Report and Financial Statements 
for the year ended 31 December 2002  Evolution Beeson Gregory: 
a specialist small and mid cap
investment bank 
IP2IPO: a unique company 
whose strategy is to commercialise
intellectual property
created by academic institutions
Christows: a leading private
client stockbroker and
fund manager  Contents
Contents 1
Directors and Advisors 2
Financial Highlights 3
Chairman’s Statement 4
Chief Executive’s Report 6
Management Team and Outline of Activities 8
Directors’ Report 12
Independent Auditors’ Report 17
Financial Statements 18
Notes to the Financial Statements 22
Notice of Annual General Meeting 58
The Evolution Group Plc | Annual Report and Accounts 2002 | 1 Directors R.I. Grifﬁths (Appointed Chairman 30 January 2003)
A.N.W . Beeson (Non Executive Chairman) (Resigned 30 January 2003)
A.C.W . Snow (Chief Executive)
G.J. Dell (Finance Director)
D. Norwood (Executive)
Sir Malcolm Field (Non Executive)
O.J. Vaughan (Non Executive)
G. Loudon (Non Executive)
Company Secretary N.R. Gordon
Registered Ofﬁce The Registry
Royal Mint Court
London
EC3N 4LB
Auditors PricewaterhouseCoopers LLP
Southwark Towers
32 London Bridge Street
London
SE1 9SY
Solicitors Stringer Saul
17 Hanover Square
London 
W1S 1HU
Nominated advisers and Brewin Dolphin Securities Limited
brokers 48 St Vincent Street
Glasgow
G2 5TS
Registrars Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4BR
Registered number 3359425
2 | The Evolution Group Plc | Annual Report and Accounts 2002
Directors and Advisors The Evolution Group Plc | Annual Report and Accounts 2002 | 3
Financial Highlights
1st Half 2nd Half 31 December 31 December
2002 2002
(1)
2002 2001
£’000 £’000 £’000 £’000
Group Turnover 5,117 10,240 15,357 7,580
Commissions payable (885) (746) (1,631) (1,386)
Gross proﬁt 4,232 9,494 13,726 6,194
Other operating income 5 87 92 31
Operating costs (6,249) (10,836) (17,085) (12,343)
Operating loss before non-recurring costs, proﬁt
on/and provision against ﬁxed asset investments
and impairment of goodwill (2,012) (1,255) (3,267) (6,118)
Proﬁt on sale of ﬁxed asset investments 19 7,003
Provision against ﬁxed asset investments (9,712) (4,739)
Non-recurring costs (1,276) (1,767)
Impairment of goodwill (10,865) (7,144)
Operating loss (25,101) (12,765)
(1)
The second half of the year includes the results of the Beeson Gregory Group after its acquisition became
unconditional in all respects on 11 July 2002. 4 | The Evolution Group Plc | Annual Report and Accounts 2002
Chairman’s Statement
2002 was a year of
extraordinary development and
growth for the Group
Evolution Beeson Gregory
is now a fully functional
independent investment bank
Following my appointment as Chairman of The Evolution
Group Plc (“Evolution Group” or the “Group”) on 30
January 2003, I am delighted to be reporting the
progress that has been made by the Group. 2002 was a
year of extraordinary development and growth for the
Group. The scale and scope of the business at 31
December 2002 is very different from that of a year
earlier.
Alex Snow, the Group’s Chief Executive Ofﬁcer, is
responsible for all aspects of the Group’s operating
businesses and he provides, in his report which follows,
a full review of the year’s results. Two things are clear
from these results. Firstly, there have been signiﬁcant
items that are non-recurring in nature – provisions
against ﬁxed asset investments, redundancy and
restructuring costs, and the impairment of goodwill –
accounting for over £21 million of the overall loss.
Secondly, the performance of our operating businesses
was signiﬁcantly stronger in the second half than the ﬁrst,
as a result of the merger with the Beeson Gregory Group
in July 2002 and recognition of the related synergies.
Therefore as we entered 2003, the Group’s operating
businesses were all structured appropriately with their
costs aligned to the achievement of proﬁtability going
forward.
The Group’s merger totally changed our investment
banking platform. Evolution Beeson Gregory was created
and, following a signiﬁcant restructuring effort, is now a
fully functional independent investment bank servicing
the small and mid-cap sector. Christows continues its
strategy for growth and has returned to proﬁtability in
2002 following signiﬁcant restructuring in 2001. IP2IPO,
the Group’s Intellectual Property commercialisation
company, has made enormous progress in 2002 with the
signing of its second major University partnership with
the University of Southampton and the successful spin-
out of further companies. I would like to thank my
predecessor, Andrew Beeson, on behalf of the Board, for
helping to ensure the integration of the two groups went
smoothly and wish him well in his future endeavours. The Evolution Group Plc | Annual Report and Accounts 2002 | 5
Outlook
2002 was a watershed year for the small and mid-cap
sector. The current trend has been for the large
integrated investment banks to withdraw from this end
of the market. This in turn has created signiﬁcant
opportunities for small, independent, well capitalised
companies, such as Evolution Beeson Gregory, who focus
exclusively on this area. We constantly strive to maintain
and improve our customer service and company
coverage to maximise the opportunities going forward. A
salary cap, along with a new equity participation scheme
for employees, ensures that management’s, employees’
and shareholders’ interests are aligned in creating capital
growth in the future. Christows has a similar opportunity
in its sector with its focus on client service and innovative
product offerings. Finally, IP2IPO looks forward to this
year as one in which it gains value from its unique and
totally leading edge access to the commercialisation
opportunities through its University partnership
agreements.
The Board recognises that all of the businesses in which
we operate are people businesses, where our primary
assets are our people. The last year has been one where
our staff have demonstrated real commitment in what
have been circumstances of internal restructuring against
a background of external market turmoil. I should like to
take this opportunity to thank everyone for these efforts
that move us toward the achievement of our goals. The
Group has a very clear and achievable strategy - revenue
maximisation, strict cost management and asset
realisation achieved in a timely and proactive fashion. 
The Group has traded proﬁtably in the ﬁrst quarter of
2003 on a consolidated operating basis. The Board looks
forward to the future with conﬁdence and conviction. 
Richard Grifﬁths
Chairman
22 April 2003
Christows has returned to
proﬁtability in 2002
IP2IPO enjoyed progress by
signing second major university
partnership 6 | The Evolution Group Plc | Annual Report and Accounts 2002
Review of the year
Investment banking
At the start of 2002, we had just commenced trading as
Evolution Capital, a newly established and regulated
company with nascent equity sales, trading and research
functions. The brand was quickly established and
revenues developed over the ﬁrst few months of the year
as we set about providing our institutional clients with
the service they wanted. It was clear as we announced
last year’s results that the sector offering investment
banking services to small and mid cap companies was
one where change and consolidation were inevitable.
We established our strategy to set about leading this
development and identiﬁed the established business of
Beeson Gregory Group as one where opportunities as a
business combination were maximised. The offer by the
Group to acquire the entire share capital of Beeson
Gregory became unconditional on 11 July 2002 and from
that point forward we set about achieving our goals of
integrating the two companies to form Evolution Beeson
Gregory, rationalising the cost base and growing the
revenue line.
The integration process was largely completed by the
year end with annualised ongoing costs reduced from a
combined level of £15m at completion to £10m
currently. A major part of this saving was achieved by
reducing the combined headcount from 128 at
completion to 84 at 31 December 2002 and introducing
caps to salaries, which signiﬁcantly reduced the average
salary levels across the company. At the same time we
have reviewed the equity participation available to our
key staff and implemented at the beginning of 2003 the
Key Performers’ Share Incentive Plan. Revenue growth
has also been achieved and the combined business
produced revenue in the second half of 2002 of £7.5m,
which was in excess of our budgets against a background
of extraordinarily difﬁcult market conditions. 
Evolution Beeson Gregory has continued to grow its
portfolio of retained corporate broking and advisory
clients over the course of the second half of 2002. In
total, 16 new retained corporate clients were added.
Evolution Beeson Gregory had 104 retained corporate
clients at the end of the year. The retainer income
derived from these corporate clients totals over 25% of
the projected overall investment banking annual cost
base. As the wholesale withdrawal from the small and
mid-cap marketplace continues by the global investment
banks, it is expected that the rate of growth of new
corporate clients will be maintained. 
A key area of synergy arising from the merger resulted
from Evolution Capital’s secondary market expertise. The
combined secondary market sales commission revenue
has grown sharply during a period when transaction
volumes and transaction value in the small and mid-cap
market have reduced sharply. Indeed, ofﬁcial market
share data conﬁrms that Evolution Beeson Gregory’s
market share has risen signiﬁcantly in the FTSE Fledgling,
FTSE small-cap and FTSE 250.
Private client stockbroking and fund
management
Christows’ overall performance during 2002 was
impressive when compared with a year earlier and,
against the background market conditions, this is
particularly encouraging. The overall result was a
retained proﬁt of £0.2m compared with a loss of £2.0m
for 2001, a turnaround of £2.2m. Within this overall
performance the revenue from all classes of transaction
based commissions and management fees have clearly
been under pressure as the conditions in the underlying
equity markets took their effect. However, we were able
to maintain the revenue against the previous year’s level
by the introduction of new clients bringing signiﬁcant
new discretionary funds under management. 
These came principally via our continued drive of sales
through the intermediary market of independent
ﬁnancial advisers with new funds of £54m being
introduced compared with £44m in 2001 from this
source. Sales to this market comprise the very successful
Private Portfolio Account and also, since its introduction
in November 2002, the Multi-Manager Portfolio Service.
We have continued through the year to focus extremely
Chief Executive’s Report The Evolution Group Plc | Annual Report and Accounts 2002 | 7
hard on cost management. We have worked with our
outsourced service providers to reduce the costs of our
business at current volume levels and to provide for
reduced marginal costs as transaction volumes grow.
Christows continues to attract new discretionary funds
under management and the launch of our Multi-Manager
Portfolio Service widens our product offering. The
concentration of effort continues to offer a traditional
private client service, whilst striving to offer new
innovative products to our growing client base.
IP2IPO
At the end of 2002, the Group had a majority stake
totalling 84% in IP2IPO Group Limited (“IP2IPO”), an
Intellectual Property commercialisation company. 
IP2IPO has continued through the second half of 2002 to
make enormous progress in the creation and
development of spin out ventures from its two university
partnerships with Oxford University’s chemistry
department and The University of Southampton.
The three spin-outs completed in the second half of
2002; Glycoform, Capsant Neurotechnologies and
Southampton Polypeptides, added to those previously
established give IP2IPO signiﬁcant equity stakes in a total
of seven companies at the end of the year, derived from
its two partnerships. There is no doubt that IP2IPO offers
the Group a strong pipeline of assets spun-out of
universities for a signiﬁcant period of time and these
provide both capital appreciation and corporate advisory
revenue opportunities to the Group.
IP2IPO has many unique features. The exclusive
ownership of long term intellectual property assets from
Oxford University’s chemistry department and The
University of Southampton has enormous, as yet
unrealised, value. The embedded value of the existing
intellectual property in these two institutions is
substantial. In addition, the ongoing spend by third
parties develops even more leading edge intellectual
property, creating further commercial opportunities.
We are very conﬁdent that IP2IPO will deliver substantial
value for shareholders.
Non-recurring costs
Within 2002 there were signiﬁcant exceptional costs that
the Board does not expect to be repeated. The most
signiﬁcant of these is the impairment charge of £10.9m
against the goodwill arising on the acquisition of the
Beeson Gregory Group. As we detailed in the circular at
the time of the Group’s share capital reduction process
in November 2002, this revaluation principally resulted
from the extreme downward movements in investment
banking shares that occurred after the transaction was
completed, together with a reduction in the valuations
ascribed to certain private equity assets within Beeson
Gregory’s portfolio. 
The restructuring costs within the Group totalled £1.3m,
consisting of a redundancy programme, professional fees
associated with streamlining the Group’s legal entities
following the merger and costs of arranging the share
capital reduction process.
Investment Provisions
The Board outlined at the half year results and in
November’s circular that the valuations of the Group’s
legacy investments in private equity ventures had been
signiﬁcantly reduced. In total for the full year we have
made further provisions during 2002 of £4.5m and at the
year end the portfolio has a value of £1.5m. As we have
stated, the Group is now no longer actively involved in
principal private equity investment and will simply seek
to extract some value from exits from this portfolio.
Events subsequent to the year end have shown that the
value of the Group’s investment in Inter-Alliance Group
Plc has been reduced and the Board has decided it is
prudent to recognise a write off of £4.5m as at the
balance sheet date.
Balance sheet strength
The Group continues to maintain its focus on the
strength of its balance sheet. As at 31 December 2002,
the Group had a cash balance of £32m, had taken all
steps to ensure ﬁxed asset investments were fully
provided for where appropriate and performed an
impairment review of its goodwill balances. 
Alex Snow
Chief Executive Ofﬁcer
22 April 2003 The Group has changed dramatically over the last 12
months and, having merged with the Beeson Gregory
Group in July, it has increased signiﬁcantly its breadth of
operating businesses. We would like to take this
opportunity to highlight the make up of its management
team and outline the current operating businesses in
detail. 
Management Team
The Evolution Group is the holding company of
Evolution Beeson Gregory, Christows and IP2IPO. The
Group has at its core an extremely strong and dynamic
senior management team in its Executive Board
members. The whole Group’s operating structure,
processes, strategic direction and ethos are based around
this team. The management of the operating subsidiaries
within the Group are also led by members of this team. 
Richard Grifﬁths (36), Chairman, joined the Group upon
its acquisition of Evolution Capital in March 2001.
Richard was appointed Chairman of the Group on 
30 January 2003. He has extensive experience of
company management, equity sales and trading and has
also been an active investor in small and emerging
companies, often in turnaround situations. Richard is
Chairman of the Board and chairs its Nominations
Committee. In addition he represents the Board in some
of the Group’s strategic and private equity investments. 
Alex Snow (33), Chief Executive Ofﬁcer, joined the
Group in May 2000 and has led the Group through its
development from a small investment company to a fully
ﬂedged ﬁnancial services group by signiﬁcant acquisitions
and resultant restructuring. Alex’s previous career
experience was with CSFB and BZW in the equity sales,
trading and capital markets areas. He is a graduate of St
Andrew’s University. Alex is in charge of the day to day
and strategic management of the Group’s activities. He
heads the Executive Committees that manage Evolution
Beeson Gregory and Christows and sits on the Board of
IP2IPO.
Graeme Dell (36), Finance Director, joined the Group in
August 2001 and is responsible for ﬁnance, operations
and technology throughout the Group. Graeme’s
previous career experience was with Deutsche Bank as a
business manager in its Global Exchange Services
business and with Goldman Sachs where he held
management positions in ﬁnance and operations. He
qualiﬁed as a Chartered Accountant with Coopers &
Lybrand having graduated in Engineering from Hertford
College, Oxford University. Graeme is a member of the
Executive Committees that manage Evolution Beeson
Gregory and Christows.
David Norwood (35), Director, joined the Group upon
its merger with Beeson Gregory Group. He joined
Beeson Gregory Group when it acquired Index IT
Partnership in March 2000, a business he had established
to provide consultancy services to technology companies.
David’s previous career experience was with Bankers
Trust as an FX trader, Duncan Lawrie as an investment
analyst and Williams de Broe, where he advised quoted
and unquoted technology companies. He is a graduate of
Modern History from Keble College, Oxford University.
David leads the Group’s Intellectual Property subsidiary,
IP2IPO Group where he is Chairman and Chief Executive
and responsible for its operational management and
strategic direction.
The Group’s Non Executive Board members combine
with the Executive team to complete the balance of
corporate governance and independence, and provide
between them a wealth of experience in strategic and
operational management of companies.
Sir Malcolm Field (65) is the Senior Non Executive
Director and Chairman of the Remuneration Committee.
He has recently been appointed by the Government on
the design and development of Transport Direct, having
previously held the role of Chairman of the Civil Aviation
Authority. Prior to this he was Chief Executive at WH
Smith and a Non Executive Director of Scottish and
Newcastle Breweries Plc, MEPC Plc and the Phoenix
Group. He was knighted in 1991.
George Loudon (60) is Chairman of the Audit
Committee. His background is in management
consultancy, including McKinsey & Co, and in banking
both in Holland and London, where he was Chief
Executive of Midland Montagu and on the Board of
Midland Bank Plc. Currently he is a Non Executive
8 | The Evolution Group Plc | Annual Report and Accounts 2002
Management Team and
Outline of Activities Director of a number of companies such as LogicaCMG
plc, Viking River Cruises SA; is Chairman of Helix
Associates Limited, Pall Mall Capital and others; and is
actively involved with the Multiple Sclerosis International
Federation, the arts and conservation.
Oliver Vaughan (55) is a Non Executive Director. He has
an extensive background investing in and being a
director of AIM listed companies. He co-founded
Juliana’s Holdings Plc in 1968, a holding company with
interests in the leisure industry of which he was
managing director for 23 years. He saw it through to
ﬂotation on the London Stock Exchange in 1983, prior to
its acquisition by Wembley Plc in 1989, on whose board
he then served for the next two years. 
Outline of Activities
Evolution Beeson Gregory (“EVBG”) aims to be the
“leading investment bank to small and mid cap
companies”. This is based upon the belief that it has the
strategy and capabilities to achieve this goal, coupled
with the fact that the market opportunity exists for this
strategy to be a successful and proﬁtable one.
The company’s capabilities are strong across the primary
and secondary equity market and central to this is the
presence of a leading corporate retained client base in
the small and mid cap sector. We service these clients by
providing the full range of corporate ﬁnance, research,
market making and sales activities and delivering all of
these with a strong client service culture.
Our corporate ﬁnance track record in the small and mid
cap sector is renowned and undoubtedly a specialism of
which we are proud. We get to know our clients’ needs
and have been able to arrange ﬂotations and secondary
share issues, acquisitions, disposals, private fundraisings
and public company takeovers and mergers. Operating in
parallel with this, our corporate broking and investor
relations’ capabilities ensure that the regular
communication with the market, regulators and
shareholders, both existing and potential, is optimised. 
The company’s sales team services its institutional
customer base and is both the medium by which deals
originated within corporate ﬁnance are brought to the
market and is a formidable presence in secondary market
trading for our corporate and other stocks. Within this
team there is a blend of experienced and dynamic
individuals who ensure they understand their
institutional clients current positions and future views
and match these with those of other institutions or
arrange for transactions to be facilitated by the sales
traders or market makers.
EVBG’s market making operates under the EVO
mnemonic and in April 2003 has been signiﬁcantly
increased in scale. We make markets in over 400 small
and mid cap stocks, including all of the company’s
corporate client stocks. Market making ensures the
operation of an orderly and liquid market and brings the
retail stockbrokers to the market to transact in the stocks
of our small and mid cap specialism.
Research is the ﬁnal cornerstone of EVBG’s product
offering and we have assembled a team of analysts
dedicated to the understanding and interpretation of
industry trends who are tasked with the responsibility of
translating that into valuable insights for institutional
clients on secondary markets and helping to provide
corporate support across a wide range of sectors in
primary markets. We aim to be proactive, disciplined, act
with integrity, produce top quality research and to be
honest in our appraisal of companies. 
Operating across the company is a sector focus to ensure
that we can maximise the impact of our offering to every
corporate client and institutional customer. The sector
specialisms include, consumer, electronics, life sciences,
resources, services and industrials. These cross discipline
groups enable knowledge transfer, the generation of
innovative solutions and complete the specialist feel that
is important to our clients. 
Overall we are conﬁdent that the investment banking
franchise has a solid foundation from which to achieve its
strategic goals, and we recognise the need to continue to
strive for strong client service to maintain and develop
our client base.
The Evolution Group Plc | Annual Report and Accounts 2002 | 9 Christows is a leading independent ﬁrm of stockbrokers
and portfolio managers which, from its foundation in
1991 in Exeter, has always set out to provide a traditional
stockbroking service whilst developing an innovative
product offering. Christows now also operates from
London and Bournemouth and has 55 staff across
account executive, research, sales and administration
staff.
Christows’ core bespoke discretionary portfolio
management services are delivered by its team of highly
qualiﬁed account executives. We formulate with each
client their investment objectives and then provide a
tailor-made solution which aims to meet these. We
believe in offering a client direct access to the account
executive and encourage regular face to face meetings.
These allow us to provide an update on performance,
market conditions and keep abreast of the clients
circumstances and ongoing objectives. The research
department supports the account executives’ portfolio
decisions by providing rigorous research and strategy
output providing economic analysis, sector weighting,
individual stock analysis and trade ideas. The company’s
regular monthly, quarterly and annual summaries of
market performance are also available to clients.
Christows’ sales team are responsible for introducing a
signiﬁcant proportion of the new client leads to the
account executives. The sales team are focused on the
intermediary market that is typically Independent
Financial Advisors and ﬁrms of lawyers and accountants
whose clients require the services of a specialist
stockbroker. The principal products developed for this
market are the Private Portfolio Account and the Multi-
Manager Portfolio Service. These allow the intermediary
to introduce clients who typically have between £25,000
and £2.5m to invest in Christows discretionary
management services whilst participating in future fee
income. 
The backbone to the business is the intranet system
which facilitates the dissemination of all centralised
model portfolios, research recommendations,
compliance data and new client account documentation.
The intranet system operates alongside the front and
back ofﬁce systems provided by Pershing Securities
Limited which offer a proven outsourced solution for the
processing of all client transactions. This allows
Christows to both concentrate on its core activity of
discretionary portfolio management and to accommodate
future growth on an easily scaleable basis.
Christows also operates a unitised range of fund
products via an Open Ended Investment Company
structure, currently through Christows Investments Plc,
which is listed in Dublin.
As at 31 December 2002, Christows had a total of £326m
client funds under management, on over three quarters
of which it receives a recurring fee based commission.
Christows’ strategy for 2003 is one of controlled growth
of the funds under management by organic means
through the sales and account executive teams and by
the recruitment of like minded account executives who
can attract new clients to the company.
IP2IPO’s business is the commercialisation of intellectual
property (“IP”) through the formation of long term
university partnerships. The company has developed a
unique business model allowing it to enter into long-
dated agreements with universities under which it
acquires a signiﬁcant interest in the IP that they create,
and to work with its university partners to commercialise
this IP .
IP2IPO’s ﬁrst university partnership is with the University
of Oxford. The partnership has a 15 year term and
entitles IP2IPO to 50% of the University of Oxford’s
interest in IP developed by the university’s chemistry
department, one of the world’s largest chemistry
departments. 
In March 2002, IP2IPO entered into partnership with the
University of Southampton. This partnership has an
10 | The Evolution Group Plc | Annual Report and Accounts 2002
Outline of Activities (continued) initial term of 25 years and covers the entire university,
which has an excellent reputation for research with
particular strengths in electronics and computer sciences,
opto-electronics, engineering, medicine and biological
sciences. Under the partnership, IP2IPO will invest £5m
in University of Southampton spin out companies over a
4 year period; and has received a 20% interest in
Southampton Asset Management Limited, a company
which was formed to hold the University of
Southampton’s equity stakes in spin out companies
created since the start of the partnership.
IP2IPO has external shareholders holding the 15.6%
interest not owned by the Group. These shareholders
have principally subscribed for these shares through two
share placings. The most recent placing occurred in
March 2002 when IP2IPO raised £3m, valuing it at £40m
immediately after the placing.
By the end of 2002, 7 spin out companies had been
formed, and since the year end a further 3 have followed.
The current spin out companies are as follows:
Inhibox Limited – a drug discovery company that
harnesses the idle time computing power of over 
2 million PCs world wide. 
Pharminox Limited – a drug development company that
focuses on platinum based cancer therapies.
Zyentia Limited – a company based on the pre-eminent
protein research of Professor Chris Dobson, FRS.
Zyentia’s primary objective is to develop novel protein
drugs using its proprietary “protein folding” technology
platform.
Glycoform Limited – a drug delivery company that uses a
proprietary carbohydrate based drug targeting system
(LEAPT) developed by 2 Oxford carbohydrate chemists.
VASTox Limited – a company founded by Professor Steve
Davies, founder of Oxford Asymmetry. VASTox is a
chemistry services company and has developed a range
of screening technologies for the pharmaceutical
industry.
ACTIVEem Limited – is a spin out from Southampton
University’s School of Oceanography and utilises novel
EM-sounding techniques for the detection of offshore oil
reserves. The company has already generated its ﬁrst
signiﬁcant revenues and has successfully raised its second
round of ﬁnance.
Capsant Neurotechnologies Limited – has been formed
to discover new treatments for disorders of the central
nervous system.
Southampton Polypeptides Limited – focuses on novel
methods for the synthetic production of proteins and
peptides. 
Nanotecture Limited – is a materials science company
that has developed a platform technology based on
nanoscale, porous lattices. The company’s ﬁrst
application is energy storage for batteries and
supercapacitors.
HepCGen Limited – has been formed to exploit new
methods of diagnosis and treatment for Hepatitis C. 
Finance, operations, technology,
compliance and resources
Throughout the Group’s operating businesses there is a
common thread supporting our business activities. All of
the Group’s products are supported by a team of ﬁnance,
operations, technology, compliance, HR and
administrative professionals. They are dedicated to
enabling, verifying, conﬁrming and reporting our
business to ensure we meet the very highest standards of
control, regulatory compliance and ﬁnancial reporting.
This team operates across the group ensuring efﬁciency
and economies of scale and providing the management
team with appropriate and timely management
information. We see these areas as fundamental to the
development of a successful business that is proﬁtable
over the long term and, once again in this area, we
recognise that quality client service whether inward
facing or to the Group’s external contacts, is paramount.
The Evolution Group Plc | Annual Report and Accounts 2002 | 11 The Directors present their report together with the
audited ﬁnancial statements for The Evolution Group Plc
(the “Company”) and its subsidiaries (the “Group”) for
the year ended 31 December 2002.
Review of business
The Group acquired the entire share capital of the
Beeson Gregory Group, a listed investment banking
group, on 11 July 2002. Following this acquisition the
Group now provides investment banking services,
comprising corporate ﬁnance and advisory services to
public and private companies, and institutional sales,
trading and research services in corporate clients. The
Group also operates in intellectual property
commercialisation through the IP2IPO Group and has a
legacy portfolio of private equity investments from which
it aims to extract value in the future.
In the prior year the Group undertook institutional
investment banking business through Evolution Capital
Limited. This business was transferred to Evolution
Beeson Gregory Limited (formerly Beeson Gregory
Limited) following the acquisition of Beeson Gregory
Group Limited (formerly Beeson Gregory Group Plc) in
July 2002. 
The Group undertook private client stockbroking and
fund management through its Christows business
throughout the year.
A review of the business during 2002 and the prospects
of the Group for the current year are set out in the
Chairman’s Statement and Chief Executive’s Report on
pages 4 to 7.
Results and Dividends
The loss attributable to the members of The Evolution
Group Plc for the year ended 31 December 2002
amounted to £23,836,000 (2001: £10,510,000).  The
Directors do not recommend the payment of a dividend
(2001: £Nil).
12 | The Evolution Group Plc | Annual Report and Accounts 2002
Directors’ Report Post balance sheet events
Full details of all signiﬁcant post balance sheet events are
set out in note 40 to the accounts.
Directors
The directors of the Company, who served during the
year, together with their dates of appointment and
resignation where appropriate are shown below:
Date of Date of
appointment resignation
Richard Grifﬁths – –
Alex Snow – –
Graeme Dell – –
David Norwood 11 July 2002 –
Andrew Beeson 11 July 2002 30 January 2003
Sir Malcolm Field 11 July 2002 –
George Loudon 11 July 2002 –
Oliver Vaughan – –
James Chilcott – 11 July 2002
Share capital reduction
On 18 December 2002 the Company’s application to
reduce its share capital and apply its accumulated loss
reserves to the Company’s share premium account was
accepted by the High Court and became effective
following the registration of the Court Order at
Companies House on 19 December 2002. The effect of
this was to reduce issued share capital by £6,971,000 and
the share premium account by £42,013,000 and reduce
the Company’s accumulated losses by £48,984,000.
These proposals were accepted by shareholders at the
Extraordinary General Meeting of 3 December 2002.
Purchase of own shares
The Group currently operates two share trusts. The
Evolution Group Employees’ Share Trust administers The
Evolution Group Plc share schemes and is managed by
the Sanne Trust, whereas the Share Incentive Trust
administers the legacy Beeson Gregory Group share
schemes managed under The Bank of Butterﬁeld.
Under the Share Incentive Trust shares which have been
purchased but not unconditionally allocated to an
employee are included within the balance sheet of the
Group at cost. The value of such shares at 31 December
2002 is £484,000 (2001: £Nil). The nominal value of such
shares at 31 December 2002 is £8,000 which represents
0.33% of the called up share capital of the Company
(2001: £Nil; Nil%).
The directors have decided to transfer all share schemes
to The Evolution Group Employees’ Share Trust in 2003.
Directors’ interests in ordinary shares of
The Evolution Group Plc
The directors in ofﬁce at the year end having interests in
the ordinary share capital of the Company are shown
below:
1 January
2002 or date of 31 December
appointment
(1)
2002
Richard Grifﬁths 4,453,615 5,428,675
Alex Snow 244,102 429,102
Graeme Dell 12,820 12,820
David Norwood 3,703,194 3,803,194
Andrew Beeson 5,239,200 4,562,000
Sir Malcolm Field 11,799 11,799
George Loudon – 18,350
Oliver Vaughan 384,961 384,961
(1)
The interests at the date of appointment in ordinary
shares have been restated to reﬂect the acquisition of the
share capital of Beeson Gregory Group Plc that occurred
on 11 July 2002. On this date every one ordinary 5p share
in Beeson Gregory Group Plc was exchanged for 1.77 1p
shares in The Evolution Group Plc.
Chairman
On 30 January 2003, Andrew Beeson resigned as
Chairman to the Group and Richard Grifﬁths was
appointed as his successor.
The Evolution Group Plc | Annual Report and Accounts 2002 | 13 Directors’ shares under option
Date of grant Note At 1 Granted Exercised Earliest Expiry Exercise Market Cancelled At 31
January during during the exercise Date price (p) price at during the December
2002
(i)
the year year date exercise year 2002
date (p)
Richard Grifﬁths
11.05.01 (3) 2,025,933 – – 12.05.03 11.05.11 58.67 – – 2,025,933
Alex Snow
14.12.00 (4) 500,000 – – 14.12.00 13.12.05 25.00 – – 500,000
11.05.01 (2) 1,065,632 – – 12.05.04 11.05.11 58.67 – – 1,065,632
11.05.01 (3) 2,025,933 – – 12.05.03 11.05.11 58.67 – – 2,025,933
29.06.01 (1) 1,500,000 – – 30.06.04 29.06.11 52.30 – – 1,500,000
Graeme Dell
06.07.01 (1) 271,002 – – 07.07.04 06.07.11 55.35 – – 271,002
Andrew Beeson
24.11.99 (5) 163,371 – – 24.11.02 24.11.09 28.25 – – 163,371
24.11.99 (5) 102,129 – – 24.11.02 24.11.09 28.25 – – 102,129
David Norwood
19.04.01 (6) 103,617 – – 19.04.04 18.04.11 – – – 103,617
16.03.00 (7) 1,063,982 – – 09.08.02 31.01.04 10.03 – – 1,063,982
(i)
Or date of appointment. The interests at the date of appointment in shares under option have been restated to
reﬂect the acquisition of the share capital of the Beeson Gregory Group Plc that occurred on 11 July 2002. On this date
every one ordinary 5p share in Beeson Gregory Group Plc was exchanged for 1.77 1p shares in The Evolution Group
Plc.
No options lapsed during the year to 31 December 2002.
Save as set out above, no Directors, nor members of the immediate family of any Directors, have any options over
shares in the Company or, during the year to 31 December 2002, exercised an option over shares in the Company.
All of the above are nil cost options.
14 | The Evolution Group Plc | Annual Report and Accounts 2002
Directors’ Report (continued) Shares under option issued to directors in the post balance sheet period
The following options of Graeme Dell were cancelled and re-issued in the post balance sheet period in relation to his
services in 2002:
Date of grant Note At 1 Granted Exercised Earliest Expiry Exercise Market Cancelled At 10
January since the since the exercise Date price (p) price at since the April
2003 year end year end date exercise year end 2003
date (p)
Graeme Dell
06.07.01 (1) 271,002 – – 07.07.04 06.07.11 55.35 – 271,002 –
31.01.03 (9) – 500,000 – 01.02.06 31.01.13 41.40 – – 500,000
31.01.03 (8) – 500,000 – 01.02.06 31.01.13 1.00 – – 500,000
Options issued to employees in the post balance sheet period have been disclosed in note 40.
Summary of schemes for Directors’ options in the above tables
1. These options were granted under the 2001 Executive Share Option Scheme. Under the terms of this scheme the
performance criteria require that the closing bid of The Evolution Group Plc share price as derived from the Daily
Ofﬁcial List published by The London Stock Exchange Plc must be not less on average than a speciﬁed amount for
a period of sixty consecutive days before options can be exercised. If the share price is 90p then 25% of the
options may be exercised, 110p a further 25% may be exercised, 130p then a further 25% may be exercised and
150p the remaining 25% may be exercised.
2. These options were granted under the 2000 Executive Share Option Scheme (Unapproved Ordinary). A
performance criteria has been set making the exercise of the option conditional on the middle market quotation of
The Evolution Group Plc share price increasing by an average of 50% above the relevant exercise price over a
period of 30 dealing days since the date of the grant.
3. These options were granted under the 2000 Executive Share Option Scheme (Unapproved Super). No
performance criteria are attached to the exercise of these options.
4. These options were granted outside of any share scheme and there are no performance criteria attached to the
exercise of these options.
5. These options were granted under the Beeson Gregory Group Executive Share Incentive Scheme 1996. No
performance criteria are attached to the exercise of these options. 
6. These options were granted under the Beeson Gregory Group Deferred Bonus Plan. No performance criteria are
attached to the exercise of these options.
7. These options were granted under the Beeson Gregory Group Replacement Options Agreement. No performance
criteria are attached to the exercise of these options. 
8. These options were granted under the 2002 Executive Share Incentive Plan. No performance criteria are attached
to the exercise of these options.
9. These options were granted under the 2001 Executive Share Option Scheme at an exercise price of 41.4p. No
performance criteria are attached to the exercise of these options.
For further details of share schemes across the Group, see note 42 to the ﬁnancial statements. All the above Beeson
Gregory Group schemes are now closed.
The Evolution Group Plc | Annual Report and Accounts 2002 | 15 Charitable donations
During the year the Group made charitable donations of
£2,763 (2001: £2,465).
Creditors payment policy
It is the Group’s policy to agree appropriate terms and
conditions for its transactions with suppliers by means
ranging from standard terms and conditions to
individually negotiated contracts. Suppliers are paid
according to agreed terms and conditions, provided that
the supplier meets those terms and conditions. Average
trade creditors days at the year end was 25 days (2001:
36).
Substantial shareholdings
Other than the interests of the directors, the following
shareholders are known to have an interest in the
Company greater than 3%: 
Shareholder Name Number of Holding %
shares held
Artemis Investment
Management Limited 13,027,150 5.42
The Company has not been notiﬁed of any other
interests greater than 3% of the issued share capital as at
22 April 2003.
Statement of Directors’ Responsibilities
The following statement, which should be read in
conjunction with the independent auditors’ report set
out on page 17, is made with a view to distinguishing for
shareholders the respective responsibilities of the
directors and of the independent auditors in relation to
the ﬁnancial statements.
The directors are required by the Companies Act 1985 to
prepare ﬁnancial statements for each ﬁnancial year which
give a true and fair view of the state of affairs of the
Company and the Group as at the end of the ﬁnancial
year and of the proﬁt or loss for the ﬁnancial year.
The directors consider that in preparing the ﬁnancial
statements on pages 18 to 57 that:
l the Company and the Group have used appropriate
accounting policies, consistently applied and
supported by reasonable and prudent judgements
and estimates, and 
l all the accounting standards which they consider to
be applicable have been followed, and
l the ﬁnancial statements have been prepared on a
going concern basis.
The directors have responsibility for ensuring that the
Company and the Group keep accounting records which
disclose with reasonable accuracy the ﬁnancial position
of the Company and the Group and which enable them
to ensure the ﬁnancial statements comply with the
Companies Act 1985.
The directors have general responsibility for taking such
steps as are reasonably open to them to safeguard the
assets of the Company and the Group and to prevent
and detect fraud and other irregularities.
Auditors
Following the conversion of our auditors,
PricewaterhouseCoopers to a limited liability partnership
(LLP), effective from 1 January 2003,
PricewaterhouseCoopers resigned as auditors and the
Board appointed PricewaterhouseCoopers LLP to ﬁll the
casual vacancy created by the resignation.
PricewaterhouseCoopers LLP have indicated their
willingness to continue in ofﬁce, and pursuant to section
388 (3) (b) of the Companies Act 1985, an ordinary
resolution, with special notice, re-appointing them as
auditors and authorising the directors to determine their
remuneration will be proposed at the 2003 Annual
General Meeting. The Audit Committee reviews and
approves the appointment of the external auditors.
BY ORDER OF THE BOARD
N.R. Gordon
Secretary
22 April 2003
16 | The Evolution Group Plc | Annual Report and Accounts 2002
Directors’ Report (continued) We have audited the ﬁnancial statements on pages 18 to
57 which comprise the proﬁt and loss account, the
balance sheet, the cash ﬂow statement and the related
notes which have been prepared under the historical cost
convention as modiﬁed by the revaluation of certain assets
and the accounting policies set out on pages 22 to 25.
Respective responsibilities of directors and
auditors
The directors’ responsibilities for preparing the annual
report and the ﬁnancial statements in accordance with
applicable United Kingdom law and accounting
standards are set out in the statement of directors’
responsibilities. 
Our responsibility is to audit the ﬁnancial statements in
accordance with relevant legal and regulatory
requirements and United Kingdom Auditing Standards
issued by the Auditing Practices Board. This report,
including the opinion, has been prepared for and only
for the Company’s members as a body in accordance
with Section 235 of the Companies Act 1985 and for no
other purpose. We do not, in giving this opinion, accept
or assume responsibility for any other purpose or to any
other person to whom this report is shown or into
whose hands it may come save where expressly agreed
by our prior consent in writing.
We report to you our opinion as to whether the ﬁnancial
statements give a true and fair view and are properly
prepared in accordance with the Companies Act 1985.
We also report to you if, in our opinion, the Directors’
Report is not consistent with the ﬁnancial statements, if
the Company and the Group have not kept proper
accounting records, if we have not received all the
information and explanations we require for our audit,
or if information speciﬁed by law regarding directors’
remuneration and transactions is not disclosed.
We read the other information contained in the annual
report and consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the ﬁnancial statements. The other
information comprises the Chairman’s Statement, the
Chief Executive’s Report and the Management Team and
Outline of Activities.
Basis of audit opinion
We conducted our audit in accordance with auditing
standards issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the ﬁnancial
statements. It also includes an assessment of the
signiﬁcant estimates and judgements made by the
directors in the preparation of the ﬁnancial statements,
and of whether the accounting policies are appropriate
to the Company’s and Group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufﬁcient evidence
to give reasonable assurance that the ﬁnancial statements
are free from material misstatement, whether caused by
fraud or other irregularity or error. In forming our
opinion we also evaluated the overall adequacy of the
presentation of information in the ﬁnancial statements.
Opinion
In our opinion the ﬁnancial statements give a true and
fair view of the state of affairs of the Company and the
Group at 31 December 2002 and of the loss and cash
ﬂows of the Group for the year then ended and have
been properly prepared in accordance with the
Companies Act 1985.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
22 April 2003
The Evolution Group Plc | Annual Report and Accounts 2002 | 17
Independent Auditors’
Report
Independent Auditors’ Report to the members of The Evolution Group Plc 18 | The Evolution Group Plc | Annual Report and Accounts 2002
Acquisitions Total Total
Note 2002 2002 2002 2001
£’000 £’000 £’000 £’000
Turnover 8,209 7,148 15,357 7,580
Commissions payable (1,631) – (1,631) (1,386)
Gross proﬁt 6,578 7,148 13,726 6,194
Administrative expenses:
Administrative expenses before
impairment of goodwill (10,790) (7,571) (18,361) (14,110)
Impairment of goodwill (10,865) – (10,865) (7,144)
2 (21,655) (7,571) (29,226) (21,254)
Other operating income 3 290 92 31
Proﬁt on sale of ﬁxed asset investments 19 – 19 7,003
Provision against ﬁxed asset investments 15 (9,062) (650) (9,712) (4,739)
Operating loss (24,118) (983) (25,101) (12,765)
Interest receivable and similar income 4 1,116 230 1,346 1,896
Interest payable and similar charges 5 (12) (3) (15) (9)
Loss on ordinary activities before taxation (23,014) (756) (23,770) (10,878)
Tax on loss on ordinary activities 8 (117) – (117) 369
Loss on ordinary activities after taxation (23,131) (756) (23,887) (10,509)
Minority interest 37 –51 51 (1)
Loss for the ﬁnancial year
attributable to the members of
The Evolution Group Plc (23,131) (705) (23,836) (10,510)
Basic loss per ordinary share 10 (13.65) (9.92)
All income is derived from continuing activities. There is no material difference between the result disclosed in the
proﬁt and loss account and the result on an unmodiﬁed cost basis.
The notes on pages 22 to 57 form an integral part of these ﬁnancial statements.
Consolidated Proﬁt and
Loss Account
FOR THE YEAR ENDED 31 DECEMBER The Evolution Group Plc | Annual Report and Accounts 2002 | 19
Note 2002 2001
£’000 £’000
Fixed assets
Intangible assets 12 11,432 –
Tangible assets 13 973 1,016
Investments 15 27,640 4,764
Own shares 16 484 –
40,529 5,780
Current assets
Debtors 17 18,721 3,983
Equity shares 18 2,664 64
Investments 19 176 –
Cash at bank and in hand 20 31,988 35,969
53,549 40,016
Creditors: Amounts falling due within one year 21 (17,706) (2,413)
Net current assets 35,843 37,603
Total assets less current liabilities 76,372 43,383
Provisions for liabilities and charges 22 (396) (414)
Net assets 75,976 42,969
Capital and reserves
Called up share capital 23 2,404 8,153
Shares to be issued 24 508 –
Share premium account 25 23,892 66,150
Merger reserve 26 57,261 6,031
Proﬁt and loss account 27 (12,053) (37,367)
Total shareholders’ funds 35 72,012 42,967
Shareholders’ funds – Equity 72,012 35,996
Shareholders’ funds – Non-equity 36 – 6,971
Minority interests – Equity 37 3,964 2
Minority interests & shareholders’ funds 75,976 42,969
A statement of movement in shareholders’ funds is given in note 35.
The notes on pages 22 to 57 form an integral part of these ﬁnancial statements.
The ﬁnancial statements on pages 18 to 57 were approved by the Board of Directors on 22 April 2003.
Graeme Dell Alex Snow
Finance Director Chief Executive
Consolidated
Balance Sheet
AS AT 31 DECEMBER 20 | The Evolution Group Plc | Annual Report and Accounts 2002
Company Balance
Sheet
AS AT 31 DECEMBER
Note 2002 2001
£’000 £’000
Fixed assets
Investments in subsidiary undertakings 14 63,846 19,806
Investments 15 5,112 –
68,958 19,806
Current assets
Debtors 17 1,574 8,724
Equity shares 18 – 64
Cash at bank and in hand 16,190 30,815
17,764 39,603
Creditors: Amounts falling due within one year 21 (13,924) (14,980)
Net current assets 3,840 24,623
Net assets 72,798 44,429
Capital and reserves
Called up ordinary share capital 23 2,404 8,153
Shares to be issued 24 508 –
Share premium account 25 23,892 66,150
Merger reserve 26 51,230 –
Proﬁt and loss account 27 (5,236) (29,874)
Total shareholders’ funds 35 72,798 44,429
Shareholders’ funds – Equity 72,798 37,458
Shareholders’ funds – Non-equity 36 – 6,971
Total shareholders’ funds 72,798 44,429
A statement of movement in shareholders’ funds is given in note 35.
The notes on pages 22 to 57 form an integral part of these ﬁnancial statements.
The ﬁnancial statements on pages 18 to 57 were approved by the Board of Directors on 22 April 2003.
Graeme Dell Alex Snow
Finance Director Chief Executive The Evolution Group Plc | Annual Report and Accounts 2002 | 21
Consolidated 
Cash Flow Statement
FOR THE YEAR ENDED 31 DECEMBER
2002 2001
Note £’000 £’000 £’000 £’000
Net cash outﬂow from operating
activities 30 (3,999) (8,698)
Returns on investments and servicing
of ﬁnance
Interest received 1,320 1,923
Interest paid (14) (9)
Income from ﬁxed asset investments – 31
Net cash inﬂow from returns on
investments and servicing of ﬁnance 1,306 1,945
Taxation
Corporation tax paid (295) (106)
Capital expenditure and ﬁnancial
investment
Sale of tangible ﬁxed assets – 1
Purchase of tangible ﬁxed assets (262) (704)
Purchase of ﬁxed asset investments (11,784) (14,030)
Sale of ﬁxed asset investments 223 16,411
Net cash (outﬂow)/inﬂow from capital
expenditure and ﬁnancial investments (11,823) 1,678
Acquisitions and disposals
Disposal of subsidiaries 36 (36)
Purchase of subsidiaries (3,167) (187)
Net cash acquired with subsidiaries 34 14,205 2,523
Net cash inﬂow from acquisitions and
disposals 11,074 2,300
Cash outﬂow before ﬁnancing (3,737) (2,881)
Financing
Issues of ordinary share capital 32 1,537
Expenses of share issue (276) (31)
Lease repayments – (27)
Net cash (outﬂow)/inﬂow from ﬁnancing (244) 1,479
Decrease in cash in the year 31 (3,981) (1,402) 1. ACCOUNTING POLICIES
Basis of preparation
The ﬁnancial statements have been prepared under the historical cost convention as modiﬁed by the revaluation of
certain assets held for trading purposes, the accounting policies set out below and in accordance with the applicable
accounting standards of the UK Accounting Standards Board and the pronouncements of its Urgent Issues Task Force
(UITF).
Basis of Consolidation
The Group’s consolidated ﬁnancial statements comprise the ﬁnancial statements of the Company and its subsidiary
undertakings made up to 31 December 2002. An undertaking is regarded as a subsidiary undertaking if the Group has
control over its operating and ﬁnancial policies.
Turnover
Turnover, comprising commission and brokerage income derived from stockbroking and fund management services,
institutional equity sales commissions and fees and commissions from listed and private equity fundraising,
underwriting, issue management and corporate ﬁnance advisory services, is recognised in the proﬁt and loss account
when the related services are performed and when considered recoverable. Proprietary trading and market making
positions are valued on a mark to market basis and the resulting income is included in turnover. All turnover is
generated within the United Kingdom and Eire is principally in sterling and is stated exclusive of value added tax.
Depreciation
Tangible ﬁxed assets are stated at historical cost less provision for any impairment in their values and are written down
to their estimated residual values over their expected useful economic lives as follows:
Leasehold improvements Over 5 years
Computers, software and similar equipment Over 3 to 5 years
Fixtures and ﬁttings and other equipment Over 3 to 5 years
Goodwill
Goodwill arises under the acquisition method of accounting for business combinations and represents the excess of
cost over fair value of the Group’s share of net assets acquired. In accordance with Financial Reporting Standard 10,
goodwill is capitalised as an intangible asset and amortised over its useful economic life. The useful economic life of
the goodwill is determined at the time of the acquisition giving rise to it by considering the nature of the acquired
business, the economic environment in which it operates and the period of time over which the value of the business
is expected to exceed the value of the identiﬁable net assets.
For acquisitions, goodwill is generally expected to have a useful economic life of twenty years and is subject to regular
impairment reviews.
Impairment of tangible ﬁxed assets and goodwill
Tangible ﬁxed assets and goodwill are subject to an impairment review in accordance with Financial Reporting
Standard 11 if there are events or changes in circumstances that indicate that the carrying amount of the ﬁxed asset or
goodwill may not be fully recoverable. The impairment review comprises a comparison of the carrying amount of the
ﬁxed asset or goodwill with its recoverable amount, which is the higher of net realisable value and value in use.
22 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 The carrying values of ﬁxed assets and goodwill are written down by the amount of any impairment and this loss is
recognised in the proﬁt and loss account in the period in which it occurs.
Fixed asset investments
The directors consider that in general the Group’s ﬁxed asset investments do not come within the Companies Act 1985
deﬁnition of associated undertakings, since The Evolution Group Plc does not exercise signiﬁcant inﬂuence over the
operating and ﬁnancial policies of investees. The Companies Act 1985 requires investments where there is signiﬁcant
inﬂuence to be treated as associated undertakings and to be accounted for using the equity method of accounting.
The directors consider that as these investments are held as part of the Group’s portfolio with a view to the ultimate
realisation of capital gains, equity accounting would not give a true and fair view of the Group’s interest in these
investments. The treatment adopted is in accordance with the accounting for venture capital and investment trusts as
set out in Financial Reporting Standard 9 – Associates and Joint Ventures.
The effect of this departure on the ﬁnancial statements is disclosed in note 15.
Fixed asset investments represent equity investments. Listed and unlisted investments are stated at historical cost less
provision for impairment in value, and are held for long-term investment purposes.
Fixed asset investment impairment provisions
Provisions for ﬁxed asset investments have been calculated in accordance with British Venture Capital Association
Guidelines (“BVCA”). Early stage investments are valued at cost less any provision considered necessary due to
performance signiﬁcantly below the expectation on which the investment was based. These provisions are made as a
percentage of cost in 25% bands. Later stage investments continue to be valued at cost less provision until a third party
valuation or earnings multiple basis becomes more applicable. Quoted investments are valued at the bid price but may
be discounted further where the holding is signiﬁcant in relation to the issued share capital.
Equity shares held as current assets
Equity shares held as current trading assets comprise “long” and “short” market making and proprietary trading book
positions, which are stated at market value and proﬁts or losses arising from this valuation are taken to the proﬁt and
loss account. This is not in accordance with Schedule 4 of the Companies Act 1985, which requires that such assets be
stated at the lower of cost and net realiseable value, or that if revalued any revaluation difference be taken to the
revaluation reserve.
The directors consider that these requirements would fail to give a true and fair view of the proﬁt or loss for the year of
the Group since the marketability of the equity shares enable decisions to be taken continually about whether to hold
or sell them and hence the economic measure of proﬁt in any period is properly made by reference to market values.
The difference between the cost of market making positions and the market value is not disclosed as its determination
is not practicable.
Current asset investments
Current asset investments are held at the lower of cost and net realisable value.
Own shares
Shares in the Company held by the Share Incentive Trust which are not allocated to speciﬁc employees are held as
ﬁxed assets at cost less a provision for impairment in value if appropriate, in accordance with Abstract 13 issued by the
The Evolution Group Plc | Annual Report and Accounts 2002 | 23 24 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002
1. ACCOUNTING POLICIES (continued)
Urgent Issues Task Force of the Accounting Standards Board.
Cash balances held with the Share Incentive Trust to purchase shares in the Company are held at the value advanced.
Accounting for share options
Share options issued under employee share schemes by the Group are accounted for in accordance with UITF Abstract
17, “Employee Share Schemes”. The intrinsic value of the options at the date an award is granted is charged to the
proﬁt and loss account between the date of grant and the options vesting date.
Pension commitments
The Group makes deﬁned contributions to employees’ approved personal pension plans, and the costs of these are
expensed when they are incurred.
Market and client balances
In accordance with market practice, unsettled bought and sold security transactions with clients, stock exchange
member ﬁrms and settlement ofﬁces are included gross in debtors and creditors respectively.
Operating leases
Rentals applicable to operating leases where substantially all the beneﬁts and risk of ownership remain with the lessor
are charged to the proﬁt and loss account on a straight line basis over the lease term.
Investments in subsidiary undertakings
Investments in subsidiary undertakings are stated at historical cost less a provision for any impairment in their value.
Details of the principal subsidiary undertakings are given in note 39.
Non credit risk provisions
Provisions are recognised for present obligations arising as consequences of past events where it is probable that a
transfer of economic beneﬁt will be necessary to settle the obligation and it can be reliably estimated.
Contingent liabilities are possible obligations whose existence will be conﬁrmed only by uncertain future events or
present obligation where the transfer of economic beneﬁt is uncertain or cannot be reliably measured. Contingent
liabilities are not recognised, however, they are disclosed unless remote.
Client money
Money held on behalf of clients (other than that required to settle outstanding bargains) by the Group, in accordance
with the Client Money Rules of The Financial Services Authority, and the corresponding liabilities are not shown on the
face of the balance sheet as the Group is not beneﬁcially entitled thereto.
Foreign currency balances
Foreign currency balances are translated at month end with the resulting gain or loss taken to the proﬁt and loss
account.
Derivatives
During the year the Group traded in Contracts For Differences (“CFDs”). These positions are marked to market based
on the underlying equity price. The Group no longer trades in CFDs nor did it hold any positions in CFDs at the end
of the year. The Group uses forward foreign exchange contracts to hedge future currency exposures once they are
certain to crystalise. Deferred tax
During the year the Group adopted Financial Reporting Standard 19 ‘Deferred Tax’ (FRS 19). This standard addresses
the recognition, on a full provision basis, of deferred tax assets and liabilities arising from timing differences between
the recognition of gains and losses in the ﬁnancial statements and their recognition in the tax computations.
Deferred tax, provided at anticipated tax rates and on a non-discounted basis, is recognised in respect of all timing
differences, arising from transactions or events that result in an obligation to pay more tax in the future, or a right to
pay less tax in the future, which have occurred at the balance sheet date. Assets are recognised on this basis only to the
extent that it is regarded as more likely than not that they will crystallise in the future.
Change in accounting policy
A change in accounting policy has arisen from the adoption in 2002 of FRS 19 ‘Deferred Tax’. As explained in the
accounting policy note above, deferred tax is now provided on a full provision basis in respect of timing differences
that have originated but not reversed at the balance sheet date.
The change in accounting policy has not resulted in a prior year adjustment as no change in the opening balance is
required to be recognised under FRS 19.
2. ADMINISTRATIVE EXPENSES
2002 2001
£’000 £’000
Administrative expenses – staff costs
Wages and salaries 7,887 5,925
Social security costs 615 772
Other pension costs 234 –
Other staff costs 458 811
Total administrative expenses – staff costs 9,194 7,508
Administrative expenses – other
Depreciation – owned assets 623 367
Amortisation of goodwill 243 –
Amortisation of investment acquisition expenses 9 –
Loss on disposal of tangible ﬁxed assets – 92
Write down of tangible ﬁxed assets 167 –
Operating lease charges – cars 37 60
Operating lease charges – leasehold property 494 273
Legal costs 289 1,407
Direct dealing costs 1,975 1,298
Other administrative expenses 5,330 3,105
Total administrative expenses – other 9,167 6,602
Administrative expenses before impairment of goodwill 18,361 14,110
Administrative expenses – impairment of goodwill 10,865 7,144
Administrative expenses – total 29,226 21,254
The Evolution Group Plc | Annual Report and Accounts 2002 | 25 2. ADMINISTRATIVE EXPENSES (continued)
Included within staff costs is an exceptional amount of £953,000 (2001: £1,023,000) relating to restructuring charges
incurred during the year.
Included within other administrative expenses is an exceptional amount of £215,000 relating to consultancy fees and
£108,000 relating to restructuring costs not expected to recur.
The statutory and regulatory audit fees paid to the main auditors comprised £180,000 (2001: £84,000) in respect of the
Group’s audit and £200,000 (2001: £10,000) relating to taxation advice. Fees relating to the audit of the Company were
£41,500 (2001: £47,000).
Other consultancy fees of £460,000 (2001: £16,000) were paid to the Group’s auditors including £400,000 relating to
the due diligence carried out prior to the acquisition of Beeson Gregory Group.
3. OTHER OPERATING INCOME
2002 2001
£’000 £’000
Other operating income 92 31
Other operating income relates primarily to foreign exchange gains and losses arising on the translation of foreign
currency balances.
4. INTEREST RECEIVABLE AND SIMILAR INCOME
2002 2001
£’000 £’000
Interest receivable from bank 1,056 1,687
Interest receivable from Pershing 290 209
1,346 1,896
5. INTEREST PAYABLE AND SIMILAR CHARGES
2002 2001
£’000 £’000
Interest payable 15 9
Interest is paid on overdrawn balances with clearing or settlement institutions.
26 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 6. EMPLOYEES
The average number of employees during the year was as follows:
2002 2001
Investment banking 65 16
Stockbroking and fund management 54 77
IP2IPO 4 –
Group activities 6 7
Total average staff numbers 129 100
The actual number of full time employees was 153 at 31 December 2002 (2001: 86).
7. DIRECTORS’ EMOLUMENTS
The aggregate emoluments of the Directors of the Company computed in accordance with Schedule 6 of the
Companies Act 1985 are shown below. The highest paid director had aggregate emoluments of £233,700 (2001:
£100,520).
Other pension costs relate to amounts paid or accrued under money purchase pension schemes. One director accrued
beneﬁts under money purchase pension schemes during the year (2001: Nil).
2002 2001
£’000 £’000
Remuneration in respect of Directors:
Aggregate emoluments 815 1,293
Other pension costs 6 –
Gains made on exercise of share options – 2,068
Termination payments for the loss of ofﬁce – 683
821 4,044
8. TAXATION
2002 2001
£’000 £’000
Current tax:
Corporation tax 34 19
Adjustments in respect of prior years – (388)
Current year tax charge 34 (369)
Deferred tax:
Current year movement 83 –
Tax on loss on ordinary activities 117 (369)
The Evolution Group Plc | Annual Report and Accounts 2002 | 27 8. TAXATION (continued)
The tax assessed for the year is lower than the standard rate of corporation tax in the UK (30%).
Factors affecting the current tax charge for the year are explained below:
2002 2001
£’000 £’000
Loss on ordinary activities before tax (23,770) (10,878)
Loss on ordinary activities multiplied by the standard 
rate of corporation tax in the UK of 30% (2001: 30%) (7,131) (3,263)
Effects of:
Expenses not deductible for tax purposes 3,046 3,975
Losses not recognised for deferred tax 4,073 1,665
Utilisation of losses brought forward/
unrecognised deferred tax asset – (2,095)
Non taxable income (6) (212)
Capital allowances for year in excess of depreciation 52 (51)
Group relief surrendered (not paid) – (388)
Current tax charge for the year 34 (369)
There is a potential deferred tax asset at 31 December 2002 of £14,500,000 (2001: £8,000,000), relating to timing
differences arising on capital allowances, provisions against investments and trading losses carried forward. This asset
has not been recognised in the accounts due to current uncertainties as to how the Group will utilise the reversal of
the underlying timing differences.
The deferred tax asset would be recovered if there were future taxable proﬁts from which the reversal of the
underlying timing differences could be deducted.
9. LOSS FOR THE FINANCIAL YEAR
As permitted by section 230 of the Companies Act 1985, the Company’s proﬁt and loss account has not been included
in these ﬁnancial statements. The Company’s loss for the ﬁnancial year was £24,512,000 (2001: £6,587,000).
10. LOSS PER ORDINARY SHARE
The calculation of the basic loss per ordinary share is based on the loss on ordinary activities after tax and on the
weighted average number of ordinary shares in issue during the year.
Year ended 31 December 2002 Year ended 31 December 2001
Loss Weighted Loss per Loss Weighted Loss per
£ average no. share (p) £ average no. share (p)
Basic loss per share (23,836,000) 174,598,980 (13.65) (10,510,000) 105,925,516 (9.92)
In accordance with Financial Reporting Standard 14 ‘Earnings Per Share’ a diluted loss per share has not been
calculated as the dilutive effect of options results in a more favourable loss per share from the table above.
28 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 11. SEGMENTAL ANALYSIS
2002 2001
Operating Operating
Turnover loss Net assets Turnover proﬁt/(loss) Net assets
£’000 £’000 £’000 £’000 £’000 £’000
Investment banking 8,722 (1,509) 12,817 1,166 (2,202) 3,112
Stockbroking and fund 
management 6,357 (74) 2,727 6,414 (3,812) 2,017
IP2IPO – (423) 25,314 – – –
Investment portfolio – (4,504) 1,536 – 2,264 4,764
Group activities 278 (18,591) 33,582 – (9,015) 33,076
15,357 (25,101) 75,976 7,580 (12,765) 42,969
The segmental analysis follows the business lines described in the Chief Executive’s Report on pages 6 to 7.
The outline of activities on pages 9 to 11 provides greater detail of the operations of the Group. These are brieﬂy
described below.
Investment banking refers to the business carried out in Evolution Capital Limited and Evolution Beeson Gregory
Limited (formerly Beeson Gregory Limited).
Stockbroking refers to Private Client Stockbroking and Fund Management under the Christows brand.
IP2IPO refers to the business carried out in the Intellectual Property commercialisation ﬁeld under the IP2IPO group of
companies.
The investment portfolio is analysed as a separate business line to provide the maximum clarity to the ongoing
operating businesses, since the results for the year and the prior year contain such material provisions against the
legacy private equity portfolio. Following the acquisition of Beeson Gregory Group, the Group has also taken on a
further investment portfolio held within Beeson Gregory Technology Investment Limited.
Group activities refer to the central administrative, shared services and holding company functions and include the
impact of goodwill impairments taken in current and prior years.
The Group’s operations are substantially based in the United Kingdom and therefore no geographical analysis has been
disclosed.
The Evolution Group Plc | Annual Report and Accounts 2002 | 29 30 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002
12. INTANGIBLE FIXED ASSETS
Goodwill
£’000
Cost
At 1 January 2002 –
Arising on acquisition 22,540
Impairment (10,865)
At 31 December 2002 11,675
Amortisation
At 1 January 2002 –
Charge for the year 243
At 31 December 2002 243
Net book value
At 31 December 2002 11,432
At 1 January 2002 –
The goodwill of £22,540,000 arose on the acquisition of the Beeson Gregory Group on 11 July 2002. An impairment review of the
goodwill arising on acquisition was carried out during the year. The Directors considered that the carrying value of the goodwill was
impaired and have written it down by £10,865,000 to reﬂect the fair value of the Beeson Gregory private equity portfolio and the
valuation attached to investment banking and intellectual property company shares. The Directors consider that the goodwill has a
useful economic life of 20 years.
13. TANGIBLE FIXED ASSETS
(i) Group
Leasehold Fixtures and Computer
improvements ﬁttings equipment Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2002 291 331 1,079 1,701
Acquired with subsidiaries 374 502 1,286 2,162
Additions 28 25 187 240
Write down (33) (68) (238) (339)
Reclassiﬁcation (156) 203 (47) –
At 31 December 2002 504 993 2,267 3,764
Depreciation
At 1 January 2002 101 150 434 685
Acquired with subsidiaries 374 404 877 1,655
Charge for the year 25 103 495 623
Write down (18) (36) (118) (172)
Reclassiﬁcation (47) 92 (45) –
At 31 December 2002 435 713 1,643 2,791
Net book values
At 31 December 2002 69 280 624 973
At 1 January 2002 190 181 645 1,016 (ii) Company
The Company does not own any tangible ﬁxed assets.
14. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
£’000
Company
Cost
At 1 January 2002 28,411
Additions 57,822
At 31 December 2002 86,233
Provision for impairment
At 1 January 2002 8,605
Charge for the year 13,782
At 31 December 2002 22,387
Net book values
At 31 December 2002 63,846
At 1 January 2002 19,806
Details of signiﬁcant investments in subsidiaries are given in note 39.
Additions
On 11 July 2002 the Company acquired the Beeson Gregory Group for a total consideration of £56,822,000. For details
on the acquisition refer to note 34.
Evolution Capital Limited issued to the Company 500,000 £1 ordinary shares at par on 30 April 2002 and a further
500,000 £1 ordinary shares at par on 31 July 2002 for cash.
Disposals
There have been no disposals of investments in subsidiaries during the year.
Impairment
An impairment review of the value of investment in Beeson Gregory Group Limited (formerly Beeson Gregory Group
Plc) was carried out during the year. The Directors consider that the carrying value of the investment was impaired and
have written it down by £10,865,000 to reﬂect the fair value of the Beeson Gregory private equity portfolio and the
valuation attached to investment banking and intellectual property company shares.
An impairment review of the value of investment in Evolution Capital Limited was carried out during the year. The
Directors consider that the carrying value of the investment was impaired and have written it down by £2,917,000 to its
net asset value.
The Evolution Group Plc | Annual Report and Accounts 2002 | 31 15. FIXED ASSET INVESTMENTS
(i) Group
Listed investments Unlisted IP2IPO Other unlisted
Portfolio (a) investments Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2002 1,332 – 21,742 23,074
Acquired with subsidiaries 75 21,144 338 21,557
Additions 9,943 – 2,614 12,557
Disposals (75) – (17) (92)
Transfers (221) – (1,699) (1,920)
Investment in spin out companies – 445 – 445
At 31 December 2002 11,054 21,589 22,978 55,621
Amortisation of costs
At 1 January 2002 – – – –
Acquired with subsidiaries – 25 – 25
Charge for the year – 9 – 9
At 31 December 2002 – 34 – 34
Provisions
At 1 January 2002 354 – 17,956 18,310
Provided in the year 5,215 650 3,847 9,712
Disposals (75) – – (75)
At 31 December 2002 5,494 650 21,803 27,947
Net book values
At 31 December 2002 5,560 20,905 1,175 27,640
At 1 January 2002 978 – 3,786 4,764
The aggregate market value at 31 December 2002 of listed investments, including Inter-Alliance Group PLC, was
£19,121,000 (2001: £1,324,000).
Transfers represent the Group’s investments in Beeson Gregory Group Limited (formerly Beeson Gregory Group Plc)
and IP2IPO Group Limited prior to the acquisition of the Beeson Gregory Group in July 2002. Following the
acquisition, the investments were transferred to the Company and held within investments in subsidiaries.
32 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 (a) IP2IPO portfolio of investments
The following table summarises the components of the IP2IPO portfolio:
Oxford Oxford
University University Southampton Other
Chemistry Chemistry University university Acquisition
Investment spin outs Spin outs spin outs costs Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 January 2002 – – – – – –
Acquired with subsidiaries 18,334 1,563 75 888 284 21,144
Investment in spin out companies (528) 528 445 – – 445
At 31 December 2002 17,806 2,091 520 888 284 21,589
Amortisation of costs
At 1 January 2002 – – – – – –
Acquired with subsidiaries – – – – 25 25
Charge for the year – – – – 9 9
At 31 December 2002 – – – – 34 34
Provisions
At 1 January 2002 – – – – – –
Provided in the year – – – 650 – 650
At 31 December 2002 – – – 650 – 650
Net book values
At 31 December 2002 17,806 2,091 520 238 250 20,905
At 31 December 2001 – – – – – –
The Group has the right to 50% of The University of Oxford’s founding shareholdings in companies spun out of its
chemistry department for 15 years up to December 2015, at a price equivalent to that subscribed by external investors.
It also has the right to 50% of the royalties due to the University under licences of intellectual property generated by
the chemistry department, entered into during the same period. This agreement was signed in December 2000 and the
invested amount is only repayable out of the proceeds of the sales of shares in spin-out companies to the Group. The
acquisition costs comprising payments to the University and related costs to secure these rights are disclosed
separately, and are amortised over the life of the agreement. In accordance with the agreement any amounts
outstanding at December 2015 will be waived.
In March 2002, the Group, added a second partnership with the University of Southampton alongside its existing
partnership with the University of Oxford. The partnership with the University of Southampton, which has a term of 25
years and which covers the entire University, commits the Group to (i) invest £5 million in seed capital in University of
Southampton spin out companies over a 4 year period in return for equity stakes in those companies and (ii) to
provide technology commercialisation advice and expertise to the University. As part of the partnership, the Group
received a 20% non participating interest in Southampton Asset Management Limited, a company which was set up to 
The Evolution Group Plc | Annual Report and Accounts 2002 | 33 15. FIXED ASSET INVESTMENTS (continued)
hold the University of Southampton’s equity stakes in spin out companies formed since the commencement of the
partnership until 2027. This interest results in the Group receiving a directly owned 20% stake in those companies in
which the University of Southampton has invested.
Other university spin outs relate to those investments not included within the original partnerships between the
Universities of Oxford and Southampton. They were investments originally made by Beeson Gregory Technology
Investments Limited and subsequently transferred to IP2IPO Limited in July 2001.
(b) Signiﬁcant ﬁxed asset investments
The Group has investments greater than 20% of the issued share capital in the following companies:
Loss before tax 
% of year ended 31 
Country of issue Net Assets December 2002
Company incorporation Type of Share Held held ‘000
(1) (1)
‘000
Fixed Asset Investments
4HighTech.com Inc 
(2)
USA Common Stock 40 – –
NTera Limited Ireland Ordinary shares 1.91 e1,505 e5,904
Preferred ordinary shares 32.33
Novarc Limited UK Ordinary shares 31.30 £293 £461
Pharminox Limited UK Ordinary shares 21.90 £573 £178
Capsant Technologies Limited UK Ordinary shares 28.00 £308 £43
Southampton Polypeptides Limited UK Ordinary shares 36.29 £153 £0
The effect of the departure from the Companies Act 1985 as described in note 1 to the ﬁnancial statements is to
increase the loss before taxation by £1,450,000 (2001: £2,585,000) and increase net assets by £360,000 (2001:
£403,000).
(1) Unaudited management information for 12 months to 31 December 2002.
(2) This company is in liquidation and the Group will not recover any funds on its winding up.
34 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 (ii) Company
Listed investments
£’000
Cost
At 1 January 2002 –
Additions 9,635
At 31 December 2002 9,635
Provisions
At 1 January 2002 –
Provided in the year (4,523)
At 31 December 2002 (4,523)
Net book values
At 31 December 2002 5,112
At 1 January 2002 –
The aggregate market value at 31 December 2002 of listed investments, which comprised Inter-Alliance Group PLC,
was £18,452,000 (2001: £Nil). The provision charged in the year has arisen as a result of the signiﬁcant size of interest
held and the fall in the share price of the investment subsequent to the year end.
16. OWN SHARES
i) Group
£’000
Cost:
At 1 January 2002 –
Acquired with subsidiaries 262
Additions 222
At 31 December 2002 484
Own shares comprise shares in The Evolution Group Plc, held by the Share Incentive Trust, which have not yet been
conditionally allocated to speciﬁc employees. The number and market value of shares held in the Share Incentive Trust
are disclosed on the following page:
The Evolution Group Plc | Annual Report and Accounts 2002 | 35 16. OWN SHARES (continued)
The Share Incentive Trust was established in 1996 by Beeson Gregory Group Limited (formerly Beeson Gregory Group
Plc) to facilitate the granting of options over fully paid shares to certain staff. The Trust held the following shares in The
Evolution Group Plc at 31 December 2002:
2002
Number of shares
Shares allocated to speciﬁc employees in respect of options issued and 
therefore not consolidated in these ﬁnancial statements 1,692,368
Shares consolidated in these ﬁnancial statements 799,668
2,492,036
Market value at £0.54 per share £1,345,699
Comparatives for the prior year are nil since the Group acquired the Share Incentive Trust as part of the acquisition of
the Beeson Gregory Group on 11 July 2002.
Following the acquisition of the share capital of Beeson Gregory Group Limited (formerly Beeson Gregory Group Plc)
by the Group on 11 July 2002 each existing ordinary 5p shares held by the Trust were exchanged for 1.77 1p shares in
The Evolution Group Plc.
ii) Company
The Company does not own any of its own shares.
17. DEBTORS
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 1,551 434 – –
Counterparty debtors 15,441 – – –
Amounts owed by Group undertakings – – 1,046 4,842
Other debtors 447 2,854 28 2,244
Corporation tax recoverable 187 50 – 27
Prepayments and accrued income 1,095 645 111
18,721 3,983 1,074 7,224
Amounts falling due after more than one year:
Subordinated loan to Evolution Capital Limited – – – 1,500
Subordinated loan to Christows Limited – – 500 –
18,721 3,983 1,574 8,724
36 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 Terms of subordinated loan
The subordinated loan, of £500,000 owed by Christows Limited, was drawn on 9 September 2002, and is repayable on
the date speciﬁed by notice in writing by either party being not less than two years after the date of which the notice is
given. The loan is interest bearing at a rate equal to the National Westminster Bank Plc base rate.
The subordinated loan to Evolution Capital Limited was repaid in full on 30 December 2002.
18. EQUITY SHARES
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Long positions in market-making and 
dealing operations at market value 2,664 64 – 64
There were no proprietary trading positions at 31 December 2002 (2001: £64,000).
19. CURRENT ASSET INVESTMENTS
i) Group
2002 2001
£’000 £’000
Listed investments 176 –
The market value of listed investments at 31 December 2002 was £226,000 (2001: £Nil).
ii) Company
The Company does not own any current asset investments.
20. CASH AT BANK AND IN HAND
Cash at bank includes £303,000 (2001: £Nil) received in the course of settlement of client transactions which is held in
trust on behalf of clients, but may be utilised to settle outstanding transactions. It also includes cash of £316,000 held
by the Share Incentive Trust (2001: £Nil).
The Evolution Group Plc | Annual Report and Accounts 2002 | 37 21. CREDITORS: amounts falling due within one year
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Trade creditors 585 641 9 –
Counterparty creditors 11,883 – – –
Amounts due to Group undertakings – – 13,463 14,393
Taxation payable 16 277 – 256
Other taxation and social security 928 653 21 161
Other creditors 74 297 1 126
Accruals 2,796 545 430 44
Short positions in market making 
and dealing operations 1,424 – – –
17,706 2,413 13,924 14,980
22. PROVISIONS FOR LIABILITIES AND CHARGES
(i) Group
Litigation Dilapidation Deferred tax Total
£’000 £’000 £’000 £’000
As at 1 January 2002 414 – – 414
Acquired with subsidiaries – 50 – 50
Charge to proﬁt and loss account 56 150 – 206
Utilised during the year (166) – – (166)
Released during the year (191) – – (191)
Transfer from proﬁt and loss account – – 83 83
As at 31 December 2002 113 200 83 396
Amounts have been provided in respect of various pending litigation against the Group. The Group has sought legal
advice and will continue to vigorously defend against these claims. The amounts provided represent anticipated costs
which the directors believe may be incurred in resolving these various legal matters.
An amount has been provided in respect of dilapidation costs for the current ofﬁces of one of the Group’s subsidiary
undertakings.
There is a deferred tax liability at 31 December 2002 of £83,000, relating entirely to accelerated capital allowances.
(ii) Company
The Company has no provisions for liabilities and charges at year end (2001: £Nil).
38 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 23. SHARE CAPITAL
2002 2001
Restated
Company £’000 £’000
Authorised:
602,913,478 ordinary shares of 1p each – 6,029
77,454,058 deferred shares of 9p each – 6,971
400,000,000 ordinary shares of 1p each 4,000 –
4,000 13,000
Allotted, issued and fully paid:
118,222,439 ordinary shares of 1p each – 1,182
77,454,058 deferred shares of 9p each – 6,971
240,362,721 ordinary shares of 1p each 2,404 –
2,404 8,153
The authorised share capital of the Company at 31 December 2001 has been restated to reﬂect the correct split
between ordinary shares of 1p each and deferred shares of 9p each following the share capital reorganisation that took
place in March 2001.
Share Capital Reorganisation
On 18 December 2002 the Company’s application to reduce its share capital and apply its accumulated loss reserves to
the Company’s share premium account was accepted by the High Court and became effective following the registration
of the Court Order at Companies House on 19 December 2002. The effect of this was to reduce the issued share
capital by £6,971,000 and the share premium account by £42,013,000 and reduce the Company’s accumulated losses
by £48,984,000. These proposals were accepted by shareholders at the Extraordinary General Meeting held on 
3 December 2002.
As a result of the reorganisation 447,913,478 authorised but un-issued ordinary shares were cancelled thus reducing
the Company’s authorised share capital to £4,000,000 divided into 400,000,000 ordinary shares of 1p. On the same
date 77,454,058 authorised and issued deferred shares of 9p each were cancelled and extinguished.
The Evolution Group Plc | Annual Report and Accounts 2002 | 39 23. SHARE CAPITAL (continued)
The following table summarises the movements of authorised share capital during 2002:
Company £’000
Authorised
At 1 January 2002 (restated)
602,913,478 ordinary shares of 1p each 6,029
77, 454,058 deferred shares of 9p each 6,971
Increases
70,000,000 ordinary shares of 1p each on 29 May 2002 700
175,000,000 ordinary shares of 1p each on 1 July 2002 1,750
Cancellation
447,913,478 ordinary shares of 1p each on 19 December 2002 (4,479)
77,454,058 deferred shares of 9p each on 19 December 2002 (6,971)
At 31 December 2002
400,000,000 ordinary shares of 1p each 4,000
The following table summarises the movements of allotted, issued and fully paid share capital during 2002:
Company £’000
Allotted, issued and fully paid
At 1 January 2002
118,222,439 ordinary shares of 1p each 1,182
77,454,058 deferred shares of 9p each 6,971
Issues
121,975,790 ordinary shares of 1p each on acquisition of 
Beeson Gregory Group (see below) 1,220
164,492 ordinary shares on exercise of 
options (see below) 2
Cancellation
77,454,058 deferred shares of 9p each on 19 December 2002 (6,971)
At 31 December 2002
240,362,721 ordinary shares of 1p each 2,404
The following issues of the ordinary shares of 1p took place during the year:
(a) 105,886,649 on 11 July 2002 credited as fully paid at 43.22p per share following the acquisition of Beeson
Gregory Group Limited (formerly Beeson Gregory Group Plc) (“BGG”) and the transfer to the Company of
59,823,103 ordinary shares of 5p each in BGG.
(b) 7,305,694 on 25 July 2002 credited as fully paid at 43.79p per share following the acquisition of BGG and the
transfer to the Company of 4,127,535 ordinary shares of 5p each in BGG.
(c) 5,808,569 on 8 August 2002 credited as fully paid at 43.79p per share following the acquisition of BGG and the
transfer to the Company of 3,281,716 ordinary shares of 5p each in BGG.
40 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 (d) 1,846,686 on 5 September 2002 credited as fully paid at 43.79p per share following the acquisition of BGG and
the transfer to the Company of 1,043,379 ordinary shares of 5p each in BGG.
(e) 1,128,192 on 5 September 2002 credited as fully paid at 43.79p per share following the acquisition of BGG and
the transfer to the Company of 637,406 ordinary shares of 5p each in BGG.
(f) 75,992 on 27 November 2002 following the exercise of 45,992 options under the exercise of options under the
2000 Executive Share Option Scheme (Unapproved) at an exercise price of 9.354p and 30,000 options under the
BGG Index Scheme at an exercise price of 10.03p.
(g) 88,500 on 18 December 2002 following the exercise of options under the BGG Executive Share Incentive Scheme
1996 at an exercise price of 28.25p
Terms of share capital
Ordinary Shares of 1p
The holder of each share is entitled to one vote on a poll. The holders also have the right to receive dividends and the
right to participate on a return of capital.
24. SHARES TO BE ISSUED
2002 2001
Company £’000 £’000
Shares to be issued
725,518 ordinary shares of 1p each 508 –
Shares to be issued relate to deferred consideration payable in shares to certain employees following the acquisition of
the Beeson Gregory Group in July 2002 and referred to as “The Enhanced Bonus” in the Offer Document to
shareholders on 13 June 2002. Shares are payable in two equal tranches in January and July 2003.
As announced in the offer document of 13 June 2002 shares to be issued have been valued at 70p per share.
25. SHARE PREMIUM ACCOUNT
£’000
Company
At 1 January 2002 66,150
Issues of ordinary share capital (net of issue costs) 31
Costs related to issue of shares (276)
Share capital reduction (42,013)
At 31 December 2002 23,892
On 19 December 2002 the Company completed a share capital reduction exercise with a resultant fall in the share
premium account of £42,013,000. The amount was used to offset accumulated losses in the Company.
The Evolution Group Plc | Annual Report and Accounts 2002 | 41 26. MERGER RESERVE
£’000
Group
At 1 January 2002 6,031
Acquisition of subsidiary 51,230
At 31 December 2002 57,261
Company
At 1 January 2002 –
Acquisition of subsidiary 51,230
At 31 December 2002 51,230
The merger reserve of £6,031,000 was created on the merger of The Evolution Group Plc and Christows Group
Limited which took place in 2000.
The acquisition of the Beeson Gregory Group on 11 July 2002 has been accounted for under acquisition accounting
using merger relief under Section 131 of The Companies Act 1985. The adoption of this method has resulted in the
premium arising on the acquisition being taken to the merger reserve.
27. PROFIT AND LOSS ACCOUNT RESERVE
£’000
Group
At 1 January 2002 (37,367)
Loss for the ﬁnancial year (23,836)
Share options 166
Share capital reduction 48,984
At 31 December 2002 (12,053)
Company
At 1 January 2002 (29,874)
Loss for the ﬁnancial year (24,512)
Share options 166
Share capital reduction 48,984
At 31 December 2002 (5,236)
The effect of the share capital reduction that took place in December 2002 on the proﬁt and loss reserve was to reduce
accumulated losses by £48,984,000.
42 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 The Evolution Group Plc | Annual Report and Accounts 2002 | 43
28. CAPITAL COMMITMENTS AND CONTINGENCIES
Under the terms of an agreement entered into during the year between two of the Group’s subsidiaries, IP2IPO
Limited and IP2IPO Management Limited and the University of Southampton and certain of the University of
Southampton’s subsidiaries, IP2IPO Limited agreed to make £5million available to IP2IPO Management Limited for the
purposes of making investments in University of Southampton spin-out companies over a period of four years ending
in July 2007. Of this amount at 31 December 2002 £520,000 had been invested in three spin-out companies formed
during the year ended 31 December 2002 and the Group had a contingent liability of £145,000 representing amounts
to be invested in university spin outs pending the meeting of certain investment milestones.
In 2001 the Group was committed to invest £100,000 in one of its ﬁxed asset investments.
29. LEASE COMMITMENTS
The Group has operating lease commitments in respect of land and buildings of £557,000 (2001: £257,000) and of
plant and machinery of £16,000 (2001: £32,000). The leases to which these amounts relate expire as follows:
Plant and machinery Land and buildings
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Within one year 6 5 315 –
Within two to ﬁve years 10 27 178 181
After ﬁve years – – 64 76
16 32 557 257
30. RECONCILIATION OF OPERATING LOSS WITH NET CASH FLOW FROM OPERATING ACTIVITIES
2002 2001
£’000 £’000
Operating loss (25,101) (12,765)
Proﬁt on sale of investments (19) (7,003)
Decrease / (increase) in equity shares 1,134 (64)
Write down of tangible ﬁxed assets 167 –
Loss on disposal of tangible ﬁxed assets – 92
Income from ﬁxed asset investments – (31)
Depreciation of tangible ﬁxed assets 623 367
Provisions against ﬁxed asset investments 9,712 4,739
Provisions for share options 166 40
Impairment of intangible ﬁxed assets 10,865 7,144
Amortisation of goodwill 243 –
Amortisation of investment acquisition costs 9 –
Increase in own shares (222) –
Increase in provisions for liabilities and charges 15 –
Increase in debtors (933) (1,862)
(Decrease) / increase in creditors (658) 645
Net cash outﬂow from operating activities (3,999) (8,698) 31. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2002 2001
£’000 £’000
Decrease in cash in the year (3,981) (1,402)
Change in net debt – 27
Movement in net funds in the year (3,981) (1,375)
Net funds at the beginning of the year 35,969 37,344
Net funds at the end of the year 31,988 35,969
32. ANALYSIS OF CHANGES IN NET FUNDS
At 1 January 31 December
2002 Cash ﬂow 2002
£’000 £’000 £’000
Cash at bank 35,969 (3,981) 31,988
33. MAJOR NON-CASH TRANSACTIONS
With the exception of shares issued as part of the consideration for the acquisition of Beeson Gregory Group detailed
in note 34 and the share capital reorganisation detailed in note 23, there were no major non-cash transactions during
the year.
44 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 34. ACQUISITION OF SUBSIDIARIES
The Group’s offer for 100% of Beeson Gregory Group Limited (formerly Beeson Gregory Group Plc) became
unconditional in all respects on 11 July 2002 for a total consideration of £56,822,000.
The assets and liabilities at the date of acquisition and the total consideration are set out in the following table:
Book value
£’000
Beeson Gregory Group
Assets
Tangible ﬁxed assets 507
Fixed asset investments 21,532
Own shares 262
Debtors 14,119
Equity shares 2,312
Current asset investments 50
Cash at bank and in hand 14,205
52,987
Liabilities
Creditors (14,640)
Provisions for liabilities and charges (50)
Minority interest (4,015)
Net assets 34,282
Satisﬁed by:
Shares 52,450
Investment in IP2IPO Group Limited shares previously held 1,699
Investment in Beeson Gregory Group shares previously held 221
Deferred consideration 508
Acquisition expenses 1,944
56,822
Goodwill arising 22,540
There was no material difference between the book value and the fair value of net assets at the date of acquisition.
Deferred consideration relates to amounts payable in shares to certain employees following the acquisition of the
Beeson Gregory Group and referred to as “The Enhanced Bonus” in the Offer Document to shareholders on 13 June
2002. Shares are payable in two equal tranches in January and July 2003.
From the date of acquisition to 31 December 2002 the Beeson Gregory Group contributed £983,000 to the Group’s
operating loss and £756,000 to its loss on ordinary activities before taxation after taking into account exceptional costs
of £953,000 relating to costs of redundancy.
The retained loss of the Beeson Gregory Group for the year ended 31 December 2001 was £8,029,000. For the period
from 1 January to 11 July 2002 the Beeson Gregory Group made a loss after tax and minority interests of £25,916,000.
The Evolution Group Plc | Annual Report and Accounts 2002 | 45 35. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Shareholders’ funds at 1 January as 
previously stated 42,967 40,807 44,429 38,346
Prior year adjustment – 340 – 340
Shareholders’ funds at 1 January as restated 42,967 41,147 44,429 38,686
Loss for the ﬁnancial year (23,836) (10,510) (24,512) (6,587)
Issues of ordinary share capital 1,253 12,290 1,253 12,290
Shares to be issued 508 – 508 –
Share options 166 40 166 40
Share capital reduction – share capital (6,971) – (6,971) –
Share capital reduction – share premium (42,013) – (42,013) –
Share capital reduction – proﬁt & loss 
account reserve 48,984 – 48,984 –
Costs of issue of share capital (276) – (276) –
Merger reserve 51,230 – 51,230 –
Net increase in shareholders’ funds 29,045 1,820 28,369 5,743
Shareholders’ funds at 31 December 72,012 42,967 72,798 44,429
Following the correct application of The Urgent Issues Task Force Abstract 17 “Employee Share Schemes” in 2001 there
was a re-statement which resulted in a reduction of creditors and a corresponding increase in shareholders’ funds of
£340,000.
36. NON-EQUITY SHAREHOLDERS’ FUNDS
£’000
At 1 January 2002 6,971
Share capital reduction (6,971)
At 31 December 2002 –
The non-equity shareholders’ funds arose on the creation of 9p deferred shares during the share reorganisation at 26
March 2001. The deferred shares were cancelled and extinguished as part of the share capital reorganisation completed
on 19 December 2002.
46 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 37. MINORITY INTEREST
£’000
At 1 January 2002 2
Disposals (2)
Acquired with subsidiaries 4,015
Loss attributable to minority interest (51)
At 31 December 2002 3,964
The Group owns 84.4% of IP2IPO Group Limited, the Group’s intellectual property company.
Disposals relate to the purchase by the Group of the minority holding in Christows Asset Management Limited from a
former director on 22 May 2002.
38. FINANCIAL INSTRUMENTS
In the normal course of business, the Group uses certain ﬁnancial instruments including cash, equity shares and ﬁxed
asset investments and has no borrowings.
The Group’s cash and short term deposits (excluding amounts received in the course of settlement of client
transactions and held by the Share Incentive Trust) were as follows:
2002 2001
£’000 £’000
On short term deposit 29,652 35,969
On current account 1,717 –
31,369 35,969
The interest rate for short term deposits is variable dependent on the rates offered by the Group’s bankers.
Equity shares, current and ﬁxed asset investments are funded by shareholders’ funds.
During the year the Group traded in Contracts for Differences (CFDs). These positions are marked to market off the
underlying equity price. The Group no longer trades in CFDs nor did it hold any positions in CFDs at the end of the
year.
The Group entered into forward foreign exchange contracts to limit its exposure on foreign currency transactions
involving the settlement of foreign securities.
The Group has detailed policies and strategies in respect of these ﬁnancial instruments, which seek to minimise the
associated risks.
The fair value for non-trading current asset investments have been disclosed in note 19. Equity shares held for trading
purposes are carried in the ﬁnancial statements at fair value, as shown in note 18.
Risk Management Objectives
Through its normal operations, the Group is exposed to a number of risks, the most signiﬁcant of which are liquidity,
currency and market risks. The management of these risks is vested in the Board of Directors.
The Evolution Group Plc | Annual Report and Accounts 2002 | 47 38. FINANCIAL INSTRUMENTS (continued)
Management of Liquidity Risk
The Group seeks to manage ﬁnancial risk, to ensure sufﬁcient liquidity is available to meet foreseeable needs and to
invest cash assets safely and proﬁtably.
Management of Currency Risk
The Group takes out spot and forward rate contracts for foreign currency transactions to reduce currency risk
exposure.
The Group’s net currency exposures, converted to sterling at year end rates, were as follows:
31 December 2002 31 December 2001
£’000 £’000
Euros 35 22
US Dollars 64 –
Other currencies 1 –
100 22
Currency exposures primarily comprise investment banking trading and counterparty positions, and bank balances.
Currency exposure is monitored daily by the Treasury manager, in order to keep it within appropriate limits and
minimise risk throughout the year.
Management of Market Risk
The Group is exposed to market risk in respect of its equity investments. These comprise (i) ﬁxed asset investments,
(ii) trading positions, which result from proprietary trading and market making activities, and (iii) current asset
investments.
i) Fixed asset investments
As stated in the Chief Executive’s Report on pages 6 to 7 no new or follow-on investments will be made by the Group
in respect of private equity ﬁxed asset investments except by IP2IPO. The Board continues to review the performance
of existing investments in the Evolution Capital Investment Limited, Beeson Gregory Technology Investments Limited
and IP2IPO portfolios, including the provisioning process. Note 15 summarises ﬁxed asset investments at the year end
date and the disposals and provisions made in the year. The impact on the year’s results is also disclosed in note 11
(Segmental analysis of operating loss).
ii) Trading positions
Management of market risk in respect of trading positions is through a limit structure and active involvement of senior
management under the supervision of the Board of Directors.
48 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 The following table shows the highest, lowest and average long, short, gross and net positions during the year, together
with those at the year end; gross positions are deﬁned as the absolute sum of long and short positions. There were no
proprietary trading positions as at 31 December 2002 (2001: £64,000).
Long Short Gross Net
Positions Positions Positions Positions
£’000 £’000 £’000 £’000
Highest positions 3,868 (3,385) 7,253 483
Lowest positions 2,371 (1,122) 3,493 1,249
Average positions 3,001 (1,648) 4,649 1,353
Positions at 31 December 2002 2,664 (1,424) 4,088 1,240
iii) Current asset investments
These comprise investments in listed and unlisted companies received in part payment for corporate ﬁnance services.
Performance is reviewed by management who will also decide when to realise investments.
39. PRINCIPAL SUBSIDIARY UNDERTAKINGS
Percentage Country of 
Held directly by the Company Business Owned Incorporation
Evolution Capital Limited Investment banking 100 UK
Evolution Capital Investment Limited Investment company: Private Equity
Portfolio 100 UK
Evolution Group Services Limited Shared services 100 UK
Christows Limited Stockbroking and fund management 100 UK
Beeson Gregory Group Limited 
(formerly Beeson Gregory Group Plc) Holding company 100 UK
Held by other group companies
Evolution Beeson Gregory Limited
(formerly Beeson Gregory Limited) Investment banking 100 UK
IP2IPO Group Limited Intellectual property exploitation 84.4 UK
Beeson Gregory Technology Investment Investment company: Private Equity 
Limited Portfolio 100 UK
Christows Investments (Dublin) Limited Manager of open ended investment 
company 100 Ireland (Eire)
Shareholdings in the above subsidiaries are of ordinary equity shares. In accordance with S231 (5) of the Companies
Act 1985 the above information is solely provided in relation to principal subsidiary undertakings. Full information is
included within the Annual Return.
40. POST BALANCE SHEET EVENTS
On 31 January 2003, 500,000 options to acquire ordinary shares under The Evolution Group Plc 2001 Executive Share
Option Scheme at an exercise price of 41.4p and an award of 500,000 ordinary shares under the The Evolution Group
Plc 2002 Executive Share Incentive Plan at an exercise price of the greater of £1 or the nominal value of the shares to
be subscribed for, were awarded to Mr Graeme Dell. These awards are subject to certain vesting criteria with an
exercise date commencing three years from the date of grant. 
The Evolution Group Plc | Annual Report and Accounts 2002 | 49 40. POST BALANCE SHEET EVENTS (continued)
Mr Dell agreed to the cancellation of 271,002 options granted to him previously under The Evolution Group Plc 2001
Executive Share Option Scheme.
On 31 January 2003 certain employees were granted awards of ordinary shares under the Key Performers’ Share
Incentive Plan. These awards total 1,820,000 shares and will be subject to the performance of individuals over the 12
months from issue. If performance, as measured in the Group appraisal process, is considered unsatisfactory, then the
award may be reduced by up to 50%. However, once the twelve months has been completed or the next year’s award
made, then the current year’s award is set and cannot be further amended. In following years up to 31 January 2005,
up to 200% of the previous year’s award may be granted. The price to be paid on exercise of these awards is the
greater of £1 or the nominal value of shares to be subscribed for. The awards may be exercised after three years from
the date of grant.
On 4 April 2003 the Company granted certain employees total awards of 750,000 ordinary shares under The Evolution
Group Plc 2002 Executive Share Incentive Plan at an exercise price of the greater of £1 or the nominal value of the
shares to be subscribed for. These awards are the ﬁrst of three annual, equal tranches, with each award having a vesting
period of two years from the date of grant.
On 4 April 2003 options over 3,193,172 shares with exercise prices between 52p and 178.53p, held by employees of
Evolution Beeson Gregory Limited (formerly Beeson Gregory Limited), were cancelled by the Company and replaced
by options over 1,192,209 shares under The Evolution Group Plc 2001 Executive Share Option Scheme, at a new
exercise price of 27p and 350,000 ordinary shares under The Evolution Group Plc 2002 Executive Share Incentive Plan
at an exercise price of the greater of £1 or the nominal value of the shares to be subscribed for. These awards may be
exercised after three years from the date of grant and expire on the tenth anniversary of the date of grant.
In the ﬁrst quarter of 2003, two further spin out companies from the University of Southampton were established in
which one of the Group’s subsidiaries, IP2IPO Management Limited, invested (or, subject to certain milestones being
met, committed to invest) £519,000. Another of the Group’s subsidiaries, IP2IPO Limited, also acquired a 20% interest
in Vastox Limited, a spin out company from the University of Oxford.
41. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption under the provisions of Financial Reporting Standard 8, Related
Party Disclosures, not to disclose transactions or balances between group entities that have been eliminated on
consolidation.
The following directors of the Company had investments in spin out companies from the IP2IPO business at the year
end:
Director Company Number of % of issued Cost of holding
shares held share capital £’000
David Norwood Pharminox Limited 265 0.03 10
Andrew Beeson Zyentia Limited 8 0.08 3
Pharminox Limited 266 0.3 10
Inhibox Limited 143 0.1 2
Richard Grifﬁths Active EM Limited 419 0.6 40
During the year a director of the Company, Alex Snow purchased a debenture at Twickenham for a term of ten years.
The debenture was paid for by the Group to the value of £25,665. An agreement is in place that requires the remaining
portion of the debenture to be repaid by the director should he leave prior to the end of the ten year term. The
debenture is used to facilitate the entertainment of clients.
50 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 42. SHARE SCHEMES
The following table summarises the options in issue within the Group as at 31 December 2002
Exercise At 1 Rolled Exercised Cancelled At 31
price January over on Granted in in the in the December
Scheme (p)
(1)
Status 2002 acquisition the year year year 2002
Options over new shares
EVG 2002 Executive Share Incentive Plan 1.00 Unapproved – – 871,451 – – 871,451
EVG 2001 Executive Share Option Scheme 39.60- Unapproved
62.70 Super 4,128,319 – 2,154,302 – (1,542,500) 4,740,121
EVG 2000 Executive Share Option Scheme 10.00- Unapproved
67.00 Ordinary 5,486,860 – – – – 5,486,860
EVG 2000 Executive Share Option Scheme 58.67 Unapproved
Super 2,368,332 – – – (476,000) 1,892,332
BGG 1994 Share Option Scheme 18.36 Approved – 265,500 – – – 265,500
BGG 1996 Executive Share Incentive Scheme 8.76-70.62 Approved – 1,949,266 – (88,500) – 1,860,766
BGG 1996 Executive Share Incentive Scheme 8.76-70.62 Unapproved – 3,183,734 – – – 3,183,734
BGG Replacement Option Agreements 10.03 Unapproved – 2,913,064 – (30,000) – 2,883,064
BGG 2000 Discretionary Share Option Scheme 81.26- –
178.53 Approved – 240,189 – – – 240,189
BGG 2000 Discretionary Share Option Scheme 81.26- –
178.53 Unapproved – 602,168 – – – 602,168
BGG Merger Share Bonus 
(2)
– Unapproved – – 648,944 – – 648,944
Other options 25.00 Unapproved 800,000 – – – – 800,000
12,783,511 9,153,921 3,674,697 (118,500) (2,018,500) 23,475,129
Notes:
(1) The exercise price of Beeson Gregory Group Limited (formerly Beeson Gregory Group Plc) shares have been re-stated to reﬂect The Evolution
Group Plc price at a conversion ratio of 1.77 Evolution shares for every one Beeson Gregory Group share following the acquisition of Beeson
Gregory Group on 11 July 2002. 
(2) The Merger Share Bonus represents a share award to retain certain Beeson Gregory Group staff following the acquisition by The Evolution Group
Plc on 11 July 2002 as referred to as “The Enhanced Bonus” in the offer document to shareholders on 13 June 2002.
Exercise At 1 Rolled Exercised Cancelled At 31
price January over on Granted in in the in the December
Scheme (p)
(1)
Status 2002 acquisition the year year year 2002
Options over existing shares held by the Share Incentive T rust
BGG 1996 Executive Share Option Scheme 8.76-70.62 Approved – 926,610 – (193,138) – 733,472
BGG 1996 Executive Share Option Scheme 8.76-70.62 Unapproved – 18,089 – – – 18,089
BGG Deferred Share Bonus Plan – Unapproved – 660,363 – (56,170) (59,158) 545,035
BGG Conditional Share Plan – Unapproved – 395,772 – – – 395,772
2,000,834 (249,308) (59,158) 1,692,368
In the above tables EVG refers to The Evolution Group Plc and BGG refers to the Beeson Gregory Group Limited
(formerly Beeson Gregory Group Plc). The Group acquired the BGG share schemes on its acquisition of Beeson
Gregory Group on 11 July 2002.
The Evolution Group Plc 2002 Executive Share Incentive Plan
This scheme was approved by the Board on 13 March 2002.
Eligibility
Any director of the Company, or a group company, and any employee of the Company, or a group company, may be
invited to participate in the Plan.
The Evolution Group Plc | Annual Report and Accounts 2002 | 51 42. SHARE SCHEMES (continued)
Nature of Plan
The Plan provides for participants to be awarded shares in the Company at their nominal cost. This award of shares is
provided via the grant of a call right over such shares. The Plan is operated in conjunction with an employee beneﬁt
trust.
Performance criteria
The Plan operates in a standalone form and is also utilised within the Key Performers’ Share Incentive Plan (“KPSIP”)
introduced for employees of Evolution Beeson Gregory Limited (formerly Beeson Gregory Limited) in January 2003
where it forms the method of delivery of such awards made within the KPSIP framework.
Standalone
Under the standalone the basic performance criteria is the continued satisfactory employment by the individual
within a group company throughout the period following grant of an award.
KPSIP
The KPSIP provides employees with an initial award and two subsequent awards at the anniversary and second
anniversary of the initial awards.
The initial award once made may be clawed back by up to 50% if, during the 12 months following the grant, the
individual’s performance as measured within the group companies annual appraisal process is below targets set
by management. The level of subsequent awards is also directly related to the individual’s overall performance
rating within the company’s annual appraisal process.
Exercise of call rights
A call right may not be exercised later than the tenth anniversary after the date of grant. The earliest date of exercise is
generally three years after the date of grant.
Scheme Limits
The overall limit on the Plan is 10% of the issued share capital.
Options granted
At 31 December 2002 call rights over 871,451 shares (2001: Nil) were outstanding at an exercise price of the greater of
£1 or the nominal value of the shares to be subscribed for. The call rights can be exercised between 28 April 2005 and
28 April 2012.
The Evolution Group Plc 2001 Executive Share Option Scheme
This scheme was approved by shareholders on 21 June 2001.
Eligibility
Any director who is required to devote the whole or substantially the whole of his working time to the service of the
Company, or a group company, and any employee of the Company, or a group company, may be invited to participate
in either Ordinary or Super options.
52 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 Option price
The exercise price shall be determined by the directors but shall not, unless approved by ordinary resolution of the
shareholders be less than the greater of nine-tenths of the market value of the share at the date of the grant or the
nominal value of a share.
Performance criteria
The option exercise may be conditional upon the performance of the Group and /or the participant over such period
and measured against such objective criteria as may be determined by the directors. The initial performance criteria
established by the Directors of the Company were that the closing bid of The Evolution Group Plc share price as
derived from the Daily Ofﬁcial List published by The London Stock Exchange must be not less on average than a
speciﬁed amount for a period of sixty consecutive days before options can be exercised. If the share price is 90p then
25% of the options may be exercised , 110p a further 25% may be exercised, 130p then a further 25% may be exercised
and 150p the remaining 25% may be exercised. At a meeting of the Board on 21 November 2002 approval was given to
the waiving of these initial performance criteria for all new options granted under the scheme by varying the scheme
rules. This recommendation was made by the Remuneration Committee, having made comparisons with the practice of
other groups and taken the appropriate legal advice.
Exercise of options
An option may not be exercised later than the tenth anniversary after the date of grant. The earliest date of exercise is
generally two years after the date of grant for Ordinary options and three years after the date of grant for Super
options.
Scheme Limits
The overall limit on Ordinary options is 10% of the issued share capital and for Super options is 5% of the issued share
capital.
Options granted
At 31 December 2002 Nil Ordinary options (2001: Nil) and 4,740,121 Super options (2001: 4,128,319) were
outstanding with exercise prices between 39.60p and 62.7p. The options can be exercised between 30 June 2004 and
20 November 2012
The Evolution Group Plc 2000 Executive Share Option Scheme (Unapproved)
This scheme was approved by shareholders on 20 November 2000.
Eligibility
Any director of the Company, or a group company, and any employee of the Company, or a group company, may be
invited to participate in either Ordinary or Super options.
Option price
The exercise price shall be determined by the directors but shall not be less than the greater of the market value of the
share at the date of grant or the nominal value of a share.
Performance criteria
The option exercise on Ordinary options, may be conditional upon the performance of the Company and /or the
participant over such period and measured against such objective criteria as may be determined by the directors. There
is no performance criteria for Super options.
The Evolution Group Plc | Annual Report and Accounts 2002 | 53 42. SHARE SCHEMES (continued)
Exercise of options
An option may not be exercised later than the tenth anniversary after the date of grant. The earliest date of exercise is
generally three years after the date of grant for Ordinary options and ﬁve years after the date of grant for Super
options.
Scheme Limits
The overall limit on Ordinary options is 10% of the issued share capital and for Super options is 5% of the issued share
capital.
Options granted
At 31 December 2002 5,486,860 Ordinary options (2001: 5,486,860) and 1,892,332 Super options (2001: 2,368,332)
were outstanding with exercise prices between 10p and 67p. The options can be exercised between 16 January 2001
and 30 June 2011.
The Evolution Group Plc 2000 Executive Share Option Scheme (Approved)
The terms of this scheme are exactly the same as the Unapproved 2000 scheme save the restriction that no individual
shall be granted options above a maximum market value (calculated as the strike price at date of grant) of £30,000.
Options granted
At 31 December 2002 Nil Ordinary options (2001: Nil) and Nil Super options (2001: Nil) were outstanding.
The Beeson Gregory Group plc Share Option Scheme 1994 (Approved)
(Existing Awards Rolled Over 9 August 2002)
Eligibility
Any former director or employee of Beeson Gregory Group who was required to devote substantially the whole of
their working time to the affairs of the group. The Scheme is closed for new awards.
Option price
Existing options rolled over at acquisition were granted on 12 October 1998 and have a post rollover exercise price of
18.36p.
Performance criteria
There are no performance criteria attached to the exercise of these options.
Exercise of options
Subject to certain speciﬁc provisions, an option may only generally be exercised within the period commencing on the
third anniversary and ending on the tenth anniversary of the relevant allocation date.
Options granted
At 31 December 2002 265,500 options were outstanding with an exercise price of 18.36p. The options can be
exercised between 9 August 2002 and 12 October 2008.
54 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
FOR THE YEAR ENDED 31 DECEMBER 2002 The Beeson Gregory Group plc Executive Share Incentive Scheme 1996 (Approved and
Unapproved) (Existing Awards Rolled Over 9 August 2002)
Eligibility
Any former director or employee of Beeson Gregory Group who was required to devote substantially the whole of
their working time to the affairs of the group. The Scheme is closed for new awards.
Option price
Existing options rolled over at acquisition were granted between 21 January 1997 and 7 March 2000 and have post
rollover exercise prices ranging from 8.76p to 70.62p.
Performance criteria
There are no performance criteria attached to the exercise of these options.
Exercise of options
Subject to certain speciﬁc provisions, an option may only generally be exercised within the period commencing on the
third anniversary and ending on the tenth anniversary of the relevant allocation date.
Options granted
At 31 December 2002 1,860,766 approved options and 3,183,734 unapproved options were outstanding over new
shares, with exercise prices between 8.76p and 70.62p. In addition 733,472 approved and 18,089 unapproved options
over existing shares were outstanding on the same terms as above. The options can be exercised between 9 August
2002 and 7 March 2010.
The Beeson Gregory Group plc Discretionary Share Option Scheme 2000 (Approved and
Unapproved) (Existing Awards Rolled Over 9 August 2002)
Eligibility
Any former director of Beeson Gregory Group who is required under their contract of employment to work for not less
than 25 hours per week and other employees of the group. The Scheme is closed for new awards.
Option price
Existing options rolled over at acquisition were granted between 6 July 2000 and 25 June 2001 and have post rollover
exercise prices ranging from 81.26p to 178.53p.
Performance criteria
There are no performance criteria attached to the exercise of these options.
Exercise of options
Subject to certain speciﬁc provisions, an option may only generally be exercised within the period commencing on the
third anniversary and ending on the day prior to the tenth anniversary of the relevant date of grant.
Options granted
At 31 December 2002 240,189 approved options and 602,168 unapproved options were outstanding with exercise
prices between 81.26p and 178.53p. The options can be exercised between 9 August 2002 and 25 June 2011.
The Evolution Group Plc | Annual Report and Accounts 2002 | 55 56 | The Evolution Group Plc | Annual Report and Accounts 2002
Notes to the 
ﬁnancial statements
For the year ended 31 December 2002
The Beeson Gregory Group Plc Shares granted under Replacement Option Agreements
(Unapproved) (Existing Awards Rolled Over 9 August 2002)
Eligibility
Former holders of options to subscribe for shares in the capital of Index IT Partnership Limited.
Option price
Existing options rolled over at acquisition were granted on 16 March 2000 and have a post rollover exercise price of
10.03p.
Performance criteria
There are no performance criteria attached to the exercise of these options.
Exercise of options
Options to exercise will lapse on 31 January 2004.
Options granted
At 31 December 2002 2,883,064 unapproved options were outstanding with an exercise price of 10.03p. The options
can be exercised between 9 August 2002 and 31 January 2004.
The Beeson Gregory Group Plc Deferred Bonus Plan (Unapproved)
(Existing Awards Rolled Over 9 August 2002)
Eligibility
Any former directors and employees of Beeson Gregory Group. The Plan is closed for new awards.
Option price
Existing awards rolled over at acquisition were granted on 19 April 2001 and have an exercise price of £1 in aggregate.
Performance Criteria
There are no performance criteria attached to the exercise of these options.
Exercise of options
Subject to certain speciﬁc provisions, an award may only generally be exercised within the period commencing on the
third anniversary and ending on the day prior to the tenth anniversary of the relevant date of grant.
Options granted under the Deferred Bonus Plan may only vest with employees three years after allocation, provided
they continue to be employed by the Group, and the cost of acquiring them is included within the bonus charge for
the years in respect of which they are granted.
At 31 December 2002 545,035 options over existing shares were allocated. The options can be exercised between 9
August 2002 and 18 April 2011. The Evolution Group Plc | Annual Report and Accounts 2002 | 57
The Beeson Gregory Group Conditional Share Plan (Unapproved)
(Existing Awards Rolled Over 9 August 2002)
Awards were granted to three employees on 27 June 2001 and the Plan is closed for new awards. Awards may be
exercised from the second anniversary of the award date to the two year and six month anniversary of the date of grant
at an aggregate exercise price of £1.
At 31 December 2002 395,772 options over existing shares were allocated. The options vest with employees on 27
June 2000 and lapse on 27 December 2003.
The Beeson Gregory Group Merger Share Bonus Scheme (Unapproved)
Awards granted under the Merger Share Bonus Scheme to former Beeson Gregory Group employees vest in two equal
tranches on January 2003 and July 2003 following the acquisition of the Beeson Gregory Group on 11 July 2002.
At 31 December 2002 648,944 options over existing shares were allocated. The options vest with employees in January
2003 and July 2003.
Other options
As at 31 December 2002 there were also the following options in issue which were outside any other option scheme:
Alex Snow and a former employee, Andrew Beaton were granted by the Company, on 14 December 2000, options to
subscribe for up to 500,000 ordinary shares and 300,000 ordinary shares (2001: 800,000) respectively at 25p per share
at any time between 14 December 2000 and 13 December 2005. Andrew Beaton exercised 150,000 options on 
15 January 2003.
In addition to the schemes above to subscribe for shares in the Company the following options have been issued to
subscribe for shares in the Group’s majority owned subsidiary, IP2IPO Group Limited:
Exercise At 1 Rolled Exercised Cancelled At 31
price January over on Granted in in the in the December
Scheme (p) Status 2002 acquisition the year year year 2002
IP2IPO Group Scheme 141.00 Unapproved – 1,436,400 – – (567,495) 868,905
The IP2IPO Share Option Agreements (Unapproved)
Individual Share Option Agreements dated 15 January 2002 with an option price of £1.41 per share are in place with
four employees. Options under these arrangements vest in three equal tranches over the period 2 August 2002 to 2
August 2004. The options lapse on the day immediately preceding the tenth anniversary of the date of grant.
At 31 December 2002 868,905 unapproved options were outstanding with an exercise price of 141p. The options can
be exercised between 2 August 2002 and 14 January 2012. NOTICE is hereby given that the 2003 Annual General Meeting of the Company will be held at Tower 42, 25 Old Broad
Street, London, EC2N 1HQ on 29 May 2003 at 11.00 am to transact the following business:
Ordinary business
1. To receive and adopt the Directors’ report, the Audited Statement of Accounts and Auditors’ report for the year ended
31 December 2002.
2. To re-elect Mr Alex Snow as a director who is offering himself for re-election in accordance with the Articles of
Association of the Company
3. To re-elect Mr Oliver Vaughan as a director who is offering himself for re-election in accordance with the Articles of
Association of the Company
4. To re-elect Mr David Norwood as a director who is offering himself for re-election in accordance with the Articles of
Association of the Company
5. To re-elect Sir Malcolm Field as a director who is offering himself for re-election in accordance with the Articles of
Association of the Company
6. To re-elect Mr George Loudon as a director who is offering himself for re-election in accordance with the Articles of
Association of the Company
7. To reappoint PricewaterhouseCoopers LLP as auditors of the Company and its subsidiaries (having previously been
appointed by the Board to ﬁll the casual vacancy arising by reason of the resignation of PricewaterhouseCoopers), to
hold ofﬁce until the conclusion of the next general meeting at which accounts are laid before the Company and that
their remuneration be ﬁxed by the directors.
Special business
As special business to consider and, if thought ﬁt, pass the following resolutions, of which Resolution 8 will be
proposed as an ordinary resolution and Resolution 9 will be proposed as a special resolution:
8. THAT the directors be and they are hereby generally and unconditionally authorised (in substitution for all previous
powers granted thereunder) to allot relevant securities (within the meaning of Section 80 of the Companies Act 1985)
(the “Act”) up to an aggregate nominal amount of £1,100,000 provided that this authority shall expire on the earlier of
the conclusion of the annual general meeting of the Company to be held in 2004 and 29 August 2004 and, unless and
to the extent that such authority is renewed or extended prior to such date, that the Company may before such expiry
make an offer or agreement which would, or might, require relevant securities to be allotted after such expiry and the
directors may allot relevant securities in pursuance of such offer or agreement as if the authority conferred hereby has
not expired.
9. THAT the directors be and they are hereby empowered pursuant to Section 95 of the Companies Act 1985 (the “Act”)
(in substitution for all previous powers granted thereunder) to allot equity securities (within the meaning of Section 94
of the Act) for cash pursuant to the authority conferred by the ordinary resolution at Resolution 8 above as if Section
89(1) of the Act did not apply to such allotment provided that this power shall be limited to:
a. the allotment of equity securities where the equity securities respectively attributable to the interests of such
shareholders are proportionate (as nearly as maybe) to the respective number of ordinary shares of 1p in the
Company (“Ordinary Shares”) held by them but subject to such exclusions or other arrangements as the directors
may deem necessary or expedient to deal with legal or practical problems in respect of overseas holders,
fractional entitlements or otherwise including (but not limited to) the allotment of equity securities to the
renouncees of the holders of Ordinary Shares;
58 | The Evolution Group Plc | Annual Report and Accounts 2002
Notice of Annual
General Meeting Special business (continued)
b. the allotment of equity securities up to an aggregate nominal amount of £6,500.00 upon the exercise of options
granted by the Company; and
c. the allotment (other than pursuant to sub-paragraphs (a) and (b) above) of equity securities up to an aggregate
nominal amount of £241,471.20 (representing 10 per cent of the nominal value of the issued share capital of the
Company at 22 April 2003);
and shall expire on the earlier of the conclusion of the Annual General Meeting of the Company to be held in 2004 or
on 29 August 2004 (whichever is the earlier) save that the Company may, before such expiry, make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the directors may allot
equity securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.
By Order of the Board
N. R. Gordon
Secretary
22 April 2003
Notes:
1. A member of the Company who is entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and (on a poll) to vote
in his or her place. A proxy need not be a member of the Company.
2. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certiﬁed copy of such a
power of authority must be deposited at the ofﬁce of the Registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4BR not
later than 48 hours before the time appointed for the Meeting. A form of proxy is enclosed.
3. There will be available for inspection at the registered ofﬁces of the Company, during usual business hours on any weekday from the date of this Notice
until the date of the Meeting, and at the place of the Meeting for 15 minutes prior to and during the Meeting, and particulars for the period up to 
22 April 2003 of the transactions of each director and, so far as he can reasonably ascertain, of persons connected to him (within the meaning of Section
346 of the Act) in the share capital of the Company and copies of any service contracts between the Company and any of its directors.
4. The Company, pursuant to regulation 41 of The Uncertiﬁcated Securities Regulations 2001, speciﬁes that only those shareholders registered in the
register of members of the Company as at 6.00 p.m. on 27 May, 2003 shall be entitled to attend or vote at the Annual General Meeting in respect of the
number of shares registered in their name at that time. Changes to entries on the relevant register of securities after that time will be disregarded in
determining the rights of any person to attend or vote at the Annual General Meeting.
The Evolution Group Plc | Annual Report and Accounts 2002 | 59
Notice of Annual
General Meeting www .evolution-group.com