditors at least twice a year. 
The Committee assists the Board in ensuring that the Group’s published financial statements give a true and fair view and that, where 
the auditors provide non-audit services, their objectivity and independence is safeguarded. 
the RemuneRation committee The Remuneration Committee comprises the Non-executive Chairman, D Liversidge CBE, and two of the Non-executive Directors, 
Dr E Moses and Prof T Atkinson. When necessary non-committee members are invited to attend. No Director is involved in deciding 
his own remuneration. The Committee is responsible for making recommendations to the Board on the scale and structure of 
remuneration for senior management, including the award of share options.
the nomination committee The Nomination Committee comprises the Non-executive Directors, and is chaired by the Chairman, D Liversidge CBE. It meets 
as necessary and is responsible for making recommendations to the Board on the appointments of Executive and Non-executive 
Directors. When required, it is the usual practice of the Nomination Committee to employ specialist external search and selection 
consultants to assist in the appointment process for new Executive and Non-executive Directors.
teRms oF ReFeRence The terms of reference for the Audit, Remuneration and Nomination Committees are available on request from the Company Secretary. 
PeRF oRmance evaluation Performance of each of the Executive Directors is evaluated on an ongoing basis by the Chairman and the Non-executive Directors, 
with a formal review held at least annually. The Non-executive Directors are responsible for the performance evaluation of the Chairman, 
taking into account the views of the other Executive Directors. The Non-executive Directors will meet with the Chairman on an ad hoc 
basis to appraise the Chairman’s performance. The performance of the Non-executive Directors and the sub-committees on which 
they serve are reviewed by the Executive Board on an ongoing basis.
Relations with shaReholdeRs Key members of the Executive Board regularly visit institutional investors and the full Board makes itself available to questions at 
all shareholder meetings it holds. The Chief Executive reports back to the Board views of investors obtained at analysts’ and brokers’ 
briefings. The Board will use the Annual General Meeting to communicate with private and institutional investors and welcomes 
their participation. 
In addition the Group operates a website, which can be found at www.fusionip.co.uk. The website contains the information about the 
Group that is required by AIM Rule 26. That information can be found under the section of the website headed Investor Relations and 
contains, amongst other information, details on the Group and its activities, the Group’s regulatory announcements, its Annual Reports 
and Interim Reports and details of the Group’s share price.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
inteRnal contRols The Directors acknowledge that they are responsible for the Group’s system of internal control and for reviewing its effectiveness. 
Internal control systems are designed to meet the particular needs of the Group and the risks to which it is exposed. In accordance 
with the guidance of the Turnbull Committee on internal control, the procedures are regularly reviewed in an ongoing process to 
identify, evaluate and manage the significant risks faced by the Group. The procedures are designed to manage, rather than 
eliminate, risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against 
material misstatement or loss.
The key procedures which the Directors have established with a view to providing effective internal control are as follows:
  The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for decision 
by the Board. Each Executive Director has been given responsibility for specific aspects of the Group’s affairs. The Executive 
Directors meet fortnightly to discuss day-to-day operational matters; 
  The Directors have established control procedures in response to key risks. Standardised financial control procedures operate 
throughout the Group to ensure the integrity of the Group’s financial statements. The Board has established procedures for 
authorisation of capital and revenue expenditure; and
 The Board reviews the Group’s performance against detailed budgets and working capital forecasts on a bi-monthly basis. 
going conceRn After making enquiries, the Directors have a reasonable expectation 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 financial statements. 
Further details are provided in note 2 to the financial statements.
statement oF the diRectoRs’ ResPonsiBilities The Directors are responsible for preparing the Annual Report, the Report on the Directors’ Remuneration and the financial statements 
in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by 
the European Union, and the Parent Company financial statements and the Report on the Directors’ Remuneration in accordance 
with UK Accounting Standards (UK GAAP) and applicable law.
The Group and Parent Company financial statements are required by law to give a true and fair view of the state of affairs of the 
Group and the Parent Company and of the profit or loss for that period. In preparing those financial statements, the Directors are 
required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent;
  state that the Group financial statements comply with IFRS as adopted by the European Union and that the Parent Company 
financial statements comply with applicable UK GAAP subject to any material departures disclosed and explained in the 
financial statements; and
  prepare the Group and Parent Company financial statements on the going concern basis unless it is inappropriate to presume 
that the Group and the Parent Company will continue in business, in which case there should be supporting assumptions or 
qualifications as necessary.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the 
financial position of the Group and the Parent Company and to enable them to ensure that the financial statements comply with 
the Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard 
the assets of the Group and to prevent and detect fraud and other irregularities. 
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s 
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in 
other jurisdictions.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
  KPMG Audit Plc 
  1 The Embankment 
  Neville Street 
  Leeds LS1 4DW 
  United Kingdom
We have audited the Group and Parent Company financial statements (the “financial statements”) of Fusion IP plc (formerly Biofusion plc) 
for the year ended 31 July 2008 which comprise the Consolidated Income Statement, the Consolidated and Parent Company 
Balance Sheets, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and the related notes. 
These financial statements have been prepared under the accounting policies set out therein.
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 
Auditors’ 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 Group financial statements in accordance with applicable law and 
International Financial Reporting Standards (IFRS) as adopted by the EU, and for preparing the Parent Company financial statements 
in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set out in the 
Statement of Directors’ Responsibilities on page 24.
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 whether the financial statements 
have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the 
information given in the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report 
includes that specific information presented in the Chairman’s Statement and Chief Executive’s Review that is cross referred from 
the Business Review section of the Directors’ Report.
In addition we report to you if, in our opinion, 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 the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. 
We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the 
financial statements. Our responsibilities do not extend to any other information.
Basis oF audit oPinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. 
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in 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 Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Group’s 
affairs as at 31 July 2008 and of its loss for the year then ended; 
  the Parent Company financial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, 
of the state of the Parent Company’s affairs as at 31 July 2008;
 the financial statements have been properly prepared in accordance with the Companies Act 1985; and
 the information given in the Directors’ Report is consistent with the financial statements.
kPmg audit Plc Chartered aCCOuntants
registered audit Or
8 October 2008
indePendent auditoRs’ RePoRt to tHe MeMBeRS oF FuSIon IP PLc (FoRMeRL y BIoFuSIon PLc)
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
      2008  2007 
     Note  £000  £000
REvENuE    5 359 351
Change in fair value of investments    15 (385) (557)
Gain on disposal of subsidiaries     44 66
opERATiNg ExpENsEs:   
– corporate operating expenses     (1,975) (1,580)
– subsidiary spin-out operating expenses     (1,653) (797)
– amortisation and impairment of intangible assets    14 (1,679) (898)
     6 (5,307) (3,275)
REsul Ts fRom opERATiNg AcTiviTiEs     7 (5,289) (3,415)
Finance income     10 556 535
Finance expenses    10 (231) (195)
l oss bEfoRE TAxATioN     (4,964) (3,075)
T axation    11 —  —
l oss foR ThE yEAR     (4,964) (3,075)
ATTRibuTAblE To:   
– equity holders of the parent     (4,289) (2,765)
– minority interest    20 (675) (310)
l oss foR ThE yEAR     (4,964) (3,075)
bAsic ANd fully diluTEd loss pER shARE ATTRibuTAblE  
To ThE EquiTy holdERs of Th E p ARENT    12 (11.70)p (9.26)p
consolidated income statement FoR tHe yeaR ended 31 juL y 2008
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annual report and accounts 2008 www.fusionip.co.uk
      2008  2007 
     Note  £000  £000
AssETs   
NoN-cuRRENT AssETs   
Property, plant and equipment    13 288 41
Intangible assets     14 13,608 15,238
Investments     15 6,426 5,091
ToTAl NoN-cuRRENT AssETs     20,322 20,370
cuRRENT AssETs   
Trade and other receivables    16 983 795
Cash and cash equivalents    17 6,363 10,600
ToTAl cuRRENT AssETs     7,346 11,395
ToTAl AssETs     27,668 31,765
EquiTy    
Called up share capital     18 367 367
Capital reserve     19 2 2
Share premium     18 31,671 31,671
Capital redemption reserve    19 1 1
Retained earnings      (8,611) (3,972)
ToTAl EquiTy ATTRibuTAblE To EquiTy holdERs of ThE p ARENT    23,430 28,069
Minority interest    20 — —
ToTAl EquiTy     23,430 28,069
NoN-cuRRENT liAbiliTiEs   
Amounts owed to related parties    22 3,270 3,293
cuRRENT liAbiliTiEs    
Trade and other payables    21 968 403
ToTAl liAbiliTiEs     4,238 3,696
ToTAl EquiTy ANd liAbiliTiEs     27,668 31,765
These financial statements were approved by the Board of Directors on 8 October 2008 and were signed on its behalf by the Chairman.
doug liveRsidge cBe Chairman
consolidated Balance sheet
aS at 31 juL y 2008
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
      2008  2007 
       £000  £000
cAsh flows fRom opERATiNg AcTiviTiEs   
Loss for the period     (4,964) (3,075)
Adjustments for:   
– depreciation of property, plant and equipment     41 11
– amortisation and impairment of intangible assets     1,679 898
– net finance costs/(income)     (325) (340)
– share-based payments     24 16
– gain on disposal of investments     (44) (66)
– negative goodwill acquired with subsidiary     — (25)
– fair value movement on investments     385 557
Changes in working capital:   
– increase in trade and other receivables     (188) (117)
– increase/(decrease) in trade and other payables     563 (138)
      (2,829) (2,279)
Interest paid     (27) —
NET cAsh flows usEd iN opERATiNg AcTiviTiEs     (2,856) (2,279)
cAsh flows fRom iNvEsTiNg AcTiviTiEs   
Purchase of property, plant and equipment     (288) (28)
Purchase of investments     (1,945) (839)
Net cash acquired with subsidiary      — 29
Proceeds from disposal of investments     353 377
Purchase of intangible assets     (57) (118)
Interest received     556 535
NET cAsh flows usEd iN iNvEsTiNg AcTiviTiEs     (1,381) (44)
cAsh flows fRom fiNANciNg AcTiviTiEs   
Proceeds from issue of share capital     — 7,757
Share issue costs     — (717)
NET cAsh flows fRom fiNANciNg AcTiviTiEs     — 7,040
Net (decrease)/increase in cash and cash equivalents     (4,237) 4,717
Cash and cash equivalents at the beginning of the period     10,600 5,883
cAsh ANd cAsh Equiv AlENTs AT ThE ENd of ThE pERiod    6,363 10,600
consolidated cash Flow statement FoR tHe yeaR ended 31 juL y 2008
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
 Attributable to equity holders of the Group
  Share Share Other  Retained  Minority  
  capital premium reserves earnings Total interests  Total 
  £000 £000 £000 £000 £000 £000 £000
At 1 August 2006  203 8,906 3 (935) 8,177 — 8,177
Loss for the year — — — (2,765) (2,765) (310) (3,075)
Minority interest attributable to Group — — — (288) (288) 288 —
Issue of share capital 164 22,765 — — 22,929 — 22,929
Share-based payments — — — 16 16 — 16
Disposal of subsidiary — — — — — (6) (6)
Acquisition of subsidiary — — — — — 28 28
At 31 July 2007  367 31,671 3 (3,972) 28,069 — 28,069
Loss for the year — — — (4,289) (4,289) (675) (4,964)
Minority interest attributable to Group — — — (374) (374) 374 —
Shared-based payments — — — 24 24 — 24
Disposal of subsidiaries — — — — — 301 301
AT 31 July 2008  367 31,671 3 (8,611) 23,430 — 23,430
 
consolidated statement  
oF changes in equity
FoR tHe yeaR ended 31 juL y 2008
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
1. geneRal inF oRmation Fusion IP plc (formerly Biofusion plc) is a public limited company which is listed on the Alternative Investment Market (AIM) of the 
London Stock Exchange and is incorporated and domiciled in the UK. The address of its registered office is the Innovation Centre, 
217 Portobello, Sheffield, S1 4DP . The registered number of the Company is 5275732.
These financial statements are presented in Sterling because that is the currency of the primary economic environment in which the 
Group operates.
2. summaRy oF signiFicant accounting Policies The principal accounting policies applied in the preparation of these consolidated statements are set out below. 
Basis oF PReP aRation 
The consolidated financial statements comprise a consolidation of amounts included in the financial statements of the 
following companies:
     Principal  Class of  
     activity Holding shares held
Fusion IP Sheffield Limited (formerly Biofusion Trading Limited)  Holding company 100% Ordinary
Fusion IP Cardiff Limited (formerly Fusion Cardiff Limited)  Holding company 100% Ordinary
Biofusion Licensing (Sheffield) Limited*  Dormant 100% Ordinary
Mantelum Limited*  IP development company 100% Ordinary
Phase Focus Limited*  Lensless microscopy 63% Ordinary
Absynth Biologics Limited*  MRSA vaccines 60% Ordinary
BioHydrogen Limited*  Hydrogen production 60% Ordinary
Medella Therapeutics Limited*  Cancer therapeutics 60% Ordinary
Diurnal Limited*  Hormone replacement 60% Ordinary
Genophrenix Limited*  Identification of Schizophrenia targets  60% Ordinary
Magnomatics Limited*  Magnetic devices 50% Ordinary
Bioacta Limited*  Dormant 52% Ordinary
Lifestyle Choices Limited*  Ovarian reserve measurement 51% Ordinary
* Indirectly held.
All companies are incorporated in England and Wales.
The consolidated financial statements of Fusion IP plc have been prepared in accordance with International Financial Reporting Standards 
as adopted by the EU (IFRS). The Company has elected to prepare its Parent Company financial statements in accordance with 
UK GAAP and these are presented on pages 46 to 48.
tRansition to iFRs The Directors have adopted IFRS for the year ended 31 July 2008 as permitted by the Companies Act 1985, IAS and other accounting 
amendments and regulations that became law on 11 November 2004. The date of transition to IFRS for the Group is therefore 
1 August 2006.
The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of 
certain financial assets at fair value through profit and loss, as required by IAS 39 “Financial Instruments: Recognition and Measurement”.
The Group’s results were prepared in accordance with UK GAAP until the year ended 31 July 2007. UK GAAP differs in a number 
of areas from IFRS. In preparing the Group’s results for the period to 31 July 2008, the Directors have amended certain accounting, 
valuation and consolidated methods applied in the UK GAAP financial statements. The comparative figures in respect of 2007 have 
been restated to reflect these IFRS adjustments.
The effect of transition from UK GAAP to IFRS on the Group’s profit, net assets and cash flows are provided in the numerical 
reconciliation and narrative statements in note 26.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also 
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a 
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial 
statements are disclosed in note 4.
going conceRn The financial statements are prepared on the going concern basis. Cash balances at 31 July 2008 amount to £6,363,000 
(2007: £10,600,000). In addition the Company raised a further £2,115,000 on 1 August 2008 (see note 25 for details). The balances 
are considered sufficient to meet expenditure for at least the next twelve months from the date of these financial statements. In addition 
the Company’s forecast expenditure includes amounts of a discretionary basis in relation to potential investments.
Cash balances are separately ring fenced for investment in spin outs from the University of Sheffield and Cardiff University respectively. 
Details of these balances are contained in note 17. The Group has a commitment in respect of the cash reserves within the Sheffield 
agreement. Details of this commitment are given in note 24.
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008
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2. summaRy oF signiFicant accounting Policies continued new standaRds and inteRPRetations not aPPlied The International Accounting Standards Board (IASB) has issued the following standards and interpretations with an effective date 
after the date of these accounts:
International Accounting Standards (IAS/IFRS) Effective date
IFRS 8 Operating Segments (endorsed by EU) 1 January 2009
No other endorsed standard is expected to have a material impact.
Basis oF consolidation subsidiaries
The Group’s consolidated financial statements consist of Fusion IP plc and all of its subsidiaries. The consolidated financial statements 
exclude intra-group transactions.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control and continues 
through to the date control ceases. Control consists of the power to govern the financial and operating policies of the entity in order 
to obtain benefit from its activities, usually by holding more than 50% of the voting rights or by way of contractual agreement.
The cost of acquisition is measured at fair value of assets given, equity instruments issued and liabilities incurred or assumed at 
the date of exchange plus costs directly attributable to the transaction. The excess of the cost of acquisition over the fair value of 
the Group’s share of the identifiable assets, liabilities and contingent liabilities is recorded as goodwill. If the cost of acquisition is 
less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
As permitted by IFRS 1 the Group has elected not to apply IFRS 3 “Business Combinations” retrospectively to business combinations 
that took place before 1 August 2006.
spin-Out investments
Spin-out investments are entities over which the Group has significant influence, but not control, generally accompanied by a 
shareholding of 20% to 50% of the equity or voting rights. Spin-out investments that are held by the Group with a view to the ultimate 
realisation of capital gains are accounted for in accordance with IAS 39 “Financial Instruments: Recognition and Measurement” and 
upon initial recognition are designated at fair value through profit or loss. 
Dilution gains and losses arising in spin-out investments are recognised in the income statement.
segmental RePoRting A business segment is a group of assets and operations engaged in providing services that are subject to risks and returns that 
are different from those of other business segments. A geographical segment is engaged in providing services within a particular 
economic environment that is subject to different risks and returns from other segments in other economic environments. All of 
the Group’s revenues and losses arise within the UK and from a single business segment, being the commercialisation of 
intellectual property.
FoReign cuRRency tRanslation Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets 
and liabilities denominated in foreign currencies at the balance sheet date are translated to Sterling at the foreign exchange rate ruling 
at that date. Foreign exchange differences arising on translation are recognised in profit or loss. 
PRoPeRty, Plant and equiPment All property, plant and equipment is shown at cost less depreciation and impairment. Depreciation is provided to write off the cost, 
less the estimated residual value by equal instalments over the estimated useful economic lives as follows:
Computer equipment – 4 years 
Office/laboratory equipment – 3 to 5 years 
Demonstration prototypes – 2 to 3 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses 
on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the income statement.
intangiBle assets 
gOOdwill
Goodwill arising on the acquisition of subsidiary undertakings, representing the excess fair value of the consideration given over 
the fair value of the identifiable assets, liabilities and contingent liabilities acquired. Goodwill is tested annually for impairment and 
is carried at cost less accumulated impairment losses.
Goodwill in respect of acquisitions prior to 1 August 2006 is included on the basis of its deemed cost, which represents the amount 
recorded under UK GAAP .
Negative goodwill arising on an acquisition is recognised directly in the income statement. 
ip rights
IP rights comprise IP , patents and licences purchased by the Group together with the IP pipeline with Cardiff University. The Group’s 
view is that these assets have a finite life of ten years and to that extent they should be amortised over their respective unexpired 
periods with provision made for any impairment when required. IP rights are tested annually for impairment and are carried at cost 
less accumulated impairment losses.
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2. summaRy oF signiFicant accounting Policies continued intangiBle assets continued impairment Of intangible assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for 
impairment and whenever events or circumstances indicate that the carrying amount may not be recoverable. Assets that are 
subject to amortisation are tested for impairment when events or a change in circumstances indicate that the carrying amount may 
not be recoverable. An impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount. 
The recoverable amount is the higher of the asset’s fair value less costs to sell and the value in use. For the purposes of assessing 
impairments, assets are grouped at the lowest levels for which there are largely independent cash flows (cash-generating units (CGUs)).
ReseaRch and develoPment exPendituRe Expenditure on research activities is recognised in the income statement as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the 
Group intends to, and has the technical ability and sufficient resources to, complete development and if the Group can measure 
reliably the expenditure attributable to the intangible asset during its development. The expenditure capitalised includes the cost 
of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in the 
income statement as an expense as incurred. 
Financial assets The Group classifies its financial assets into one of the categories listed below, depending on the purpose for which the asset 
was acquired. None of the Group’s assets are categorised as held to maturity or available for sale.
In respect of regular purchases and sales, these are recognised on the trade-date – the date on which the Group commits to 
purchasing or selling the asset. Financial assets are derecognised when the rights to receive cash flows from the assets have expired 
or the Group has transferred substantially all risks and rewards of ownership.
finanCial assets at fair value thrOugh prOfit Or l Oss
The Group classifies all its equity investments as financial assets at fair value through profit and loss. Spin-out investments that are 
held by the Group with a view to the ultimate realisation of capital gains are designated as financial assets at fair value through profit 
and loss.
The fair value of unlisted securities is established using British Venture Capital Association (BVCA) guidelines. The valuation 
methodology used most commonly by the Group is the “price of recent investment” contained in the BVCA valuation guidelines. 
The following considerations are used when calculating the fair value using the price of recent investment guidance:
 where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value;
 where there has been any recent investment by third parties, the price of that investment will provide a basis for the valuation; and
  where a fair value cannot be estimated reliably the investment is reported at cost unless there is evidence that the investment has 
since been impaired.
Realised and unrealised gains on financial assets at fair value through profit or loss are included in the income statement in the period 
they arise.
lO ans and reCeivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. 
They are included in current assets and comprise “trade and other receivables” and “cash and cash equivalents”.
tRade ReceivaBles Trade receivables are stated initially at fair value and subsequently at amortised cost.
Payments on account Payments on account are recorded within trade and other receivables and represent the transfer of funds in advance to the 
University of Sheffield held on the balance sheet of Fusion IP Sheffield Limited. The payments on account are held at cost, less any 
amounts transferred to investments on account of the acquisition of interests in spin-out companies from the University of Sheffield 
Life Science Department.
c ash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.
Financial liaBilities Financial liabilities are comprised of trade payables and other short term monetary liabilities, which are recognised at amortised cost. 
Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reasonable approximation of their fair value. 
non-cuRRent liaBilities owed to Related P aRties Non-current liabilities owed to related parties relate to loan notes and accrued interest due to the University of Sheffield and 
Cardiff University arising from the purchase of the Group’s interest in its portfolio of spin-out companies. These amounts are 
repayable on the earlier of the sale by Fusion IP of the underlying share capital in the Company, or the Company making dividend 
payments, or ten years from the day of issue should the spin-out company generate a return. These amounts are only payable 
to the extent that any gain or dividend is received by Fusion IP , and can be cancelled by Fusion IP by the return of the shares to 
which they relate to the University of Sheffield or Cardiff University respectively. 
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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annual report and accounts 2008 www.fusionip.co.uk
2. summaRy oF signiFicant accounting Policies continued shaRe c aPital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown 
in equity as a deduction, net of tax, from the proceeds.
leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating 
leases. Payments made under operating leases are charged to the income statement on a straight line basis over the period of 
the lease.
deFeRRed taxation Deferred tax arises from temporary differences as a result of the different treatment for accounts and taxation purposes of transactions 
and events recognised in the financial statements of the current period and previous periods. Deferred tax assets are not currently 
recognised in the accounts because of the uncertainty of future taxable profits against which they may be recovered.
emPloyee BeneFits pensiOn ObligatiOns
The Group does not operate any pension schemes for employees but makes contributions to employee personal pension schemes 
on an individual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are 
recognised as employee benefit expenses when they are due.
share-based payments
Share-based incentive arrangements are provided to Directors and certain employees. Share options granted are valued at the 
date of grant using the Black-Scholes option pricing model and are expensed on a straight line basis over the vesting period to 
operating profit.
Revenue Recognition Revenue comprises:
  fees for various advisory and fund management services which are recognised in the income statement when the related services 
are performed and when considered recoverable; and
  licence fees which are recognised in full upon signing once all the Group’s obligations have been completed, in accordance with 
the substance of the agreement.
3. Financial Risk management In the normal course of business, the Group uses certain financial instruments including cash, equity investments and loans to 
its portfolio of spin-out companies. Loans to spin-out companies are treated on the same basis as equity for valuation purposes.
Risk management oB jectives The Group is exposed to a number of risks through the performance of its normal operations. The most significant are liquidity 
and market price risk. Income from surplus funds is dependent on market interest rates.
The Group’s main objective in using financial instruments is to promote the commercialisation of IP held by technology businesses 
through the raising and investing of funds for this purpose. The Group’s policies in calculating the nature, amount and timing of 
investments are determined by planned future investment activity.
Due to the nature of the Group’s activities, the Directors do not consider it necessary to use derivative financial instruments 
to hedge the Group’s exposure to fluctuations in interest rates, as these exposures have not been significant during the period 
covered by this report.
inteRest Rate Risk PRoFile oF Financial liaBilities The Group’s liabilities consist of short term payables, therefore disclosures have been excluded. The amounts owed to related parties 
falling due after more than one year relate to loan notes and accrued interest due to the University of Sheffield and Cardiff University 
arising from the purchase of the Group’s interest in its portfolio of spin-out companies. These amounts are interest bearing at a rate 
which tracks the London Interbank Offered Rate (LIBOR).
BoRRowing F acilities The Group had no undrawn committed borrowing facilities available during the period.
cuRRency exPosuRes The Group occasionally enters into transactions in currencies other than Sterling. Any exposure to fluctuations in market currency 
exchange rates is considered immaterial from a Group perspective. Therefore no sensitivity analysis has been prepared in relation 
to this risk.
inteRest Rate Risk The Group has directly maintained special interest bearing accounts with a corporate bank at variable rates of interest related to 
LIBOR. These deposits are made on a daily basis with minimal balances held on current account. Fixed rate deposits for periods 
of up to three months are placed with a corporate bank where surplus funds in excess of £1m exist and interest rates above LIBOR 
are available.
The Group’s cash and cash deposits as at 31 July 2008 amounted to £6,363,000 (2007: £10,600,000).
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3. Financial Risk management continued liquidity Risk The Group seeks to manage financial risk, and in particular liquidity risk, ensuring that sufficient liquidity is available to meet 
foreseeable requirements and to invest surplus cash in low risk instruments with reputable institutions. 
maRket PRice Risk The Group is exposed to risk in respect of equity investments and loans to spin-out companies. The Group seeks to mitigate this risk 
by routinely monitoring the performance of the spin-out companies. The Group uses a rigorous investment appraisal process prior 
to deciding on investment. Regular spin-out company updates are provided to the Board on the status and valuation of investments. 
Most spin-out companies also have a Fusion IP plc Executive Director on their Board who closely monitors the performance of the 
company against strategic milestones. The value of early stage technology and life science spin-out companies is affected by the 
ability to attract strategic industrial partners and venture capital institutions to invest in follow-on funding rounds, which is ultimately 
determined by the general economic environment and the performance of the international equity markets.
c aPital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide 
returns for shareholders and benefits for other stakeholders. 
The Group does not currently utilise debt within its capital structure. Additional cash and cash equivalents for operating and investment 
requirements is generated through the issue of new shares.
There were no changes in the Group’s approach to capital management during the year. 
4. cRitical accounting estimates and judgements
In the process of applying the Group’s accounting policies, which are set out in note 2, the Directors have made certain judgements 
that have a significant effect on the amounts recognised in the financial statements. The Group makes estimates and assumptions 
concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates 
and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within 
the next financial year are described below.
v aluation oF unquoted equity investments
The judgements required to determine the appropriate valuation methodology of unquoted equity investments means there is a 
risk of material adjustment to the carrying amounts of assets and liabilities. These judgements include a decision whether or not 
to impair valuations.
Valuations of unquoted equity investments are based on the last external funding round where one has taken place, otherwise at cost.
v aluation oF intangiBle iP Rights The Group is required to test, at least annually, whether the IP rights have suffered any impairment. There are a number of variable 
assumptions set out in note 14. The Directors consider that for each of these variables there is a wide range of reasonably possible 
alternative values, which result in a wide range of fair value estimates for the IP rights agreement. None of these estimates of fair value 
is considered more appropriate or relevant than any other. As a result of this, the Directors’ view is that the IP rights should be amortised 
over the ten year life of the agreement with provision made for any impairment when required. 
suBsidiaRies and sPin-out investments
At the point of investing in a new spin-out company the Directors consider the definitions of a subsidiary and a spin-out investment 
as set out in note 1. The judgements over control of the company are assessed through:
 proportion of voting rights held;
	 power to govern policies of the entity; and
	 power to appoint a majority of board members.
5. segmental inF oRmation PRimaRy Business segment
For the year ended 31 July 2008 and the year ended 31 July 2007 the Group’s revenue and profit was derived from its principal activity, 
within the United Kingdom. For management purposes, the Group is organised into one business segment, which encompasses 
technology transfer, Company incubation and early stage venture capital.
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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6. Results FRom oPeRating activities Results from operating activities have been arrived at after charging/(crediting) the following operating expenses:
       2008 2007 
      £000 £000
Depreciation on property, plant and equipment     41 11
Amortisation and impairment of intangible assets     1,679 898
Employee costs (see note 8)     1,242 738
Operating leases – property     53 25
Payments to Cardiff University for IP mining     210 118
Research, development and patent costs     741 529
Legal, professional, insurance and advisory costs     676 482
Administration and marketing costs     665 474
      5,307 3,275
7. auditoRs’ RemuneRation During the year the Group obtained the following services from the Group’s auditors:
       2008 2007 
      £000 £000
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts   19 18
Fees payable to the Company’s auditors and its associates for other services:   
– the audit of the Company’s subsidiaries     9 8
– review of interim financial statements     20 9
– other services relating to corporate finance transactions (review of working capital projections)  35 55
8. emPloyee costs
       2008 2007 
      £000 £000
Wages and salaries     1,036 614
Social security costs     117 68
Pension costs – contributions to money purchase plans     65 40
Share-based payments     24 16
      1,242 738
Average monthly number of persons (including Executive Directors) employed:
       2008 2007 
      Number Number
Central corporate functions     14 12
Subsidiary spin-out companies     7 1
      21 13
9. shaRe-Based P ayments No share options or share warrants were exercised during the period. 
During the year no new share warrants were issued. Options over 33,333 shares were issued to one employee on 30 November 2007, 
details of which are set out in the table on page 36. The exercise price of these options is £1.50.
Details of the share options held by Directors are set out within the Report on Directors’ Remuneration.
On 23 March 2006, as part of a £10m Side Fund Agreement, Fusion IP issued the following warrants to NPI Ventures:
 1,225,000 Ordinary shares with an exercise price of £1.50;
 1,225,000 Ordinary shares with an exercise price of £1.60;
  612,500 Ordinary shares with an exercise price of £1.80; and
  612,500 Ordinary shares with an exercise price of £2.20.
All of the warrants are exercisable at any time commencing on the first anniversary of the associated Warrant Deed and on or before 
the tenth anniversary of the date of the Warrant Deed.
The fair value of the share-based options and warrants are recognised as an expense through the profit and loss account over the 
relevant vesting periods. The charge in the current year was £24,000 (2007: £16,000).
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9. shaRe-Based P ayments continued The fair values are determined by using the Black-Scholes option pricing model and the assumptions used at the fair value 
measurement date are shown in the table below:
    Employees Directors  NPI
Fair value at grant date   47.24p 47.24p 43.98p to 18.83p
Share price at grant   150.00p 150.00p  152.25p
Dividend yield   0.0% 0.0%  0.0%
Expected volatility   18.52% 18.52%  18.85%
T erm to maturity   6.5 years 6.5 years  5.5 years
Risk free interest rate   4.46% 4.46%  4.28%
Number of shares under option   33,333 99,999  3,675,000
The expected volatility was benchmarked against an index of similar companies in the biotech index as no historic data was available 
for the Company at the grant date.
10. Finance income and costs
       2008 2007 
      £000 £000
fiNANcE iNcomE   
Interest income on short term bank deposits     478 467
Interest income on loans to spin-out investments     78 68
      556 535
fiNANcE ExpENsEs   
Interest payable on loans from related parties     (231) (195)
      (231) (195)
NET fiNANcE cosTs     325 340
11. t axation       2008 2007 
      £000 £000
Current tax     — —
Deferred tax     — —
      — —
Corporation tax is calculated at 28% (2007: 30%) of the estimated assessable profit for the period. The tax rate of 28% was 
substantively enacted from 1 April 2008.
The charge for the year can be reconciled to the loss per the income statement as follows:
       2008 2007 
      £000 £000
Loss before tax     (4,964) (3,075)
Current tax at 28% (2007: 30%)     (1,390) (923)
EffEcTs of:   
– expenses not deductible for tax purposes     44 8
– tax losses carried forward     1,346 915
ToTAl cuRRENT chARgE     — —
Deferred tax assets of £2,743,000 (2007: £1,397,000) from unutilised tax losses have not been recognised as the Directors consider 
there to be sufficient uncertainty over the availability of future taxable profits from which the trading losses can be deducted.
The Directors believe that the Group will qualify for the Substantial Shareholder Exemption (SSE) and therefore no deferred tax is 
provided for in respect of the fair value uplifts in valuation of certain of the equity investments. 
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 cont Inued
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12. eaRnings PeR shaRe       2008 2007
Loss attributable to the equity holders of the parent     £4,289,000 £2,765,000
Weighted average number of Ordinary shares in issue     36,663,967 29,852,493
Basic and fully diluted loss per share     (11.70)p (9.26)p
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number 
of Ordinary shares in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares outstanding to assume conversion 
of all dilutive potential Ordinary shares according to IAS 33. Dilutive potential Ordinary shares include granted share options and warrants 
where the exercise price is less than the average market price of the Company’s Ordinary shares during the year.
IAS 33 requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease net 
profit or increase net loss per share. Only options or warrants that are “in the money” are treated as dilutive and net loss per share would 
not be increased by the exercise of such options or warrants. Therefore no adjustment has been made to dilute loss per share for any 
outstanding shares options or warrants.
Subsequent to the year end, on 1 August 2008 the expanded Agreement with the University of Sheffield was completed together with 
a Placing of Ordinary shares which resulted in the issue of an additional 5,489,999 Ordinary shares (see note 25 for further details). 
This increased the issued share capital to 42,153,966 Ordinary shares, which would have had a material impact on the calculation of 
earnings per share above.
13. PRoPeRty, Plant and equiPment     Office Prototypes  
     and and  
     computer laboratory  
     equipment equipment Total 
     £000 £000 £000
cosT   
At 1 August 2007    58 4 62
Additions    26 262 288
AT 31 July 2008    84 266 350
AccumulATEd dEpREciATioN   
At 1 August 2007    (21) — (21)
Charge for the year    (17) (24) (41)
AT 31 July 2008    (38) (24) (62)
NET book v AluE   
AT 31 July 2008    46 242 288
     Office Prototypes  
     and and  
     computer laboratory  
     equipment equipment Total 
     £000 £000 £000
cosT   
At 1 August 2006    34 — 34
Additions    24 4 28
At 31 July 2007    58 4 62
AccumulATEd dEpRE ciATioN   
At 1 August 2006    (10) — (10)
Charge for the year    (11) — (11)
At 31 July 2007    (21) — (21)
NET book v AluE   
At 31 July 2007    37 4 41
At 1 August 2006    24 — 24
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14. intangiBle assets     IP rights Goodwill Total 
     £000 £000 £000
cosT
At 1 August 2007    16,064 599 16,663
Additions    57 — 57
Disposals    — (8) (8)
AT 31 July 2008    16,121 591 16,712
AccumulATEd AmoRTisATioN   
At 1 August 2007    (898) (527) (1,425)
Amortisation charge    (1,628) — (1,628)
Impairment charge    — (51) (51)
AT 31 July 2008    (2,526) (578) (3,104)
NET book v AluE   
AT 31 July 2008    13,595 13 13,608
     IP rights Goodwill Total 
     £000 £000 £000
cosT   
At 1 August 2006    — 599 599
Additions    16,064 — 16,064
At 31 July 2007    16,064 599 16,663
AccumulATEd AmoRTisATioN   
At 1 August 2006    — (527) (527)
Charge for the year    (898) — (898)
At 31 July 2007    (898) (527) (1,425)
NET book v AluE   
At 31 July 2007    15,166 72 15,238
At 1 August 2006    — 72 72
The IP rights acquired in the year arise from IP acquired from the University of Sheffield in relation to certain subsidiary undertakings.
Goodwill relates to that generated on the acquisition of the Group’s subsidiaries, Bioacta Ltd (fully written down), Diurnal Ltd and 
Lifestyle Choices Ltd. Following an impairment review the goodwill relating to Lifestyle Choices Ltd was fully written down in the year.
c aRRying value oF the c aRdiFF univeRsity i P PiPeline Rights The following key variables would be relevant in determining a fair value for the IP pipeline rights:
 the timing and number of spin-out companies from Cardiff University;
	 dilution of percentage shareholding rates as a result of financing related spin-out companies in the future; and
	 disposal values and timings.
The Directors consider that for each of these variables there is a wide range of reasonably possible alternative values, which result in 
a wide range of fair value estimates for the IP rights agreement. None of these estimates of fair value is considered more appropriate 
or relevant than any other. As a result of this, the Directors’ view is that the IP rights should be amortised over the ten year life of the 
agreement with provision made for any impairment when required. The carrying value of the Cardiff University IP rights amounted 
to £13,465,000 (2007: £15,059,000).
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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15. investments     Unquoted  
     spin-out  
     companies Loans Total 
     £000 £000 £000
fAiR v AluE   
At 1 August 2007    4,209 882 5,091
Additions    681 1,039 1,720
Transfers    11 (11) —
Change in fair value in the year    (234) (151) (385)
AT 31 July 2008    4,667 1,759 6,426
chANgE iN f AiR v AluE iN ThE yEAR   
Fair value gains    551 — 551
Fair value losses    (785) (151) (936)
     (234) (151) (385)
     Unquoted  
     spin-out  
     companies Loans Total 
     £000 £000 £000
fAiR v AluE   
At 1 August 2006    2,728 1,127 3,855
Additions    1,762 389 2,151
Disposals    (358) — (358)
Transfers    634 (634) —
Change in fair value in the year    (557) — (557)
At 31 July 2007    4,209 882 5,091
chANgE iN f AiR v AluE iN ThE yEAR   
Fair value gains    96 — 96
Fair value losses    (653) — (653)
     (557) — (557)
The fair value of investments has been determined using a valuation method, details of which are set out in the accounting policy for 
“financial assets held at fair value through profit and loss”.
At 31 July 2008, the Group had investments where it holds 20% or more of the issued share capital as follows:
    Principal  Class of 
    activity Holding shares held
Axordia Limited  Stem cell therapy 49% Ordinary
Adjuvantix Limited  Vaccine adjuvants 49% Ordinary
Demasq Limited  Bone and soft tissue imaging products 48% Ordinary
Asterion Limited  Cytokine therapies 38% Ordinary
Medaphor Limited  Medical training solutions 35% Ordinary
Abcellute Limited  Cell stabilising technology 33% Ordinary
Art of Xen Limited  Medical use of xenon gas 32% Ordinary
Simcyp Limited  Drug metabolism 23% Ordinary
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15. investments continued At 31 July 2008, the Group had investments where it holds 20% or less of the issued share capital as follows:
    Principal  Class of 
    activity Holding shares held
Morvus Technology Limited  Oncology therapies 17% Ordinary
CellTran Limited  Chronic wound therapy 16% Ordinary
Muscagen Limited  Drug discovery 13% Ordinary
Q Chip Limited  Life science and therapeutic products 11% Ordinary
I2L Research Limited  Pesticide testing 10% Ordinary
Bitecic Limited  Clinical research and support 10% Ordinary
Zilico Limited (formerly Aperio Diagnostics Limited)  Cervical cancer detection 6% Ordinary
All companies are incorporated in England and Wales.
16. tRade and otheR ReceivaBles       2008 2007 
      £000 £000
Trade debtors     68 27
Amounts due from related parties     211 216
Other tax and social security     71 36
Other debtors     6 14
Payments on account     358 296
Prepayments and accrued income     269 206
      983 795
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
The amounts due from related parties are detailed in note 24. 
Payments on account represent the transfer of funds in advance to the University of Sheffield, details of which are set out in the 
accounting policy for “payments on account”.
cRedit Risk The Directors believe that given the majority of trade and other receivables are with related parties (primarily public sector organisations) 
there is little risk to credit quality.
a geing oF tRade ReceivaBles No trade receivables are past their due date and no impairment provision is considered necessary.
17. c ash and cash equivalents       2008 2007 
      £000 £000
Cash and cash equivalents     1,363 2,600
Short term deposits     5,000 8,000
      6,363 10,600
Cash and cash equivalents comprise cash held by the Group and short term bank deposits with an original maturity of three months 
or less. The carrying amount of these assets approximates their fair value.
For investment purposes the cash balances are in ring-fenced funds for investment into the University of Sheffield and Cardiff University IP . 
The balances at 31 July 2008 were £285,000 and £5,909,000 respectively (2007: £2,660,000 and £7,630,000 respectively). The remaining 
cash balances related to cash held within consolidated spin-out subsidiaries. 
sensitivity analysis – inteRest Rate Risk At 31 July 2008, if interest rates had been 2% higher/lower, the loss for the year and other components of equity, would have been 
£174,000 (2007: £170,000) lower/higher as a result of higher interest received on cash and short term cash deposits.
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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18. shaRe caPital and PRemium       2008 2007 
      £000 £000
AuThoRisEd:
56,500,000 Ordinary shares of £0.01 each     565 565
AlloTTEd, cAllEd up ANd fully p Aid:
36,663,967 Ordinary shares of £0.01 each     367 367
shARE pREmium     31,671 31,671
The Company has one class of Ordinary shares which carry equal voting rights, equal rights to income and distribution of assets 
on liquidation or otherwise and no right to fixed income.
Post year end, on completion of the expanded Sheffield Agreement, an additional 5,489,999 Ordinary shares were issued on 
1 August 2008. See note 25 for further details.
19. o theR ReseRves The other reserves totalling £3,000 (2007: £3,000) comprise a capital redemption reserve of £1,000 (2007: £1,000) and a capital 
reserve of £2,000 (2007: £2,000) arising from the Company’s admission to AIM in 2005 and the resulting differences on consolidation 
under merger accounting.
20. minoRity inteRest       2008 2007 
      £000 £000
At 1 August     — —
On acquisition of subsidiary undertaking     — 28
Disposal of subsidiary undertakings     301 (6)
Share of loss in year     (675) (310)
Minority interest attributable to Group     374 288
At 31 July     — —
The disposal of subsidiary undertakings reflects the change of the Group’s holdings in Lifestyle Choices Limited and Phase Focus Limited 
following investment monies received from funding rounds involving third parties.
21. tRade and otheR P ayaBles 
       2008 2007 
      £000 £000
Trade creditors     618 189
Other creditors     23 —
Other tax and social security     7 6
Accruals and deferred income     320 208
      968 403
22. non-cuRRent liaBilities       2008 2007 
      £000 £000
Amounts owed to University of Sheffield     1,868 1,754
Amounts owed to Cardiff University     1,334 1,474
Amounts owed to Sheffield University Enterprises Limited      68 65
Amounts owed to related parties     3,270 3,293
The amount owed to the University of Sheffield and Cardiff University relate to loan notes and accrued interest due arising from 
the purchase of the Group’s interest in its portfolio of spin-out companies. These amounts are repayable on the earlier of the sale 
by Fusion IP of the underlying share capital in the Company, or the Company making dividend payments, or ten years from the day 
of issue. These amounts are only payable to the extent that any gain or dividend is received by Fusion IP and can be cancelled by 
Fusion IP by the return of the shares to which they relate to the University of Sheffield or Cardiff University respectively.
The amounts owed to Sheffield University Enterprises Limited relate to a loan and accrued interest repayable by the subsidiary 
undertaking, Diurnal Limited. 
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22. non-cuRRent liaBilities continued
sensitivity analysis All loan notes are as set at a fixed interest rate of LIBOR plus 1.5%. At 31 July 2008, if interest rates had been 2% higher/lower, 
the loss for the year and other components of equity, would have been £71,000 (2007: £60,000) higher/lower as a result of higher 
interest payable on amounts owed in respect of loan notes to the University of Sheffield and Cardiff University.
matuRity analysis Due to the repayment terms described above, the date of maturity of these loans is uncertain.
23. oPeRating lease commitments
       2008 2007 
      £000 £000
Minimum commitments under non-cancellable operating leases on property expiring:   
– no later than one year     45 11
– later than one year and no later than five years     12 47
      57 58
The lease payments represent amounts payable by the Group for its offices, accommodation and laboratory requirements in the 
United Kingdom.
24. Related P aRty tRansactions During the year, the Group purchased administrative and other services from Sheffield University Enterprises Ltd (SUEL), a wholly 
owned subsidiary of the University of Sheffield, totalling £91,000 (2007: £42,000). In addition, Fusion IP provided support services 
to SUEL during the year of £120,000 (2007: £120,000). At 31 July 2008 the balance due from SUEL was £211,000 (2006: £216,000).
In addition, under the terms of the agreement dated January 2005, Fusion IP paid the University of Sheffield £120,000 (2007: £120,000) 
as payments on account for IP . Fusion IP Sheffield Limited purchased IP from the University during the year with a total value of 
£57,000 (2007: £118,000). These payments were taken against payments on account. 
Under the terms of the Agreement with the University of Sheffield, should the amount of cash balances ring-fenced for investment 
into Sheffield IP fall below £500,000, the University of Sheffield has the right to suspend rights to the future IP pipeline. Additional 
funds amounting to £2,115,000 were raised on 1 August 2008 as part of the expanded Sheffield Agreement. Cash balances at 
31 July 2008 are shown in note 17. The University of Sheffield waived its right to suspend the future IP pipeline in the few days 
leading to 1 August 2008.
Under the terms of the agreement dated January 2007 Fusion IP Cardiff Limited paid Cardiff University £210,000 (2007: £118,000) 
as payments to support the management of the IP pipeline. At 31 July 2007 the balance due to Cardiff University was £7,000 
(2007: £3,000).
During the year Fusion IP has continued to accrue interest due on loans in respect of the purchase of the original portfolio companies 
from both the University of Sheffield and Cardiff University. The total amounts due are set out in note 22.
During the year, Fusion IP supplied management services to companies in which it held a participating interest totalling £7,000 
(2007: £11,000). 
25. events aFteR the Balance sheet date Subsequent to the year end on 1 August 2008, the Company announced that it had signed a new ten year agreement with 
the University of Sheffield for all non-life science IP . Consideration for the agreement was up to 4,347,826 Ordinary shares 
with an initial issue of 3,140,000 Ordinary shares.
In conjunction with the expanded Sheffield agreement, the Company placed 2,349,999 Ordinary shares at 90p per share 
with institutional investors raising £2,115,000.
Also on 1 August 2008 the Company changed its name from Biofusion plc to Fusion IP plc to reflect more accurately the Group’s 
enlarged business.
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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26. imP act oF the FiRst time adoPtion oF iFRs For all periods up to and including the year ended 31 July 2007, the Group prepared its financial statements in accordance with UK GAAP . 
The Group’s financial statements for the year ended 31 July 2008 are its first annual financial statements that comply with IFRS, 
as adopted by the EU (IFRS).
In preparing these financial statements, the Group has started from an opening balance sheet as at 1 August 2006, the Group’s date 
of transition to IFRS and made those changes in accounting policies and other restatements required by IFRS 1 “First-time Adoption 
of International Financial Reporting Standards” for the first-time adoption of IFRS.
This note explains the principal adjustments made by the Group in restating its UK GAAP balance sheet as at 1 August 2006 and its 
previously published UK GAAP financial statements for the year ended 31 July 2007. 
There is no impact on the Group’s cash flow following the implementation of IFRS although there is an impact on disclosure of cash flow 
under IFRS presentation which is required. 
Balance sheet Reconciliation at 1 august 2006
      Effect of  
      transition  
     UK GAAP to IFRS  ifRs 
    Note £000 £000 £000
AssETs    
NoN-cuRRENT AssETs    
Property, plant and equipment    25 — 25
Intangible assets    A 68 5 73
Investments    B 3,370 485 3,855
ToTAl NoN-cuRRENT AssETs    3,463 490 3,953
cuRRENT AssETs    
Trade and other receivables    576 — 576
Cash and cash equivalents    5,883 — 5,883
ToTAl cuRRENT AssETs    6,459 — 6,459
ToTAl AssETs    9,922 490 10,412
EquiTy     
Called up share capital     203 — 203
Capital reserve     2 — 2
Share premium     8,906 — 8,906
Capital redemption reserve    1 — 1
Retained earnings     (1,370) 435 (935)
ToTAl EquiTy ATTRibuTAblE To EquiTy holdERs of ThE p ARENT   7,742 435 8,177
Minority interest   C (55) 55 —
ToTAl EquiTy    7,687 490 8,177
NoN-cuRRENT liAbiliTiEs    
Amounts owed to related parties    2,038 — 2,038
cuRRENT liAbiliTiEs     
Trade and other payables    197 — 197
ToTAl liAbiliTiEs    2,235 — 2,235
ToTAl EquiTy ANd liAbiliTiEs    9,922 490 10,412
A.  Goodwill acquired on business combinations is carried at cost less impairment in value under IFRS 3. Previously amortised 
goodwill has been reversed as there is no impairment in cost (£5,000).
B. Equity investments have been increased to reflect a fair value uplift (£485,000).
C.  Minority interests have been restated to comply with the requirements of IAS 27 (£55,000). Minority interests are only recognised 
where there is a binding obligation to cover the losses.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
26. imP act oF the FiRst time adoPtion oF iFRs continued Reconciliation oF income statement yeaR ended 31 july 2007 
      Effect of  
      transition  
     UK GAAP to IFRS  ifRs 
    Note £000 £000 £000
REvENuE    351 — 351
Change in fair value of investments   D (653) 96 (557)
Gain on disposal of subsidiaries    66 — 66
opERATiNg ExpENsEs:    
– corporate operating expenses    (1,580) — (1,580)
– subsidiary spin-out operating expenses   E (821) 24 (797)
– amortisation of intangible assets   F (903) 5 (898)
     (3,304) 29 (3,275)
REsul Ts fRom opERATiNg AcTiviTiEs    (3,540) 125 (3,415)
Finance income    535 — 535
Finance expenses    (195) — (195)
l oss bEfoRE TAxATioN    (3,200) 125 (3,075)
T axation    — — —
l oss foR ThE yEAR    (3,200) 125 (3,075)
ATTRibuTAblE T o:    
– equity holders of the parent    (2,890) (163) (3,053)
– minority interest   G (310) 288 (22)
l oss foR ThE yEAR    (3,200) 125 (3,075)
D. Fair value gains recognised on equity investments during the period (£96,000).
E.  Negative goodwill generated on the acquisition of a spin-out company, previously within intangible assets in the balance sheet, 
has been derecognised at the date of acquisition and taken through the income statement in the year (£24,000). 
F . Amortisation of goodwill on business combinations (£5,000) has been reversed under IFRS 3 (see A).
G. Minority interests have been restated to comply with the requirements of IAS 27 (£288,000).
notes to the consolidated  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
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annual report and accounts 2008 www.fusionip.co.uk
26. imP act oF the FiRst time adoPtion oF iFRs/ias continued Balance sheet Reconciliation at 31 july 2007
      Effect of  
      transition  
     UK GAAP to IFRS  ifRs 
    Note £000 £000 £000
AssETs    
NoN-cuRRENT AssETs    
Property, plant and equipment    41 — 41
Intangible assets    H 15,204 34 15,238
Investments    I 4,510 581 5,091
ToTAl NoN-cuRRENT AssETs    19,755 615 20,370
cuRRENT AssETs    
Trade and other receivables    795 — 795
Cash and cash equivalents    10,600 — 10,600
ToTAl cuRRENT AssETs    11,395 — 11,395
ToTAl AssETs    31,150 615 31,765
EquiTy     
Called up share capital     367 — 367
Capital reserve     2 — 2
Share premium     31,671 — 31,671
Capital redemption reserve    1 — 1
Retained earnings     (4,244) 272 (3,972)
ToTAl EquiTy ATTRibuTAblE To EquiTy holdERs    27,797 272 28,069
Minority interest   J (343) 343 —
ToTAl EquiTy    27,454 615 28,069
NoN-cuRRENT liAbiliTiEs    
Amounts owed to related parties    3,293 — 3,293
cuRRENT liAbiliTiEs     
Trade and other payables    403 — 403
ToTAl liAbiliTiEs    3,696 — 3,696
ToTAl EquiTy ANd liAbiliTiEs    31,150 615 31,765
H.  Goodwill acquired on business combinations is carried at cost less impairment in value under IFRS 3. Amortisation on goodwill has 
been reversed as there is no impairment in cost (£9,000). Negative goodwill generated on the acquisition of a spin out company, 
previously within intangible assets in the balance sheet, has been derecognised at the date of acquisition and taken through the 
income statement in the period (£25,000).
I. Equity investments have been increased to reflect a fair value uplift (£581,000).
J. Minority interests have been restated to comply with the requirements of IAS 27 (£343,000). 
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
      2008  2007 
     Note £000 £000
fixEd AssETs   
T angible assets    3 32 23
Investments     4 2 2
      34 25
cuRRENT AssETs   
Debtors    5 31,888 31,885
      31,888 31,885
cREdiToRs: AmouNTs f AlliNg duE wiThiN oNE yEAR    6 (75) (63)
NET AssETs     31,847 31,847
cApiTAl ANd REsERvEs   
Called up share capital     7 367 367
Share premium     7 31,671 31,671
Capital redemption reserve    7 1 1
Retained deficit    7 (192) (192)
EquiTy shAREholdERs’ fuNds     31,847 31,847
These financial statements were approved by the Board of Directors on 8 October 2008 and were signed on its behalf by the Chairman.
doug liveRsidge cBe Chairman
comP any Balance sheet
aS at 31 juL y 2008
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
notes to the comP any  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
1. a ccounting Policies The financial statements have been prepared under the historical cost convention in accordance with applicable United Kingdom 
accounting standards and the Companies Act 1985. A summary of the Company accounting policies, which have been consistently 
applied throughout the year, are set out below.
t angiBle assets All tangible assets are shown at cost less depreciation and impairment. Depreciation is provided to write off the cost, less the 
estimated residual value by equal instalments over the estimated useful economic lives as follows:
Computer/office equipment – 3 to 4 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. 
investments in suBsidiaRy undeRtakings Investments in subsidiary undertakings are stated at historic cost less any provision for impairment in value.
Fixed asset investments
Unlisted investments are held at historic cost less any provision for impairment in value.
l oans to suBsidiaRy undeRtakings All inter-company loans are initially recognised at cost. As all inter-company loans are repayable on demand, their carrying value 
approximates to their fair value. 
c ash Flow statement The Company has taken advantage of the exemption in FRS 1 “Cash Flow Statements”, which provides that where a company is a 
member of a Group and a Consolidated Cash Flow Statement is published, the Company does not have to prepare a cash flow statement.
2. Results F oR the P aRent comP any The Directors have taken advantage of the exemption available under Section 230 of the Companies Act 1985 and have not presented 
a profit and loss account for the Parent Company. The Parent Company’s result for the year was a profit of £nil (2007: £nil) after recharges. 
Details of auditors’ remuneration are disclosed in note 7 to the consolidated financial statements.
3. t angiBle assets Computer and  
 office equipment 
      2008 2007 
      £000 £000
cosT   
At 1 August     28 —
Additions     20 7
Acquired from subsidiary undertaking     — 21
At 31 July     48 28
dEpREciATioN   
At 1 August     (5) —
Charge for year     (11) (5)
At 31 July     (16) (5)
NET book vAluE     32 23
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
notes to the comP any  
Financial statements FoR tHe yeaR ended 31 juL y 2008 contInued
4. investments       2008 2007 
      £000 £000
Investments in subsidiary undertakings     1 1
Fixed asset investments     1 1
      2 2
Details of the subsidiary undertakings at 31 July 2008 are as follows:
     Principal  Class of  
     activity Holding shares held
Fusion IP Sheffield Limited (formerly Biofusion Trading Limited)  Holding company 100% Ordinary
Fusion IP Cardiff Limited (formerly Fusion Cardiff Limited)  Holding company 100% Ordinary
All companies are incorporated in England and Wales.
5. deBtoRs       2008 2007 
      £000 £000
Prepayments and accrued income     167 29
Loans to subsidiary undertakings     31,721 31,856
      31,888 31,885
Loans to subsidiary undertakings represent amounts advanced to Fusion IP Sheffield Limited and Fusion IP Cardiff Limited in respect 
of the IP pipeline agreements with the University of Sheffield and Cardiff University respectively. No interest has been charged on 
these loans and there is no fixed repayment term.
6. cReditoRs – amounts F alling due within one yeaR
       2008 2007 
      £000 £000
Accruals and deferred income     75 63
7. shaRe caPital and ReseRves     Capital  
   Share Share redemption   Retained 
   capital premium reserve  deficit Total 
   £000 £000 £000 £000 £000
At 1 August 2007  367 31,671 1 (192) 31,847
AT 31 July 2008  367 31,671 1 (192) 31,847
Details of the Company’s authorised share capital can be found in note 18 to the consolidated financial statements.
8. diRectoRs’ emoluments and emPloyee inF oRmation Full details of Directors’ remuneration can be found in the Report on the Directors’ Remuneration on pages 20 to 22.
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
notice oF annual geneRal meeting
Notice is hereby given that the Annual General Meeting of Fusion IP plc will be held at the offices of Ashurst, Broadwalk House, 
5 Appold Street, London EC2A 2HA on Friday 21 November 2008 at 10.30 a.m., for the following purposes:
1.  T o receive the accounts (including the Directors’ Remuneration Report) for the financial year ended 31 July 2008, together with 
the reports of the Directors and auditors thereon. (Resolution 1)
2. T o re-appoint KPMG Audit Plc as auditors of the Company. (Resolution 2)
3. T o authorise the Directors to set the remuneration of the auditors. (Resolution 3)
4.  T o re-elect Mr B Rabone as a Director of the Company, having been appointed as a Director since the last Annual General Meeting. 
(Resolution 4)
By order of the Board
RichaRd BiRtles COmpany seCretary
8 October 2008
registered Office:
Innovation Centre 
217 Portobello 
Sheffield S1 4DP
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Fusion IP plc
annual report and accounts 2008 www.fusionip.co.uk
notes to the notice oF  
annual geneRal meeting
notes:
PRoxies 1.  A member entitled to attend and vote may appoint a proxy or proxies who need not be a member of the Company to attend 
(and on a poll to vote) instead of him or her. Forms of proxy need to be deposited with the Company’s registrar Capita Registrars 
at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. Completion 
of a form of proxy will not preclude a member attending and voting in person at the meeting.
documents on disPlay 2.  The register of Directors’ interests in the share capital and debentures of the Company, together with copies of service agreements 
under which Directors of the Company are employed, and copies of the terms and conditions of appointment of Non-executive 
Directors are available for inspection at the Company’s registered office during normal business hours from the date of this notice 
until the date of the Annual General Meeting and will be available for inspection at the place of the Annual General Meeting for at 
least 15 minutes prior to and during the meeting.
Right to attend and vote 3.  Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001 (SI 2001 No 3755), the Company specifies that 
in order to have the right to attend and vote at the meeting (and also for the purpose of calculating how many votes a person 
entitled to attend and vote may cast), a person must be entered on the register of holders of the Ordinary shares of the Company 
by no later than 10.30 a.m. on 19 November 2008, being 48 hours before the time fixed for the meeting. Changes to entries 
on the register after this time shall be disregarded in determining the rights of any person to attend or vote at the meeting.

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Fusion IP plc
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FoRm oF PRoxy Please read the notes below before completing this form.
Any amendments to this form should be initialled by the signatory.
I/We (name(s) in full)
........................................................................................................................................................................................................................ 
of (address(es))
........................................................................................................................................................................................................................ 
being (a) member(s) of the above-named company, hereby appoint the Chairman of the meeting, or failing him
........................................................................................................................................................................................................................ 
as my/our proxy to vote for me/us on my/our behalf as directed below at the 2008 Annual General Meeting of the Company to be held 
at the offices of Ashurst, Broadwalk House, 5 Appold Street, London EC2A 2HA on Friday 21 November 2008 at 10.30 a.m., and at 
any adjournment thereof.
Please indicate in the boxes below how you wish your votes to be cast.
   Vote 
 For Against witheld
 REsoluTioN 1 To receive the accounts and reports of the Directors and auditors 
  for the year ended 31 July 2008.
 REsoluTioN 2 To re-appoint KPMG Audit Plc as auditors of the Company.
 REsoluTioN 3 To authorise the Directors to set the remuneration of the auditors.
 REsoluTioN 4 To re-elect Mr B Rabone.
Signature......................................................................................................................................................Date........................................... 
notes to the F oRm oF PRoxy 1.  You may appoint one or more proxies of your own choice, if you are unable to attend the meeting but would like to vote. If such an 
appointment is made, delete the words “the Chairman of the meeting” and insert the name(s) of the person or persons appointed 
as proxy/proxies in the space provided. A proxy need not be a member of the Company. If no name is entered, the return of this 
form duly signed will authorise the Chairman of the meeting to act as your proxy.
2.  In the case of a corporation, this form of proxy must be executed under its common seal or under the hand of a duly authorised 
officer or attorney.
3.  In order that this form of proxy shall be valid, it must be deposited (together with any power of attorney or other authority under which 
it is signed or a notarially certified copy of such power or a copy certified in accordance with the Powers of Attorney Act 1971 or in 
some other manner approved by the Directors), at the Company’s registrars Capita Registrars at The Registry, 34 Beckenham Road, 
Beckenham, Kent BR3 4TU, not later than 48 hours before the time appointed for the meeting. The completion and return of a form 
of proxy will not, however, preclude shareholders from attending and voting in person at the meeting or at any adjournment thereof, 
should they wish to do so.
4.  If two or more persons are jointly entitled to a share conferring the right to vote, any one of them may vote at the meeting either in 
person or by proxy, but if more than one joint holder is present at the meeting either in person or by proxy, the one whose name 
stands first in the register of members in respect of the joint holding shall alone be entitled to vote in respect thereof. In any event, 
the names of all joint holders should be stated on the form of proxy.
5.  The “vote withheld” option is provided to enable you to instruct your proxy not to vote on any particular resolution, however, it should 
be noted that a “vote withheld” in this way is not a vote in law and will not be counted in the calculation of the proportion of votes 
“for” and “against” a resolution.

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Business Reply
Licence Number
MB 122
Capita Registrars (Proxies)
PO Box 25
Beckenham
Kent BR3 4BR
first fold
second fold
third fold and tuck in
_0_FIP_ar08_Back.indd   35 21/10/2008   16:01:18 Company seCretary riChard Birtles
Company numBer 5275732
registered offiCe Innovation Centre 
217 Portobello 
Sheffield S1 4DP
independent auditor Kpmg audit pl C
1 The Embankment 
Neville Street 
Leeds LS1 4DW
soliCitor ashurst Broadwalk House 
5 Appold Street 
London EC2A 2HA
BanKer BarClays Cambridge Business Centre 
28 Chesterton Road 
Cambridge CB4 3UT
nominated advisor and BroKer nomura Code
1 Carey Lane 
London EC2V 8AE
registrar Capita registrars 34 Beckenham Road 
Beckenham 
Kent BR3 4TU
puBliC relations BuChanan CommuniC ations 45 Moorfields  
London EC2Y 9AE
Company information and advisors ShEFFIELD OFFICE
The Sheffield Bioincubator 
40 leavygreave road 
Sheffield S3 7RD 
 
www.fusionip.co.uk
CarDIFF OFFICE
8th Floor 
eastgate house 
35–43 Newport Road 
Cardiff CF24 0AB
fusion IP plc annual report and accounts 2008
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