14921 21/04/2008 Proof 5 14921 21/04/2008 Proof 5
Advanced Medical Solutions Group plc
advanced woundcare

wound closure and sealants

annual report and accounts 2007

Advanced Medical Solutions Group plc
Registered Office:
Road Three, Winsford Industrial Estate
Winsford, Cheshire, CW7 3PD, UK
Company Number: 2867684
Tel: +44 (0)1606 863500
Fax: +44 (0)1606 863600
E-mail: info@admedsol.com
Web: www.admedsol.com
Technology Platforms for Growth
Advanced Medical Solutions Group plc annual report and accounts 2007
14921ADVANCE1CVR SPINE:Layout 1  24/4/08  14:15  Page 1 Our Strategy
Welcome to
www.admedsol.com
Advanced Medical Solutions Group plc
01 Highlights
02 At a Glance
04 Our Strategy
06 Chairman’s Statement
10 Chief Executive’s Review
16 Financial Review
18 Board of Directors
18 Advisers and Committees
20 Report of the Directors
24 Remuneration Report
28 Corporate Governance
30 Independent Auditor’s Report
32 Consolidated Income Statement
33 Consolidated Balance Sheet
34 Consolidated Statement of Changes in Equity
35 Consolidated Cash Flow Statement
36 Notes Forming Part of the Consolidated Financial Statements
67 Transition to IFRS
73 Company Balance Sheet
74 Notes Forming Part of the Financial Statements 
of the Company
77 Five Year Summary
78 Notice of Meeting
Contents
 Develop and provide leading edge technology to
the global woundcare market
 Work with strategic partners and major brands
to commercialise our products worldwide
 Supply and develop our own branded solutions
to the NHS in our UK home market
 Create shareholder value by expanding the
business organically and through acquisition
advanced woundcare

woundclosure and sealants
 advanced woundcare

wound closure and sealants

Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
01
Business Highlights
Continued progress with key growth drivers:
Financial Highlights
Step change in financial performance:
211 %
 Continued growth of silver alginate business with further launches by
strategic partners in US and Europe.
 NHS direct woundcare business building steadily with the number of
NHS Trusts using ActivHeal® range more than doubling during the
year to in excess of 100.
 Surgical skin sealant launched in US by Kimberly-Clark Health Care.
 LiquiBand® progressing on track for US regulatory approval in 2008.
 Pre-tax profit increased threefold to £1.9 million
(2006: £0.6 million).
 EPS trebled to 1.57p (2006: 0.52p).
 Net cash inflow from operating activities of
£3.7 million (2006: £1.4 million) resulting in
net funds of £7.2 million at year end (2006:
£4.3 million).
 Group revenues up 18% to £16.9 million (2006:
£14.3 million).
 Gross margin further improved to 44% from 42%.
highlights

Profit before
taxation
£1.9m 
(2006: £0.6m)
202%

Earnings 
per share
1.57p 
(2006: 0.52p)
158%
18%

Net cash flow
from operating
activities
£3.7m
(2006: £1.4m)

Revenue
£16.9m
(2006: £14.3m)
highlights
stockcode: AMS Technology Platforms:
advanced woundcare
advanced woundcare

wound closure and sealants

advanced woundcare
at a glance
AMS provides a full range of advanced woundcare products for sale in
hospital, nursing home and community care markets. The main
indications are for chronic wounds such as ulcers and pressure sores.
These products pioneer the concept of moist wound healing to allow
wounds to heal faster and with less pain and scarring if they remain moist.
They protect the wound, deal with tissue fluids and provide an optimal
environment for healing to occur.
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
02
Advanced Medical Solutions
Developer and Manufacturer
advanced woundcare routes to market
AMS has successfully adopted a three tier route to market strategy:
Branded Partners — The Group believes that the most effective way of rapidly commercialising new technologies/concepts on a global
basis is through strategic partnerships with major branded companies.
Private Label — AMS also addresses the increasing trend towards private label in advanced woundcare, driven by cost constraints by
health care providers, by provision of own label products to distributors. These products allow savings to be made on treatment of routine
wounds alongside the use of the new innovative products for more difficult wounds.
Direct — AMS sells direct to the NHS in its own home market. 
New Concepts Branded Partners
Private Label Partners
UK Direct (NHS)

Silver alginate
    
Alginate Hydrogel Hydrocolloid Foam Film
Cost Management
  

 
percentage of total
group revenue
revenue £12.8m
76% advanced woundcare

wound closure and sealants
 
wound closure and sealants
Technology Platforms:
wound closure and sealants
Our wound closure and sealants products are based on cyanoacrylate
adhesive technology developed for medical applications.
Tissue adhesives offer significant benefits over convential ways of closing
wounds following trauma or surgical incision.
They are simple to use, non-invasive, help to reduce the risk of infection,
minmise trauma to the patient and provide good clinical and cosmetic
outcomes.
The technology is also ideally suited to protecting skin from breakdown
or for use as a skin sealant to help prevent infection of surgical sites.
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
03

SkinLink™

LiquiBand Laparoscopic™

LiquiBand Surgical™

LiquiBand Flow Control™

LiquiBand®
Advanced Medical Solutions
Developer and Manufacturer
wound closure and sealants routes to market
The use of tissue adhesives and sealants is still a relatively new concept and requires market creation, education and development.
Products are taken to market either through a major branded partner or under our own LiquiBand® brand, direct in the UK and via
distributors in Europe.
New
Concepts
Branded Partners
Distributors
Direct



 
LiquiBand® 
Brand

at a glance
stockcode: AMS
percentage of total
group revenue
revenue £4.1m
24% advanced woundcare

wound closure and sealants

our strategy
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
04
Organic Growth Drivers: Silver alginate
2007 market size: $125 million ($250 million Silver Products)
Growth rate: 25% AMS available market: $50 million
Product status: Silver fibre technology — Global exclusive with
leading brand
Ionic silver technology — multi-partner US/EU
What’s new:  Further launches of silver products by
partners in US hospital, nursing homes and home
care markets, and in EU countries
 FDA 510(k) clearance for extended 
claims for 21 day duration burn dressing

Organic Growth Drivers: NHS Advanced woundcare
2007 market size: £110 million
Growth rate: 10% AMS available market: £55 million
Product status: Routine wounds — ActivHeal
® 
sold direct by AMS as 
a value range for first line therapy
Difficult wounds — higher performance 
products/new technologies sold via partners
What’s new:  NHS Trusts using ActivHeal
® 
doubled to over 100
 UCLH adopted products for routine wounds
 4 new products launched
 Strong educational and training support provided by
AMS Clinical Nurse Team

Silver alginate
NHS
LiquiBand™ US
approval



2008 
to 
2009
Surgical Skin
Sealant

To achieve sustained profitability and cash generation in order to
grow a substantial global medical technology business.
Strategy

Develop and provide leading edge technology to the global
woundcare market

Work with strategic partners and major brands to
commercialise our products worldwide

Supply and develop our own branded solutions to the NHS
in our UK home market

Create shareholder value by expanding the business
organically and through acquisition
Key strengths
Four key strengths underpin our strategy:

Broad portfolio of materials technology, supported by
strong intellectual property and patents

Track record of commercialising research and development
and forming strategic relationships with blue-chip partners

Multiple routes to market

Experienced management team
Strategic goal
Organic growth strategy: Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
05
Product status Innovative product to help prevent surgical 
site infection due to patient’s skin flora
Licensed to Kimberly-Clark Health Care in 
2006 as global exclusive (InteguSeal*)
What’s new  US launch in Feb 2007 — roll-out under way
 Now available in US, Europe and other
international markets
 Product is being evaluated in a wide range of
surgical procedures
 Initial reaction positive by surgeons and institutions

2007 market size: $150 million (US market $110 million)
Growth rate: 15% AMS available market: $25 million
US regulatory  Currently approval of topical adhesives is via PMA
approval status  In August 2006 FDA panel recommended 
reclassification to less onerous 510(k) route
 FDA has now accepted and is promoting 510(k)
 Federal Register Notice containing proposed
510(k) controls posted in July requesting 
public comment
 Formal reclassification to 510(k) expected 
in 2008

Organic Growth Drivers: Surgical Skin Sealant Organic Growth Drivers: LiquiBand
® 
US approval
our strategy
stockcode: AMS
Strategy:
To acquire
complementary new
products/technologies
to leverage existing
distribution outlets —
direct, strategic partners
and distributors.
Target areas:
New material
technologies
Actives
Internal adhesives
Strategy:
To broaden direct sales
presence in order to
accelerate penetration
of key markets and
maximise value of 
AMS technology.
Target areas:
Major European
markets
Wound closure
Surgical/Operating
Room arena
Technology

Acquisitions
Distribution

• Higher performance
dressing
• Actives/anti-
microbials
• Fast wound healing
— MMP modulation
• Indication specific
devices
• Internal adhesives
• Surgical/OR
appplications
Advanced
woundcare

Organic R&D
Wound closure
and sealants

Investment opportunities for growth  advanced woundcare

wound closure and sealants

chairman’s statement
Overview
I am pleased to inform investors that
AMS continued to make excellent
progress during 2007, further
strengthening its financial position and
progressing key strategic growth
opportunities.
Group revenues increased 18% to £16.9
million with good growth achieved in our
two business segments, advanced
woundcare (up 12%) and wound closure
and sealants (up 41%). The growth was
also well spread across our key global
markets: UK up 27%, rest of Europe up
19% and US up 21%. 
Gross margins continued to improve from
42% to 44% due to a move towards
higher value products and improved
manufacturing efficiencies. 
Pre-tax profits increased 211% to £1.9
million with maiden first half pre-tax
profits being achieved. Post-tax profits of
£2.2 million resulted in earnings per
share (EPS) trebling to 1.57p.
The Group generated a net cash inflow
from operating activities of £3.7 million
contributing to a robust balance sheet
with cash and cash investments of £7.5
million at the year-end. The balance
sheet was reconstructed during 2007, to
create a distributable reserve to allow the
Group to pay dividends in the future. The
Board currently believes that it is best
able to deliver shareholder returns by
growing the business and delivering
capital growth. 
Good progress was made during 2007
with the key identified organic growth
drivers:

Silver alginate — Further product
launches were made in the first half
of 2007 strengthening the Group’s
position in the dynamic silver alginate
market. AMS has two silver
technologies and a broad range of
marketing and distribution partners
selling into the major global markets.

NHS woundcare — The ActivHeal®
advanced woundcare range was
expanded by the introduction of four
new products during the year. Sold
direct to the NHS, ActivHeal®
products are now used in more than
100 Hospital and Primary Care
Trusts, offering substantial savings in
woundcare budgets.

Surgical skin sealant — This novel
product for helping to prevent
infection of surgical sites is now
available in most of the major
international markets following its US
launch in February 2007 by
Kimberly-Clark Health Care, AMS’
exclusive global marketing partner for
this technology.
“The Group has delivered
against all of its major
objectives for 2007”
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
06 
US approval of LiquiBand® — The
LiquiBand® tissue adhesive range
continues to progress through the
FDA approval process with clearance
expected to be obtained during 2008
allowing sale of the product into the
US market.
The Group’s strong balance sheet
provides the opportunity to fund future
growth both organically and through
acquisition and a number of strategic
investment opportunities have been
identified that are currently under
discussion.
Operating Review
Advanced Woundcare
Advanced woundcare sales of £12.8
million were up 12% on the prior year,
well ahead of market growth rates. The
global advanced woundcare business is
estimated at $3.2 billion and growing at
around 9%. 
AMS has a particularly strong proprietary
position with its alginate and silver
technologies and has used this to
continue to develop its silver alginate
business. Driven by concerns over wound
infection, silver has become the
predominant anti-microbial technology,
and alginate the major wound dressing,
for this indication. New partner launches
took place during the first half-year into
the US hospital market, the US home
care market and in a number of European
countries strengthening the Group’s
global presence in this dynamic market
currently estimated at $125 million and
growing at 25%. Due to widespread use
of silver alginate dressings for treatment
of infected wounds, AMS has also
experienced continued growth of its base
alginate product range. With its broad
partner base and global presence, this is
a core part of the AMS business.
Good progress continues to be made in
penetrating the UK NHS advanced
woundcare market with AMS’s direct
ActivHeal® offering. More than 100 NHS
Trusts are now using these products as a
first line therapy for treating routine
wounds, complementing the use of the
Group’s new technologies such as silver
alginate, for treating infected or more
difficult to heal wounds sold through
strategic partners.
The addition of University College London
Hospital (UCLH) NHS Foundation Trust in
August 2007 as a customer is a strong
endorsement of the ActivHeal® product
range and the success AMS is now
achieving with this business model.
Following a review of its woundcare
product formulary, this major London
teaching centre adopted ActivHeal® as a
way to manage costs without
compromising patient care for routine
wounds.
The ActivHeal® product range has been
strengthened during the year with the
launch of new foam and hydrocolloid
products in June and ActivHeal
Aquafiber® in November. The Group
remains confident that it will continue to
penetrate the NHS advanced woundcare
market currently estimated at £110
million. Increased central decision
making and further integration of product
usage between hospitals and their
associated Primary Care Trusts are
positive trends that support timely
selection and adoption of the ActivHeal®
range.
Wound Closure and Sealants
The wound closure and sealants business
grew 41% to £4.1 million as the Group
continued to develop its LiquiBand®
business within Europe and Kimberly-
Clark Health Care launched surgical skin
sealant into the US market in February.
The Group maintained its strong
leadership position in the UK Accident &
Emergency (A&E) arena in the period and
has also focused the efforts of its
European distributors on the A&E market
where the adhesive technology has real
clinical and cosmetic benefits over
alternative wound closure methodologies
such as sutures, staples and adhesive
strips. The Group is developing its
strategy for penetration of the European
Operating Room (OR) market either
through recruitment of specialist OR
distributors or by expanding its direct
sales presence in this area, together with
the development of a range of products
aimed specifically at the OR with strong
clinical support. 
chairman’s statement
stockcode: AMS
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
07 The dominant segment of the $150
million topical tissue adhesive market is
the US and regulatory approval for
entering this market is progressing. The
FDA has now accepted, and is promoting,
the panel recommendation of August
2006 for these products to be
reclassified from a Premarket Approval
(PMA) to the less onerous 510(k)
approval route.
A Federal Notice was posted on 3 July
2007 containing draft Special Controls to
be used for 510(k) clearance, and written
comments from the public were
requested. Subject to the outcome of the
public comments, formal reclassification
allowing 510(k) regulatory approval is
anticipated during 2008. In the
meantime, the Group continues to build
clinical data to support a PMA route in
parallel.
Kimberly-Clark Health Care is continuing
its US roll-out of the new surgical skin
sealant following its initial introduction in
February 2007. The product is now
available in the US, Europe and other
international markets. Initial reaction
from the surgical community to this
innovative product to help prevent
infection of surgical sites is very positive,
both at the institutional and at the
individual surgeon level. The product is
being evaluated in a wide range of
surgical procedures as a means to help
reduce skin flora contamination of the
wound. 
R&D
The Group has continued to build on its
current technology platforms by investing
in a strategically aligned and focused
R&D programme during 2007. Total R&D
spend increased from £1.0 million in
2006 to £1.1 million in 2007
representing 7% of sales. As well as
adding line extensions to the current
advanced woundcare range, new
dressings with improved fluid handling
and wound healing characteristics are
under development. Of particular interest
are materials that inhibit or negate the
effect of enzymes produced by the body
that prevent healing of chronic wounds. 
A number of technologies are under
evaluation, both through internal
development and as licensing and
acquisition candidates, that could lead to
products with superior performance by
modulating enzymic activity and hence
may help to accelerate wound healing.
In wound closure and sealants, as well as
broadening the existing product portfolio
for topical skin closure and protection,
the Group has started to evaluate
technologies that will allow it to enter the
internal adhesives and sealants market
currently estimated at around $600
million. Whilst this is likely to be a
medium to long-term development and
regulatory approval programme, it will
allow the Group to leverage its current
cyanoacrylate adhesives platform and its
expertise in applicator design to enter the
surgical arena as part of continuing to
move to higher value products.
“With a strong start to 2008
and a number of step change
opportunities on the horizon
the outlook is very positive”
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
08
chairman’s statement continued
advanced woundcare

wound closure and sealants
 Board
Steve Bellamy was appointed as non-
executive director in February 2007 and
now chairs the Audit Committee. Steve’s
previous experience and strong City
background is of great value as the Group
continues to evaluate strategic corporate
opportunities to enhance growth. 
Chris Meredith’s role has been broadened
to become Managing Director of the
Advanced Woundcare business segment
in addition to his responsibility as Group
Commercial Director, as part of a
programme to ensure we have the right
management team to enable the Group to
meet its longer term growth targets.
International Accounting Standards
The Group has adopted International
Financial Reporting Standards (IFRS) for
the first time in 2007. The overall effect
of this has been to improve profit before
tax by £0.3 million (equivalent to EPS of
0.2p) with the main changes arising from
the capitalisation of qualifying R&D
activities.
Outlook
Woundcare is an attractive market with
favourable demographics and an
increasing need for products for the
treatment of both chronic and acute
wounds.
Organic growth is set to continue due to
the dynamic silver market, increasing
penetration into the NHS, the launch of
surgical skin sealant and the ongoing
R&D programme. Additionally, the Group
has exciting step change opportunities on
the horizon such as entry into the US
market with LiquiBand® and through
acquisitions that leverage AMS’
technology and distribution base.
The outlook is very positive. Trading
continues to be strong at the start of
2008 and the Group continues its move
into sustainable profitability.
I would like to thank all AMS employees
for their continued efforts in 2007 in
building a successful medical technology
business and look forward to continuing
working with the team in meeting the
challenges and opportunities ahead.
Dr Geoffrey N Vernon
Chairman
18 April 2008 
chairman’s statement
stockcode: AMS
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
09 2007 has seen AMS continue to make
excellent progress in building a leading,
global woundcare technology company.
The financial position has continued to
strengthen, new products have been
launched and partners have been added
in key markets. Both segments of the
business — advanced woundcare and
wound closure and sealants — have
performed well in 2007 giving the Group
a broad base of products and routes to
market to deliver future growth.
Advanced Woundcare
AMS provides a comprehensive range of
advanced woundcare products that
pioneer the concept of moist wound
healing. This allows wounds to heal faster
and with less pain and scarring compared
with traditional wound dressings. The
products protect the wound, deal with
tissue fluids and provide an optimal
healing environment. 
In the case of routine wounds or where
cost management is key, AMS provides
wound dressings direct to the NHS in the
UK under its own ActivHeal® brand or
through private label distribution partners
in other markets.
The Company made good progress in
2007 with its direct ActivHeal® offering
by broadening its product range and
gaining new Hospital and Primary Care
Trusts. A key addition was University
College London Hospital (UCLH) NHS
Foundation Trust which adopted products
from the ActivHeal® range in August
2007 as a first line therapy for routine
wounds. Granted Foundation Trust status
in 2004 and comprising seven separate
hospital sites, UCLH NHS Trust is a major
London teaching centre and contracts
with 300 Primary Care Trusts. The
training and educational assistance
provided by the AMS clinical nurse team
to support successful conversion was well
received. This is particularly encouraging
as over the past year the Group has
focused on providing strong clinical
support to back up the value proposition
of its product offering.
As well as cost management, and training
and educational support, the users of
advanced woundcare products seek
technological innovation and AMS has
also delivered a number of new products
during the period. New improved foam
and hydrocolloid dressings were launched
in June and ActivHeal Aquafiber® was
launched at the Wounds UK 2007
Conference in Harrogate, North Yorkshire
in November.
ActivHeal Aquafiber® is a soft,
conformable and highly absorbent
dressing. In contact with wound exudate,
the product forms a soft, clear gel
providing an ideal moist wound
environment that supports the wound
healing process. Indicated for moderate
to heavily exuding chronic and acute
wounds, ActivHeal Aquafiber® also
controls minor bleeding in superficial
wounds. ActivHeal Aquafiber® competes
in a segment of the advanced woundcare
market on which it is estimated that the
NHS currently spends £15 million each
year. In a scientific poster presented at 
the Harrogate conference, ActivHeal
Aquafiber® was shown to be equivalent
to or better than a significantly more
expensive leading brand on all five
performance characteristics tested
including absorbency, speed of
absorbency, dry strength, wet strength
and lateral wicking — all key attributes of
a moist wound healing dressing. 
advanced woundcare

wound closure and sealants

chief executive’s review
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
10 Aquafiber® is available
for prescribing by NHS
Trusts in the UK
chief executive’s review
stockcode: AMS
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
11
Aquafiber® is a soft, conformable, highly absorbent dressing. In contact
with wound exudate Aquafiber® converts to a soft, clear gel providing an
ideal moist wound environment that supports the wound healing process.
Aquafiber® is indicated for moderately to heavily exuding 
wounds and to control minor bleeding in superficial wounds.
Aquafiber® is designed to remain intact when wet or dry making it easy and atraumatic
when removing from the wound.
Aquafiber® contains calcium ions that
exchange with sodium ions found in
wound fluid. Calcium is known to be
beneficial in several stages of the
wound healing process.
Aquafiber
®
For more on Aquafiber
®
visit the 
website and follow the menu route below:
www.admedsol.com
AMS Products and Services
Home >> Our Products 
>> ActivHeal
®
>>  Product Range 
>> ActivHeal Aquafiber
®
New
Web Link The ActivHeal Aquafiber® dressing has
been listed in the Drug Tariff and is
available for prescribing by NHS Trusts at
an average price 30% lower than the
equivalent branded dressing, thus
offering a significant immediate saving on
NHS woundcare budgets.
In the case of infected or problematic
wounds, AMS provides its new
technologies such as silver dressings
through strategic partnerships with major
players who have the marketing presence
and global reach to rapidly commercialise
new concepts. The Group continued to
make good progress with its silver
alginate business and is looking to
broaden its offering to include new anti-
microbial technologies and delivery
systems. The opportunity to access the
US burns market was strengthened with
510(k) clearance being granted by the
FDA, allowing AMS to extend its claims
for a silver alginate dressing that is
effective for up to 21 days. This allows
the frequency of dressing changes to be
reduced, thus providing a significant
reduction in the time and overall cost of
treatment, a better opportunity for
healing to progress undisturbed and less
pain and discomfort to the patient. The
extended claims strengthen the
commercial offering to marketing partners
looking to access the burns market. 
Wound closure and sealants
The wound closure and sealants product
portfolio has been strengthened by the
introduction of new products in key
markets.
LiquiBand™ EZ Squeeze is an addition to
the LiquiBand® wound closure range sold
throughout Europe. This development is
part of a continual process to make tissue
adhesives easier to use. Simple, safe and
precise application is equally important
to the adhesive properties in gaining user
acceptance of cyanoacrylate tissue
adhesives for closure of small cuts and
trauma wounds through to large surgical
incisions. Accreditation of the Company’s
Educational Programme for minor wound
closure by the Royal College of Nursing
Accreditation Unit is also helping to gain
user acceptance in the UK.
Simple innovations such as the EZ
Squeeze product and strong educational
support to clinical users have helped
AMS maintain its leadership position in
the UK A & E market and continue to
penetrate other EU markets through its
distributor base.
Obtaining approval of the LiquiBand™
wound closure range for the US market
by the FDA remains a major focus for the
business. It is currently anticipated that
topical tissue adhesives will be
reclassified to a 510(k) approval route
during 2008 allowing subsequent entry
into this major market. A marketing and
distribution partner has been identified
for the US and market entry plans are
being drawn up subject to regulatory
approval. In parallel with the 510(k)
reclassification route, multi-centre
clinical studies are being conducted to
support the existing PMA route if
necessary.
As well as being an ideal wound closure
material, the AMS cyanoacrylate
technology offers exciting applications for
sealing and protecting skin. LiquiShield®
S (Superskin®) is a barrier film that is
indicated for helping to prevent skin
breakdown which can lead to bed sores
particularly in patients in long term care
facilities. This product is available in
Europe and US markets, sold through
distributors who are focused on the
nursing home sector.
Surgical skin sealant is an innovative
product designed to help prevent
infection of surgical sites due to the
patients’ skin flora. This product was
licensed to Kimberly-Clark Health Care in
2006 as a global exclusive and was
launched under their InteguSeal® brand
into the US in February 2007. The
product, which is now available in the
US, Europe and other international
markets, is being evaluated in a wide
range of surgical procedures with positive
initial reactions by surgeons and
institutions. It is estimated that the cost
of hospital acquired infection was $3
billion in the US in 2007, with surgical
site infections (SSI) a major component.
This is resulting in considerable interest
being taken in products that can reduce
the incidence of SSI, particularly when
reimbursement of the cost of these is
under question.
chief executive’s review continued
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
12
advanced woundcare

wound closure and sealants

Skin sealant designed to reduce the
risk of skin flora contamination of a
surgical wound.
Contamination by the patient’s own skin
flora is recognized as a major factor in the
development of surgical site infection
during surgical procedures. Compared with
uninfected patients, those with surgical site
infections have been shown to remain in
hospital seven days longer, are 60% more
likely to be re-admitted to intensive care
units, are five times more likely to return for
treatment within 30 days of discharge and
have double the mortality rate.
1
Working with Kimberly-Clark Health Care, a
global leader in infection control, AMS has
developed InteguSeal* Microbial Sealant,
an innovative product designed to protect
Surgical Skin Sealant chief executive’s review
stockcode: AMS
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
13
against skin flora migration into surgical
incisions.
InteguSeal* Microbial Sealant consists of a
liquid adhesive film applied to the skin
surface using a novel applicator prior to
surgery. Skin flora are immobilised during
the time of the surgery thus reducing the
potential for contamination of the 
surgical site.
1
Barnard, B (2003) Prevention of Surgical Site
Infections. Infection Control Today.
®
Registered Trademark or *Trademark of Kimberly-
Clark Worldwide, Inc. © 2007 KCWW
Skin 
Sealants
Wound management products range from
traditional gauzes and adhesive plasters to
the advanced moist woundcare dressings as
currently sold by AMS. The use of medical
adhesives as a barrier for the protection of
skin is a relatively new concept.
LiquiShield® S is a topical, liquid barrier
film that is painted onto the skin in a very
thin layer in order to provide protection
against skin damage caused by friction,
shear and/or the presence of moisture. 
LiquiShield® S (Formerly SuperSkin®)
received FDA clearance for sale in the USA
in December 1997 and a CE mark for sales
into Europe in April 1998. While it was
renamed LiquiShield® S for the USA
market, it continues to be sold under the
name of SuperSkin® in the UK.
LiquiShield® S is sold through distributors
into both markets, targeted mainly at the
nursing home sector. There are few
competitors within the liquid barrier market
and the formulation of the LiquiShield® S
product provides some significant
competitive advantages.
Friction, shear or the presence of moisture
can lead to skin breakdown, particularly in
radiation patients, amputees utilising
prosthetic limbs, stoma patients, bedridden
patients, paraplegics, quadriplegics and
individuals with generally compromised
skin integrity. LiquiShield® S has
applications in each of these areas.
LiquiShield® S (SuperSkin®)
— a tissue barrier film for wound management
For more on LiquiShield
®
visit the 
website and follow the menu route below:
www.admedsol.com
AMS Products and Services
Home >> Our Products 
>> LiquiShield
®
S Skin Protection
Web Link Investment opportunities
The Group’s strengthening financial
position is allowing it to actively review
investment opportunities to deliver future
growth:

Research and Development
AMS built on its development
activities during 2007 and continues
to provide a strong new product
pipeline for its organic business
based on a broad patent portfolio. In
addition, a number of new technology
platforms are being researched.
In advanced woundcare, the focus
remains on the incorporation of
ingredients into the base material
technologies, that actively help
accelerate the wound healing process.
The initial approach is to deal with
infection, which delays wound
healing, hence AMS’ active
programme in the inclusion of anti-
microbials such as silver, into its
dressings. Whilst the current activity
is centred on silver alginate,
opportunities exist to broaden this
into other products, and appropriate
developments and regulatory
approvals are under way. 
An area that is attracting considerable
interest in the research community is
the role of metallo-matrix proteases
(MMPs), enzymes produced by the
body in response to a wound, that
subsequently inhibit or delay healing.
A number of technologies that
modulate MMPs are being reviewed
as candidates for inclusion in AMS
products as part of the next
generation wound dressings.
A number of avenues continue to be
progressed to enter the internal
adhesives and sealant market. This
involves leveraging the Group’s
current cyanoacrylate technology
platform or licensing or acquiring new
materials and exploiting existing
expertise in adhesive development,
applicator design and regulatory
approval.

Manufacturing operations
2007 saw a strong performance from
the company’s manufacturing
operations delivering significant
volume growth whilst ramping up
production to support major product
launches in silver alginate and
surgical skin sealants. This was
achieved within tight management of
working capital whilst maintaining
quality and service levels. The Group
is planning to rationalise its two
manufacturing operations in
Winsford, Cheshire into a new single
site in the local area supported by
selective strategic outsourcing. This
will create substantial additional
capacity for future growth of the
business and deliver operational
efficiencies over the current set-up. A
capital investment of £4 million has
been identified during 2009 for
setting up the new facility which is
expected to come on stream in early
2010. An experienced project
manager has been recruited who is
dedicated to overseeing this major
project, reporting to the Executive
Board.
Summary
The Group continued to make excellent
progress during 2007 in strengthening its
financial position and advancing the key
drivers of its multi-faceted growth
strategy.
As a technology rich, profitable, cash
generative business in the medical device
sector, with a dedicated and focused
workforce, AMS is well placed to continue
to create value for shareholders.
Dr Don W Evans
Chief Executive Officer
18 April 2008 
advanced woundcare

wound closure and sealants
 
chief executive’s review continued
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
14
The Group’s strengthening financial
position is allowing it to actively 
review investment opportunities to
deliver future growth. chief executive’s review
stockcode: AMS
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
15
Organic Research and Development
The Group continued to build on its current
technology platforms by investing in a
strategically aligned and focused R&D
programme during 2007. In addition, a number
of new technology platforms are being
researched.
Advanced Woundcare

Higher performance dressing

Actives/anti-microbials

Faster wound healing 
— MMP modulation 
Wound closure and sealants

Indication specific devices

Internal adhesives

Surgical/OR applications
research and
development
For more on Research and Development visit
the website and follow the menu route below:
www.admedsol.com
AMS Products and Services
Home >> Our Products >> Key Technologies
Web Link advanced woundcare

wound closure and sealants

financial review
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
16
The Group has adopted International
Financial Reporting Standard (IFRS) for
the first time in 2007 and the
consolidated financial statements for the
Group have been prepared on this basis.
Overall, the profit before taxation has been
improved by less than £0.3 million under
IFRS with the main change arising from
the capitalisation of development costs of
£0.3 million.
Revenue
Revenue for the Group increased by 18%
to £16.9 million (2006: £14.3 million),
with advanced woundcare sales increasing
12% to £12.8 million (2006: £11.4
million) and wound closure and sealants
sales growing by 41% to £4.1 million
(2006: £2.9 million). The advanced
woundcare business showed good growth
with silver alginate and the NHS
performing particularly well. The main
reason for the strong performance in the
wound closure and sealants business
resulted from the successful launch of
InteguSeal® by Kimberly-Clark.
Growth was strong across all of the Group’s
major geographic regions. In the UK, sales
increased by 27%, reflecting increased
business to both the NHS and UK
partners. Sales in Europe grew 19% as a
result of the growth in partner generated
business particularly in advanced
woundcare. Sales in the US also
performed well, increasing 21%. With a
significant proportion of US sales
transacted in dollars the Group was,
however, affected by the weak US dollar.
On a comparable dollar basis to last year,
sales growth in the US would have been
27% and overall underlying sales growth
for the whole Group would have been
19%. Rest of world sales did, however,
reduce by 70% to £0.2 million (2006:
£0.7 million). This was an indirect result
of the success of the Company’s silver
alginate business with AMS’s partners in
the UK and Europe gaining market share
at the expense of some alginate business
in the rest of the world market.
Gross margin
The gross margin for the Group was 44%
(2006: 42%). The Group’s strategy of
selling higher value products, especially
silver alginate, and increased sales to the
NHS contributed to improved margins.
Additionally, the benefits of increased
production improved operational gearing.
Operating profit 
Administration costs increased by 3.5% to
£6.1 million (2006: £5.9 million), with
the main increase being in sales and
marketing costs, which increased by £0.2
million to £1.6 million reflecting the full
year effect of building the integrated
Group commercial team which started 
in 2006.
Under IFRS, within research and
development, some development costs
must now be capitalised when a project
has met certain criteria regarding viability.
This resulted in a reduced research and
development cost being expensed through
the income statement. Compared with
2006, there was an additional £0.2
million of these development costs
capitalised.
Overall, the total spend on research and
development was £1.1 million in 2007
(2006: £1.0 million) representing 7% of
Group revenue (2006: 7%) which is
broadly in line with the Group’s internal
targets. £784k (2006: £909k) was
expensed to the income statement and
£294k (2006: £69k) was capitalised. The
main areas of research and development
spend in the year were in further
developments in silver-based advanced
woundcare products, foam dressings and
the development of the cyanoacrylate
technology. A number of new products
were launched in the year including a
foam-backed hydrocolloid and ActivHeal
Aquafiber® for the NHS.
The Group has
established a
strong financial
platform for future
growth.
revenue analysis (%)
  UK
  Europe
  USA
  Rest of World
25%
1%
34%
40%
revenue (£m)
24%
5%
32%
39%
18
16
14
12
10
8
6
4
2
0
03 04 05 06 07 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
financial review
stockcode: AMS
17
Other income was at a similar level to
2006 at £0.5 million and resulted from
fees paid by partners towards the
development of new products.
Finance income
Finance income doubled to £0.3 million
as a result of the interest earned on
increased level of cash and investment
balances maintained throughout the year.
Profit before taxation
The Group achieved a profit before
taxation of £1.9 million, over three times
the profit in the previous year (2006: 0.6
million).
Taxation
The Group recognised a tax income of
£0.3 million resulting from deferred tax
(2006: £0.1 million), reflecting the extent
that recoverability of tax as a result of past
losses can be foreseen with reasonable
probability. As a result, the Group holds a
deferred tax asset on the balance sheet of
£1.4 million (2006: £0.8 million). There
is, however, approximately, a further £9.1
million (2006: £9.4 million) of tax losses
at future rates of tax which have not been
recognised.
Earnings per share
The profit after tax for the period was £2.2
million (2006: £0.7 million) resulting in
fully diluted earnings per share of 1.48p,
over three times EPS in 2006 (0.50p).
Balance sheet and cash flow
Cash generation in 2007 was very strong
and optimising working capital continues
to be a key focus for management. The
Group generated £3.7 million of cash from
operating activities (2006: £1.4 million).
Whilst sales increased by 18%, inventory
was at a similar level to last year and trade
and other receivables reduced by £0.4
million, mainly as a result of early
payment by two customers at the end of
the financial year. Adjusting for this, trade
and other receivables would have been at
a similar level to 2006. Trade and other
payables increased by £0.5 million.
The Group invested £0.5 million (2006:
£0.3 million) on property, plant and
equipment which are expected to improve
efficiencies in 2008. The Group has
identified the need to rationalise its sites
and is expecting that around £4 million of
capital expenditure will be associated with
this in 2009. The benefits of the
rationalisation will be to provide extra
capacity for the future and to improve
process flows and efficiencies.
At the end of the year the Group had £7.5
million in cash and cash investments
(2006: £4.6 million) and net funds stood
at £7.2 million (2006: £4.3 million).
Capital reorganisation
On 6 July 2007 the Company completed
its capital reorganisation. The share
capital was reduced by the cancellation of
the Deferred Shares together with the
cancellation of the share premium
account. Although the total equity of the
Group remained unchanged the Company
was able to create a profit reserve of £5.9
million following the reconstruction. This
capital reorganisation enables the Group to
pay dividends, should the Board make a
recommendation to do so. No dividend is
being proposed for 2007. 
KPIs
The Group currently operates key
performance indicators (KPIs) to monitor
business progress. The Group regularly
reviews its KPIs and going forward will use
the following as the main measurements
of the Group’s performance: 

Revenue growth

Gross margin

Profit from operations

Earnings per share

Percentage of revenue from products
launched in the last 5 years

Working capital ratio

Customer satisfaction

Employee satisfaction

Quality compliance
Financial risk
The Group is subject to various financial
risks including the following:

Market. The Group’s main currency
exposure is to the US dollar with
around 14% of the Group’s sales
denominated in US dollars. The
Group’s policy is to hedge significant
transaction exposure to the dollar by
using forward contracts and options
and has both contracts and options in
place to the end of 2008. In 2007, if
the dollar had depreciated by 10%
more than it did this would have had a
£0.2 million impact on revenue and
the gross margin would have been
reduced by 1%.

Liquidity and Cash Flow. The Group
invests funds which are surplus to
short-term requirements in fixed rate
deposits operating within parameters
for credit ratings and credit limits for
individual institutions that are
approved and monitored by the Board.

Credit. The Company assesses the risk
of contracting with each customer and
sets credit limits which are carefully
monitored. If a significant risk is
identified credit facilities are
withdrawn and transactions are carried
out on a cash basis.

Price. Supplier costs, discounts and
rebates are monitored and checked in
line with budgets and documentary
evidence. Wherever possible, contracts
are in place with key suppliers which
define prices and terms. The Group
estimates that if material prices had
increased by a further 5% in 2007
and the Group was unable to pass the
increases on there would have been a
negative impact of £0.2 million to cost
and the gross margin would have been
reduced by 1%. 
Mary G Tavener
Finance Director
18 April 2008 
gross profit and gross margin earnings per share (p)
8
7
6
5
4
3
2
1
0
Gross profit (£ million)
Gross margin (%)
50
45
40
35
30
25
20
15
10
5
0
Gross profit (£m)
Gross margin (%)
2
1.5
1
0.5
0
-0.5
-1
-1.5
-2
03 04 05 06 07 03 04 05 06 07 advanced woundcare

wound closure and sealants

board of directors
advisers
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
18
Dr Geoffrey N Vernon BPharm, PhD, MBA, Ch.Dir.
Non-Executive Chairman 
Dr Vernon is a former executive director
of Rothschild Asset Management and
partner of the venture capital group
Advent Limited. He joined AMS as a
non-executive director in July 1998
and became Chairman in January
2001. He has over 20 years’
experience in healthcare and life
sciences. He is a non-executive
chairman and director of a number of
quoted and privately owned companies.
He is a Chartered Director of the
Institute of Directors.
Dr Don W Evans BChemEng, MASc, PhD 
Chief Executive Officer
After completing a degree in Chemical
Engineering at the University of
Queensland and a PhD in Biomedical
Engineering at the University of
Toronto, Dr Evans joined Johnson &
Johnson UK where he worked for 19
years in Research & Development and
Manufacturing. He was subsequently
appointed as Vice-President of
European Operations for Johnson &
Johnson Professional. Dr Evans joined
AMS in 1997 as Operations Director
and was appointed Managing Director
of Advanced Woundcare in January
1999. He became Group Chief
Executive in January 2000.
Mary G Tavener ACMA, MCT, BA (Hons) Chem (Oxon)
Finance Director
Ms Tavener joined AMS as Finance
Director in 1999. Prior to this she was
the Group Financial Controller at BTP plc
during a period of considerable corporate
activity and was involved in the
acquisition and disposal of several
businesses that repositioned BTP plc as a
fine chemical company. Her experience
has been gained in manufacturing and
she has held financial positions with
Cadburys Ltd and Parker Hannifin, a US
Engineering Corporation. Prior to BTP
plc, she was the Finance Director of
Churchill Tableware Ltd.
Financial Adviser
Landsbanki Securities (UK) Limited
Beaufort House, 
15 St Botolph Street,
London, EC3A 7QR
NOMAD
Landsbanki Securities (UK) Limited
Beaufort House, 
15 St Botolph Street,
London, EC3A 7QR
Auditors
Baker Tilly UK Audit LLP
Number One Old Hall Street, 
Liverpool, L3 9SX
Solicitors
Wragge & Co
55 Colmore Row, Birmingham, B3 2AS
Registrars and Transfer Office
Capita IRG Plc
Northern House, Woodsome Park, 
Fenay Bridge, Huddersfield, 
West Yorkshire, HD8 0LA
Bankers
HSBC Bank plc
City Branch, 4 Dale Street, 
Liverpool, L69 2BZ
Patent Attorneys
Marks & Clerk 
Manchester Office, Sussex House, 
83–85 Mosley Street, Manchester, M2 3LG
Foley & Lardner, LLC
Building 3, Palo Alto Square, 
3000 El Camino Real, Palo Alto, CA 94306
Public Relations
Buchanan Communications
45 Moorfields, London, EC2Y 9AE corporate governance standing committees
Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
19
A Chris Meredith BSc (Hons)
Group Commercial Director
Mr Meredith joined AMS as Group
Commercial Director in July 2005. He
began his career in sales for Beecham
Pharmaceuticals and has continued to
hold commercial roles within the
healthcare industry ever since. His
experience covers contract
manufacturing, product development,
clinical research and branded product
sales all within the medical device,
pharmaceutical or consumer healthcare
markets. Mr Meredith has previously
held senior commercial positions at
Cardinal Health, Banner Pharmacaps,
Aster Cephac and Smiths Industries.
R Stephen Harris BPharm, FRPharmS 
Non-Executive Director
Mr Harris was appointed as a non-
executive director of AMS in January
2001. His career has been in both
prescription and consumer healthcare
sectors, with sales, marketing and
general management experience with
MSD, Lilly, Boots and Reckitt &
Colman before becoming a main Board
Director of Medeva plc. He resigned as
a director of Medeva in 1995 to set up
his own consultancy business. He now
holds non-executive appointments with
a number of quoted and privately
owned healthcare companies. 
Stephen G. Bellamy BCom & ACA (NZ) 
Non-Executive Director
Mr Bellamy was appointed as non-
executive director of AMS on 20 February
2007. He is currently Chairman of The
First Close Technology Fund which
invests in early stage UK technology
companies, a founding partner of
Accretion Capital LLP (a new technology
fund management business) and non-
executive director of Clarity Commerce
Solutions plc. Formerly an executive
director of Sherwood International plc,
and Brierley Investments’ London
operations, he has also held a number of
other non-executive directorships and
advisory roles including Budgens plc, a
UK food retailer, and Dr. Foster Limited,
a provider of information services to the
UK health industry. He is a qualified
chartered accountant.
Audit Committee
S G Bellamy (from 20 February 2007),
Chairman (from 6 June 2007)
R S Harris
Dr G N Vernon
Remuneration Committee
R S Harris, Chairman 
Dr G N Vernon
S G Bellamy (from 20 February 2007)
Nominations Committee
Dr G N Vernon, Chairman 
R S Harris
S G Bellamy (from 20 February 2007)
Dr D W Evans
Company Secretary
M G Tavener
Registered Office
Road Three, Winsford Industrial Estate,
Winsford, Cheshire, CW7 3PD
Registered Number
2867684
board of directors
stockcode: AMS Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
20
report of the directors
For the year ended 31 December 2007
The directors present their report and the
audited financial statements for the year
ended 31 December 2007.
Principal activities, trading review and future
developments
The Group is primarily involved in the
design, development, manufacture and
distribution of novel high performance
polymers (both natural and synthetic) for
use in advanced woundcare dressings and
materials and medical adhesives for
closing and sealing tissue for sale into the
global medical device market.
In addition to the risk factors and key
performance indicators discussed below,
further information about the business, its
strategy, products and markets and its
financial risks is contained in the
Chairman’s Statement on pages 6 to 9, 
Chief Executive’s Review on pages 10 to
15 and the Financial Review on pages 16
and 17.
Principal risks and uncertainties
Advanced Medical Solutions Group plc is a
business that depends on revenues
through its direct sales to the NHS, sales
to business partners and distributors, 
a successful pipeline of new products
through its research and development
programme to build future revenues and 
a manufacturing capability to produce the
products it sells.
Risk associated with global economic
conditions
The company has a widespread
geographical market sector and customer
base which minimises the impact of any
single event. With an ageing population
increasingly suffering health problems
such as obesity and diabetes, the
incidence of chronic wounds is increasing
and hence the demographics are
beneficial for the company.
There has been consolidation in the
healthcare industry in recent years which
is ongoing. This presents both
opportunities and risks. Consolidation
could result in the loss of a partner which
could have a material effect on the results
of the company.
Risk associated with revenue stream
The Group’s revenues are mainly from the
sale of its products. The Group enters
contractual relationships with its business
partners wherever possible; however, there
can be no guarantee that sales will be
maintained or increased in future years.
The Group maintains close partnerships
with a number of companies so that not
more than 20% of its revenues are from
any one partner. The loss of any of these
key partners could have a material impact
on results.
There are also risks from pricing pressure
and from competition from other products.
The Group seeks to provide differentiated
products that are patented wherever
possible to reduce the effects of
competition.
Risk associated with new products
The Group continues to invest in research
and development to develop its next
generation of products. By its nature, not
all research leads to successful new
products, although the Group believes that
by monitoring progress against key
milestones, it avoids excessive expenditure
on projects that will not deliver a viable
product. There is also the risk that the
Group will not identify a new technology or
opportunity before its competition and
therefore miss an opportunity to gain
competitive advantage.
Risk associated with manufacture
The Group seeks to work with its business
partners through the use of forecasts to
ensure that products are delivered on time
and in full. 
The Group is also exposed to the risk that
margins would be eroded if price increases
occur in raw materials, and the price
increases could not be passed on to the
business partner. Wherever possible the
Group tries to maintain more than one
source of the supply of key materials.
Where materials can only be sourced from
a sole supplier or are linked to commodity
prices, the Group includes pricing
mechanism clauses in its contracts
wherever possible.
As a manufacturer, the Group is exposed
to potential product liability claims but
has in place insurance cover to manage
this potential risk. The Group’s products
are subject to medical device regulatory
approval and certification before launch.
The Group’s manufacturing facilities are in
compliance with ISO 13485, the latest
international quality assurance standard
for medical devices and receives regular
inspection by regulatory authorities.
The Group’s financial risks are discussed
in the Financial Review on pages 16 
and 17.
Key Performance Indicators
The Group currently uses the following Key
Performance Indicators (KPIs) to measure
progress: revenue, gross margin, operating
profit and earnings per share. Details on
the Group’s success as measured against
these KPIs are included in the Financial
Review on pages 16 and 17.
The Group has now identified the need to
include further KPIs that address other
aspects of the business. Details of these
KPIs are also included in the Financial
Review.
Dividends
The Group made a profit for the year to 
31 December 2007 of £2.2 million. The
directors do not recommend the payment
of a dividend and the whole of the surplus
will be transferred to reserves.
Research and Development
The Group has expensed to the income
statement £784k (2006: £909k) in the
year ended 31 December 2007 on
research and development. In accordance
with International Accounting Standards a
further £294k (2006: £69k) has been
capitalised. Further details on the Group’s
research and development are included in
the Chief Executive’s Review on pages 
10 to 15.
Creditors’ payment policy
The Group’s policy for the year to 
31 December 2008, for all suppliers, is to
fix terms of payment when agreeing the
terms of each business transaction, to
ensure the supplier is aware of those
terms, and to abide by the agreed terms of
payment provided that the supplier
performs its obligations. Where terms have
not been specifically agreed, it is the
Group’s practice to settle invoices in line
with local and industry requirements. The
Group’s trade creditors at 31 December
2007 represented approximately 70 days
of purchases (2006: 85 days).
Charitable and political contributions
The Group did not make any charitable or
political contributions during the year.
Share capital and issue of ordinary shares
The authorised and issued share capital of
the Company is set out in note 27 to the
accounts on page 62. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
21
report of the directors
stockcode: AMS
Substantial shareholdings
The company’s major shareholders at 31 March 2008 are:
No. of
Ordinary
Shares %
Axa Framlington Investment Management 18,697,057 13.1
Cavendish Asset Management 11,885,000 8.3
Invesco Asset Management 8,850,000 6.2
Newton Investment Management 7,366,343 5.2
Artemis Investment Management 5,882,352 4.1
J D Slater and family 5,850,000 4.1
Acuity Capital Management 5,732,352 4.0
Aerion Fund Management 5,677,972 4.0
Employees
The Group’s policy is to consult and
discuss with employees through meetings,
both formal and informal, those matters
likely to affect employees’ interests. The
Employees’ Consultative Committee,
which comprises representatives of
employees and management, meets
regularly to discuss business issues and
areas of concern. 
Employees are incentivised directly
through the Group’s bonus scheme, share
option schemes, deferred share bonus
schemes, performance reviews, and
training and development opportunities.
The Group’s aim is to recruit and retain
sufficient skilled and motivated employees
to meet the needs of the business. The
required skills are defined and employees
are encouraged to acquire additional skills
through a skill grid structure for which
they are remunerated. Each line manager
is responsible for implementing this
approach.
It is the Group’s policy to give full and fair
consideration to all applications for
employment from disabled persons having
regard to their particular aptitudes and
abilities and to encourage the training and
career development of all personnel
employed by the Group, including disabled
persons. Should an employee become
disabled, the Group would, where
practicable, seek to continue the
employment and arrange appropriate
training.
Employees’ Share Schemes
All employees, except for participants in
the Long Term Incentive Plan (LTIP), are
eligible after a period of service to be
granted options over shares in the
company under the company’s Executive
Share Options Schemes, under which both
Enterprise Management Incentive (EMI)
options and the Unapproved options may
be granted. Options granted under these
schemes are not offered at a discount.
The exercising of options under these
schemes is conditional on certain
performance conditions which are pre-
determined by the Remuneration
Committee and which accord with the
Joint Statement from the Investment
Committees of the Association of British
Insurers and the National Association of
Pension Funds. Options are exercisable no
earlier than 3 and no later than 10 years
after the date of grant. Details of the
options granted are provided in note 28 on
pages 63 to 66.
The company also operates a Deferred
Share Bonus Scheme (DSB) in which all
employees are invited to participate. 
The DSB will encourage employee share
ownership and will align the employees’
interests with those of the shareholders.
The details on the Deferred Share Bonus
Scheme are provided in the Remuneration
Report on pages 24 to 27.
Health and Safety and the Environment 
The Group is committed to high standards
in health, safety and environmental
performance. It is Group policy to abide by
all laws, directives and regulations
pertinent to its field of operations and to
act in a manner so as to minimise the
effects of its operations on the
environment. The company provides safe
places and systems of work, safe plant and
machinery, safe handling of materials and
ensures that appropriate information,
instruction and training is given. Regular
audits are undertaken to evaluate
compliance with company policy. 
The business is proactive in assessing its
impact on the environment. It ensures that
removal of waste is only made by suitable
registered and accredited organisations.
Directors and their interests 
The directors of the company at 31 December 2007 and their interests, all of which are beneficially held in the share capital of the
company were:
Ordinary shares Ordinary shares
of 5p each of 5p each
31 December 2007 31 December 2006
Shares Options LTIP Shares Options LTIP
G Vernon 960,000 —— 860,000 ——
D Evans 763,859 616,666 3,001,173 700,000 616,666 1,865,173
M Tavener 155,421 300,000 2,214,571 111,562 300,000 1,348,571
S Harris 237,857 —— 237,857 ——
A C Meredith 55,000 — 1,208,000 15,000 — 500,000
S G Bellamy 100,000 —— ——— Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
22
report of the directors continued
There have been no changes to the
directors’ interests between the end of the
financial year and 18 April 2008 being
less than a month prior to the date of
notice of the Annual General Meeting.
Further details of the directors’
remuneration and benefits are included 
in the Remuneration Report on pages 
24 to 27.
Reappointment
At the forthcoming Annual General
Meeting, Geoffrey Vernon will retire by
rotation and, being eligible, will be
proposed for reappointment. Details of the
current directors of the Company are
shown on pages 18 and 19.
Statement of Directors’ Responsibilities
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulations.
UK Company law requires the directors to
prepare Group and company financial
statements for each financial year. Under
that law the directors are required to
prepare Group financial statements in
accordance with International Financial
Reporting Standards (“IFRS”) as adopted
by the EU and have elected to prepare the
company financial statements in
accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards
and applicable law).
The Group financial statements are
required by law and IFRS adopted by the
EU to present fairly the financial position
and performance of the Group; the
Companies Act 1985 provides in relation
to such financial statements that
references in the relevant part of that Act
to financial statements giving a true and
fair view are references to their achieving a
fair presentation.
The Company financial statements are
required by law to give a true and fair view
of the state of affairs of the Company. 
In preparing each of the Group and
company financial statements, the
directors are required to:

select suitable accounting policies and
then apply them consistently;

make judgements and estimates that
are reasonable and prudent;

for the Group financial statements,
state whether they have been prepared
in accordance with IFRSs adopted by
the EU; and for the Company financial
statements state whether applicable
UK accounting standards have been
followed, subject to any material
departures disclosed and explained in
the Company financial statements;

prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and the Company will continue
in business.
The directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
financial position of the Company and to
enable them to ensure that the financial
statements comply with the requirements
of the Companies Act 1985. They are also
responsible for safeguarding the assets of
the Group and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.
The directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of financial statements may
differ from legislation in other
jurisdictions.
Third party indemnity provision for directors
Qualifying third party indemnity provision
was in place for the directors of the Group
for the financial year.
Auditor
Baker Tilly UK Audit LLP has indicated its
willingness to continue in office.
Resolution 2 to appoint Baker Tilly UK
Audit LLP as auditor to the Company will
be proposed at the Annual General
Meeting and authorises the directors to
agree payment for their services.
Statement as to disclosure of information 
to auditor
The directors who were in office on the
date of approval of these financial
statements have confirmed, so far as they
are aware, there is no relevant audit
information of which the auditor is
unaware. Each of the directors has
confirmed that they have taken all
reasonable steps to ascertain such
information and to establish that the
auditor is aware of it.
Special business at the Annual General
Meeting
The effect of Resolution 4, which will be
proposed as an ordinary resolution, seeks
your authority to amend the rules of the
Advanced Medical Solutions Group Plc
Unapproved Executive Share Option
Scheme (the “Unapproved Scheme”), The
Advanced Medical Solutions Long Term
Incentive Plan, The Advanced Medical
Solutions Group plc 2006 Deferred Share
Bonus (Unapproved) Plan (the
“Unapproved DSB”) and The Advanced
Medical Solutions Group plc 2006
Deferred Share Bonus (Approved) Plan
(the “Approved DSB”) (together, the
“Plans”).
The changes to the rules of the Plans
would increase the current “10% in 10
years” share capital limit in each of the
Plans which applies to the grant of options
and/or making of awards over new issue
shares in the Company under each of the
Plans and any other employees’ share
scheme of the Company to a “15% in 10
years” limit in each of the Plans. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
23
report of the directors
stockcode: AMS
Additionally, changes would be made to
the Unapproved Scheme and the
Unapproved DSB removing the current
prohibitions in that Scheme and Plan
against granting options (awards in the
case of the Unapproved DSB) within a
specified period prior to the retirement of
an otherwise eligible employee under that
Scheme or Plan (the period of 2 years
prior to retirement in the case of the
Unapproved Scheme and of 6 months
prior to retirement in the case of the
Unapproved DSB). Such provisions were
included in the Unapproved Scheme and
the Unapproved DSB to take account of
previous requirements of guidelines issued
by the Association of British Insurers for
share-based incentive schemes (the
“Guidelines”) which are no longer required
by the Guidelines, being considered to be
age discriminatory and in conflict with EU
legislation intended to combat age
discrimination implemented in the UK in
October 2006.
Changes would also be made to the
Unapproved Scheme to remove the current
full-time working requirement for a
director who is employed by a
participating Company in the Unapproved
Scheme to be eligible to be granted an
option under the Unapproved Scheme.
This requirement was included in the
Unapproved Scheme to take account of a
previous requirement of the Guidelines
which is no longer required by the
Guidelines, being considered to be
potentially sex discriminatory. A further
change to the Unapproved Scheme would
increase the current maximim individual
limit for the grant of enterprise
management incentive (“EMI”) options
under the Unapproved Scheme from the
“£100,000” limit referred to in the
Unapproved Scheme to “£120,000”,
being the new maximum limit for EMI
options granted on and following 6 April
2008, as introduced in the Budget on 
12 March 2008.
The change to The Approved DSB will only
take effect once HM Revenue & Customs
has approved the amendment and
confirmed it does not affect the approved
status of the Approved DSB.
Copies of the Plans, as proposed to be
amended, will be available for inspection
at the Company’s registered office at Road
Three, Winsford Industrial Estate,
Winsford, Cheshire, CW7 3PD during
normal office hours from the date of issue
of the Notice of Annual General Meeting
until the date of the Annual General
Meeting and at the Meeting itself.
Further details on this are included in the
Remuneration Report.
The effect of Resolution 5 which will be
proposed as a special resolution at the
meeting would be to disapply the statutory
pre-emption rights conferred by Section
89 of the Companies Act 1985 to a
limited extent, that is to say:

In connection with generally pre-
emptive issues; or

In respect of shares having an
aggregate nominal value of
£710,412.68 representing
approximately 10% of the nominal
value of the Company’s current issued
ordinary share capital
The resolution will cease to have an effect
a the conclusion of the Company’s Annual
General Meeting to be held in 2009 or, if
earlier, fifteen months after the date of the
passing of this resolution.
Annual General Meeting
The Annual General Meeting will be held
on 3 June 2008 at 11.00 am at the
Macdonald Portal Hotel, Cobblers Cross
Lane, Tarporley, Cheshire, CW6 0DJ.
Details of the notice of the Annual General
Meeting are given on pages 78 and 79.
The Annual General Meeting provides an
opportunity for private shareholders to
question your Board and to meet
informally with the executive management
after the meeting.
By order of the Board
Mary G Tavener
Company Secretary
18 April 2008 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
24
remuneration report
The members of the Remuneration
Committee are all non-executive directors of
the Group and have no personal financial
interest arising from cross-directorship and
no day-to-day involvement in running the
business. The Committee met twice during
the year. New Bridge Street Consultants
LLP, who have experience in executive
remuneration and share schemes, were
appointed by the Committee to provide
independent advice and analysis on
remuneration matters, including the
provision of competitive market data. New
Bridge Street Consultants LLP also assisted
the Group on the measurement of Total
Shareholder Return on the company’s LTIP
scheme. 
The Board has accepted the Remuneration
Committee’s recommendations in full.
The Remuneration Committee, on behalf of
the Board and in consultation with the Chief
Executive, determines the Group’s policy on
executive remuneration, employment
conditions, and the individual remuneration
packages of executive directors and
management earning in excess of £50,000
per annum and administers the Share
Option Schemes. 
The Group has complied during the year
with Section 1B ‘Directors’ Remuneration’
of the provisions of the Combined Code and
the Schedules A & B to the Combined Code. 
Remuneration policy
The remuneration policy is based on the
need to offer competitive packages to attract
and retain senior executives of the highest
calibre. Regular reviews of the policy are
carried out, supported by independent
advice, to ensure that the range and level of
emoluments and incentive schemes
continue to match current market practice.
Salary
Salaries are measured against performance
and market medians.
Annual performance bonus
The service agreements provide that each
executive director shall be entitled to receive
an annual bonus to be determined by the
Remuneration Committee based on the
Group’s financial and operating
performance. Each participant may receive
up to 40% of his or her salary dependent
upon performance measured against targets
resulting from the completion of the Group’s
business plan and the performance of the
Group is measured by total shareholder
return compared with the FTSE Small Cap
Index. Following a review by New Bridge
Street Consultants LLP, the Remuneration
Committee has determined that market
practice is to allow executive directors to
receive up to 60% of his or her salary as
bonus but only on achievement of testing
targets. From January 2008, it will be
possible for the executive directors to earn
up to 60% of their salary upon achieving
such targets; however, a percentage of the
bonus earned will be required to purchase
shares in AMS in the marketplace.
Long Term Incentive Plan
All employees, except for participants in the
Long Term Incentive Plan (LTIP), can be
granted options over shares in the company
under the company’s Executive Share Option
Schemes, under which both Enterprise
Management Incentive (EMI) options and
Unapproved options may be granted.
Options granted under these schemes are
not offered at a discount.
The exercising of options under these
schemes is conditional on certain
performance conditions which are pre-
determined by the Remuneration
Committees and which accord with the Joint
Statement from the Investment Committees
of the Association of British Insurers and the
National Association of Pension Funds. Full
details of these are included in note 28 on
page 63.
Following feedback from shareholders,
proposals for the adoption of a LTIP were
introduced as the most appropriate vehicle
for long-term incentivisation for executive
directors and other key employees. The
company’s LTIP was approved by
shareholders on 24 May 2005. Those
individuals who are entitled to awards under
the LTIP are no longer eligible to receive
options under the company’s Executive
Share Option Schemes. Any options issued
to those employed prior to the introduction
of the LTIP will still be exercisable subject
to the relevant performance criteria being
met. The objectives of the LTIP are to align
the interests of executives with those of
shareholders by making a part of
remuneration dependent on the success of
management in delivering superior returns
to shareholders.
Awards under the LTIP are subject to
performance conditions determined by the
Remuneration Committee. Participants may
be awarded shares up to a maximum value
of 150% of their basic annual salary in any
year. The shares will vest three years after
the date of award provided certain
performance conditions are met.
The release of shares to participants will
depend upon growth in AMS’s Total
Shareholder Return (TSR) over a three year
period relative to a comparator group of
companies at the start of the period. TSR is
a measure of the return on an investment in
the company’s shares based on both share
price improvement and dividends. No shares
will be released unless the company’s TSR
performance is ranked at least the median
performing company within the comparator
Group. At this level 30% of the award will
vest at the end of the performance period. If
AMS achieves a ranking in the top quartile
of the comparator group, 100% of the award
will vest. Where the company achieves a
ranking between the median and the top
quartile the amount of the award will be
determined on a straight-line basis. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
25
remuneration report
stockcode: AMS
As with share options granted under the
Company’s share options plans, awards will
not vest if the company is not profitable at
the end of the performance period.
TSR was selected by the Committee to be
the appropriate measure for this plan as it
believes it to be a long-term indication of
financial success and one which is
acceptable to shareholders.
After consultation with New Bridge Street
Consultants LLP the Group believes that any
future LTIP awards should have performance
conditions based on both earnings per share
and TSR.
Deferred Share Bonus Plan
The Company has also set up a Deferred
Share Bonus Plan (the “DSB”) which is
available to all employees. The DSB allows
for the payment of any bonus to be made in
the form of shares. It also allows for the
provision of additional matching shares if
the bonus shares are held for a set period.
DSB encourages employees to acquire
shares in the Company and retain those
shares to receive additional free shares from
the company. It acts as a valuable retention
tool and aligns the employees’ interests with
those of shareholders. The first year that the
DSB operated was 2007. The Company
intends to continue to operate the scheme
in 2008.
Changes to the Rules of the Company’s 
Share Incentive Plans
As a result of the review of the Company’s
Share Option Schemes and LTIPs the
Company has identified that the dilution
effect of these schemes is 8.8%. This
will leave the Company with a 1%
headroom under its current 10% limit. As
the Company grows, both organically and
through acquisition, it will look to hire
some key individuals to help achieve its
growth strategy. The Company is seeking
to increase the dilution limit from 10% to
15% so that it will be in a position to
attract and retain those key people to
drive the business forward. This will
provide the Company with sufficient
headroom for the next five years when
options previously issued will start to fall
outside the 10 year rule.
Additionally, recent legislation has
resulted in some of the rules in our share
incentive plans requiring amendment.
Resolution 4, as described in the
Directors’ Report, seeks shareholder
approval to increase the dilution limit for
all schemes from 10% to 15% and to
amend the rules so that the schemes
meet current legislation.
Pension
Executive directors are entitled to become
members of the Group Pension and Life
Assurance Scheme, which was set up with
effect from 1 February 1999. This covers all
employees and requires a contribution of
3% by the employee and 6% by the Group.
Executive directors may contribute up to
10%, and the Group contributes 10%. The
Pension Plan is a money purchase scheme.
Service agreements
The service agreements for Don Evans, Mary
Tavener and Chris Meredith are terminable
by either party giving not less than 12
months’ notice in writing.
Private healthcare
Executive directors are entitled to private
healthcare and permanent health insurance.
Car
The Company no longer considers it to be
market practice to offer company vehicles to
executive directors. Salaries now include an
amount to cover the cost of a car.
Non-executive directors
The fees of the non-executive directors are
determined by the executive directors. Non-
executive directors receive travel expenses
but do not participate in any incentive
arrangements. The non-executive directors
have entered into terms of appointment. The
non-executive directors’ appointments are
terminable by either party upon 6 months’
notice in writing. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
26
remuneration report continued
Directors’ detailed emoluments
Total Total
Paid to year year
Salary & Annual third ending ending
fees bonus Benefits Pension parties 2007 2006
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive
Don Evans 171 50 15 17 — 253 246
Mary Tavener 124 36 — 12 — 172 161
Chris Meredith 115 34 1 11 — 161 134
Non-executive
Geoffrey Vernon ———— 46 46 46
Steve Harris ———— 27 27 26
Steve Bellamy ———— 25 25 —
410 120 16 40 98 684 613
The opening share price for the year was 13.75p and the closing price on the last trading day of 2007 (31 December) was 25p.
The range during the year was 27.25p (high) and 13.25p (low). (Source: daily official list of the London Stock Exchange.)
Directors’ interests in share options
Unapproved Executive Share Option Scheme: 
Number of Ordinary shares under option
as at lapsed in as at Exercise price Date of
31 Dec 2006 the year 31 Dec 2007 (p) grant
Don Evans 616,666 — 616,666 9.00 15 July 2004
Mary Tavener 300,000 — 300,000 9.00 15 July 2004
These options are exercisable on or after the third anniversary of the date of the grant and will lapse on the tenth anniversary of the date of 
the grant.
Directors’ interests in the Long-Term Incentive Plan (LTIP)
The maximum numbers of shares to be allocated to the directors under the LTIP, in each case for an aggregate consideration of £1, are as
follows:
Market
price
As at As at at date First 
31 December Granted in 31 December of grant vesting
2006 the year 2007 (p) date
Don Evans 1,865,173 — 1,865,173 8.75 1 January 2008
— 1,136,000 1,136,000 16.75 1 January 2010
Mary Tavener 1,348,571 — 1,348,571 8.75 1 January 2008
— 866,000 866,000 16.75 1 January 2010
A Chris Meredith 500,000 — 500,000 8.75 1 January 2008
— 708,000 708,000 16.75 1 January 2010 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
27
remuneration report
stockcode: AMS
The entitlement to shares under the LTIP is subject to achieving the performance conditions referred to on page 23. The figures shown are
maximum entitlements and the actual number of shares (if any) will depend on these performance conditions being achieved. New Bridge
Street Consultants LLP have advised on the TSR performance of the Company’s shares for the LTIPs granted in 2005 and have advised that
AMS’s TSR was in the top quartile of performance against the comparator group and that consequently 100% of the award will vest.
Awards made have no performance retesting facility.
Five Year Share Performance
For the five year period ended 30 March 2008, Advanced Medical Solutions Group plc share price has outperformed the FTSE All Share by
132%, FTSE Techmark by 93.2%, FTSE Health Care by 253.9%, FTSE Small Cap Index by 109% and FTSE AIM by 116.3%.
Mary Tavener
Company Secretary
18 April 2008
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
Share price (p)
Mar-03 Sept-03 Mar-04 Sept-04 Mar-05 Sept-05 Mar-06 Sept-06 Mar-07 Sept-07 Mar-08
AMS FTSE Techmark FTSE All Share
FTSE AIM FTSE Small Cap FTSE Healthcare Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
28
corporate governance
The Board is committed to the principles
of corporate governance and has
continued to apply the Combined Code in
a manner which it considers appropriate
for the size of the Group. In compliance
with the Code, the narrative below
describes how the Group applied the
principles, any details of non-compliance
and the reasons for this.
The Board of Directors
The Board retains full and effective control
of the Group and has a schedule of
matters specifically reserved for its
decision. The Board meets on a formal
basis regularly, and met formally 6 times
in 2007. All of the directors attended all
of the meetings. Prior to each Board
Meeting, directors are sent an agenda
including monthly management accounts
and accompanying reports from the
executive directors. Additionally, the Board
is responsible for formulating the Group’s
corporate strategy, approval of budgets,
monitoring financial performance,
approval and review of major capital
expenditure, corporate governance and risk
management. Operational control is
delegated to the executive directors and
the executive management committee
(EMC). The EMC meets monthly. All
directors have access to the advice and
services of the Company Secretary and can
take independent professional advice, if
necessary, at the Group’s expense. The
non-executive directors are able to contact
the executive directors at any time for
further information.
The Board consists of three executive
directors and three non-executive
directors. Whilst the Board does not meet
the Combined Code requirements, in that
at least half of the Board excluding the
Chairman should comprise non-executive
directors, the Board believes it is
appropriate for the size of the Group. The
Chairman is one of the non-executive
directors and there is a clear division of
responsibility between the Chairman and
Chief Executive. All of the non-executive
directors are considered to be
independent and independent of the
executive management. They are able to
discuss matters without the executive
directors present. The Board formally
evaluates its performance annually. Each
director completes a comprehensive
questionnaire, the results are collated by
the Company Secretary and discussed by
the Board. The Board then acts upon the
findings. Given the size of the Board, the
Board does not have a Senior
Independent Director. All directors are
required to stand for re-election at the
first annual general meeting following
their appointment and, as a minimum,
every three years, thereafter. 
Board Committees
The Board has delegated specific
authority to the Remuneration
Committee, Nominations Committee and
the Audit Committee. The non-executives
are the only members of the
Remuneration and Audit Committees.
The Audit Committee is chaired by
Stephen Bellamy, a chartered accountant,
and met three times in 2007. The
Committee considers the appointment
and fees of the auditors and discusses
the scope of the audit and its findings. It
is also responsible for monitoring the
Group’s accounting policies, assessing
the Group’s internal controls and
reviewing the annual and interim
statements prior to their submission for
approval by the Board. The Committee
has the right of access to the external
auditors without the attendance of the
executive directors, and does so regulary. 
The Audit Committee also undertakes a
formal assessment of the auditor’s
independence which includes:

A review of non-audit services
provided to the Group and related
fees.

Discussion with the auditors of a
written report detailing all
relationships with the company and
any other parties that could affect
independence or the perception of
independence. 

A review of the auditor’s own
procedures for ensuring the
independence of the audit firm and
partners and staff involved in the
audit, including the regular rotation of
the audit partner.

Obtaining written confirmation from
the auditor that, in its professional
judgement, it is independent.

An analysis of the fees payable to the
external audit firm in respect of both
audit and non-audit services during
the year is set out in note 5 of the
financial statements.
The lead external audit partner is rotated
on a five-year basis. For the year ended
31 December 2007 the Committees has
concluded that the external auditor
remains independent and is effective.
The Remuneration Committee comprising
solely of the non-executive directors is
chaired by Steve Harris and, in
consultation with the Chief Executive,
determines the Group’s policy on
executive remuneration, employment
conditions and the individual
remuneration packages of executive
directors and senior management earning
in excess of £50,000 per annum. It
approves all new incentive schemes, the
grants of options under the Group’s Share
Option Schemes, and the grant of shares
under the Group’s Long Term Incentive
Plan (LTIP). The Remuneration
Committee met twice in 2007. Its report
is included on pages 24 to 27.
The Nominations Committee nominates
and recommends the appointment of new
directors to the Board and determines the
Group’s policy on succession planning. 
In making recommendations, the
Committees takes into account the
balance of skill, knowledge and
experience of the Board. The Committee
is chaired by the Chairman of the Group
and comprises the non-executive
directors and the Chief Executive. 
The Nominations Committee met once 
in 2007. 
Investor Relations
The Group maintains a regular dialogue
with its shareholders, mainly in the
periods following the announcement of
the interim and final results, but also at
other times during the year. The views of
shareholders are sought through direct
contact and from feedback from advisors
and are communicated to the Board as a
whole. The Board encourages the
participation of shareholders at its annual
general meeting, notice of which is sent
to shareholders at least 20 working days
before the meeting. The AMS website
‘www.admedsol.com’, which was
redesigned in 2007, is regularly updated
and provides additional information on
the Group including information of the
Group’s products and technology.
The Company proposes separate
resolutions for each issue. The company
ensures all proxy votes are counted and
indicates the level of proxies on each
resolution along with the abstentions
after it has been dealt with on a show of
hands. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
29
corporate governance
stockcode: AMS
Internal Control
The Board is responsible for the Group’s
system of internal control and for
reviewing its effectiveness. In the context
of the Group’s business any such system
can only reasonably be expected to
manage rather than eliminate risks
arising from its operations. It can
therefore only provide reasonable and not
absolute assurance against material loss
or misstatement.
The Combined Code required directors to
review the effectiveness of the Group’s
system of internal control in the wider
sense, encompassing operational and
compliance matters in addition to the
traditional financial issues.
Key features of the internal control
system are as follows:

The Group has an organisational
structure with clearly established
responsibilities and lines of
accountability. The Group promotes
the values of integrity and
professionalism. The members of the
Board are available to hear, in
confidence, any individuals concerns
about improprieties.

The Board has a schedule of matters
expressly reserved for its
consideration. This schedule includes
acquisitions, major capital projects,
treasury, risk management policies
and approval of budgets and health
and safety.

An ongoing risk management process
has been implemented which
identifies the key business risks
facing the Group including both
financial and operational risks.

The controls in place to minimise the
occurrence of the risk are
documented and analysed for
effectiveness. These include
procedures for the approval of major
expenditure or commitment of
resources.

The Board monitors the activities of
the Group through the management
accounts, monthly forecasts and other
reports on current activities and
plans. The executive management
regularly monitors financial and
operational performance in detail and
takes any necessary corrective action.
The Board reviews and continues to
review the effectiveness of the Group’s
procedure in managing risk and,
therefore, believes it meets the
requirements of the Guidance.
The Audit Committee has considered the
need for internal audit. It is of the
opinion that, given the size and nature of
the Group’s operations and the other
controls in place, it would not be
appropriate at the present time. The
matter is formally reviewed at least
annually. The Group does call on the
services of external bodies to review the
controls in certain areas of the Group.
The quality assurance systems are
reviewed by the Group’s notified bodies,
the British Standards Institute (BSI) and
TUV Product Service on a regular basis.
The British Safety Council also reviews
and reports on the Health and Safety
Systems in the Group each year.
Going Concern
The directors are of the opinion that the
Group has adequate resources to
continue in operational existence for the
foreseeable future. For this reason, they
continue to adopt the going concern basis
in preparing the accounts.
Compliance with the Combined Code
During the year ended 31 December
2007, the Group has been in compliance
with the requirements of the Combined
Code, except in the following area:

The Board believes that given its size
and complexity it is not appropriate to
specify a ‘senior’ non-executive
director.

The non-executive directors did not
meet the executive directors without
the Chairman present to appraise his
performance.

The Terms of Reference of the
Nomination, Remuneration and Audit
Commitees are not available on the
Company’s website.
By order of the Board
Mary G Tavener
Company Secretary
18 April 2008 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
30
independent auditor’s report to the
members of Advanced Medical Solutions
Group plc
We have audited the Group and parent
company financial statements on pages
32 to 76.
This report is made solely to the
company’s members, as a body, in
accordance with section 235 of the
Companies Act 1985. Our audit work has
been undertaken so that we might state
to the company’s members those matters
we are required to state to them in an
auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility to
anyone other than the company and the
company’s members, as a body, for our
audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and
auditors
The directors’ responsibilities for
preparing the Annual Report, and the
Group financial statements in accordance
with applicable law and International
Financial Reporting Standards (IFRSs) as
adopted by the European Union (“EU”),
and for preparing the parent company
financial statements in accordance with
applicable law and United Kingdom
Accounting Standards (United Kingdom
Generally Accepted Accounting Practice)
are set out in the Statement of Directors’
Responsibilities. 
Our responsibility is to audit the financial
statements in accordance with relevant
legal and regulatory requirements and
International Standards on Auditing (UK
and Ireland). 
We report to you our opinion as to
whether the financial statements give a
true and fair view and whether the
financial statements have been properly
prepared in accordance with the
Companies Act 1985. We also report to
you whether in our opinion the
information given in the Directors’ Report
is consistent with the financial
statements. 
In addition we report to you if, in our
opinion, the company has not kept proper
accounting records, if we have not
received all the information and
explanations we require for our audit, or if
information specified by law regarding
directors’ remuneration and other
transactions is not disclosed.
We read other information contained in
the Annual Report and consider whether
it is consistent with the audited financial
statements. The other information
comprises only the Highlights, At a
Glance, the Strategy, the Chairman’s
Statement, Chief Executive’s Review,
Financial Review, Board of Directors,
Advisers and Committees, Report of the
Directors, Remuneration Report and
Corporate Governance. We consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the
financial statements. Our responsibilities
do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK and Ireland) issued by the Auditing
Practices Board. An audit includes
examination, on a test basis, of evidence
relevant to the amounts and disclosures
in the financial statements. It also
includes an assessment of the significant
estimates and judgements made by the
directors in the preparation of the
financial statements, and of whether the
accounting policies are appropriate to the
Group’s and company’s circumstances,
consistently applied and adequately
disclosed.
We planned and performed our audit so
as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufficient evidence to give reasonable
assurance that the financial statements
are free from material misstatement,
whether caused by fraud or other
irregularity or error. In forming our
opinion we also evaluated the overall
adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion:

the Group financial statements give a
true and fair view, in accordance with
IFRSs as adopted by the European
Union, of the state of the Group’s
affairs as at 31 December 2007 and
of its profit for the year then ended;

the parent company financial
statements give a true and fair view,
in accordance with United Kingdom
Generally Accepted Accounting
Practice, of the state of the parent
company’s affairs as at 31 December
2007;

the financial statements have been
properly prepared in accordance with
the Companies Act 1985; and

the information given in the Directors’
Report is consistent with the financial
statements. 
Baker Tilly UK Audit LLP
Registered Auditor
Chartered Accountants
Number One Old Hall Street
Liverpool L3 9SX
18 April 2008 financial
statements
32 Consolidated Income Statement
33 Consolidated Balance Sheet
34 Consolidated Statement of Changes in Equity
35 Consolidated Cash Flow Statement
36 Notes Forming Part of the Consolidated Financial Statements
67 Transition to IFRS
73 Company Financial Statements
74 Notes Forming Part of the Financial Statements of the
Company
77 Five Year Summary
78 Notice of Meeting
Advanced Medical Solutions Group plc
Annual Report and Accounts 2006
31
financial statements
stockcode: AMS Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
32
consolidated income statement
For the year ended 31 December 2007
Year ended Year ended
31 December 31 December
2007 2006 
Note £’000 £’000
Revenue 3 16,856 14,322
Cost of sales (9,431) (8,280)
Gross profit 7,425 6,042
Distribution costs (130) (107)
Administration costs (6,158) (5,912)
Profit/(loss) on disposal of property, plant and equipment 3 (11)
Other income 4 512 480
Profit from operations 1,652 492
Finance income 9 282 149
Finance costs 10 (29) (29)
Profit before taxation 1,905 612
Income tax 331 135
Profit for the year attributable to equity holders of the parent 12 2,236 747
Earnings per share
Basic 13 1.57p 0.52p
Diluted 13 1.48p 0.50p
The above results relate to continuing operations. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
33
financial statements
stockcode: AMS
consolidated balance sheet
At 31 December 2007
2007 2006
Note £’000 £’000
Assets
Non-current assets
Acquired intellectual property rights 14 1,566 1,734
Software intangibles 14 45 29
Development costs 14 342 64
Property, plant and equipment 15 2,910 3,094
Deferred tax assets 16 1,421 828
Trade and other receivables 200 200
6,484 5,949
Current assets
Inventories 17 1,726 1,786
Trade and other receivables 18 3,504 3,719
Tax receivable — 17
Investments 6,654 3,950
Cash and cash equivalents 876 602
12,760 10,074
Total assets 19,244 16,023
Liabilities
Current liabilities
Trade and other payables 19 2,909 2,415
Other taxes payable 276 244
Financial liabilities 20 15 14
Obligations under finance leases 5 5
3,205 2,678
Non-current liabilities
Financial liabilities 21 279 295
Obligations under finance leases 21 14 1
293 296
Total liabilities 3,498 2,974
Net assets 15,746 13,049
Equity
Share capital 27 7,157 11,782
Share-based payments reserve 154 60
Investment in own shares (13) —
Share-based payments deferred tax reserve 320 67
Share premium 17 37,978
Other reserve 1,531 1,531
Retained earnings 6,580 (38,369)
Equity attributable to equity holders of the parent 15,746 13,049
The financial statements on pages 32 to 67 were approved by the Board of Directors and authorised for issue on 18 April 2008
and were signed on its behalf by:
Dr D W Evans
Chief Executive Officer
18 April 2008 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
34
consolidated statement of changes in equity
Attributable to equity holders of the Group
Share-
based
Share- payments 
Share based deferred Share Other Retained
capital payments tax premium reserves earnings Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2006 11,782 18 1 37,978 1,531 (39,116) 12,194
Share-based payments — 42 —— —— 42
Share-based payments
— deferred tax —— 66 —— — 66
Consolidated profit for the year to 
31 December 2006 —— ——— 747 747
At 31 December 2006 11,782 60 67 37,978 1,531 (38,369) 13,049
Share-
based
Share- Investment payments
Share based in own deferred Share Other Retained
capital payments shares tax premium reserves earnings Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2007 11,782 60 — 67 37,978 1,531 (38,369) 13,049
Share-based payments — 94 —— ——— 94
Share-based payments
— deferred tax —— — 253 —— — 253
Issue of share capital 34 —— ——— — 34
Share options exercised 19 —— — 17 —— 36
Cancellation of deferred shares (4,678) —— ——— 4,678 —
Cancellation of share 
premium account —— —— (37,978) — 37,978 —
Shares purchased by EBT —— (34) —— —— (34)
Shares sold by EBT —— 21 —— —— 21
Surplus on EBT —— ——— — 57 57
Consolidated profit for the year to 
31 December 2007 —— ——— — 2,236 2,236
At 31 December 2007 7,157 154 (13) 320 17 1,531 6,580 15,746 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
35
financial statements
stockcode: AMS
consolidated cash flow statement
For the year ended 31 December 2007
Year ended Year ended
31 December 31 December 
2007 2006
£’000 £’000
Cash flows from operating activities
Profit from operations 1,652 492
Adjustments for:
Depreciation 686 804
Amortisation — intellectual property rights 168 168
— development costs 16 5
— software intangibles 19 13
(Profit)/loss on sale of non-current assets (3) 11
Decrease/(increase) in inventories 60 (117)
Decrease/(increase) in trade and other receivables 396 (472)
Increase in trade and other payables 603 483
Share-based payments expense 94 42
Net cash inflow from operating activities 3,691 1,429
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment 3 8
Purchase of software (35) (21)
Research and development (294) (69)
Purchases of property, plant and equipment (502) (288)
Taxation 9 78
Investment in money market deposits (2,704) (964)
Interest received 101 74
Net cash used in investing activities (3,422) (1,182)
Cash flows from financing activities
Finance lease (8) (6)
Repayment of secured loan (15) (13)
Issue of equity shares 70 —
Shares purchased by EBT (34) —
Shares sold by EBT 21 —
Interest paid (29) (28)
Net cash from/(used in) financing activities 5 (47)
Net increase in cash and cash equivalents 274 200 
Cash and cash equivalents at the beginning of the year 602 402
Cash and cash equivalents at the end of the year 876 602 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
36
notes forming part of the consolidated financial statements
1. Reporting entity
Advanced Medical Solutions Group plc (“the company”) is a public limited company incorporated and domiciled in England
and Wales (registration number 2867684). The company’s registered address is Road Three, Winsford Industrial Estate,
Winsford, Cheshire, CW7 3PD. 
The company’s ordinary shares are traded on the AIM market of the London Stock Exchange plc. The financial statements of
the company for the twelve months ended 31 December 2007 comprise the company and its subsidiaries (together referred
to as the “Group”).
The Group is primarily involved in the design, development and manufacture of novel high performance polymers (both
natural and synthetic) for use in advanced woundcare dressings and materials and medical adhesives for closing and sealing
tissue, for sale into the global medical device market.
Basis of preparation
In 2007 the Group has adopted International Financial Reporting Standards (IFRSs) as adopted by the EU for the first time. 
The Group has applied IFRS 1 First Time Adoption of International Financial Reporting Standards to provide a starting point
for reporting under IFRS. The Group’s date of transition to IFRS is 1 January 2006 and all comparative information in the
financial statements is restated to reflect the Group’s adoption of IFRS, except where otherwise required or permitted 
under IFRS 1.
The accounting policies set out below have been applied consistently to all periods presented in the financial statements.
They have also been applied in preparing an opening IFRS balance sheet at 1 January 2006 for the purposes of the transition
to IFRSs, as required by IFRS 1. The impact of the transition from UK GAAP to IFRSs on the Group’s income statement and
balance sheet is explained in Note 30.
The financial statements have been prepared on the historical cost basis of accounting except as disclosed in the accounting
policies set out below.
The individual financial statements for each Group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the
results and financial position of each Group company are expressed in pounds sterling, which is the functional currency of
the company, and the presentation currency for the consolidated financial statements.
2. Accounting policies
Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may
differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods affected. 
Classification of leases
The Group utilises assets subject to operating and finance leases. The classification of these leases is based on a number of
factors such as risk and reward, length of use and the fair value of minimum lease payments. Lease classification is made at
the inception of the lease.
Share-based payment
The charge to the income statement in relation to options and incentive plans is based on the Black–Scholes Merton
valuation technique. This technique requires a number of assumptions to be made such as those in relation to share price
volatility, movement in interest rates, dividend yields and staff behavioural patterns. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
37
financial statements
stockcode: AMS
2. Accounting policies continued
Inventory impairment provisions
The Group makes provisions for inventory deemed to be irrecoverable. This provision is established on each individual stock
keeping unit (SKUs) based on the age of the stock, the forward order book, management’s experience and its assessment of the
present value of estimated future cash flows.
Receivables impairment provisions
The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group’s
management based on prior experience and their assessment of the present value of estimated future cash flows.
Deferred tax
A deferred tax asset is recognised when it is judged probable that the Group will generate taxable profits which can be offset
against tax losses.
Transition to IFRSs
An explanation of how the transition to IFRSs has affected the reported financial position, financial performance and cash
flows of the Group is provided in note 30.
IFRS 1 grants certain exemptions from the full requirements of IFRSs in the transition period. The following exemptions have
been taken in these consolidated financial statements:

Business combinations that took place prior to 1 January 2006 have not been revisited under IFRS 3 ‘Business
Combinations’. IFRS 3 has been applied prospectively from the date of transition.

Land and buildings at the date of transition to IFRSs have been measured at fair value. This fair value has been adopted as
deemed cost at the date of transition.

Cumulative translation differences for all foreign operations have been deemed to be zero at 1 January 2006.

IFRS 2 ‘Share-based payment’ has not been applied to share-based payments granted before 7 November 2002 nor those
granted after 7 November 2002 that had vested prior to 1 January 2006.
The Group has adopted IFRS 2 for share options granted after 7 November 2002 which had not vested at 1 January 2006. The
adoption of IFRS 2 has not required numerical adjustments to be made to the balance sheet at 1 January 2006 nor to the
income statement for the year ended 31 December 2006.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and
operating policies of an entity so as to retain benefits from its activities. Subsidiaries are included in the consolidated financial
statements on the basis of both acquisition and merger accounting, from the date that control commences until the date that
control ceases.
Intercompany transactions and balances between Group entities are eliminated upon consolidation.
Goodwill
Goodwill written off to reserves under UK GAAP prior to 1998 of £5,586k has not been reinstated and is not included in
determining any subsequent profit or loss on disposal. 
Revenue recognition
Revenue represents the fair value of sales of the Group’s products to external customers at amounts less value added tax, and
is recognised when the products have been delivered and title has passed. Revenue is recognised to the extent that it is
probable that the economic benefits will flow to the Group and the revenue can be reliably measured. 
Revenue from royalty income receivable under licence agreements from external customers at amounts less value added tax is
recognised as the products under licence are sold and the revenue can be reliably measured.  Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
38
notes forming part of the consolidated financial statements continued
2. Accounting policies continued
Other income
This represents non-refundable upfront licence payments received for the grant of rights for the development and marketing
of products, contributions received to research and development, and other sundry income. The income is recognised in the
income statement, over the life of each development project, in proportion to the stage of completion for each project.
Finance income
Finance income relates to interest earned on cash, cash equivalents and investments. Interest income is accrued on a time
basis, by reference to the principal outstanding and at the effective interest rate applicable.
Finance costs
Finance costs relate to finance payments associated with financial liabilities. They are recognised in the income statement as
they accrue using the effective interest method.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Foreign currencies
The presentation currency for the consolidated financial statements is pounds sterling. 
The financial statements for each of the Group’s subsidiaries are prepared using their functional currency. The functional
currency is the currency of the primary economic environment in which an entity operates.
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate
ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair
value are translated at foreign exchange rates ruling at the date the fair value was determined.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated
at foreign exchange rates ruling at the balance sheet date. The revenue and expenses of foreign operations are translated at an
average rate for the year where this rate approximates to the foreign exchange rates at the dates of the transactions.
Taxation
Taxation expense includes the amount of current income tax payable and the charge for the year in respect of deferred
taxation.
The income tax payable is based on an estimation of the amount due on the taxable profit for the year. Taxable profit is
different from profit before tax as reported in the income statement because it excludes items of income or expenditure which
are not taxable or deductible in the year as a result of either the nature of the item or the fact that it is taxable or deductible
in another period. The Group’s liability for current tax is calculated by using tax rates that have been enacted or substantially
enacted by the balance sheet date.
Deferred tax is accounted for on a basis of temporary differences, except to the extent where it arises from the initial
recognition of goodwill or of an asset or liability in a transaction that is not a business combination. Deferred tax assets are
recognised only to the extent that it is probable that future taxable profits will be available against which temporary
differences can be utilised.
Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to
equity, in which case it is dealt with within equity. It is calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
39
financial statements
stockcode: AMS
2. Accounting policies continued
Intangible assets
Acquired intellectual property rights
Intellectual property rights that are acquired in a business combination are initially recognised at their fair value. Intellectual
property rights purchased outright are initially recognised at cost. Intellectual property rights are capitalised and amortised over
their estimated useful economic lives, usually not exceeding 18 years. In determining the useful economic life each asset is
reviewed separately and consideration given to the period over which the Group expects to derive economic benefit from 
the asset.
Development costs
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge, is recognised
in the income statement as an expense in the period in which it is incurred.
Expenditure on development activities where research findings are applied to a plan or design for the production of new or
substantially improved products and processes is capitalised once it can be demonstrated that the product or process is clearly
identifiable, technically and commercially feasible, will generate future economic benefits, that the development costs of the
asset can be measured reliably and the Group has sufficient resources to complete development. Expenditure capitalised is
stated as the cost of materials, direct labour and an appropriate proportion of overheads less accumulated amortisation.
Where development expenditure results in new or substantially improved products or processes and it is probable that recovery
will take place, it is capitalised and amortised on a straight-line basis over the product’s useful life starting from the date on
which serial production commences which is between one and ten years. Patents and trademarks are measured initially at
purchase cost and are amortised on a straight-line basis over their estimated useful lives which is between three and 
twenty years.
Software intangibles
Where computer software is not integral to an item of property, plant or equipment its costs are capitalised and categorised as
intangible assets. Amortisation is provided on a straight-line basis over its economic useful life which is in the range of three 
to five years.
Property, plant and equipment
Land and buildings and plant and equipment held for use in the production of goods and services or for administrative
purposes are carried in the balance sheet at cost less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
The Group has elected to use the fair value as the deemed cost in respect of land and buildings at the date of transition to
IFRS. Fair value has been calculated by reference to their existing use at the date of transition.
Depreciation is provided to write off the cost, less estimated residual values, of all property, plant and equipment, over the
expected useful life of the asset from the date that the asset is brought into use. It is calculated at the following rates:

Freehold property — 4% per annum on cost

Leasehold improvements — over the length of the lease

Plant and machinery — 6.67% to 33.3% per annum on cost

Fixtures and fittings — 33.3% per annum on cost

Motor vehicles — 25% per annum on cost
No depreciation is provided on freehold land. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
40
notes forming part of the consolidated financial statements continued
2. Accounting policies continued
Impairment
The carrying amount of the Group’s assets, other than inventories and deferred tax assets, is reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in
the unit on a pro rata basis. A cash generating unit is the smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets or groups of assets.
Calculation of recoverable amount
The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value of estimated
future cash flows. As the Group’s receivables are of short duration they are not discounted.
Reversal of impairment
An impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in recoverable
amount can be related objectively to an event occurring after the impairment loss was recognised.
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer
exist and there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Inventory
Inventory is valued at the lower of cost or net realisable value. Cost is calculated as follows;
Raw materials — cost of purchase on first in, first out basis
Work in progress and finished goods — cost of raw materials and labour and attributable overheads
Net realisable value is based on estimated selling price less further costs to completion and disposal.
The Group makes provision for inventory deemed to be irrecoverable or where the net realisable value is lower than cost. This
provision is established on a stock keeping unit (SKU) basis by reference to the age of the stock, the forward order book and
management’s experience.
Financial Instruments
Classification of financial instruments
Financial instruments are classified as financial assets, financial liabilities or equity instruments.
Following the adoption of IAS 32 ‘Financial Instruments: Presentation’, financial instruments issued by the Group are treated
as equity only to the extent that they meet the following two conditions.

They include no contractual obligations upon the Group to deliver cash or other financial assets that are potentially
unfavourable to the Group. 

Where the instrument will or may be settled in the Group’s own equity instruments, it is either a non-derivative that
includes no obligation to deliver a variable number of the Group’s own equity instruments or is a derivative that will be
settled by the Group exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity
instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability.  Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
41
financial statements
stockcode: AMS
2. Accounting policies continued
Recognition and valuation of financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and cash deposits and amounts under short-term guarantees usually three
months or less that are held for the purpose of meeting short-term cash commitments and are subject to insignificant risk in
change in value which are readily convertible to a known amount of cash. 
Investments
Cash held in accounts with more than 90 days’ notice that are not required to meet short-term cash commitments are shown as
an investment. The Group invests funds which are surplus to requirements in fixed rate deposits operating within parameters
for credit ratings and credit limits for individual institutions that are approved and monitored by the Board.
Under IAS 39 ‘Financial instruments: recognition and measurement’, such investments are classified as loans and receivables
and are recognised at fair value on initial recognition and subsequently measured at amortised cost using the effective interest
method.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. An
impairment is made when it is likely that the balance will not be recovered in full. The recoverable amount is calculated as the
present value of estimated future cash flows. Estimated future cash flows are not discounted due to the relatively short period
of time between recognition of trade receivables and receipt of cash.
Recognition and valuation of equity instruments
Equity instruments are stated at par value. Premiums on issue are taken to a share premium reserve.
Ordinary share capital
Equity instruments are recorded initially at fair value. For ordinary share capital, the par value is recognised in share capital
and the premium in the share premium reserve.
Recognition and valuation of financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Trade payables
Trade payables are initially recognised at fair value and are subsequently recognised at amortised cost using the effective
interest method.
Other loans
Other loans are initially recognised at fair value and are subsequently recognised at amortised cost.
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership
to the Group. All other leases are classified as operating leases.
Assets held as finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the
minimum lease payments during the lease term at the inception of the lease. Lease payments are apportioned between the
reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest in the
remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life
of the assets and the lease term.
Assets leased under operating leases are not recorded on the balance sheet. Rental payments are charged directly to the
income statement. Lease incentives, primarily upfront cash payments or rent-free periods, are capitalised and spread over the
period of the lease term. Payments made to acquire operating leases are treated as prepaid lease expenses and amortised over
the life of the lease. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
42
notes forming part of the consolidated financial statements continued
2. Accounting policies continued
Pensions
The Group operates a money purchase pension scheme. The assets of the scheme are held separately from those of the Group
in an independently administered fund. The amount charged against the income statement represents the contributions
payable to the scheme in respect of the accounting period.
Share-based payment transactions
The Group has applied the requirements of IFRS 2 Share-based payments. IFRS has been applied to all options granted after
7 November 2002 that were unvested as of 1 January 2006.
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are
measured at fair value at the date of grant. The fair value as determined at the grant date of equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of options that will
eventually vest.
Fair value is measured by use of a Black-Scholes Merton model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effect of non-transferability, exercise restrictions and behavioural
considerations.
Share-based payments relate to employees of the subsidiaries and as such are recharged to the subsidiaries’ accounts.
Capital management
For the years ended 31 December 2006 and 31 December 2007, the Group has had net funds with minimal borrowings.
Capital is managed by maximising retained profits. Working capital is managed in order to generate maximum conversion of
these profits into cash and cash equivalents thereby maintaining capital. The share capital of the Group has increased as
noted above.
Capital includes share capital, share premium, investment in own shares, share-based payments reserve, share-based
payments deferred tax reserve, other reserve and retained earnings reserve. There are no externally imposed capital
requirements on the Group.
Cash flow
Cash and cash equivalents comprise cash at banks and in hand and short-term deposits with an original maturity of three
months or less that are held for the purpose of meeting short-term cash commitments and are subject to insignificant risk in
change in value. Cash held in accounts with more than 90 days’ notice that are not required to meet short-term cash
commitments are shown as an investment.
Employee benefit trusts
The Group operates an Employee Benefit Trust (EBT): ‘Advanced Medical Solutions Group plc UK Employee Benefit Trust’.
The Group has de facto control of the assets, liabilities and shares held by the Trust and bear their benefits and risks. The
Group records certain assets and liabilities of the Trust as its own.
In compliance with Standing Interpretations Committee 12 (SIC 12) ‘Consolidation — Special Purpose Entities’, Group
shares held by the EBT are included in the consolidated balance sheet as a reduction in equity. Gains and losses on Group
shares are recognised directly in reserves. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
43
financial statements
stockcode: AMS
2. Accounting policies continued
IFRSs adopted early
The Group has elected to adopt the following in advance of its effective dates.
IFRS 8 operating segments — effective for accounting periods beginning on or after 1 January 2009.
IFRS 8 is a disclosure standard which has resulted in a redesignation of the Group’s reportable segments (see note 3), but has
had no impact on the reported results or financial position of the Group. 
IFRSs not yet effective and not adopted early
The following IFRSs have been issued but have not been adopted by the Group in these financial statements as they are not yet
effective:

IFRIC 11 ‘IFRS 2 — Group and treasury share transactions’ gives guidance on the accounting treatment of share-based
payment within a group and is effective for periods beginning on or after 1 March 2007. As the adoption will require intra-
Group transfers which will be eliminated on consolidation, there will be no effect on the results or net assets of the Group.

IFRIC 12 ‘Service concession arrangements’ gives guidance on the accounting treatment relating to service arrangements 
over public infrastructures and is effective for periods beginning on or after 1 January 2008. As the Group does not enter 
into such arrangements, the adoption will have no impact upon the results or net assets of the Group.

IFRIC 13 ‘Customer loyalty programmes’ give guidance on the treatment of the grant of award credits under a customer
loyalty programme and is effective for periods beginning on or after 1 July 2008. As the Group does not operate such
schemes, the adoption will have no impact upon the results or net assets of the Group.

IFRIC 14 ‘IAS 19 — the limit on a defined benefit asset, minimum funding requirements and their interaction’ gives 
guidance on accounting for a pension surplus and is effective for periods beginning on or after 1 January 2008. As the 
Group does not have a pension surplus, the adoption will have no impact upon the results or net assets of the Group.

IAS 1 ‘Presentation of financial statements’ — Revision. This revision aims to assist users in their ability to analyse and
compare the information given in the financial statements. Changes include changes to titles of some of the financial
statements and changes to the components of financial statements. The revision is effective for periods commencing on or
after 1 January 2009.

IAS 23 ‘Borrowing costs’ — Revision. This revision eliminates the option to expense borrowing costs to the income statement
as incurred and is effective for periods commencing on or after 1 January 2009. As the Group does not have any borrowings
the adoption of this standard is not anticipated to have an impact.

IAS 27 ‘Consolidated and separate financial statements’ — Revision. The revision is part of the second phase of the business
combinations project between the International Accounting Standards Board and the US Financial Accounting Standards
Board. The main amendments relate to the accounting for minority interests and the loss of control of a subsidiary. The
revision is effective for periods commencing on or after 1 July 2009. The directors do not believe the adoption of this revision
will have a significant impact on the business. 

IAS 32 ‘Financial Instruments: Presentation’ — Revision. The revision requires certain puttable financial instruments and
certain financial instruments that impose an obligation on the entity to deliver a pro rata share of the net assets of the entity
on liquidation to be classified as equity. The revision is effective for periods commencing on or after 1 January 2009. The
directors do not believe the adoption of this revision will have a significant impact on the business. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
44
notes forming part of the consolidated financial statements continued
2. Accounting policies continued

IFRS 3 ‘Business combinations’ — Revision. The revision is part of the second phase of the business combinations
project between the International Accounting Standards Board and the US Financial Accounting Standards Board. The
main changes include the scope, accounting for acquisition costs and post acquisition changes to contingent
consideration, accounting for goodwill and accounting for business combinations achieved in stages. There is additional
guidance on recognition and measurement of fair values and on determining what is part of the business combination
transaction. There are also a number of changes to disclosure requirements. The revision is effective for periods
commencing on or after 1 July 2009. The directors will consider the requirements of the revision on any future business
acquisitions. 

Amendment to IFRS 2 — Share-based payment vesting conditions and cancellations. The guidance provides more
information on the amendment to the guidance regarding cancellation, amendment to the definition of ‘vest’ and ‘vesting
conditions’ and clarification of the accounting treatment of non-vesting conditions. An entity shall apply these
amendments respectively in annual periods commencing on or after 1 January 2009. Earlier application is permitted as
long as the entity discloses the fact.
3. Segment information
For management purposes, the Group is organised into two business units, advanced woundcare and wound closure and
sealants. These divisions are the basis on which the Group reports its segment information.
Intersegment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly investments, and related revenue, corporate assets, head office
expenses and income tax assets.
Business segments
The principal activities of the advanced woundcare business unit are the research, development, manufacture and
distribution of novel, high performance polymers for use as wound dressings.
The principal activities of the wound closure and sealants business unit is the research, development, manufacture and
distribution of medical adhesives and products for closing and sealing tissue.
Segment information about these businesses is presented below. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
45
financial statements
stockcode: AMS
3. Segment information continued
Advanced Wound closure 
woundcare & sealants Eliminations Consolidated
year ended year ended year ended year ended
31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007
2007 £’000 £’000 £’000 £’000
Revenue
External sales 12,799 4,057 — 16,856
Inter-segment sales 28 — (28) —
Total revenue 12,827 4,057 (28) 16,856
Inter-segment sales are charged at 
prevailing market prices.
Result
Segment result 1,363 715 — 2,078
Unallocated expenses (426)
Profit from operations 1,652
Finance income 282
Finance costs (29)
Profit before tax 1,905
Tax 331
Profit for the year 2,236
Advanced Wound closure 
woundcare & sealants Eliminations Consolidated
year ended year ended year ended year ended
31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007
Other information £’000 £’000 £’000 £’000
Capital additions:
Software intangibles 33 2— 35
Research and development 187 107 — 294
Property, plant and equipment 335 167 — 502
Depreciation and amortisation 645 244 — 889
Balance sheet
Assets
Segment assets 7,084 4,377 — 11,461
Unallocated assets 7,783
Consolidated total assets 19,244
Liabilities
Segment liabilities 2,213 1,061 — 3,274
Unallocated liabilities 224
Consolidated total liabilities 3,498 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
46
notes forming part of the consolidated financial statements continued
3. Segment information continued
Advanced Wound closure 
woundcare & sealants Eliminations Consolidated
year ended year ended year ended year ended
31 Dec 2006 31 Dec 2006 31 Dec 2006 31 Dec 2006
2006 £’000 £’000 £’000 £’000
Revenue
External sales 11,445 2,877 — 14,322
Inter-segment sales 9— (9) —
Total revenue 11,454 2,877 (9) 14,322
Inter-segment sales are charged at prevailing market prices.
Result
Segment result 805 28 — 833
Unallocated expenses (341)
Profit from operations 492
Finance income 149
Finance costs (29)
Profit before tax 612
Tax 135
Profit for the year 747
Advanced Wound closure 
woundcare & sealants Eliminations Consolidated
year ended year ended year ended year ended 
2006 31 Dec 2006 31 Dec 2006 31 Dec 2006 31 Dec 2006 
Other information £’000 £’000 £’000 £’000
Capital additions;
Software intangibles 18 3— 21
Research and development 24 45 — 69
Property, plant and equipment 243 45 — 288
Depreciation and amortisation 749 240 — 989
Balance sheet
Assets
Segment assets 7,090 4,594 — 11,684
Unallocated assets 4,339
Consolidated total assets 16,023
Liabilities
Segment liabilities 2,067 820 — 2,887
Unallocated liabilities 87
Consolidated total liabilities 2,974 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
47
financial statements
stockcode: AMS
3. Segment information continued
Geographical segments
The advanced woundcare and wound closure and sealants segments operate mainly in the UK, with a sales office located in the
USA. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location
of customers. Segment assets are based on the geographical location of the assets.
The following table provides an analysis of the Group’s sales by geographical market, irrespective of the origin of the
goods/services based upon location of the Group’s customers:
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
United Kingdom 5,731 4,524
Europe excluding United Kingdom 6,686 5,600
United States of America 4,217 3,480
Rest of World 222 718
16,856 14,322
All assets are classified as under the United Kingdom due to the immateriality of the carrying value of all assets held in the
United States of America.
4. Other income
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Development fees 512 456
Other — 24
512 480 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
48
notes forming part of the consolidated financial statements continued
5. Profit from operations
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Profit from operations is arrived at after charging/(crediting):
Profit/loss on sale of non-current assets (3) 11
Depreciation of property, plant and equipment 686 804
Amortisation of:
— acquired intellectual property rights 168 168
— software intangibles 19 13
— development costs 16 5
Operating lease rentals — plant and machinery 90 90
— land and buildings 294 294
Research and development costs expensed to the income statement 784 909
Net foreign exchange (gains)/losses (36) 105
Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
Amounts payable to Baker Tilly UK Audit LLP and their associates (2006: Baker Tilly and their associates) in respect of both
audit and non-audit services:
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Audit services
— Statutory audit of parent and consolidated financial statements 21 10
— Statutory audit of subsidiary companies 30 28
Tax services
— Compliance services 6 8
— Advisory services 48 4
Other services
— Other costs 6 11
111 61
6. Employees
The average monthly number of employees of the Group during the year, including executive directors, was as follows:
Year ended Year ended
31 December 2007 31 December 2006
Number Number
Production 117 109
Research and development 16 15
Sales and marketing 26 26
Administration 20 20
179 170
Sales and marketing includes 1 person (2006: 1) employed in the United States. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
49
financial statements
stockcode: AMS
6. Employees continued
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Staff costs for all employees, including executive directors, consists of:
Wages and salaries 5,115 4,734
Social Security costs 491 461
Pension costs 200 194
Share-based payments (see note 28) 94 60
5,900 5,449
7. Directors’ emoluments
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Remuneration for management services 546 503
Pension 40 38
Amounts paid to third parties 98 72
684 613
Retirement benefits are accruing to the following number of directors under 
money purchase schemes 3 3
8. Key management
The key management of the Group comprises the executive directors of the Group together with senior members of the
management team. Their aggregate compensation is shown below:
Key management compensation
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Salaries and short-term employee benefits 821 754
Pension 54 51
875 805
Directors
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Salaries and short-term employee benefits 546 503
Pension 40 38
586 541 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
50
notes forming part of the consolidated financial statements continued
8. Key management continued
Highest paid director 
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Salaries and short-term employee benefits 236 230
Pension 17 16
253 246
9. Finance income
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Bank interest 274 143
Rent deposit interest 8 6
282 149
10. Finance costs
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Finance leases 2 1
Other loan interest 27 27
Bank interest — 1
29 29 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
51
financial statements
stockcode: AMS
11. Taxation 
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
a) Analysis of credit for the year
Current tax:
UK corporation tax — 17
Capital gains tax (9) —
Adjustment in respect of previous period — 3
Deferred tax 340 115
Taxation 331 135
b) Factors affecting tax credit for the year
The tax assessed for the year is lower than the standard rate of corporation tax in the 
UK (30%) as explained below:
Profit before taxation 1,905 612
Profit multiplied by the standard rate of corporation tax in the UK of 30% (2006: 30%) 
as explained below: 572 184
Effects of:
Expenses not deductible for tax purposes 207 19
Discounts allowed — (34)
Depreciation for period less than capital allowances (68) (33)
Profit on disposal of property, plant and equipment (1) —
Expensive leased cars disallowed costs 6 3
Trading losses carried forward 17 —
Trading losses utilised (733) (139)
Research and development relief — (17)
Capital gains tax 9 —
Adjustment in respect of previous period — (3)
Deferred taxation (340) (115)
Taxation (331) (135)
12. Retained profit for the financial year
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Profit dealt with in the accounts of the parent company 399 361
Profit retained by subsidiary undertakings 2,014 715
Consolidation adjustment (445) (329)
IFRS adjustment 268 —
2,236 747 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
52
notes forming part of the consolidated financial statements continued
13. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Year ended Year ended
31 December 2007 31 December 2006
£’000 £’000
Earnings for the purposes of basic and diluted earnings per share being net 
profit attributable to equity holders of the parent 2,236 747
Year ended Year ended
31 December 2007 31 December 2006
Number of shares £’000 £’000
Weighted average number of ordinary shares for the purposes of
basic earnings per share 142,535 142,083
Effect of dilutive potential ordinary shares:
share options, deferred share bonus, LTIPs 8,684 4,031
Weighted average number of ordinary shares for the purposes of 
diluted earnings per share 151,219 146,114
14. Acquired intellectual property rights, software intangibles and development costs
Acquired
intellectual Software Development
property rights intangibles costs
2007 £’000 £’000 £’000
Cost
At beginning of year 2,518 123 69
Additions — 35 294
At end of year 2,518 158 363
Amortisation
At beginning of year 784 94 5
Charged in the year 168 19 16
At end of year 952 113 21
Net book value
At 31 December 2007 1,566 45 342
At 31 December 2006 1,734 29 64 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
53
financial statements
stockcode: AMS
14. Acquired intellectual property rights, software intangibles and development costs continued
Acquired
intellectual Software Development
property rights intangibles costs
2006 £’000 £’000 £’000
Cost
At beginning of year 2,518 102 —
Additions 21 69
At end of year 2,518 123 69
Amortisation
At beginning of year 616 81 —
Charged in the year 168 13 5
At end of year 784 94 5
Net book value
At 31 December 2006 1,734 29 64
At 31 December 2005 1,902 18 —
15. Property, plant and equipment
Freehold land, Short Fixtures
property and leasehold Plant and and Motor
improvements improvements machinery fittings vehicles Total
2007 £’000 £’000 £’000 £’000 £’000 £’000
Cost
At beginning of year 1,055 450 8,691 150 44 10,390
Additions —— 478 24 — 502
Disposals — (49) — (49)
At end of year 1,055 450 9,120 174 44 10,843
Depreciation
At beginning of year 8 403 6,696 145 44 7,296
Provided for the year 4 22 657 3— 686
Disposals —— (49) — (49)
At end of year 12 425 7,304 148 44 7,933
Net book value
At 31 December 2007 1,043 25 1,816 26 — 2,910
At 31 December 2006 1,047 47 1,995 5— 3,094 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
54
notes forming part of the consolidated financial statements continued
15. Property, plant and equipment continued
Freehold land, Short Fixtures
property and leasehold Plant and and Motor
improvements improvements machinery fittings vehicles Total
2006 £’000 £’000 £’000 £’000 £’000 £’000
Cost
At beginning of year 1,055 1,135 7,476 528 44 10,238
Transfers — (685) 1,063 (378) ——
Additions —— 288 —— 288
Disposals —— (136) —— (136)
At end of year 1,055 450 8,691 150 44 10,390
Depreciation
At beginning of year 4 653 5,458 451 44 6,610
Transfers — (269) 590 (321) ——
Provided for the year 4 19 765 15 — 803
Disposals —— (117) —— (117)
At end of year 8 403 6,696 145 44 7,296
Net book value
At 31 December 2006 1,047 47 1,995 5— 3,094
At 31 December 2005 805 482 2,039 77 — 3,403
The net book value of property, plant and equipment includes £nil of motor vehicles (2006: £nil) and £68k of plant and
machinery (2006: £103k) held under finance leases. The related depreciation charge for the year was £nil for motor 
vehicles (2006: £nil) and £38k for plant and machinery (2006: £38k).
16. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the
current and prior reporting period.
Revaluation Share-based
of building payment Tax losses Total
£’000 £’000 £’000 £’000
At 1 January 2006 (74) 1 720 647
Charge to income — 18 97 115
Charge to equity — 66 — 66
At 31 December 2006 (74) 85 817 828
Charge to income — 25 315 340
Charge to equity — 253 — 253
As 31 December 2007 (74) 363 1,132 1,421
Maturity of the deferred tax asset is as follows:
2007 2006
£’000 £’000
Less than one year 467 107
Greater than one year 954 721
1,421 828 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
55
financial statements
stockcode: AMS
16. Deferred tax continued
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset)
for financial reporting purposes:
2007 2006
£’000 £’000
Deferred tax liabilities (74) (74)
Deferred tax assets 1,495 902
1,421 828
At the balance sheet date, the Group has unused tax losses of £9.1 million (2006: £9.4 million) available for offset against
future profits. A deferred tax asset has been recognised in respect of £1.4 million (2006: £0.8 million) of such losses. 
17. Inventories
2007 2006
£’000 £’000
Raw materials 769 652
Work in progress 483 500
Finished goods 474 634
1,726 1,786
There is no material difference between the replacement cost of stock and the amount at which it is stated in the financial
statements. 
Included above are raw materials of £nil (2006: £nil) work in progress of £nil (2006: £nil) and finished goods of £nil (2006:
£2k) carried at net realisable value.
2007 2006
£’000 £’000
Total gross inventories 2,136 2,270
Inventory impairment (410) (484)
Net inventory 1,726 1,786
2007 2006
Inventory impairment: £’000 £’000
At beginning of year (484) (322)
Income statement charge (194) (271)
Provision released 38 —
Provision utilised 230 109
At end of year (410) (484) Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
56
notes forming part of the consolidated financial statements continued
18. Trade and other receivables
2007 2006
£’000 £’000
Due within one year
Trade receivables 2,601 3,023
Other receivables 393 359
Prepayments and accrued income 510 337
3,504 3,719
Trade and other receivables
2007 2006
£’000 £’000
Amount receivable for the sale of goods 3,515 3,763
Provision for impairment (11) (44)
3,504 3,719
The average credit period taken on sales of goods is 52 days. 
Before accepting any new customer, the Group assesses the potential customer’s credit quality and defines credit limits by
customer. Limits are reviewed on an ongoing basis and reflect current payment history.
2007 2006
Ageing of overdue but not impaired receivables £’000 £’000
31–60 days overdue 242 119
61–90 days overdue 40 277
Over 91 days overdue — —
Total 282 396
2007 2006
Movement in provision for impairment £’000 £’000
Balance at the beginning of the year 44 41
Impairment losses recognised 8 3
Amounts written off as uncollectable (41) —
Amounts recovered during the year — —
Balance at the end of the year 11 44
In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due
to the Group’s large and unrelated customer base. Accordingly, the directors believe that there is no further credit provision
required in excess of the allowance for impairments. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
57
financial statements
stockcode: AMS
18. Trade and other receivables continued
Analysis of customers
% of total
Revenue revenue
31 December 2007 £’000 %
Customers accounting for more than 10% of revenue
— Customer 1 2,669 15.8
— Customer 2 1,862 11.0
% of total
Revenue revenue
31 December 2006 £’000 %
Customers accounting for more than 10% of revenue
— Customer 1 2,258 15.8
— Customer 2 1,487 10.4
— Customer 3 1,838 12.8
2007 2006
Ageing of impaired trade receivables £’000 £’000
31–60 days overdue — —
61–90 days overdue — —
Over 90 days overdue 11 44
Total 11 44
19. Trade and other payables
2007 2006
£’000 £’000
Trade payables 1,466 1,519
Other payables 230 78
Accruals and deferred income 1,213 818
2,909 2,415 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
58
notes forming part of the consolidated financial statements continued
20. Current financial liabilities
2007 2006
£’000 £’000
Other loans 15 14
15 14
21. Non-current financial liabilities
2007 2006
£’000 £’000
Obligations under finance leases 14 1
Other loans 279 295
293 296
22. Analysis of borrowings
The maturity by currency of finance leases and other loans is given below:
Other loans
See note 23.
The loan is secured by a fixed charge on the freehold property. It is repayable in monthly instalments and interest is payable
at 8
1
/2% fixed rate.
23. Financial instruments
All financial instruments held by the Group, as detailed in this note, are classified as “Loans and Receivables” (trade and
other receivables, cash and cash equivalents), “Held to maturity investments” (short-term investments) and “Financial
Liabilities Measured at Amortised Cost” (trade and other payables) under IAS 39 ‘Financial Instruments: Recognition and
Measurement’ and finance leases under IAS 17 ‘Leases’.
Pages 16 and 17 of the Financial Review provide an explanation of the financial risks faced by the Group and the objectives
and policies for managing those risks. The information below deals with the financial assets and liabilities.  Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
59
financial statements
stockcode: AMS
23. Financial instruments continued
(a) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities, of which other loans and finance lease obligations are at fixed rates and
denominated in sterling, is as follows:
On demand Between Between Five Total Total
or within one and two and years medium/ financial Interest
one year two years five years or more long-term liabilities rate
2007 £’000 £’000 £’000 £’000 £’000 £’000 %
Other loans 15 17 59 203 279 294 8.5
Finance lease creditors 559 — 14 19 13.7
At 31 December 2007 20 22 68 203 293 313 —
On demand Between Between Five Total Total
or within one and two and years medium/ financial Interest
one year two years five years or more long-term liabilities rate
2006 £’000 £’000 £’000 £’000 £’000 £’000 %
Other loans 14 15 55 225 295 309 8.5
Finance lease creditors 51 — —16 15.5
At 31 December 2006 19 16 55 225 296 315 —
2007 2006
Financial liabilities Financial liabilities
Fixed rate on which no Fixed rate on which no
financial liabilities interest is paid financial liabilities interest is paid
Weighted Weighted
Weighted average Weighted average
average period period until average period period until
for which rate is fixed maturity for which rate is fixed maturity
Years Years Years Years
Other loans 12 — 13 —
Finance lease creditors 4— 1—
(b) Interest rate and currency of financial assets
The currency and interest rate profile of the financial assets of the Group is as follows:
Investments and cash and cash equivalents
Fixed rate
weighted
Non-interest average
Total Floating Fixed bearing interest rate
£’000 £’000 £’000 £’000 %
Currency
Sterling 7,425 642 6,783 — 6.1
US dollar 74 —— 74 —
Euro 31 —— 31 —
At 31 December 2007 7,530 642 6,783 105 6.1 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
60
notes forming part of the consolidated financial statements continued
23. Financial instruments continued
Fixed rate
weighted
Non-interest average
Total Floating Fixed bearing interest rate
£’000 £’000 £’000 £’000 %
Currency
Sterling 4,422 472 3,950 — 5.0
US dollar 30 —— 30 —
Euro 100 —— 100 —
At 31 December 2006 4,552 472 3,950 130 5.0
The floating rate financial assets comprise bank deposits bearing interest at commercial rates.
Receivables
The directors consider that the carrying amount of trade and other receivables approximates to their fair value.
2007 2006
£’000 £’000
Sterling 2,557 2,329
Euro 76 113
US dollar 871 1,277
3,504 3,719
Wherever possible, sales contracts with customers include clauses which provide for interest to be charged on overdue
receivables. In practice, interest is not charged unless the Group is involved in litigation to collect an outstanding receivable.
The financial assets all mature within one year.
(c) Currency exposures
At 31 December 2007 the Group had unhedged US dollar currency exposures of £nil (2006: £nil) and unhedged euro
currency exposures of £33k (2006: £175k)
Risk Sensitivity
The majority of the Group’s revenues are in sterling. However, increasingly, the Group has an exposure to the US dollar as an
increasing amount of revenue is generated by sales to the US. In 2007, the Group had revenue of £2.4 million denominated
in US dollars, if the dollar had depreciated by a further 10% on average over the period, revenue and equity would have
been negatively impacted by £0.2 million and gross margin reduced by 1%. It is the policy of the Group to enter into forward
foreign exchange contracts to cover the anticipated sales out to twelve months within 50% to 80% of the exposure
generated.
If all material prices increased by 5% and the Group was unable to pass on the increase, the Group estimates that this would
have had a negative impact of £0.2 million and gross margin would be reduced by 1%.
The Group is able to mitigate its exposure to the euro by sourcing raw materials from Europe. Consequently the Group’s
sensitivity to the euro is not material. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
61
financial statements
stockcode: AMS
24. Obligations under finance leases
Minimum lease payments Present value of lease payments
Year ended Year ended Year ended Year ended
31 December 2007 31 December 2006 31 December 2007 31 December 2006
£’000 £’000 £’000 £’000
Amounts payable under finance leases:
Within one year 5 5 5 5
In the second to fifth years 14 1 14 1
Inclusive
After five years
Less: future finance charges — —
Present value of lease obligations 19 6 19 6
Less: Amount due for settlement within
12 months (shown under current 
financial liabilities) 5 5 5 5
Amount due for settlement after 12 months 14 1 14 1
It is the Group’s policy to lease certain of its fixtures and equipment under finance leases. The average lease term is 3 years. For the year
ended 31 December 2007, the average effective borrowing rate was 13.7% (2006: 15.5%). Interest rates are fixed at the contract date. 
All lease obligations are denominated in sterling.
The fair value of the Group’s lease obligations approximates their carrying amount.
25. Fair value of financial assets and liabilities
The comparison of book and fair value of all the Group’s financial assets and liabilities at the year end is set out below:
2007 2006
Book value Fair value Book value Fair value
£’000 £’000 £’000 £’000
Investments 6,654 6,654 3,950 3,950
Cash and cash equivalents 876 854 602 602
Trade and other receivables 3,504 3,508 3,719 3,719
Trade and other payables 2,909 2,898 2,415 2,415
Current financial liabilities 15 15 14 14
Non-current financial liabilities 279 279 295 295
The directors consider that the fair values of the Group’s financial instruments do not differ significantly from their book values.
26. Foreign exchange rates
Average rate Closing rate Percentage change
2007 2006 2007 2006 Average Closing
%%
Currency
US dollar 2.000 1.843 1.990 1.957 8.5 1.7
Euro 1.462 1.467 1.362 1.484 (0.3) (8.2) Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
62
notes forming part of the consolidated financial statements continued
27. Share capital
Number of ordinary shares of 5p each
Allotted, called up
Authorised and fully paid
£‘000 £‘000
At 1 January 2006 206,447 142,083
At 31 December 2006 206,447 142,083
New issues in the year — 683
Share options exercised — 375
At 31 December 2007 206,447 143,141
The following share movements occurred during the year:
During the year, employees exercised share options of 375k shares at a range of option prices from 9p to 12p. On 12 April
2007 683k shares were issued under the Deferred Share Bonus Plan at the nominal value of 5p per share. 249k (£13k) of
shares are retained by the Trust to meet the matching requirements of the Plan.
Number of deferred shares of 5p each
Allotted, called up
Authorised and fully paid
£’000 £’000
At 1 January 2006 93,553 93,553
At 31 December 2006 93,553 93,553
Shares cancellation — capital reconstruction (93,553) (93,553)
At 31 December 2007 ——
The following share movements occurred during the year:
Value of ordinary shares of 5p each
Allotted, called up
Authorised and fully paid
£’000 £’000
At 1 January 2006 10,322 7,104
At 31 December 2006 10,322 7,104
New issues in the year — 34
Share options exercised — 19
At 31 December 2007 10,322 7,157
Value of deferred shares of 5p each
Allotted, called up
Authorised and fully paid
£’000 £’000
At 1 January 2006 4,678 4,678
At 31 December 2006 4,678 4,678
Share cancellation — capital reconstruction (4,678) (4,678)
At 31 December 2007 —— Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
63
financial statements
stockcode: AMS
28. Share-based payment transactions
The charge for share-based payments transaction under IFRS 2 arises across the following schemes: 
2007 2006
£’000 £’000
Unapproved Executive Share Option Scheme 1 2
Enterprise Management Incentive Scheme 21 18
Long Term Incentive Plan 54 26
Deferred Share Bonus Scheme 18 —
94 42
Unapproved Executive Share Option Scheme and Enterprise Management Incentive Scheme.
The fair value of the executive options is calculated based on a Black–Scholes Merton model assuming the inputs below:
Grant Date 14/4/03 7/10/03 7/4/04 15/7/04 16/7/04 16/9/04
Share price at grant date 8.75p 11.5p 10p 9p 9p 9p
Exercise price 8.75p 11.5p 10p 9p 9p 9p
Expected life 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs
Contractual life 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs
Risk-free rate 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
Expected volatility 30% 30% 30% 30% 30% 30%
Expected dividend yield 0% 0% 0% 0% 0% 0%
Fair value of options 1p 2p 1p 1p 1p 1p
Grant Date 21/3/05 12/9/05 15/3/06 6/4/06 21/9/06 12/04/07 26/09/07
Share price at grant date 10.2p 9.25p 10.75p 10.75p 11.25p 16.75p 26.75p
Exercise price 10.2p 9.25p 10.75p 10.75p 11.25p 16.75p 26.75p
Expected life 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs 3.5 yrs
Contractual life 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs
Risk-free rate 4.5% 4.5% 4.5% 4.5% 4.5% 5.0% 5.0%
Expected volatility 30% 30% 30% 30% 30% 27% 27%
Expected dividend yield 0% 0% 0% 0% 0% 0% 0%
Fair value of options 1p 2p 1p 1p 1p 2p 4p
Under the terms of the company’s Share Option Schemes, approved by shareholders in 1999 and amended in 2001 and 2002,
the Board may offer options to purchase ordinary shares in the Company to all employees of the Company at the market price on
a date to be determined prior to the date of the offer. Since 2005, individuals who are entitled to awards under the LTIP are no
longer eligible to receive options under the Company’s Share Option Schemes.
Performance targets are assessed over a three year period from the date of grant. Once options have vested they can be
exercised during the period up to 10 years from the date of grant. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
64
notes forming part of the consolidated financial statements continued
28. Share-based payment transactions continued
Shares to be issued
Options have been granted over the following number of ordinary shares which were outstanding at 31 December 2007.
Weighted No. of No. of
average options Remaining options Remaining
Option price at as at 1 life 1 as at 31 life 31
Date of price exercise January January December December
grant (p) (p) 2007 2007 Issued Lapsed Exercised 2007 2007
Unapproved Executive Share Option Scheme
15.07.04 9.00 — 234,722 7.5 —— — 234,722 6.5
12.09.05 9.25 — 100,000 8.7 —— — 100,000 7.7
12.04.07 16.75 —— — 50,000 —— 50,000 9.3
Enterprise Management Incentive Scheme
14.04.03 8.75 17.00 90,000 6.3 —— 60,000 30,000 5.3
07.10.03 11.50 18.96 80,000 6.8 —— 65,000 15,000 5.8
07.04.04 10.00 23.36 76,000 7.3 — 15,000 45,000 16,000 6.3
15.07.04 9.00 26.67 1,117,419 7.5 — 2,500 203,663 911,256 6.5
16.07.04 9.00 — 7,324 7.5 —— — 7,324 6.5
16.09.04 9.00 24.50 42,000 7.7 — 10,000 1,000 31,000 6.7
21.03.05 10.20 — 16,000 8.2 —— — 16,000 7.2
12.09.05 09.25 — 492,000 8.7 — 1,000 — 491,000 7.7
15.03.06 10.75 — 1,615,000 9.2 — 145,000 — 1,470,000 8.2
06.04.06 10.75 — 150,000 9.3 —— — 150,000 8.3
21.09.06 11.25 — 32,000 9.7 — 10,000 — 22,000 8.7
12.04.07 16.75 —— — 1,605,182 —— 1,605,182 9.3
26.09.07 26.75 —— 18,000 —— 18,000 9.7
4,052,465 1,673,182 183,500 374,663 5,167,484
The weighted average remaining contractual life of the options outstanding at 31 December 2007 is 8.1 years (2006: 
8.4 years).
2007 2006
Number of Weighted average Number of Weighted average
options exercise price (p) options exercise price (p)
Outstanding at beginning of the period 4,052,465 9.88 2,274590 9.19
Granted 1,673,182 16.86 1,997,000 10.76
Exercised (374,663) 9.51 ——
Forfeited (183,500) 10.59 (219,125) 10.61
Expired —— ——
Outstanding at end of the period 5,167,484 12.14 4,052,465 9.88
Exercisable at end of period 1,245,302 9.04 170,000 10.04 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
65
financial statements
stockcode: AMS
28. Share-based payment transactions continued
Long Term Incentive Plan (LTIP)
The fair value of the executive options is calculated based on a Black–Scholes Merton model assuming the inputs below:
Grant date 12/10/05 12/04/07
Share price at grant date 8.75p 16.75p
Exercise price 0p 0p
Expected life 3.5 yrs 3.5 yrs
Contractual life 10 yrs 10 yrs
Risk-free rate 4.5% 5.0%
Expected volatility 30% 27%
Expected dividend yield 0% 0%
Probability of performance conditions 40.4% 42.5%
Fair value of option 2p 4p
The entitlement to shares under the LTIP is subject to achieving the performance conditions referred to on pages 24 to 27. The number
shown are maximum entitlements and the actual number of shares (if any) will depend on these performance conditions being achieved.
Market Number of Remaining Number of Remaining
price at LTIPs at life LTIPs life
Date of date of 1 January 1 January 31 December 31 December
grant grant (p) 2007 2007 Issued Lapsed 2007 2007
Long Term Incentive Plan
12.10.05 8.75 3,713,744 8.8 —— 3,713,744 7.8
12.04.07 16.75 —— 2,710,000 — 2,710,000 9.3
3,713,744 2,710,000 6,423,744
The weighted average remaining contractual life of the LTIPs outstanding at 31 December 2007 is 8.4 years (2006: 8.8 years).
2007 2006
Number of Number of 
options options
Outstanding at beginning of the period 3,713,744 3,713,744
Granted 2,710,000 —
Exercised — —
Forfeited — —
Expired — —
Outstanding at end of the period 6,423,744 3,713,744
Exercisable at end of period — —
The exercise price of these options is nil. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
66
notes forming part of the consolidated financial statements continued
28. Share-based payment transactions continued
Deferred Share Bonus
The fair value of the executive options is calculated based on a Black–Scholes Merton model assuming the inputs below:
Grant date 12/04/07 12/04/07
Share price at grant date 18.25p 18.25p
Exercise price 0p 0p
Expected life 3.5 yrs 3.5 yrs
Contractual life 10 yrs 10 yrs
Risk-free rate 5.0% 5.0%
Expected volatility 27% 27%
Expected dividend yield 0% 0%
Probability of performance conditions 100% 66.7%
Fair value of option 14p 9p
The entitlement to shares under the DSB is subject to a 3 year holding period. Additionally, for certain levels of share
matching, additional performance conditions also need to be achieved. The actual number of shares that will be matched
will depend on these performance conditions. Details on the DSB are given on pages 24 to 27.
Number of Number of
Market DSB matching Remaining DSB matching Remaining
price at shares at life shares at life
Date of date of 1 January 1 January 31 December 31 December 
grant grant (p) 2007 2007 Issued Lapsed 2007 2007
Deferred Share Bonus Plan
12.04.07 18.25 —— 508,242 — 508,242 9.3
12.04.07 18.25 —— 164,383 — 164,383 9.3
672,625 672,625
The weighted average remaining contractual life of the DSB outstanding at 31 December 2007 is 9.3 years.
2007 2006
Number of Number of
options options
Outstanding at beginning of the period — —
Granted 672,625 —
Exercised — —
Forfeited — —
Expired — —
Outstanding at end of the period 672,625 —
Exercisable at end of period — —
The exercise price of the matched shares is nil. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
67
financial statements
stockcode: AMS
29. Commitments under operating leases
As at 31 December 2007, the Group had outstanding commitments under operating leases, which fall due as follows:
2007 2006
Land and Land and
buildings Other buildings Other
£’000 £’000 £’000 £’000
Amounts payable under operating leases:
Within one year 290 80 290 80
In two to five years 394 71 684 99
684 151 974 179
Operating leases relate to buildings and vehicles. For the buildings, rental payments are fixed for one year and are reviewed
every five years. Vehicle leases are fixed for a period of three years.
30. Transition to IFRS
To explain the impact of the transition, reconciliations have been included that show the changes made to the statements previously
reported under UK GAAP. The following unaudited reconciliations are included:
• Reconciliation of Group balance sheet at 31 December 2005 from UK GAAP to IFRS.
• Reconciliation of Group income statement for the 12 months ended 31 December 2006 from UK GAAP to IFRS.
• Reconciliation of Group balance sheet at 31 December 2006 from UK GAAP to IFRS.
The transition from UK GAAP to IFRS does not affect the cash flows generated by the Group. The IFRS cash flow statement is in a
different format from that required under UK GAAP. The reconciling items between UK GAAP format and IFRS format have no net
impact on the cash flows generated and accordingly reconciliations have not been presented.
The Group’s date of transition is 1 January 2006. The accounting policies used for IFRS are set out in Note 2.
Descriptions of the reconciling items between UK GAAP and IFRS are listed below. The amounts of the reconciling items are detailed in
the tables set out beneath each of the reconciliations.
Intangible assets
On transition the Group has reclassified separately identifiable computer software assets from tangible to intangible asset following the
provisions of IAS 38.
Expenditure on development activities resulting in new or substantially improved products which will generate future economic benefits
is now capitalised and amortised over the products’ useful life. Previously, under UK GAAP, all such development costs were expensed.
Property, plant and equipment
The Group has elected to use the fair value as the deemed cost for land and buildings at the date of transition to IFRS. The revaluation
increased arising on the revaluation is credited to a revaluation reserve.
Deferred tax
IAS 12 takes a balance sheet approach to deferred tax whereby deferred tax is recognised in the balance sheet by applying the
appropriate tax rate to the temporary differences arising between the carrying value of assets and liabilities and their tax base. IAS 12
does not permit discounting of deferred tax balances. The Group has recognised a deferred tax liability resulting from the revaluation of
property, plant and equipment which has been debited to the revaluation reserve. It has also increased the value of the deferred tax
asset from unwinding the discount factors on the deferred tax asset recognised under UK GAAP.
The Group, on transition to IFRS, has recognised a deferred tax asset arising on the difference between market value and exercise price
of unexercised employee options and LTIPs. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
68
notes forming part of the consolidated financial statements continued
30. Transition to IFRS
Reconciliation of consolidated balance sheet 
at 31 December 2005 from UK GAAP to IFRS
UK GAAP
31 Dec 2005 
restated in IFRS Reclassification IFRS adjustments IFRS
format 31 Dec 2005 31 Dec 2005 31 Dec 2005 
Note £’000 £’000 £’000 £’000
Assets
Non-current assets
Acquired intellectual property rights 1,902 — 1,902
Software intangibles 1— 14 14
Development costs ———
Property, plant and equipment 2,3 3,403 233 3,636
Deferred tax assets 4,5,8 547 100 647
Trade and other receivables 200 — 200
6,052 347 6,399
Current assets
Inventories 1,669 — 1,669
Trade and other receivables 3,230 — 3,230
Tax receivable 17 — 17
Investments — 2,986 — 2,986
Cash and cash equivalents 3,388 (2,986) — 402
8,304 —— 8,304
Total assets 14,356 347 14,703
Liabilities
Current liabilities
Trade and other payables 1,945 — 1,945
Other taxes payable 230 — 230
Financial liabilities 13 — 13
Obligations under finance leases 5—5
2,193 — 2,193
Non-current liabilities
Financial liabilities 309 — 309
Obligations under finance leases 7—7
316 — 316
Total liabilities 2,509 — 2,509
Net assets 11,847 347 12,194
Equity
Share capital 11,782 — 11,782
Share-based payments’ reserve 6— 18 18
Share-based payments’ deferred tax 8
Reserve —11
Share premium 37,978 — 37,978
Other reserve 1,531 — 1,531
Retained earnings 3,4,5,7,8 (39,444) 328 (39,116)
Equity attributable to equity 
holders of the parent 11,847 347 12,194 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
69
financial statements
stockcode: AMS
30. Transition to IFRS continued
Reconciliation of Group balance sheet 
At December 2005 from UK GAAP to IFRS
Non-current Shareholders’
assets equity
Note £’000 £’000
Conversion effects comprise:
IAS 38 — Reclassification of software from property, plant 1 14
and equipment to intangible assets
IAS 38 — Reclassification of software from property, plant 2 (14)
and equipment to intangible assets
IFRS 1 — Revaluation of land and buildings to fair value 3 247 247
at date of transition at deemed cost
IAS 12 — Deferred tax — revaluation of land and buildings 4 (74) (74)
IAS 12 — Reversal of discount on deferred tax 5 168 168
IFRS 2 — Share-based payments reserve 6 18
IFRS 2 — Profit and loss 7 (18)
IAS 12 — Deferred tax — share-based payments 86 1
Profit and loss 5
Net movement 347 347 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
70
notes forming part of the consolidated financial statements continued
30. Transition to IFRS continued
Reconciliation of Group income statement 
For 12 months ended 31 December 2006 from UK GAAP to IFRS
IFRS
UK GAAP adjustments IFRS
31 Dec 2006 31 Dec 2006 31 Dec 2006 
Note £’000 £’000 £’000
Revenue 14,322 — 14,322
Cost of sales 1 (8,279) (1) (8,280)
Gross profit 6,043 (1) 6,042
Distribution costs (107) — (107)
Administration costs 2,3,7 (6,011) 99 (5,912)
Loss on disposal of property, plant and equipment (11) — (11)
Other income 480 — 480
Profit from operations 394 98 492
Finance income 4 204 (55) 149
Finance costs (29) — (29)
Profit before taxation 569 43 612
Income tax 5,6 167 (32) 135
Profit for the year attributable to equity holders of the parent 736 11 747
Earnings per share
Basic 0.52p 0.52p
Diluted 0.50p 0.50p
Conversion effects comprise: Note
IFRS 1 — Depreciation of revaluation of land and buildings 1 (1)
IAS 38 — Expenditure on development activities and patents which have met 2 64
the criteria to be capitalised less amortisation
IFRS 2 — Reversal of share based payments included in year ended 31 December 2005 3 18
Adjustment in respect of exchange differences 7 17
Operating profit 98
IAS 12 — Reversal of unwinding of discount on deferred tax asset 4 (55)
IAS 12 — Reversal of discount on deferred tax 5 (45)
IAS 12 — Deferred tax on share-based payments 6 13
Profit attributable to equity shareholders 11 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
71
financial statements
stockcode: AMS
30. Transition to IFRS continued
Reconciliation of Group balance sheet
At 31 December 2006 from UK GAAP to IFRS
UK GAAP
31 Dec 2006 IFRS
restated in IFRS Reclassification adjustments IFRS
format 31 Dec 2006 31 Dec 2006 31 Dec 2006
Note £’000 £’000 £’000 £’000
Assets
Non-current assets
Acquired intellectual property rights 1,734 — 1,734
Software intangibles 1— 29 29
Development costs 3— 64 64
Property, plant and equipment 2,4 2,877 217 3,094
Deferred tax assets 5,6,7 749 79 828
Trade and other receivables 208 (8) — 200
5,568 (8) 389 5,949
Current assets
Inventories 1,786 — 1,786
Trade and other receivables 3,711 8— 3,719
Tax receivable 17 — 17
Investments — 3,950 — 3,950
Cash and cash equivalents 4,552 (3,950) — 602
10,066 8— 10,074
Total assets 15,634 — 389 16,023
Liabilities
Current liabilities
Trade and other payables 2,415 — 2,415
Other taxes payable 244 244
Financial liabilities 14 14
Obligations under finance leases 55
2,678 — 2,678
Non-current liabilities
Financial liabilities 295 — 295
Obligations under finance leases 1—1
296 — 296
Total liabilities 2,974 — 2,974
Net assets 12,660 389 13,049
Equity
Share capital 11,782 — 11,782
Share-based payments reserve 60 — 60
Share-based payments deferred tax reserve7— 67 67
Share premium 37,978 — 37,978
Other reserve 1,531 — 1,531
Retained earnings 3,4,5,6,7 (38,691) 322 (38,369)
Equity attributable to equity holders of the parent 12,660 389 13,049 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
72
notes forming part of the consolidated financial statements continued
30. Transition to IFRS continued
Reconciliation of Group balance sheet 
At 31 December 2006 from UK GAAP to IFRS
Non-current Shareholders’
assets equity
Note £’000 £’000
Conversion effects comprise:
IAS 38 — Reclassification of software from property, plant and 1 29
equipment to intangible assets
IAS 38 — Reclassification of software from property, plant and 2 (29)
equipment to intangible assets
IAS 38 — Recognition of development activities less amortisation 3 64 64
IFRS 1 — Revaluation of land and buildings to fair value at 4 246 246
date of transition less depreciation — deemed cost
IAS 12 — Deferred tax — revaluation of land and buildings 5 (74) (74)
IAS 12 — Reversal of discount on deferred tax 6 68 68
IAS 12 — Deferred tax — share-based payments 7 85 67
Profit and loss 18
Net movement 389 389 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
73
financial statements
stockcode: AMS
company balance sheet
At 31 December 2007
2007 2006
Note £’000 £’000
Fixed assets
Investments 32 6,454 8,904
6,454 8,904
Current assets
Debtors — due within one year 33 277 93
— due after more than one year 33 200 200
Cash at bank and in hand 6,942 3,961
7,419 4,254
Creditors: amounts falling due within one year 34 (195) (87)
Net current assets 7,224 4,167
13,678 13,071
Capital and reserves
Called up share capital 35 7,157 11,782
Share-based payments reserve 154 60
Investment in own shares (13) —
Share premium account 17 37,978
Profit and loss account 6,363 (36,749)
Equity shareholders’ funds 13,678 13,071
The financial statements on pages 73 to 76 were approved by the Board of Directors and authorised for issue on 18 April 2008
and were signed on its behalf by:
Dr D W Evans
Chief Executive Officer
18 April 2008 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
74
notes forming part of the financial statements 
of the company
31. Accounting policies
The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom
and under the historical cost convention. The company has taken advantage of the exemption from presenting its own profit
and loss account. A summary of the more important company accounting policies, which have been applied consistently, is
set out below.
Merger accounting
Where merger accounting is used, the investment is recorded in the company’s balance sheet at the nominal value of the
shares issued together with the fair value of any additional consideration paid.
Investments
Investments are stated at cost less provision for any loss in value considered permanent.
Liquid resources
Liquid resources comprise variable term deposits that are accessible with less than 12 months’ notice.
Cash flow statement
The company is exempt under FRS 1 (revised) from preparing the cash flow statement as its cash flows are included in the
consolidated cash flow statement. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
75
financial statements
stockcode: AMS
32. Fixed asset investments
Investments Loans Capital contributions Total
Cost
1 January 2007 1,670 45,006 — 46,676
Additions —— 154 154
Movement in loans — (3,147) — (3,147)
31 December 2007 1,670 41,859 154 43,683
Impairment
1 January 2007 1,670 36,102 — 37,772
Reversal of provision — (543) — (543)
31 December 2007 1,670 35,559 — 37,229
Net book value
31 December 2007 — 6,300 154 6,454
31 December 2006 — 8,904 — 8,904
Shares in Group undertakings and loans to Group undertakings have been written down to recognise losses in subsidiary companies.
The following were subsidiary undertakings at the end of the year and have all been included in the consolidated accounts.
Proportion of
voting rights
and ordinary
Country of share capital
Name Operation held Nature of business
Advanced Medical Solutions Limited England 100% Development and manufacture
of medical products
Advanced Medical Solutions (UK) Limited England 100% Holding Company
Advanced Medical Solutions Trustee 
Company Limited England 100% Trustee Company
MedLogic Global Limited England 100% Development and manufacture
of medical products
Advanced Healthcare Systems Limited England 100%* Dormant
Advanced Medical Solutions Group Inc. USA 100%† Holding Company
Advanced Medical Solutions (Delaware) Inc. USA 100%† Dormant
Advanced Medical Solutions (US) Inc USA 100%§ Development and manufacture
of medical products
Advanced Medical Solutions Inc USA 100%† Dormant
MedLogic Global Holdings Limited England 100%¶ Holding Company
Innovative Technologies Limited England 100%‡ Dormant
* Held indirectly through Advanced Medical Solutions Limited.
‡ Held indirectly through MedLogic Global Holdings Limited.
† Held indirectly through Advanced Medical Solutions (UK) Limited.
§ Held indirectly through Advanced Medical Solutions Group Inc.
¶ Held indirectly through MedLogic Global Limited.
The above table reflects the situation at the year end. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
76
notes forming part of the financial statements of the company continued
33. Debtors
2007 2006
£’000 £’000
Due within one year
Prepayments and accrued income 277 93
277 93
Due after more than one year
Other debtors — leasehold rental deposit 200 200
34. Creditors: amounts falling due within one year
2007 2006
£’000 £’000
Trade creditors 77 14
Accruals and deferred income 109 73
Tax payable 9 —
195 87
35. Share capital
Details on the share capital of the company are provided in note 27 on page 62 in the notes to the Group’s accounts.
36. Profit for the financial year
2007 2006
£’000 £’000
Profit dealt with in the accounts of the parent company 399 361
The Company has taken advantage of section 230(4) of the Companies Act 1985 not to publish its own profit and loss
account.
37. Profit and loss account
2007
£’000
As at 1 January 2007 (36,749)
Cancellation of deferred shares 4,678
Cancellation of share premium account 37,978
Surpus on EBT 57
Profit for the financial year 399
As at 31 December 2007 6,363 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
77
five year summary
stockcode: AMS
five year summary
IFRS IFRS IFRS UK GAAP UK GAAP
2007 2006 2005 2004 2003
£m £m £m £m £m
Consolidated income statement
Revenue 16.9 14.3 12.9 11.0 9.0
Profit from operations 1.7 0.5 (0) (1.1) (2.4)
Finance income 0.3 0.1 0.1 0.1 0.1
Profit attributable to equity holders 
of the parent 2.2 0.7 0.3 (0.4) (2.1)
Basic earnings/(loss) per share 1.6p 0.5p 0.2p (0.3)p (1.5)p
Weighted average number of 
shares in issue 142.5 142.1 142.1 142.1 142.1
Consolidated balance sheet
Net assets employed
Non-current assets 6.5 6.0 6.4 5.8 6.6
Current assets 12.7 10.0 8.3 6.2 5.7
Total liabilities (3.5) (3.0) (2.5) (0.4) (0.3)
Net assets 15.7 13.0 12.2 11.6 12.0
Shareholders’ equity
Share capital and investment 
in own shares 7.1 11.8 11.8 11.8 11.8
Share-based payments reserve 0.2 —
Share-based payments deferred 
tax reserve 0.3 0.1
Share premium account — 38.0 38.0 38.0 38.0
Other reserve 1.5 1.5 1.5 1.5 1.5
Retained equity 6.6 (38.4) (39.1) (39.7) (39.3)
Equity attributable to equity 
holders of the parent 15.7 13.0 12.2 11.6 12.0 Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
78
notice of meeting
Notice is hereby given that the fourteenth Annual General Meeting of the company will be held at 11.00 am on 3 June 2008 at
Macdonald Portal Hotel, Cobblers Cross Lane, Tarporley, Cheshire, CW6 0DJ.
As ordinary business:
1. To receive the report of the directors and the financial statements of the company for the year ended 31 December 2007
(together with the report of the auditors thereon).
2. To reappoint Baker Tilly as auditor and to authorise the directors to fix their remuneration.
3. To re-elect Geoffrey Vernon (who retires by rotation in accordance with the Articles of Association), as a director of the company.
As special business:
To consider and, if thought fit, to pass Resolution 4, which will be proposed as an Ordinary Resolution, and Resolution 5, which will
be proposed as a Special Resolution.
4. That the directors be authorised:
i) to make such amendments to the rules of each of The Advanced Medical Solutions Group plc Unapproved Executive Share
Option Scheme, The Advanced Medical Solutions Long Term Incentive Plan and The Advanced Medical Solutions Group
plc 2006 Deferred Share Bonus (Unapproved) Plan (together, the “Unapproved Plans”) as are marked on the copies of the
rules of the Unapproved Plans produced to the meeting and initialled by the Chairman for the purposes of identification
only and which are described in the Report of the Directors on pages 20 to 23; and
ii) subject to the approval of HM Revenue & Customs (“HMRC”), to make the amendment to the rules of The Advanced
Medical Solutions Group plc 2006 Deferred Share Bonus (Approved) Plan (the “Approved DSB”) as marked on the copy of
the rules of the Approved DSB produced to the meeting and initialled by the Chairman for the purposes of identification
only and which is described in the report of the directors on pages 20 to 23 and to make such further amendment to the
rules of the Approved DSB to take account of any comments of HMRC and as may be necessary to maintain the approved
status of the Approved DSB, provided that the amendment shall not have effect until HMRC has confirmed that it does not
affect the approved status of the Approved DSB.
5. That the directors be empowered pursuant to and in accordance with Section 95 of the Companies Act 1985 (“Act”) to allot
equity securities pursuant to the authority conferred by a special resolution of the company dated 6 June 2007 as if Section
89(1) of the Act did not (in so far as it would otherwise do) apply to any such allotment, provided that:
i) this power shall expire on the date fifteen months after the date of passing of this resolution or at the conclusion of the
next Annual General Meeting of the company, whichever is the earlier, save that the company may before such expiry make
any offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may
allot equity securities in pursuance of such an offer or agreement as if this power had not expired and provided further that
such allotments would have fallen within the limit hereinafter mentioned if made before such expiry;
ii) equity securities allotted otherwise than in connection with a Pro Rata Offer (as defined below) or a scrip dividend
alternative offered in accordance with Article 151 of the company’s Articles of Association or pursuant to the terms of any
share option scheme for employees approved by the members in general meeting shall not exceed an aggregate nominal
value of £710,412.68 and for this purpose an issue of securities convertible into ordinary shares shall be deemed to be an
allotment of the number of shares which would be required to satisfy the conversion rights attached to those securities in
full at the initial conversion price provided for in the terms and conditions of the issue. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
79
notice of meeting
stockcode: AMS
Group
Year ended Year ended
31 December 31 December
2007 2006
Note £’000 £’000
Profit for the financial year 736 276
Currency translation differences on foreign currency net investments 17 (3)
Total profit recognised since last annual report 753 273
Group Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Opening shareholders’ funds 11,847 11,574 12,650 12,454
Profit for the financial year 736 276 361 196
Share based payments 60 — 60 —
Currency translation differences 
on foreign currency net investments 17 (3) — —
Closing shareholders’ funds 12,660 11,847 13,071 12,650
The profit for the Company includes the reversal of a provision against the carrying value of investments of £388k (2005:
£101k).
reconciliation of movements in shareholder’s funds
For the year ended 31 December 2007
In this resolution:
(a) words and expressions shall be construed in accordance with Part IV of the Act; and
(b) the expression ‘Pro Rata Offer’ means an offer of equity securities open for acceptance for a period fixed by the directors to
holders of ordinary shares on the register on a fixed record date in proportion (or as nearly as may be) to their then holdings of
such ordinary shares (but subject to such exclusions or other arrangements as the directors may consider necessary or
expedient in relation to fractional entitlements or on account either of legal problems under the laws of any territory or the
requirements of any recognised regulatory body or any other stock exchange).
By order of the Board
Mary G Tavener
Company Secretary
18 April 2008
Registered office:
Road Three
Winsford Industrial Estate
Winsford
Cheshire
CW7 3PD
Notes
1. A member entitled to attend and vote at the meeting convened by the notice set out above may appoint a proxy to attend,
speak and to vote in his place. A holder of more than one ordinary share may appoint different proxies in relation to each or
any of those ordinary shares. 
2. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may
not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, notice must be
given to the company’s Registrars not later than 48 hours before the time appointed for the holding of the meeting. 
3. A proxy does not need to be a member of the company but must attend the meeting to represent you. Details of how to
appoint the chairman of the meeting or another person as your proxy using the proxy form are set out at note 1 of the proxy
form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the
Chairman) and give your instructions directly to them. 
4 A form of proxy is enclosed for use by members. To be effective, it must be completed and arrive not later than 48 hours
before the time fixed for the meeting at Capita Registrars, Proxies Dept, PO Box 25, Beckenham, Kent, BR3 4BR. You may
also deliver by hand to The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU during usual business hours.
5. The register of directors’ interests in the shares of the company will be available for inspection at the registered office of the
company during usual business hours on any weekday (public holidays excepted) until the date of the meeting and also on
that date and at the place of the meeting from 9.00 am until the conclusion of the meeting.
6 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 pm on 1 June 2008 shall be entitled to attend
or vote at the aforesaid general meeting in respect of the number of shares registered in their names at that time. Changes in
the entries in the relevant register of Securities after 6.00 pm on 1 June 2008 shall be disregarded in determining the rights
of any person to attend or vote at the meeting. Advanced Medical Solutions Group plc
Annual Report and Accounts 2007
80
shareholder notes Our Strategy
Welcome to
www.admedsol.com
Advanced Medical Solutions Group plc
01 Highlights
02 At a Glance
04 Our Strategy
06 Chairman’s Statement
10 Chief Executive’s Review
16 Financial Review
18 Board of Directors
18 Advisers and Committees
20 Report of the Directors
24 Remuneration Report
28 Corporate Governance
30 Independent Auditor’s Report
32 Consolidated Income Statement
33 Consolidated Balance Sheet
34 Consolidated Statement of Changes in Equity
35 Consolidated Cash Flow Statement
36 Notes Forming Part of the Consolidated Financial Statements
67 Transition to IFRS
73 Company Balance Sheet
74 Notes Forming Part of the Financial Statements 
of the Company
77 Five Year Summary
78 Notice of Meeting
Contents
 Develop and provide leading edge technology to
the global woundcare market
 Work with strategic partners and major brands
to commercialise our products worldwide
 Supply and develop our own branded solutions
to the NHS in our UK home market
 Create shareholder value by expanding the
business organically and through acquisition
advanced woundcare

woundclosure and sealants
 Advanced Medical Solutions Group plc
advanced woundcare

wound closure and sealants

annual report and accounts 2007

Advanced Medical Solutions Group plc
Registered Office:
Road Three, Winsford Industrial Estate
Winsford, Cheshire, CW7 3PD, UK
Company Number: 2867684
Tel: +44 (0)1606 863500
Fax: +44 (0)1606 863600
E-mail: info@admedsol.com
Web: www.admedsol.com
Technology Platforms for Growth
Advanced Medical Solutions Group plc annual report and accounts 2007