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surgical innovations group plc
Annual report and accounts 2010 surgical innovations group plc specialises in 
the design and manufacture of innovative devices 
for use in minimally invasive surgery (Mis) and 
industrial markets.
Specialising in the design and manufacture of creative 
solutions for MIS and industrial markets, our pioneering 
products are user orientated with ergonomics at the 
core of our technology.
our growth strategy:
 Continuous innovation and product development
 Technology transfer into other areas of MIS 
 Development of both new and existing OEM relationships 
  Continued expansion through organic 
growth of SI brand in international markets 
  Explore acquisition opportunities in new 
therapeutic markets   Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 01
Review of the year 01 - 19
At a glance: Highlights 01
The Queen’s Award 02
At a glance: Our business  04
Chairman’s statement 06
Business and financial review  08
Corporate social responsibility  16
Governance 20 - 35
Board of Directors 20
Senior management and advisers  22
Clinical Advisory Board  24
Surgical Innovations’ trade marks  26
Report of the Directors  27
Report on remuneration  31
Corporate governance  34
 
Accounts 36 - 61
 Report of the independent auditor – Group  36
 Consolidated statement of comprehensive income  37
Consolidated balance sheet  38
Consolidated cash flow statement  39
Consolidated statement of changes in equity  40
 Notes to the consolidated financial statements  41
 Report of the independent auditor – Company  56
Company balance sheet  57
 Notes to the Company financial statements  58
Five-year summary  61
Shareholder information 62 - 68
Notice of Annual General Meeting  62
Explanatory notes to the Notice of Annual General Meeting 66
Form of proxy  67
Warning to shareholders – boiler room scams IBC
Revenue  (£m)
Operating margins (%)
Pre-tax profit  (£m)
Net cash generated from operating activities (£m)
Review of the year
At a glance: Highlights
£7 .045m 
+55%
07 08 09 10
4.770
4.312
4.541
7 .045
22% 
07 08 09 10
15
19
6
22
£1 .549m 
+487%
£2.202m 
07
07
08
08
09
09
10
10
0.731
0.428
0.820
0.700
0.264
1.439
1.549
2.202
 Financial highlights
  Revenue increased 55% to £7 .045 million 
(2009: £4.541 million)
  Pre-tax profit increased 487% to 
£1.549 million (2009: £264,000)
  Operating margins increased to 22% 
(2009: 6%)
  Net cash of £2.2 million generated from 
operating activities 
  Basic earnings per share of 0.48p 
(2009: 0. 14p)
Operational highlights
  Own brand sales increased 30% to 
£3.852 million (2009: £2.956 million); 
driven by flagship Resposable
®
 products
  OEM revenues increased 71% to 
£2.506 million (2009: £1.463 million)
  Industrial sales boosted by delivery 
of £616,000 order 
  Continued major investment in research 
and development, plant and manufacturing
Visit our website:  
www.surginno.com The Queen’s Award
Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 02
Surgical Innovations (SI) celebrates winning the Queen’s Award.
Announced on the Queen’s birthday – 21 April 2010 – SI was awarded 
the Queen’s Award for Enterprise, the UK’s most prestigious award for 
outstanding innovation and business performance.
Receiving the award under the Innovation category , the accolade 
acknowledges the technical and clinical excellence SI has achieved 
with its pioneering YelloPort+plus
®
 – a port access system which 
acts as a channel into the body allowing surgeons to carry out 
delicate keyhole procedures. 
The awards are made each year by Her Majesty Queen Elizabeth II, 
on the advice of the Prime Minister , who is assisted by an Advisory 
Committee that includes representatives of Government, industry 
and commerce and the trade unions. 
Speaking about the award Graham Bowland, Managing Director 
of Surgical Innovations, said: “We are delighted to win such a 
prestigious royal award for our contribution to the healthcare 
industry . This award acknowledges the commitment and also 
the dedication made by every single one of our employees from 
design through to production and also acknowledges Yorkshire’s 
thriving healthcare technology sector” .
Chairman Doug Liversidge CBE, added: “The Board would like 
to extend its congratulations and say a personal thank you to 
everyone involved in this achievement and their contribution 
towards the overall success of the Group. ”
“ Designing and developing YelloPort+plus
®
 
was a real milestone in the history of Surgical 
Innovations and travelling to Buckingham 
Palace to meet the Queen was a real honour 
and pleasure. It certainly is a day I will 
always remember. ”
Mike White
Product Development Director   Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 03
After the presentation, the Rt Hon David Blunkett MP revealed 
how he was a “guinea pig” for the device while he was serving as 
Home Secretary. The Labour MP spoke about how he was 
diagnosed with gastro-oesophageal reflux during this time and 
was introduced to SI’s co-founder Professor Mike McMahon who 
operated on him using SI’s instruments.
Other awards we’ve won:
Regional Innovation Award 2010
Medilink Yorkshire and Humber Innovation 
and Healthcare Business Award 2010
Individual of the Y ear  
(Large Company) 2010
Yorkshire Productivity Awards
Y orkshire Innovator Award 2010
TheBusinessDesk.com 
Yorkshire Business Masters 2010
“ I’m here as a recipient of the wonders 
of instrumentation that have been 
created by this company. ”
Rt Hon David Blunkett
Labour MP
00%
Read more stories like this 
www.surginno.com/news Surgical Innovations Group plc      Annual report and accounts 2010 04
At a glance: Our business
Review of the year
SI Brand
Specialising in the design and manufacture of creative solutions 
for MIS and industrial markets, our pioneering products are user 
orientated with ergonomics at the core of our technology .
SI reports under three operating statements:
OEM 
We design and manufacture our own successful 
brand of Resposable
®
 medical devices
SI has introduced advancements such as 
YelloPort +plus
®
 laparoscopic port access 
system, Logi
®
Range resposable laparoscopic 
instrument system, FastClamp endoscopic 
clamping system and Quick
®
Range single use 
laparoscopic instrumentation.
We are proud to be an OEM supplier to several 
leading medical device manufacturers
It is testament to our design and manufacturing 
skills that our products are in demand by highly 
renowned medical companies. SI can offer an 
effective solution, providing expertise in the design 
and development of an instrument combined with our 
manufacturing capability to produce a final device 
ready for ultimate sale.
Industrial
We are excited about the growth of the 
Group’s business providing industrial 
solutions for major international companies 
The solutions are based on our core technology 
developed over the years in our surgical 
instruments business. We believe that there is 
scope to develop and expand this segment using 
our core technology. 
Strategy:
  New product development to enhance 
the SI brand
  Increase our network of specialist 
distributors
  Expand the use of YelloPort+plus
®
 
within the US market 
Strategy:
  Develop the OEM proposition to provide 
a full-service solution from concept, 
through to the development and 
manufacture of innovative devices
  Use SI’ s core intellectual property to create 
medical device solutions for OEM partners 
  Continue promotion and adoption of 
SI’s resposable philosophy with major 
medical device companies
Strategy:
  Continue to seek opportunities where 
SI’s intellectual property can be 
adapted to industrial applications 
  Continue to engage with major 
industrial partners  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 05
OEM revenue
£2,506,000  
00%
00%
Read more on this division  
page 10 - 11
Read more on this division  
page 12 - 13
SI Brand revenue
£3,852,000  
Percentage of Group revenue
Key product ranges:
 YelloPort+plus
®
 Logi
®
Range
 Logic
®
Range
36%
54%
Percentage of Group revenue
Percentage of Group revenue
Companies we are working with:
 Gyrus
	 T elefle x
 CareFusion
Key Industrial applications:
 Aero engine
 Power generation
10%
Industrial revenue 
£687 ,000 
00%
Read more on this division  
page 14 - 15
00%
International growth
The growth strategy of the business is based upon 
the distribution of SI branded products through 
our worldwide independent dealer network.
00%
Read more online  
www.surginno.com Surgical Innovations Group plc      Annual report and accounts 2010 06
Chairman’s statement
Review of the year
I am pleased to report a record year in 
the continuing development of the Group. 
Our strategy of producing innovative, high 
quality and cost-effective instruments to an 
increasingly cost-conscious market, coupled 
with the strong investment in 2008 and 2009, 
has really started to bear fruit, both for our 
own branded and OEM products. 
Given the growth of the business, and to 
provide greater clarity of progress in the key 
markets in which we operate, the Group 
is for the first time reporting across three 
segments: SI Brand, OEM and Industrial. 
Results
Revenue for the period was £7 .045 million 
(2009: £4.541 million) and profit before tax 
increased nearly five-fold to £1.549 million 
(2009: £264,000). 
A large part of this growth has arisen from 
sales in the OEM segment which accounted 
for 35% of total revenue (2009: 32%). 
A year of progress and innovation
“ The Group has undergone 
yet another year of 
transformation, successfully 
meeting the demands 
of rapid growth. We have 
continued to invest heavily 
in the business while R&D 
capability has undergone 
a step-change to speed up 
new product development 
and improvements to our 
existing technology . ”
Doug Liversidge CBE
Chairman
Summary of Chairman’s statement
  Total revenue for the period increased by 
55% to £7 .045 million and profit before tax 
increased nearly five-fold to £1.548 million 
  Capitalised investment in R&D rose by 
57% to £1.674 million 
  The Board is confident about future growth 
prospects of the business for 2011  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 07
Sales growth of SI branded products was 
driven by our Resposable
®
 products and 
overall revenues were boosted by the delivery 
of a £616,000 order in the Industrial segment 
in May 2010; sales to industrial customers 
accounted for 10% of total revenues for 2010. 
Retained profit for the period was £1 .788 million 
(2009: £525,000) including a taxation. 
Cash flow and investment 
During the year the Group generated net cash 
of £2.202 million from operating activities, 
enabling the Group to continue its strong 
investment in product development with 
capitalised investment in research and 
development (R&D) increasing by 57% 
to £1.674 million (2009: £1.066 million), 
reflecting a step-change in the structure 
of the R&D team as well as a stronger 
focus on new product development. 
Elsewhere capital expenditure remained 
strong with £628,000 invested in plant 
and equipment while the total number 
of employees and agency staff increased 
from 76 at the end of 2009 to 117 at the end 
of 2010. We have continued to make staff 
appointments in all areas of the business, 
while the R&D team has been re-organised 
in such a way as to encourage product 
concept generation. 
The Clinical Advisory Board now consists 
of nine highly experienced surgeons covering 
a wide range of specialisms in MIS, with 
Mr Marco Adamo and Mr Jon Conroy joining 
the Board in January 2011, the latter extending 
the team’s expertise into arthroscopy.
Dividend 
In 2009, SI successfully applied to the courts 
to cancel the Group’s accumulated losses. 
The purpose of this was to enable the Board 
to implement a dividend strategy at such time 
as it considers appropriate. While a strategy 
remains under review, the Board believes that 
at this stage in the Group’s development it 
would be more appropriate to continue its 
focus on strong inward investment. 
Acquisitions 
The Board continues to review acquisition 
opportunities in the area of MIS where 
strong synergies exist with the Group and 
where our R&D expertise and in-house 
manufacturing capabilities can create 
improvements to the products and cost 
savings for the end user.
Outlook
Trading in the period since the year end has 
been encouraging, particularly from the core 
business, where we have seen further orders 
for SI branded products, particularly for 
YelloPort+plus
®
. The R&D team continues 
to improve the SI branded product range to 
generate a wider range of new products and 
enhancements for our global distributor 
network and affirm our position as a leading 
innovator within the field of MIS.
In February 2011 we were pleased to announce 
the four-year exclusive contract for a minimum 
of $2.2 million with US-based Mediflex 
Surgical Products (“Mediflex”) with regard 
to the inclusion of YelloPort+plus
®
 in surgical 
trays in the US. 
We are also being approached by several other 
OEM customers to develop new laparoscopic 
products on an exclusive basis. 
We remain confident about the future growth 
prospects of the business for the remainder 
of 2011 and further into 2012 and 2013 as 
new products are launched towards the end 
of this year and the increasing traction with 
OEM customers gains momentum.
I would like to thank the Board and staff 
for their tireless work in 2010 and their 
contribution to the rapid growth of the 
business. We are better positioned than ever 
to take full advantage of the opportunities 
that are available to us and I look forward 
to reporting on the continuing success 
of the Group over the coming year.
Doug Liversidge CBE
Chairman
19 April 2011
00%
Innovation
In 2010 SI officially received the Queen ’ s Award for 
Enterprise for their pioneering YelloPort+plus
®
 device 
– a port access system which acts as a channel into 
the body allowing surgeons to carry out delicate 
keyhole procedures. Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 08
Business and financial review
Operating review
The investment made in the Group throughout 
2008 and 2009 started to make a material 
impact in 2010 and resulted in a year of 
record performance. 
All three segments of the business demonstrated 
significant growth in 2010. The main focus 
remains our core business of MIS, either 
through our own branded products or on 
behalf of our OEM customers. 
We continued to make significant investment in 
R&D as well as in our manufacturing capability . 
R&D
The Group ’ s continuing success and growth is 
dependent on its ability to create new concepts 
and intellectual property in the field of MIS. 
Significant investment of £1 .834 million was 
made in 2010 (2009: £1 .066 million) in the R&D 
team as well in a change in its structure. R&D 
now employs 28 individuals and is divided into 
concept and development teams. 
The concept team of seven has been given 
a wide brief to generate new ideas across all 
areas of MIS. Working closely with the Clinical 
Advisory Board, the team has a target to 
generate six concepts per annum which can 
be transferred to the development team for 
further work. The team is working on a 
‘‘ The investment made in 
the Group throughout 2008 
and 2009 started to make 
a material impact in 2010 
and resulted in a year of 
record performance. ’’
Significant investment in research 
and development
Graham Bowland
Chief Executive Officer
Summary of Business and financial review
  Own-brand sales driven by flagship 
Resposable
®
 products
  Significantly improved trading with 
OEM partners
  Industrial sales boosted by delivery of 
£616,000 order
  Continued significant investment in R&D 
across a range of products
  Creation and expansion of concept and 
product development teams   Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 09
number of new products and improvements 
which are on course to be brought to the 
market by the end of 2011. Furthermore, in 
2010 the Group filed nine new UK patents 
as compared to five in 2009. 
The R&D team has also benefited from the 
investment in in-house manufacturing, a 3D 
printer and advanced CAD technology, with 
the result that new ideas and prototypes can 
now be presented to potential customers in 
a matter of days rather than months. 
Looking forward, the Group expects to continue 
its high level of investment in R&D as part of an 
ongoing strategy to ensure a regular stream of 
new products and continual product improvement. 
Manufacturing
During 2010, £628,000 was invested 
in tooling, plant and machinery; this was 
a continuation of the £839,000 invested 
in 2009. The focus in 2010 was in areas 
where additional capacity was required, 
and in plastic injection moulding, which 
now enables the Group to manufacture 
in-house instrumentation in their entirety. 
The manufacturing facility now operates 
a continuous daily three-shift system, 
constituting a much higher return on capital 
employed as compared to 2009. Capacity has 
increased in all areas of the facility and this 
has been complemented by the introduction 
of lean manufacturing practices to optimise 
process performance; this will continue 
throughout 2011. Computerised data control 
measuring has now been introduced to all 
areas of the machine shop, giving us the 
ability to analyse tolerance information and 
enhance quality control. 
Our facility allows for further capacity in the 
foreseeable future and investment scheduled 
for the current financial year will facilitate 
the continued growth and optimisation of
Number of patents filed in 
the UK alone 
 
9 patents 
in 2010 
in the UK 
alone 
09 10
5
9
At a glance: key performance indicators
Research and development
The Group expects to continue its high level of 
investment in R&D as part of an ongoing strategy 
to ensure a regular stream of new products and 
continual product improvement. 
The Directors have monitored the overall progress of the Group and the individual 
strategic elements by reference to certain financial and non-financial KPIs:
Financial performance
KPIs are in place to measure sales, profitability, rate of divisional growth, cash generation 
and returns on capital employed. 
Customer satisfaction
KPIs are established to measure and improve customer relationships, quality of service 
and our order delivery times.
Employee satisfaction
KPIs are agreed to measure staff morale, training needs and personal development.
Leadership
KPIs are set to measure the performance of Directors and management in conjunction 
with overall Group strategy and planning.
Innovation
KPIs are positioned to measure the creativity and inventiveness of employees to improve 
the number of patents filed, design rights applied for and internal products developed.
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Share price performance 
  Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 10
Business and financial review continued
Operating review continued
Manufacturing continued
the manufacturing arm. Injection 
moulding capacity will be expanded and 
further automation within the cleanrooms 
is planned as part of our wider initiative to 
improve operating efficiencies throughout 
the Group. 
SI Brand
Revenues from SI branded products increased 
over the period by 30% to £3.852 million 
(2009: £2.956 million). This growth was driven 
by SI’s flagship Resposable
®
 products, 
YelloPort+plus
®
 and Logi
®
Range. 
Demand for Resposable
®
 instruments, where 
some elements are disposable and others 
reusable, reflects a culture change within 
the medical device industry and provides 
cost-effective solutions to an increasingly 
cost-conscious environment. 
The sales and marketing of SI’s products 
continued apace in its target regions. The 
business development team now consists 
of four full time employees who are looking 
to expand distribution of SI’s products 
through its network of over 45 dealers in 
Europe, the Middle East, India, Australasia 
and the US. The team continues to attend 
international exhibitions in these territories. 
In 2010 it became evident that the routes 
to market in the US are different for each 
product. For example, the most effective way 
to distribute the Logi
®
Range is via a master 
dealer, while YelloPort+plus
®
 benefits from 
being distributed via serviced tray companies. 
Since the year end we announced a $2.2 million 
contract with Mediflex Surgical Products with 
regard to the inclusion of YelloPort+plus
®
 
in surgical trays throughout the US.
In the UK, the Group extended its exclusive 
distribution partnership with Elemental 
Healthcare for a further three years, with 
particular focus on YelloPort+plus
®
 and 
Logi
®
Range instruments. 
New product development and product 
enhancement for the SI brand continues 
apace and is driven by the R&D team’s close 
working relationship with the Clinical 
Advisory Board. 
All our existing products are under continuous 
scrutiny by the R&D team to improve quality 
and performance, as well as product line 
extensions. Investment in our own machinery 
allows us to provide a greater range of disposable 
elements that complement the reusable parts. 
We are currently expanding the Logi
®
Range 
to include a broader range of jaws in different 
sizes introducing it to new areas of 
laparoscopic surgery . 
With increasing focus on safer surgery and 
cosmesis (the cosmetic aspect surgery), 
there is a drive for smaller and even less 
invasive surgery . To respond to this, SI is taking 
the strategic step of developing a range of 
3mm Resposable
®
 instrumentation which is 
compatible with its existing non-disposable 
handles that are already in the market place. 
SI is also designing percutaneous instruments – 
surgical devices that access the patient 
through a needle puncture rather than a port – 
and updates on these developments will be 
provided in due course. 
As a result the Group has steadily built a 
reputation as a leading innovator in the field 
of MIS. 
OEM 
Revenues in the OEM segment increased 
during the period by 71% to £2.506 million 
(2009:  £1 .463 million), of which royalties were 
£347 ,000. The growth in this part of the business 
is a reflection of our strong relationships with 
large medical device companies such as Gyrus, 
T eleflex Medical and CareFusion. 
Our Product Ranges
design icon
 Logi
®
 Logic
®
 Quick
®
 YelloPort
®
 YelloPort+plus
®  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 11
What have we done?
  Revenues from SI products increased over the period by 30% 
to £3.852 million (2009: £2.956 million).
	 	 Since	the	y ear	end	w e	announced	a	$ 2.2	million	contr ac t	with	Medifl e x	
Surgical Products with regard to the inclusion of YelloPort+plus
® 
in surgical trays throughout the US.
  In the UK, the Group extended its exclusive distribution partnership 
with Elemental Healthcare for a further three years.
What’s next?
  The business development team is looking to expand further the 
international distribution network.
	 	 De v el opment 	 o f 	 de vices 	 using 	 SI ’ s 	 fl e x 	 t ec hnol ogy . 	
  Expansion of the Logi
®
Range enabling the devices to be used 
in a broader range of laparoscopic procedures.
  Taking the strategic approach of developing a range of 3mm 
Resposable
®
 instrumentation to meet future patient demand 
for improved surgical cosmesis.
Demand for Resposable
®
 instruments, where some 
elements are disposable and others reusable, reflects 
a culture change within the medical device industry 
and provides cost-effective solutions to an increasingly 
cost-conscious environment.
Si brand
Resposable
®
 technology is saving hospitals thousands 
of pounds a year
Hospitals that switch to Resposable
®
 technology – surgical 
instruments that combine both disposable and reusable components – 
can save thousands of pounds a year, according to information 
released by SI and its UK distributor Elemental Healthcare.
Carrying out the study into the use of YelloPort+plus
®
, the 
companies discovered that those hospitals who had switched from 
disposable to Resposable
®
 saved £108,000 over 500 procedures.
‘‘ We don’t want patients and surgeons to have 
to compromise on quality, which is why our 
Resposable
®
 range has been designed to satisfy 
both surgeons and procurement managers. It has 
the high quality aspect of a disposable product, yet 
still provides the cost effectiveness of a reusable. ’’ 
David Marsh
Co-founder and Joint Managing Director Surgical Innovations Group plc      Annual report and accounts 2010 12
Review of the year
Business and financial review continued
Operating review continued
OEM continued
The OEM business is reliant on our partners 
to drive business on our behalf and it can, on 
occasion, be unpredictable in terms of repeat 
revenue streams from individual partnerships. 
T o counteract this we collaborate closely with 
our partners to gain understanding of the 
challenges they encounter in the marketing and 
acceptance of their specific OEM product lines. 
The greatest attraction to our OEM customers 
is undoubtedly our strategic positioning of a 
value-added, full-service offering of design, 
regulation and manufacturing. This approach 
has made us of particular interest to US medical 
device companies and it is from here that the 
majority of enquiries are now being generated. 
Crucially and strategically, the Group retains 
the full intellectual property rights for any 
devices it develops in return for providing 
exclusive worldwide distribution rights to the 
OEM customer over a fixed period of time. 
Importantly the Group is not offering contract 
manufacturing or a long-term assignment of 
a licence, with the exception of revenues that 
are generated from royalties. The ownership 
of all intellectual property enables the Group 
to take back distribution rights at the end of 
any distribution agreement or if sales targets 
are not met. 
Industrial 
Total revenues for the Industrial segment 
during the year were £687 ,000 (2009: £122,000). 
As previously stated, the delivery of a 
£616,000 order in May 2010 significantly 
boosted sales and revenues. As predicted, 
sales in the second half of the year returned 
to historic levels. We continue to seek 
opportunities where our intellectual property 
can be adapted to industrial applications and 
the Group continues to engage with major 
industrial partners. We look forward to 
updating shareholders on our progress. 
Employees and management
In 2010 we continued to make appointments 
across all areas of the business increasing 
the total number of employees and agency 
staff to 117 (2009: 76). I would like to thank 
all our staff and management for their 
support and hard work in the last year. 
Financial review
Revenue
Revenue increased 55% to £7 .045 million 
(2009: £4.541 million). This increase was as 
a result of a 71% increase in OEM revenues 
to £2.506 million together with increases in 
the other two reporting segments, SI Brand 
and Industrial. 
Gross margin
Gross margin has increased to 50% 
(2009: 42%) with the Group again targeting 
an improvement in 2011 with increasing 
volumes, operational efficiencies and 
substantial investment in machinery. 
Operating expenses 
The Group’s operating expenses increased 
in 2010 by £404,000 (26%) as a consequence 
of investment in business development 
personnel and associated sales and 
marketing costs.
Employee numbers increased substantially 
during the year in areas which will add future 
value to the business and provide a level 
of customer service that benefits our 
organisation. As a consequence, operating 
expenses are projected to increase in 2011 
but at levels that provide overall Group 
profitability within planned objectives.
Notwithstanding our investment in personnel, 
the Group continues to rigorously control 
costs and is aware of the need to generate 
cash within the business as a means of 
funding future capital and product investment. 
OEM revenue growth (£m)
 
£2.506m 
+71%
09 10
1.463
2.506  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 13
OEM 
What have we done?
  Total revenues for the OEM segment during the year were £2,506,000 
(2009: £1,463,000).
	 	 La unc h	o f	ins tr umenta tion	r ang e	f or	 T el e fl e x	Medical .
  Continued collaboration with Gyrus Medical.
  Successful transfer of SI valve technology within third-party port 
access system.
What’s next?
	 	 Continued	collabor a tion	with	 T el e fl e x	Medical	t o	ensur e	success f ul	
adoption of developed technology.
  Promotion of SI’s OEM proposition to US medical device companies.
  Development of new intellectual property with exclusive rights 
to key OEM partners.
The Group’s ability to conceive, develop and 
manufacture products to order for OEM partners, 
while retaining full intellectual property rights, is 
a key factor in securing SI’s future growth.
Surgical Innovations wins five-year contract with T eleflex Medical
Buil ding	upon	a	pr e vious	r ela tionship , 	 T el e fl e x	ap pr oac hed	SI	t o	
develop new handle technology. The articulating reusable handles 
ha v e	been	under	de v el opment	b y	 T el e fl e x	and	SI	f or	tw o	y ear s	and	
the	unique , 	fl e xibl e	na tur e	impr o v es	the	er g onomics	and	ease	o f	
use for surgeons performing keyhole surgery. SI retains the full 
intellectual property rights for the devices, subject to the rights of 
T el e fl e x 	 t o 	 utilise 	 the 	 int ell ec tual 	 pr operty 	 in 	 the 	 sal e 	 o f 	 the 	 de vices 	
pursuant to the Supply Agreement. The initial roll out of the 
technology will be throughout Europe with the potential for 
expansion into the US.
‘‘ This order represents an important milestone 
for our OEM business. We have been working 
successfully with Teleflex for more than ten years 
and we are delighted to continue this successful 
relationship. Our in-house design, prototype and 
manufacturing facilities allow us to develop new 
and improved technologies. ’’
Graham Bowland
Chief Executive Officer Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 14
Business and financial review continued
Financial review continued
Finance income and costs
The net financial expense for the year was 
£30,000 (2009: £27 ,000). This reflects the 
reduced returns available on the Group’s 
cash deposits coupled with the cost of asset 
finance. We continue to finance assets 
used in the manufacturing processes of the 
business, ensuring funds remain within the 
Group for both internal product development 
and our working capital needs. 
Profitability and operating margins
The Group’s operating profit for 2010 was 
£1.579 million (2009: £291,000). This is after 
charging £8,000 of non-cash expenditure 
relating to share-based payments. We are 
greatly encouraged by the substantial uplift 
in operating margin to 22% (2009: 6%). We 
believe there is further room for improvement 
through product mix and continued capital 
investment within the manufacturing facility.
Capitalised development costs
The Group has a policy of continuous product 
development both for SI Brand and OEM 
partner devices. As in previous years, the 
Board is confident in the success of these 
products and accordingly £1.674 million of 
costs have been capitalised during the year, 
increasing the total amount of capitalised 
costs to £3.984 million. 
YelloPort+plus
®
 continues to generate revenues 
and under the Group’s accounting policy 
£73,000 of associated development costs 
were amortised in the period (2009: £101,000) 
together with £111,000 in relation to other 
products where revenue commenced in 
the period. 
Following review the Board recognised an 
impairment charge of £334,000 within the 
financial statements and at 31 December 2010 
confirmed that no further provision for 
impairment was necessary.
Foreign currency
The Group maintains foreign currency bank 
accounts and, wherever possible, supplier 
payments are made in Euros or Dollars 
to utilise currency receipts. 
The Group has used forward exchange 
contracts and will continue to monitor the 
need for such contracts depending upon 
the level of natural hedging achievable. 
Taxation
The Group recognised a tax credit of £239,000 
resulting from deferred tax, reflecting the 
extent to which recoverability of tax losses 
can be foreseen with reasonable certainty. 
The Group holds deferred tax assets on the 
balance sheet of £432,000 (2009: £193,000). 
In addition there are a further £16. 100 million 
(2009: £14.600 million) of tax losses that have 
not been recognised. 
Earnings per share (EPS)
The Group achieved 0.48p (2009: 0.14p) 
underlying basic EPS in 2010. There were 
shares issued during the year and full details 
of all the EPS calculations are set out in note 
6 to the accounts.
Cash and net funds
At the end of 2010 the Group had £442,000 
(2009: £622,000) in net funds. Net funds are 
defined as cash and cash equivalents less 
obligations under finance leases.
Working capital
Working capital increased to £3.942 million 
(2009: £3.630 million) as a result of a reduction 
of £211,000 in trade and other payables 
to £607 ,000 (2009: £818,000). The business 
generated net cash from operations of 
£2.202 million (2009: £1.439 million), however , 
after accounting for the acquisition 
of non-current assets of £2.044 million 
(2009: £1.517 million), there was a net cash 
increase in the year of £60,000 
(2009: decrease of £316,000).
Industrial revenue growth (£’000)
 
£687 ,000 
+463%
09 10
122
687  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 15
What have we done?
  Total revenues for the Industrial segment during the year were 
£687 ,000 (2009: £122,000).
  Delivered a £616,000 order in May 2010 for our key industrial partner.
What’s next?
  Continue to seek opportunities where SI’s intellectual property can be 
adapted to industrial applications. 
  Continue to engage with major industrial partners.
The Group’s Industrial segment provides industrial 
solutions for major international companies. We 
believe there is scope to develop and expand this 
segment using our core technology .
indUS trial
Surgical Innovations delivers major industrial order
On 17 May 2010, SI announced that it had delivered a £616,000 
order to one of its key industrial partners. The order, originally due 
for completion in December 2009, was delayed as a consequence 
o f	thir d	par ty	t ec hnical	difficulties , 	whic h	w er e	r esolv ed	in	Mar c h	
2010. This is the largest single order the Group has received within 
its industrial division.
‘‘ Fulfilling this order represents an important step 
for our industrial division and we are delighted that 
a commercially successful outcome has arisen 
from the eighteen month development project. 
We look forward to continuing development of the 
industrial business as we strive to develop the 
technology for a wider range of applications within 
the field. ”
Graham Bowland
Chief Executive Officer Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 16
Corporate social responsibility
Committed to our stakeholders
Impact on society
At Surgical Innovations we strive to play 
an integral role in society and our core value 
is to meet the needs of forward-thinking 
surgeons and clinicians by supplying 
high-quality, cost-effective instrumentation 
that empowers surgeons and provides 
patients with an improved quality of life.
 SI has chosen to bring “manufacturing home” 
to West Yorkshire – a goal that has been 
achieved through total capital investment of 
£2.6 million since moving facilities in April 
2008. This strategic move has enabled us to 
design and manufacture all products 
in-house thereby tripling our workforce by 
the end of 2010. It has also led to a significant 
reduction in the Group’s carbon footprint.
 On a fundraising level, SI organises internal 
activities to raise money for a local children’s 
charity and we actively encourage employee 
participation in local fundraising events, 
such as a recent abseiling event at the 
Royal Armouries (Leeds). Many members 
of the SI team also regularly participate 
in sponsored sporting challenges for their 
own individual charities for which SI has 
a policy of financially matching employee 
sponsorship contributions. 
Environmental impact
SI’ s objective is to create a climate of excellence, 
not only for our products and services, but also 
for employees and persons affected by our 
activities and the environment. In order to achieve 
this we have an Environmental Policy and 
are committed to regular monitoring of our 
environmental performance against objectives 
regulated by a committed managed system. 
The Environmental Policy reviews the impact 
of all SI’ s policies, operations and investment 
decisions and covers emissions and fuel 
efficiency , noise, waste, energy use and recycling. 
Relations with suppliers, partners and 
contractors
SI uses criteria of a reputable standard to select 
major suppliers, partners and contractors 
and ties to ensure that all our major suppliers 
meet the requirements of our ISO 9001:2000. 
Recently we helped two of our major suppliers 
to implement this criteria by continued support 
and encouragement. In all cases we will try 
to ensure a long-term partnership which 
benefits all parties involved. 
Relations with regional stakeholders
Working with key stakeholders across the region 
allows SI to play a key role in the healthcare 
sector of Yorkshire and Humber, and enjoying 
a long-standing relationship with both 
Medilink and Medipex enables the Company 
to benefit from the sector expertise available. 
Relations with regional educational institutes
Surgical Innovations strives to play an 
integral role in society and 2010 has seen 
the Company venture further into the wider 
community, recognising the importance to 
invest in the younger generation by working 
with local schools and universities. 
A group of BTEC Science students from a 
local high school visited Surgical Innovations 
in February to learn about the potential career 
opportunities available to them before being 
given a tour of the factory and set a 
design challenge.
Alongside this activity, SI has been working 
the Thackray Medical Museum to create an 
individual exhibit for the museum which will 
go on display in the next quarter. The purpose 
of the exhibit is to showcase SI’s world-leading 
products, explaining the history of the Company 
and encouraging schoolchildren to understand 
the diverse opportunities available in a medical 
career – from doctor to designer.
   Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 17
The strategy for SI’s work with the 
younger generations is to inform and educate 
schoolchildren on the opportunities available 
to them through design and manufacturing 
with a company such as SI and to plant the 
seed of enthusiasm required for a career 
in innovation. 
Implementing this strategy, SI held an 
Open Day, welcoming school leavers in the 
area to learn more about the manufacturing 
apprenticeships on offer, whilst gaining an 
overall appreciation of the business. 
Working with universities in the region, SI 
is currently running two Knowledge Transfer 
Partnerships (KTP) with the University of 
Leeds and the University of Bradford. 
KTPs aim to help businesses improve their 
competitiveness and productivity through 
the better use of knowledge, technology and 
skills that reside within the knowledge 
base, through specifically managed projects 
organised by SI and the universities to ensure 
commercial benefit.
In addition to this, SI is also working with both 
the University of Bradford and the University 
of Leeds to sponsor students through their 
Masters degree studies. This collaboration 
will enable students to work on specific 
SI projects, guided by representatives of 
academia and industry, to provide them 
with valuable research and development 
knowledge within a commercial environment.
Relations with employees
SI has a happy and motivated team of 
employees and endeavours to ensure the 
highest working standards for all staff. 
An example of this is Business Improvement 
Training, which is carried out through the NVQ 
Awards, designed to give employees an 
important insight into the layout and 
processes of SI’s business. 
 SI has a number of safe working practices in 
place. These include sending representatives 
on the NEBOSH programme, a nationally 
recognised qualification that covers the main 
legal requirements for health and safety in 
the UK.
 A Health and Safety Committee, made up 
of employees from across the organisation, 
is in place to continually review and update 
the Health and Safety Policy. This ensures a 
safe working environment for both employees 
and visitors to the SI facility. 
 To assess staff performance, annual 
appraisals are carried out by department 
heads and an annual ‘Employee of the Year’ 
award takes place to recognise and reward 
Who we collaborate with: Review of the year
Surgical Innovations Group plc      Annual report and accounts 2010 18
Corporate social responsibility continued
Relations with employees continued
achievements made throughout the year. 
There are also regular team building events to 
increase staff morale, unite the organisation 
and encourage inter-departmental interaction.
In a bid to ensure a work life balance, SI offers 
flexibility in working hours and extended 
holidays for long service, as well as extra time 
off at Christmas if all work is completed on 
time. These excellent terms of employment, 
which are above and beyond industry norms, 
have led to a high working morale and high 
staff retention; many employees have worked 
for SI for over ten years.
 SI has employed an HR Manager who will 
look at reviewing and implementing policies 
and procedures with an objective of gaining 
the Investors in People accreditation.
Relations with customers
SI’s ultimate customer is the surgeon and 
the true evaluator of SI products. A high 
proportion of sales consist of repeat 
purchases, which is a meaningful indicator 
of quality, as surgeons will only use products 
that deliver their needs and offer patients 
the highest level of care.
SI continually looks to improve the quality 
of these products by advancing technologies, 
seeking to understand customer requirements 
and being advised by its Clinical Advisory 
Board, which is made up of internationally 
renowned surgeons. 
All products are designed to meet the 
requirements of ISO 9001:2000 and 
ISO 13485:2003 for sales in Europe and 
where appropriate meet similar regulations 
throughout the world. Specific quality 
objectives are also set by the management 
team during the quality system review 
process and these are communicated 
to all employees on a regular basis. 
Finally, to ensure that all our products exceed 
customers ’ expectations SI continually monitors 
their performance, carrying out post market 
surveillance with all our customers 
and distributors.
VIP visits
2010 has been a busy year for SI, with VIP 
visits from across the country.
Following his appointment as Prime Minister 
in June 2010, we were delighted to welcome 
the Rt Honourable David Cameron to our 
Leeds facility on his first major visit since 
the election. 
Greg Mulholland, MP for Leeds, spoke 
after his visit: “We are incredibly proud 
that this innovative company is designing 
and manufacturing leading-edge surgical 
equipment and exporting all round the world. 
It shows that, with vision, flair and drive, 
British companies can be world leaders. 
It is so exciting that Surgical Innovations 
is doing this right here in Leeds” .
Following this exciting visit, SI was honoured 
once again when HRH The Princess Royal 
visited the Head Office in February 2011.
HRH The Princess Royal met staff and took 
a tour of the design and manufacturing 
facilities before officially opened the Company’s 
Injection Moulding Centre.
The visit was a real honour and further 
recognition of the achievements of the 
entire team in recent years.
Some of the country’s finest surgeons 
travelled to Leeds to mark the event as well 
as UK and international distributors and a 
number of stakeholders to celebrate the 
success of SI and highlight how the Company 
is waving the British flag of excellence around 
the world. 
2010 has been a busy year for SI, with VIP 
visits from across the country  Review of the year 01 - 19
Annual report and accounts 2010      Surgical Innovations Group plc 19
“This highlights how close collaboration 
and strong innovation have helped to develop 
Surgical Innovations into a successful 
company that is waving the British flag 
of excellence around the world. ” Surgical Innovations Group plc      Annual report and accounts 2010 20
Governance
Board of Directors
Name: Doug Liversidge CBE 
Position: Non-executive Chairman
Age: 74
Board committees: Remuneration 
Committee (Chairman), Audit Committee
Doug was educated in Sheffield and graduated 
with a degree in Metallurgy in 1957 . Employed 
for 21 years at British Steel, Doug attained the 
position of Chief Quality Manager.
After moving to G W Thornton as Managing Director 
and subsequently appointed Chief Executive, Doug 
guided the company through its flotation on the 
London Stock Exchange in March 1987 and was 
instrumental in the company winning numerous 
prestigious business awards including the Queen’s 
Award to Industry for Export Achievement and twice 
the Cutlers Acclaim Award for Corporate Growth. 
In 1991, Doug was awarded South Yorkshire 
Businessman of the Year.
Until recently he was Chairman of Medilink Yorkshire 
and Humber and proud to hold the office of Master 
Cutler in Hallamshire from 1998 to 1999. In 2000, 
Doug was appointed Chairman of the South Yorkshire 
Learning & Skills Council by Government Office, Leeds 
and awarded the CBE in the 2000 New Year’s Honours 
List for services to industry.
Name: Graham Bowland
Position: Chief Executive Officer 
and Company Secretary
Age: 49
Graham graduated from Cardiff University with 
an honours degree in Physics in 1982. He qualified 
as a Chartered Accountant in 1987 whilst working 
for a local firm of chartered accountants.
After gaining substantial experience in the private 
sector, Graham joined SI in February 1999 as 
Financial Controller and was promoted in the 
same year to the Group Board as Finance 
Director and Company Secretary.
Appointed Joint Managing Director of Surgical 
Innovations Limited in 2000 and made sole 
Managing Director in 2008, Graham has been 
instrumental in building upon the Company’s 
reputation within the industry for innovation and 
in-house manufacturing. In 2010, Graham became 
Group Chief Executive Officer, continuing to build 
the Company’s strategy as well as representing the 
Leeds city region on its Innovation Panel reporting 
to the Leeds Enterprise Partnership.
Name: Colin Glass
Position: Non-executive Director
Age: 67
Board committees: Audit Committee 
(Chairman), Remuneration Committee
Colin is a Chartered Accountant and a partner in 
Winburn Glass Norfolk. He is a founder Director of 
Surgical Innovations Limited and was instrumental 
in securing early funding and in the reverse takeover 
of Haemocell plc in 1998, which resulted in the 
quotation of the Company on AIM. 
Colin is a Non-executive Director of several companies, 
including Straight PLC and Getech Group PLC. He is the 
Chairman of SI’s Audit Committee and a member of 
SI’s Remuneration Committee. Using his expertise 
in financial and corporate advisory matters, Colin 
has built up a wide range of contacts from various 
industries and organisations which benefit the 
companies with which he is involved. Annual report and accounts 2010      Surgical Innovations Group plc 21
 Governance 20 - 35
Name: Ray Simkins
Position: Non-executive Director
Age: 67
Board committees: Remuneration 
committee, Audit Committee
Ray is a mechanical engineer by training and has 
qualifications from Buckingham Technical College 
and Massachusetts Institute of Technology (MIT). 
He has worked for Getz since 1966 where he 
has represented their business interests in the 
US, Japan, Thailand, Malaysia and Singapore. 
He is currently President of the Getz Group with 
interests throughout the Asia/Pacific region.
Ray has been a Non-executive Director since 1996 
and was instrumental in securing investment from 
Getz prior to the reverse takeover of Haemocell plc 
in 1998. Ray is a member of both the SI’s Audit 
and Remuneration Committees and, with a wealth 
of experience in international distribution 
management, he provides invaluable input into 
many aspects of the Board’s activities.
Name: Professor Mike McMahon
Position: Non-executive Clinical Director
Age: 68
Mike, a founder Director of Surgical Innovations 
Limited, became Non-executive Clinical Director 
in October 2007 , holds a Chair in Surgery at the 
University of Leeds and is Consultant Surgeon 
at the Nuffield Hospital, Leeds. 
He is the immediate past President of the 
Association of Laparoscopic Surgeons of 
Great Britain and Ireland (ALS) and was recently 
a Royal College of Surgeons tutor in MIS. He also 
established the Leeds Institute for Minimally 
Invasive Therapy . 
Mike’s past roles include President of the Pancreatic 
Society of Great Britain and Ireland and Chairman 
of the Education Committee of the European 
Association of Endoscopic Surgery. Surgical Innovations Group plc      Annual report and accounts 2010 22
Governance
Senior management and advisers
Mike graduated from Brunel University with a first 
class honours degree in product design in 1996. 
After winning the James Dyson award for product 
design at London’s New Designers exhibition, 
he worked for Dyson Appliances before joining 
SI as a design engineer in 1997 .
The first project that Mike was involved with at SI, 
Logic
®
, went on to win Best Medical Device in the 
1999 Plastics and Rubber Weekly (PRW) Awards 
for Excellence and has patents filed worldwide.
A member of the Chartered Society of Designers 
since 2002, Mike was appointed to the Management 
Board of SI as Design Director in 2006 and is 
dedicated to expanding the Company’s product 
portfolio with innovative, ergonomic and commercially 
successful instrumentation.
Name: Mike White
Position: Product Development Director
Age: 37
Paul joined the Company as Manufacturing 
Director in 2005. He has a background in mechanical 
engineering with extensive experience of manufacturing 
both in the UK and overseas. 
Paul began his career as an apprentice at 
Renolds Power Transmission in Bradford before 
moving into management at a sub-contract 
engineering company in Heckmondwike. He then 
moved into production management at Pinco, 
Bradford, a textile engineering manufacturer. 
Paul also spent eight months in the US, where he 
was responsible for setting up a textile engineering 
plant, before returning to the UK where he joined SI. 
Paul has been instrumental in the recent setting 
up of in-house manufacturing thereby enabling 
the more effective and efficient manufacture 
of products.
Name: Paul Birtles
Position: Manufacturing Director
Age: 45
Name: Stephen Seed
Position: Quality Manager
Age: 45
Stephen was educated in Sheffield and graduated 
with a degree in Mineral Processing in 1988. 
He began his quality career in the County Durham 
mining industry, soon moving into the chemical 
industry and then into engineering.
Stephen now has over 20 years’ experience as 
a quality manager. He is a Chartered Quality 
Professional, member of the Chartered Quality 
Institute and is a qualified lead auditor for ISO 13485, 
the medical device manufacturing standard.
Stephen joined SI as Quality Manager in 2006, since 
when he has completely rewritten the Company’s 
quality systems and employed his Lean Six Sigma 
experience to continually improve procedures 
and practices. Annual report and accounts 2010      Surgical Innovations Group plc 23
 Governance 20 - 35
Duncan studied Business Studies at Sheffield 
Polytechnic, completing his studies in 1977 . He then 
went on to study for his professional accountancy 
examinations, becoming an Associate Member 
of the Chartered Institute of Management 
Accountants (CIMA) in 1984.
Duncan has spent the majority of his professional 
career working in both civil and mechanical 
engineering businesses. He joined SI in 2008 
as a member of the senior management team and 
has since built a strong financial and administrative 
team providing valuable support to the Board of 
Directors and the Company.
Name: Duncan Pidsley
Position: Financial Controller
Age: 54
Name: Mark Hughes
Position: Business Development Manager
Age: 29
Mark is fluent in Spanish and has a strong 
command of several other European languages, 
having left Durham University in 2004 with a BA (Hons) 
in Modern European Languages and an MSc 
in Computer Science. 
Mark has developed his career working in UK based 
business in both national and international business 
sales roles, managing challenging relationships 
with large firms such as Smith and Nephew 
and Caterpillar.
Joining Surgical Innovation Limited’s export sales 
team in late 2009, Mark travels thousands of miles 
a year to meet distributors and visit international 
exhibitions and his five-strong team has made 
significant contribution to the 2010 sales growth. 
Company Secretary and registered office
N Graham Bowland
Clayton Wood House 
6 Clayton Wood Bank 
Leeds LS16 6QZ
Registered number 
2298163
Nominated adviser 
Seymour Pierce Limited
20 Old Bailey 
London EC4M 7EN
Solicitors
Walker Morris
Kings Court 
12 King Street 
Leeds LS1 2HL
Auditor
Grant Thornton UK LLP
No 1 Whitehall Riverside 
Leeds LS1 4BN
Broker
Seymour Pierce Limited
20 Old Bailey 
London EC4M 7EN
Registrars
Capita Registrars
The Registry 
34 Beckenham Road 
Beckenham 
Kent BR3 4TU
Bankers
HSBC Bank Plc
7 Prospect Crescent 
Harrogate HG1 1RN
Financial public relations
The Communications Portfolio
7 Ensign House 
Admirals Way 
London E14 9XQ Surgical Innovations Group plc      Annual report and accounts 2010 24
Governance
Clinical Advisory Board
Peter qualified from Leeds Medical School in 1983 
with honours after initially gaining a first class 
honours degree in Pathology in 1980. After basic 
surgical training at The General Infirmary in Leeds 
and becoming a Fellow of the Royal College of 
Surgeons, he went on to complete a Doctorate in 
Medicine with research into new techniques in the 
surgery for inflammatory bowel disease. This work 
was awarded the prestigious Patey Prize by the 
Surgical Research Society in 1990. 
His research interests continued as a Lecturer 
in Surgery at the University of Liverpool before 
working as a Chief Resident at the Mayo Clinic, 
Rochester, Minnesota. 
In 1996, he was appointed to the staff at the Leeds 
General Infirmary and has gone on to develop a 
national referral practice for the management of 
recurrent pelvic malignancy. He has been involved 
in the laparoscopic management of colon and rectal 
disease since its inception and currently runs an 
active training and research fellowship. He has 
lectured throughout the world and has published 
over 160 papers.
Ian graduated as an Operating Department 
Practitioner in 1994. He has continued to train 
in this area and in 2004 completed a Diploma 
in Advanced Surgical Practice at Huddersfield 
University and went on to complete The Royal 
College of Surgeons Basic Skills course. He is 
a surgical first assistant for the Leeds General 
Infirmary, where he has worked since 1981. 
Ian specialises in laparoscopic bariatric surgery, 
upper GI and cholorectal surgery. He has been 
the first assistant in over 500 bariatric cases 
and 50 colorectal pouch procedures in the UK.
Name: Peter Sagar
Key speciality: Colorectal
Name: Ian Brayshaw
Key speciality: Laparoscopic bariatric
Philippe qualified from the Medical School in Nancy 
and then qualified from Poitiers in general surgery 
in 1986 and urology in 1989. He is now a consultant 
at King’s College Hospital in London, Honorary 
Professor of Urology at The Beijing Hospital and 
Honorary Consultant Laparoscopist at Guy’s 
Hospital and University College of London Hospital. 
His main field of interest lies in pioneering 
laparoscopic procedures and he has performed over 
2,000 major laparoscopic procedures in oncological 
urology, uro-gynaecology and abdominal surgery. 
Philippe has been teaching and mentoring radical 
prostatectomy in 40 centres for the past three years. 
He is currently a course director for laparoscopic 
skills (BAUS, China, RCS, UCLH, ESI) and is an adviser 
to the Royal College of Surgeons for laparoscopic 
skills courses. He is an adviser on the board 
of the International Society of Cryosurgery.
Name: Phillippe Grange
Key speciality: Laparoscopy and Urology
Marco is a Consultant Surgeon and Bariatric 
Surgery Lead at the prestigious University College 
London Hospital (UCLH) where he has worked since 
2007 . He graduated in 1995 with full marks and 
honours in Palermo, Italy, and also completed his 
training in general surgery at the same university. 
He has been living in the United Kingdom since 
2000, dedicating his activity to advanced 
laparoscopic surgery and laparoscopic bariatric 
(obesity) surgery. He was awarded an MD by the 
University of Leeds for his research on appetite 
hormones and bariatric surgery. 
He is a pioneer of single incision bariatric surgery 
having performed the first single incision 
laparoscopic sleeve gastrectomy in the UK and 
often runs advanced training courses for UK and 
European surgeons in laparoscopic bariatric 
surgery and laparoscopic hernia surgery. 
Name: Marco Adamo
Key speciality: Bariatric
The Clinical Advisory Board brings 
together a wealth of experience 
and expertise. It works closely 
with the design team to develop 
and test products. Annual report and accounts 2010      Surgical Innovations Group plc 25
 Governance 20 - 35
Gary comes to us as the Director of Surgery at 
St Francis Hospital, New York with an international 
reputation in minimally invasive surgery and 
surgical oncology. Having trained in South Africa 
as a gastrointestinal surgical oncologist, he 
pioneered numerous laparoscopic techniques 
and was responsible for the development 
of flexible laparoscopy, which has become 
an integral part of minimally invasive 
intra-abdominal solid tumour resection and 
minimally invasive esophagectomy (MIE).
He spent the past decade as Chief of General 
Surgery at Long Island Jewish Medical Center 
and, in 2005, was appointed Vice Chairman of 
Surgery for the NSLIJ Health System and Site 
Director for Surgery at the LIJ Medical Center. 
He is Associate Professor of Clinical Surgery 
at the Albert Einstein College of Medicine. 
Upon immigrating to the US, Gary was appointed 
Assistant Professor of Surgery at SUNY Stony Brook. 
During that tenure he was appointed Medical 
Director of the Operating Room at University 
Hospital and was appointed Chairman of the 
Medical Executive Committee in 1998.
He has published extensively in his field and 
has been invited to lecture throughout the world, 
including Britain, South Africa, Chile, Argentina 
and Colombia. He is also a standing member of 
the American College of Surgeons’ Ultrasound 
Education Faculty. 
Gary has patents in surgical safety devices and 
has lectured internationally on optimising the 
surgical care environment. He participates on 
many national clinical trials in novel cancer 
therapies and is on the Clinical Advisory Board 
of numerous cutting edge technology companies.
Alberic was Senior Lecturer in Surgery at 
St George’s Hospital Medical School from 1990 
to 2003, Consultant General and Upper Digestive 
Surgeon at St George’s Hospital from 2004 to 2007 
and Director of Bariatric Surgery at University 
College London Hospital from 2007 to 2009.
He has been a Council member of the 
British Obesity Surgery Society (BOSS) for 
four years and is currently President of the 
society. He chairs the National Bariatric 
Surgery Registry Data Committee.
He first undertook laparoscopic cholecystectomy 
in 1991, TEPP hernia repair in 1992 and was the 
first UK surgeon to offer day-case laparoscopic 
cholecystectomy and hernia repair. 
He has been active in bariatric surgery since 
1995 when he took on the aftercare of a cohort 
of patients who had undergone weight-loss 
surgery in the 1970s and 80s. The team he now 
leads has 14 years’ experience in the NHS and 
the independent sector.
Alfred, consultant at University College Hospital, 
London, achieved a distinction in obstetrics and 
gynaecology in 1985 and went on to obtain his 
Doctorate in Medicine from the University of 
London in 1993.
Alfred gained his Part II to become a Member of the 
Royal College of Obstetricians and Gynaecologists 
in 1993, having obtained Part I in 1987 .
He has written a book entitled “Basic Urogynaecology” 
(1993) and has also contributed to many others, 
including “The Investigation and Management of 
Urinary Incontinence in Women” (1995) and a more 
recent chapter in R Kearney , A Cutner “Laparoscopic 
Colposuspension and Paravaginal Repair” . Alfred has 
been a member of several committees and currently 
holds the position of President of the BSGE.
Jon is a Consultant Orthopaedic Surgeon specialising 
in joint replacements and arthropscopic, or “keyhole” , 
surgeries to the hip and knee and is a member of the 
British Hip Society, International Society of Hip 
Arthroscopy, The British Orthopaedic Association 
and a Fellow of The Royal College of Surgeons 
of England. He also holds a Masters degree in 
Mechanical Engineering from the University of 
Leeds and has published research in several 
medical journals and won the GlaxoSmithKline 
Orthopaedic Essay Prize in 2005 and the John Fitton 
Prize for Orthopaedic Specialist Registrars in 2006. 
Name: Gary Gecelter
Key speciality: MIS and Oncology
Name: Alberic Fiennes
Key speciality: Bariatric
Name: Alfred Cutner
Key speciality: Gynaecology and Urology
Name: Jon Conroy 
Key speciality: Orthopaedics  Governance
Surgical Innovations Group plc      Annual report and accounts 2010 26
        South 
     UK EU US Africa
Logi    
® ®
 ™ ™
Logic    
® ® ® 
™
Quick   
 ®
 
®
 ™ ™
Resposable   
 ® ®
 ™ ™
Surgical Innovations   
 ™
 
™ 
®
 
®
SwingTop   
 ® ® ®
 
®
YelloPort   
 ® ® ®
 
®
YelloPort+plus   
 ® ® ®
 
®
FrictionFinish   
 
™
 ® 
™ ™
Surgical Innovations’ trade marks
as at 31 December 2010 Annual report and accounts 2010      Surgical Innovations Group plc 27
 Governance 20 - 35
The Directors present their annual report, together with the audited financial statements, for the year ended 31 December 2010.
Principal activities and business review
The Company is the holding company of a group whose principal activities in the year involved the design, development and manufacture of 
devices for use in minimally invasive surgery (MIS) and industrial markets. Surgical devices are targeted at the operating theatre environment 
in both public and private hospitals. In international markets, the Group sells through independent healthcare distributors, through original 
equipment manufacture (OEM) and licensing contracts with major suppliers of medical equipment. A review of the Group’s activities during 
the year is included within the Chairman’s statement on pages 6 and 7 and the Business and financial review on pages 8 to 15.
Results and dividends
The Consolidated statement of comprehensive income for the year is set out on page 37 . 
The Directors believe that at this stage in the Group’s development it would be more appropriate to continue its focus on strong inward 
investment and hence are not recommending the payment of a dividend and the whole of the gain will be transferred to reserves.
Research and development
The Group’s activities in this area have focused principally on the continuing development of innovative instruments for use in the field of MIS.
Employees
The commitment and ability of our employees are key factors in achieving the Group’s objectives.
Employment policies are based on the provision of appropriate training, whilst annual personal appraisals support skill and career development.
The Board encourages management feedback at all levels to facilitate the development of the Group’s business. The Group seeks to keep 
its employees informed on all matters affecting them by regular management and departmental meetings. The Company operates an 
Enterprise Management Incentive (EMI) share option scheme.
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.
Directors
The names of the current Directors of the Company and their biographical details are set out on pages 20 and 21. All Directors served 
throughout the year.
Directors’ interests
The interests in the share capital of the Company of those Directors in office at the end of the year were as follows:
       31 December 1 January 
       2010 2010 
Ordinary shares of 1p each      Beneficial  Beneficial
D B Liversidge CBE      5, 171,821 4,171,821
N G Bowland       4,217 ,498 1,617,498
C Glass       4,881,602 3,881,602
R Simkins      2,369,461 2,369,461
M J McMahon      13,188,281 12,188,281
Apart from the interests disclosed above and the options referred to on page 33, no Directors held interests, at any time during the year, in the 
share capital of the Company or other Group companies. There have been changes in Directors’ interests between the year end and 19 April 2011.
Otherwise than as disclosed in note 16, no Director has an interest in any material contract, other than contracts of service and employment, 
to which the Group was a party.
Copies of the Directors’ service contracts are available for inspection at the registered office of the Company, Clayton Wood House, 
6 Clayton Wood Bank, Leeds LS16 6QZ, and will be available at this year’s Annual General Meeting (AGM) for 15 minutes prior to and during 
the whole course of the Meeting.
Report of the Directors Governance
Surgical Innovations Group plc      Annual report and accounts 2010 28
Report of the Directors continued
Substantial shareholdings
Other than the Directors’ own holdings, the Board has been notified that as at 14 April 2011 the following shareholders on the Company’s 
share register were interested in 3% or more of the issued ordinary share capital of the Company:
        Number   
        of shares  %
Getz Bros & Co. (BVI) Inc.       49,248,810 12.55
Barclayshare Nominees Limited       31,124,894  7.94
R C Greig Nominees Limited       23,699,054 6.04
Pershing Nominees Limited       20,530,492 5.23
The Bank of New York (Nominees)       19,155,416 4.88
TD Waterhouse Nominees (Europe)       15,539,075 3.96
HSDL Nominees Limited       13,546,962 3.45 
Share issues
During the year the following ordinary shares of 1p were issued in respect of exercised share options:
 600,000 at 1.5p
  3,000,000 at 1.7p
  3,050,000 at 2.0p
  1,000,000 at 3.0p
Creditor payment policy
The Group’s current policy concerning the payment of suppliers is to:
  settle the terms of payment with those suppliers when agreeing the terms of each transaction;
  ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
  pay in accordance with its contractual and other legal obligations.
The payment policy applies to all payments to creditors for revenue and capital supplies of goods and services without exception. 
The Company has trade creditors.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have to prepare the 
financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). Under 
company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state 
of affairs and profit or loss of the Company and Group for that period. In preparing these financial statements, the Directors are required to:
  select suitable accounting policies and then apply them consistently;
  make judgements and accounting estimates that are reasonable and prudent; 
  applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and
  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. 
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions 
and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements 
comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities. Annual report and accounts 2010      Surgical Innovations Group plc 29
 Governance 20 - 35
Statement of Directors’ responsibilities continued
Insofar as each of the Directors is aware: 
  there is no relevant audit information of which the Company’s auditor is unaware; and
  the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and 
to establish that the auditor is aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. 
Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 
Summary of Key Performance Indicators (KPIs)
The Directors have monitored the overall progress of the Group and the individual strategic elements by reference to certain financial 
and non‑financial KPIs.
Financial performance
KPIs are in place to measure sales, profitability, rate of divisional growth, cash generation and returns on capital employed. 
Customer satisfaction
KPIs are established to measure and improve customer relationships, quality of service and our order delivery times.
Employee satisfaction
KPIs are agreed to measure staff morale, training needs and personal development.
Leadership
KPIs are set to measure the performance of Directors and management in conjunction with overall Group strategy and planning.
Innovation
KPIs are positioned to measure the creativity and inventiveness of employees to improve the number of patents filed, design rights applied 
for and internal products developed.
Charitable donations
The Group made a small number of charitable donations during the year, principally to local projects and sponsorship of employees charitable 
fundraising events.
Political donations
The Group made no political donations. 
Principal risks and uncertainties
The management of the business and the nature of the Group’s strategy are subject to a number of risks.
The Directors have set out below the principal risks facing the business.
The Directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks 
identified below. Where possible, processes are in place to monitor and mitigate such risks.
Patents and proprietary rights
The Group’s success is dependent upon its ability to establish, file and protect intellectual property relating to the development of its 
proprietary products for eventual sale or license. Whilst the Group seeks patent protection where appropriate for its developments, there can 
be no assurance that patent applications will mature into granted patents or that existing patents will provide the Group with sufficient 
protection in the case of infringement by third parties, or be successfully challenged or revoked by competitors.
Regulatory approval
As an international business a significant proportion of the Group’s products require registration from national or federal regulatory bodies 
prior to being offered for sale. With our major product lines now having FDA approval in the US, we are subject to their audit and inspection 
of our manufacturing facilities. There is no guarantee that any product developed by the Group will obtain and maintain national registration 
or that the Group will always pass regulatory audit of its manufacturing processes. Failure to do so could have severe consequences upon 
the Group’s ability to sell products in the relevant country.
Product obsolescence
Due to the nature of the market in which the Group operates, products are subject to technological advances and, as a result, obsolescence. 
The Directors are committed to the research and development strategy in place and are confident that the Group is able to react effectively 
to the developments within the market. Governance
Surgical Innovations Group plc      Annual report and accounts 2010 30
Report of the Directors continued
Principal risks and uncertainties continued
Dependence upon reimbursement
The commercial success of the Group’s products is partly dependent upon reimbursement levels for laparoscopic procedures set by governments, 
health authorities, private insurers and other organisations. There is no guarantee that changes in reimbursement policy in the Group’s main 
markets will not have an impact on the ability to sell products into those markets.
Financial risk 
The Directors are confident that the banking facilities currently in place are more than adequate for the Group’s working capital requirements 
for the foreseeable future.
Some of the Group’s sales and purchases are made in currencies other than Sterling and consideration is given to the use of forward currency 
contracts to reduce the exposure.
The Directors are satisfied that credit risk is adequately managed and the level of bad debts is consistent with the nature of the industry; 
further details with regard to this are given in note 12.
Auditor
Grant Thornton UK LLP has indicated its willingness to continue in office. A resolution for its re‑appointment as independent auditor will be 
proposed at the AGM.
By order of the Board
N G Bowland
Chief Executive Officer
19 April 2011 Annual report and accounts 2010      Surgical Innovations Group plc 31
 Governance 20 - 35
Report on remuneration
Executive Director’s remuneration
The Board recognises that the Executive Director’s remuneration is of legitimate concern to the shareholders. The Group operates within 
an innovative and competitive arena that places constant demands on the technical abilities of the Group. Its performance depends on the 
individual contributions of the Executive Director and employees and it believes in rewarding all those who have made a positive contribution 
in the development of the Group.
Remuneration Committee
The Remuneration Committee, which meets as required, is made up of the following Directors:
D B Liversidge CBE (Chairman)
C Glass
R Simkins
Remuneration policy
The principal objective is to develop policies and recommend proposals appropriate to facilitating the recruitment, retention and motivation 
of the Executive Director and in so doing to avoid the Group bearing more than a reasonable and necessary cost. Where practical and 
appropriate, the remuneration of the Executive Director (and other senior management) is aligned with the interests of shareholders.
The Remuneration Committee considers that a successful remuneration policy needs to be sufficiently flexible to take account of future 
changes in the Group’s business environment and in remuneration practice. Any changes to policy for years after 2010 will be described 
in future Reports on remuneration.
The remuneration of the Executive Director comprises four main elements:
  basic salary: to remain competitive in the marketplace, reflecting the experience, level of competence of the individual and comparative 
base salaries elsewhere within the Group;
  annual bonus payment: to provide additional short‑term remuneration which directly reflects Group and individual performance;
  share options: through the regular grant of options to reward achievements of target and outstanding business performance over the 
longer term; and
  pension arrangements: to enable the Director to make appropriate provision for retirement.
It is Group policy that a significant proportion of the remuneration of the Executive Director should be performance related. 
Contracts of service
No Director has a service contract with a notice period in excess of one year. Governance
Surgical Innovations Group plc      Annual report and accounts 2010 32
Report on remuneration continued
Directors’ emoluments – information subject to audit
Details of Directors’ emoluments for the year are as follows:
          
    Salary      
    and  Total Total Pension Pension 
     fees Benefits emoluments  emoluments  contributions contributions 
    2010 2010 2010 2009 2010 2009 
     £’000 £’000 £’000 £’000 £’000 £’000
Executive      
N G Bowland   118 7 125 103 6 4
Non‑executive      
D B Liversidge CBE
1
   28 — 28 25 — —
C Glass
2
   20 — 20 13 — —
R Simkins
3
   20 — 20 13 — —
M J McMahon   20 — 20 13 — —
Total   206 7 213 167 6 4
1. D B Liversidge’s fees are paid to Quest Investments Limited, a company of which he is a Director.
2. C Glass’ fees are paid to Winburn Glass Norfolk, a firm of which he is a partner.
3. R Simkins’ fees are paid to Getz Bros & Co. Inc., a company of which he is Vice President.
Benefits received consist of the provision of motor cars and private health.
At 31 December 2010 a loan of £18,600 made available to N G Bowland in 2009 was still repayable.
Pension contributions represent payments made to defined contribution schemes. Non‑executive Directors are not entitled to retirement benefits.
Remuneration of the Non‑executive Directors is determined by the Board. Annual report and accounts 2010      Surgical Innovations Group plc 33
 Governance 20 - 35
Directors’ share options
Details of the share options held by Directors are as follows:
    At Exercised At    
    1 January during 31 December  Option  
    2010 the year 2010  price  Date granted
D B Liversidge CBE   1,000,000 1,000,000 — 1.70p  November 2000
1
    1,000,000 — 1,000,000 1.70p  April 2001
1
    1,500,000 — 1,500,000 1.70p  November 2007
1
    1,000,000 — 1,000,000 1.50p  January 2009
1
    400,000 — 400,000 1.70p  November 2009
1
N G Bowland   1,000,000 1,000,000 — 3.00p  November 2000
1
    1,000,000 1,000,000 — 2.00p  November 2001
1
    2,545,454 — 2,545,454 3.50p  November 2007
2
    1,454,546 — 1,454,546 1.70p  November 2007
1
    2,000,000 600,000 1,400,000 1.50p  January 2009
1
    2,200,000  2,200,000 1.70p  November 2009
1
C Glass   1,000,000 1,000,000 — 1.70p  November 2000
1
    1,000,000 — 1,000,000 1.70p  April 2001
1
    1,500,000 — 1,500,000 1.70p  November 2007
1
    1,000,000 — 1,000,000 1.50p  January 2009
1
    400,000 — 400,000 1.70p  November 2009
1
R Simkins   2,000,000 — 2,000,000 1.70p  May 2001
1
    1,500,000 — 1,500,000 1.70p  November 2007
1
    1,000,000 — 1,000,000 1.50p  January 2009
1
    400,000 — 400,000 1.70p  November 2009
1
M J McMahon   1,000,000 1,000,000 — 1.70p  November 2000
1
    1,000,000 — 1,000,000 1.70p  April 2001
1
    1,500,000 — 1,500,000 1.70p  November 2007
1
    1,000,000 — 1,000,000 1.50p  January 2009
1
    400,000 — 400,000 1.70p  November 2009
1
1. Share options are exercisable between nil and ten years from the date of the grant.
2. Share options are exercisable between three and ten years from the date of the grant.
The market price of the Company’s shares at the end of the financial year was 5.30p and the range of market prices during the year was 
between 1.63p and 5.30p.
On behalf of the Board
D B Liversidge CBE
Non‑executive Chairman
19 April 2011 Governance
Surgical Innovations Group plc      Annual report and accounts 2010 34
Corporate governance
Principles of good governance
The Board continues to support the principles of good governance. The Board has adopted such procedures as it considers practical and 
appropriate for a group of its size so as to affect good governance.
Application of principles
Directors 
The Company supports the concept of an effective Board leading and controlling the Group. The Board is responsible for approving Group 
policy and strategy. It meets regularly and has a schedule of matters specifically reserved to it for decision. Management supplies the Board 
with appropriate and timely information and the Directors are free to seek any further information they consider necessary. All Directors have 
access to advice from the Company Secretary and independent professionals at the Group’s expense. Training is available for new Directors 
and other Directors as necessary.
The Board members are:
D B Liversidge CBE – Non‑executive Chairman
N G Bowland – Chief Executive Officer
C Glass  – Non‑executive Director
R Simkins  – Non‑executive Director
M J McMahon  – Non‑executive Director
Accountability and audit
The Board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investments and the Company’s assets.
The Audit Committee comprises C Glass (Chairman), D B Liversidge CBE and R Simkins who are all Non‑executive Directors.
The Committee considers the appointment and terms of engagement of the external auditor and assesses the independence of the external 
auditor and reviews the auditor’s policy for the rotation of audit partners.
The terms of reference of the Committee include reviewing the scope and results of the external audit and its effectiveness.
Communication with shareholders
The Board is committed to effective communication between the Group and its shareholders.
It regards the AGM as a means of communicating directly with private investors and encourages their participation. All Directors normally 
attend the AGM and private investors have the opportunity to meet the Directors and discuss any issues on an informal basis. Separate 
resolutions are passed on each issue so that they can be given proper consideration and there is a resolution to approve the annual report 
and accounts.
The shareholders can gain access to information on the Group, as well as to the annual report and accounts, through the website, www.surginno.com. Annual report and accounts 2010      Surgical Innovations Group plc 35
 Governance 20 - 35
Internal controls
The Board of Directors is ultimately responsible for the Group’s management and internal control systems. During the financial period and 
to the date of approval of the financial statements, it has reviewed the operation and effectiveness of the Group’s systems of internal control, 
which can provide only a reasonable but not absolute assurance against material misstatement or loss. 
The Board discharges its responsibility for internal financial control through the following key procedures:
  the establishment of an organisational structure appropriate to the size of the business, with clearly defined levels of authority and division 
of responsibilities for approval of external payments and receipt and dispatch of goods;
  a comprehensive budgeting and financial reporting system which compares actual performance with budget on a monthly basis; and
  the formulation by the Board of policies and of approval procedures in a number of key areas such as credit control, expenditure 
authorisation, stock ordering and quality assurance.
Going concern
On the basis of the budget for 2011 and forecasts prepared by the Directors, the Board has a reasonable expectation that the Company and 
the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the 
going concern basis in preparing the financial statements.
On behalf of the Board
D B Liversidge CBE
Non‑executive Chairman
19 April 2011 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 36
Report of the independent auditor – Group
to the members of Surgical Innovations Group plc
Independent auditor’s report to the members of Surgical Innovations Group plc
We have audited the Group financial statements of Surgical Innovations Group plc for the year ended 31 December 2010 which comprise the 
Consolidated statement of comprehensive income, the Consolidated balance sheet, the Consolidated cash flow statement, the Consolidated 
statement of changes in equity and the related notes. The financial reporting framework that has been applied in their preparation 
is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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 auditor
As explained more fully in the Statement of Directors’ responsibilities set out on pages 28 and 29, the Directors are responsible for the 
preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express 
an opinion on the Group financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. 
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the Group financial statements:
  give a true and fair view of the state of the Group’s affairs as at 31 December 2010 and of its profit for the year then ended; 
  have been properly prepared in accordance with IFRSs as adopted by the European Union; and
  have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the Group financial statements are prepared 
is consistent with the Group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
  certain disclosures of Directors’ remuneration specified by law are not made; or
  we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the parent company financial statements of Surgical Innovations Group plc for the year ended 31 December 2010. 
Timothy Lincoln
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountant
Leeds
19 April 2011 Annual report and accounts 2010      Surgical Innovations Group plc 37
 Accounts 36 - 61
Consolidated statement of comprehensive income
for the year ended 31 December 2010
 2010  2009
    Non-recurring   Non‑recurring  
   Headline costs Total Headline costs Total 
  Notes £’000 £’000 £’000 £’000 £’000 £’000
Revenue 2 7,045 — 7,045 4,541 — 4,541
Cost of sales  (3,526) — (3,526) (2,447) (200) (2,647)
Gross profit  3,519 — 3,519 2,094 (200) 1,894
Other operating expenses  (1,932) — (1,932) (1,528) — (1,528)
Share‑based payments   (8) — (8) (75) — (75)
Operating profit 3 1,579 — 1,579 491 (200) 291
Finance costs 5 (39) — (39) (40) — (40)
Finance income  9 — 9 13 — 13
Profit before taxation  1,549 — 1,549 464 (200) 264
Taxation 6 239 — 239 261 — 261
Profit and total comprehensive income for the period  
attributable to the owners of the parent  1,788 — 1,788 725 (200) 525
Earnings per share, total and continuing       
Basic 7   0.48p   0.14p
Diluted 7   0.45p   0.14p
The Consolidated statement of comprehensive income above relates to continuing operations.
The Group has no recognised gains or losses other than the results for the year as set out above.
The accompanying accounting policies and notes form part of the financial statements. Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 38
       2010 2009 
      Notes £’000 £’000
Assets   
Non‑current assets   
Property, plant and equipment     8 2,477 2,056
Intangible assets     9 3,295 2,139
Deferred tax asset     6 432 193
       6,204 4,388
Current assets   
Inventories     10 2,033 2,047
Trade receivables     11 2, 168 2,135
Other current assets     11 513 460
Cash and cash equivalents      2,622 2,508
       7 ,336 7,150
Total assets      13,540 11,538
Equity and liabilities   
Equity attributable to equity holders of the parent company   
Share capital     13 3,815 3,738
Share premium account      75 18,809
Capital reserve      329 329
Retained earnings      6,369 (14,236)
Total equity      10,588 8,640
Non‑current liabilities   
Obligations under finance leases      653 511
       653 511
Current liabilities   
Bank overdraft      1, 177 1,123
Trade and other payables      607 818
Obligations under finance leases      350 252
Accruals      165 194
       2,299 2,387
Total liabilities      2,952 2,898
Total equity and liabilities      13,540 11,538
The accompanying accounting policies and notes form part of the financial statements.
The financial statements on pages 37 to 55 were approved by the Board of Directors on 19 April 2011 and were signed on its behalf by:
D B Liversidge CBE
Director
19 April 2011
Company registered number: 2298163
Consolidated balance sheet
as at 31 December 2010 Annual report and accounts 2010      Surgical Innovations Group plc 39
 Accounts 36 - 61
       Year ended  Year ended 
       31 December 31 December  
       2010 2009 
       £’000 £’000
Cash flows from operating activities  
Operating profit      1,579 291
Adjustments for:  
Depreciation of property, plant and equipment      448 345
Amortisation of intangible assets      518 101
Share‑based payment      8 75
Operating cash flows before movement in working capital      2,553 812
Decrease/(increase) in inventories      14 (331)
(Increase)/decrease in receivables      (86) 913
(Decrease)/increase in payables      (240) 47
Cash generated from operations      2,241 1,441
Interest paid      (39) (40)
Tax received      — 38
Net cash generated from operating activities      2,202 1,439
Cash flows from investing activities      
Interest received      9 13
Acquisition of non‑current assets      (2,044) (1,517)
Net cash used in investment activities      (2,035) (1,504)
Cash flows from financing activities  
Cash received from issue of shares      152 —
Repayment of bank loans      — (6)
Repayment of obligations under finance leases      (259) (245)
Net cash used in financing activities      (107) (251)
Net increase in cash and cash equivalents      60 (316)
Cash and equivalents at beginning of period      1,385 1,701
Cash and cash equivalents at end of period      1,445 1,385
Cash at bank and in hand      2,622 2,508
Bank overdraft      (1, 177) (1,123)
Cash and cash equivalents at end of period      1,445  1,385
Consolidated cash flow statement
for the year ended 31 December 2010 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 40
    Share Share Capital Retained  
    capital premium reserve earnings Total 
    £’000 £’000 £’000 £’000 £’000
Balance as at 1 January 2009   3,738 18,809 329 (14,836) 8,040
Employee share‑based payment options   — — — 75 75
Profit and total comprehensive income for the period   — — — 525 525
Balance as at 31 December 2009   3,738 18,809 329 (14,236) 8,640
Employee share‑based payment options   — — — 8 8
Reorganisation   — (18,809) — 18,809 —
Transactions with owners   77 75 — — 152
Profit and total comprehensive income for the period   — — — 1,788 1,788
Balance as at 31 December 2010   3,815 75 329 6,369 10,588
Consolidated statement of changes in equity
for the year ended 31 December 2010 Annual report and accounts 2010      Surgical Innovations Group plc 41
 Accounts 36 - 61
1. Group accounting policies under IFRS
(a) Basis of preparation
These financial statements have been prepared on the basis of the IFRS accounting policies set out below. 
The financial statements have been prepared in accordance with IFRS as adopted for use by the European Union, including IFRIC 
interpretations and in line with those provisions of the Companies Act 2006 applicable to companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires 
management to exercise its judgement in the process of applying the Group’s accounting policies.
The Directors have considered the available cash resources of the Group and its current forecasts and are satisfied that the Group has 
adequate resources to continue in operational existence for the foreseeable future and so the going concern basis has been adopted in the 
preparation of these financial statements.
The financial statements have been prepared under the historical cost convention.
The consolidated financial statements are presented in Sterling, rounded to the nearest thousand.
These accounts reflect the first time adoption of improvements to IFRS and amendments to IFRS 1 and IFRS 2. The effect of the adoption 
of these standards has been presentational only. Given this, the opening comparative balance sheet has not been represented as the 
information is unchanged from that presented previously.
(b) Consolidation
Subsidiaries
The Group financial statements consolidate those of the parent company and of its subsidiary undertakings. The results of subsidiaries, 
accounted for under the merger accounting method, are included in the Consolidated statement of comprehensive income as if they had 
always been part of the Group. Intra‑group sales and results are eliminated on consolidation and all sales and results relate to external 
transactions only.
(c) Foreign currency translation
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions. 
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates 
of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated statement of comprehensive income.
(d) Property, plant and equipment
These are stated at the cost of acquisition less any provision for depreciation. Cost includes expenditure that is directly attributable to the 
acquisition of the items. 
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying 
value may not be recoverable.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.
Depreciation is charged so as to write off the cost of property, plant and equipment less estimated residual value over their estimated useful 
economic lives at the following rates:
Office and computer equipment – 10–20% per annum
Plant and machinery  – 10% per annum
Tooling  – 20% per annum
Placed equipment – 33.3% per annum
Leasehold improvements – Over the remaining term of the lease
Tooling developed for the Group’s own products is only depreciated when brought into use.
Placed equipment relates to equipment placed in clinical settings to generate a stream of recurring revenue from the single use element 
of the equipment.
Notes to the consolidated financial statements Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 42
Notes to the consolidated financial statements continued
1. Group accounting policies under IFRS continued
(e) Intangible assets
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Development expenditure arising from the Group’s development activities is capitalised and amortised over the life of the product only if the 
Group can demonstrate the following:
  the technical feasibility of completing the intangible asset so it will be available for use or sale;
  the intention to complete the intangible asset and use or sell it;
  the ability to use or sell the intangible asset;
  that it is probable that the asset created will generate future economic benefits;
  there is the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible 
asset; and
  the development cost of the asset can be measured reliably.
Where no intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. 
Capitalised development costs are amortised over the life of the product within cost of sales, which is usually no more than ten years.
(f) Impairment of non‑financial assets
Impairment reviews are carried out on a development project by project basis periodically and where there is a specific indicator 
of impairment. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is based 
on  the accounting policy in (e) above and is greater than its estimated recoverable amount. The recoverable amount is the higher of an 
asset’s fair value less costs to sell and its value in use.
(g) Inventories
Inventories are stated at the lower of cost (using weighted average) and net realisable value.
Cost is the purchase cost, including transport, for raw materials, together with a proportion of manufacturing overheads based on normal 
levels of activity, for work in progress and finished goods.
Net realisable value is based on estimated normal selling price, less further costs expected to be incurred to completion and sale. Provision 
is made for obsolete, slow moving or defective items where appropriate. Such provisions are based upon established future sales and 
historical experience.
(h) Trade receivables
Trade receivables are recognised initially at fair value, thereafter at amortised costs less provision for impairment. A provision for impairment 
of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the 
original terms of the receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value 
of estimated future cash flows. The amount of the loss is recognised in the Consolidated statement of comprehensive income, as are 
subsequent recoveries of amounts previously written off.
(i) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call at banks and bank overdrafts. Bank overdrafts are shown within 
borrowings in current liabilities on the balance sheet.
(j) Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate.
(k) Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.  Annual report and accounts 2010      Surgical Innovations Group plc 43
 Accounts 36 - 61
1. Group accounting policies under IFRS continued
(l) Income tax
The charge for current tax is based on the results for the period as adjusted for items which are non‑assessable or disallowed and any 
adjustment to tax payable in respect of previous years. It is calculated using rates that have been enacted or substantively enacted by the 
balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the 
carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. 
In principle, deferred tax liabilities are recognised for all taxable and temporary differences and deferred tax assets are recognised to the extent that 
it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not 
recognised if the temporary difference arises from the initial recognition of goodwill (or negative goodwill) or from the initial recognition (other than 
in business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit. 
Tax benefits are not recognised unless the tax positions are probable of being sustained. Once considered to be probable, management 
reviews each material tax benefit to assess whether a deferred tax asset should be recognised, based on the ability under tax statute 
to recover those tax losses and through the assessment of probable future taxable profits in which to recover those tax losses.
Where the Group is able to control the distribution of reserves from subsidiaries, and there is no intention to distribute the reserves, deferred 
tax is not recognised for these temporary differences. 
Deferred tax is calculated at the rates that are enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited 
in the Consolidated statement of comprehensive income, except when it relates to items credited or charged directly to equity, in which case 
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends 
to settle its current tax assets and liabilities on a net basis.
Information as to the calculation of the income tax expense is included in note 6.
(m) Employee benefits
Pension obligations
The Group provides pension benefits to its employees through contributions to defined contribution Group personal pension policies. 
The amounts charged to the Consolidated statement of comprehensive income are the contributions payable in the period.
Share‑based compensation
All share‑based payment arrangements granted after 7 November 2002 that had not vested by 1 January 2006 are recognised in the financial 
statements. The Group issues share options to certain employees which are measured at fair value and recognised as an expense in the 
Consolidated statement of comprehensive income with a corresponding increase in profit and loss reserve. The fair value of the employee 
services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed over the vesting 
period is determined by reference to the fair value of the options granted.
The fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become 
unconditionally entitled to the awards. At each balance sheet date, the Group revises its estimate of the number of options that are expected 
to vest. It recognises the impact of the revision to original estimates, if any, in the Consolidated statement of comprehensive income, with 
a corresponding adjustment to retained earnings.
(n) Income recognition
Revenue
Revenue is the total amount receivable by the Group for the supply of goods and services, excluding VAT and trade discounts. It is recognised 
that significant risks and rewards are transferred when title of goods passes and the Group fulfils its contractual obligations. 
Royalty income
Royalty income is derived from agreements with other parties for them to manufacture and distribute products. Such royalty income 
is recognised in the same period as the licensee makes the related sale. 
Design contracts
As soon as the outcome of a design contract can be estimated reliably, contract revenue and expenses are recognised in the Consolidated 
statement of comprehensive income in proportion to the stage of completion of the contract. The stage of completion is assessed by reference 
to work performed. An expected loss on the contract is recognised immediately in the Consolidated statement of comprehensive income.
Interest income
Interest income is recognised using the effective interest rate method. Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 44
Notes to the consolidated financial statements continued
1. Group accounting policies under IFRS continued
(n) Income recognition continued
Government grants
Government grants are recognised in the Consolidated statement of comprehensive income so as to match them with the expenditure 
towards which they are intended to contribute. To the extent that the grants received are intended as a specific reduction against certain 
assets, they are recognised in the Consolidated statement of comprehensive income over the expected useful life of the related assets.
(o) Leases
Where the Group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated 
as a finance lease. The asset is recorded in the balance sheet as property, plant and equipment and is depreciated over its estimated useful 
life or the term of the lease, whichever is the shorter. Future instalments under such leases, net of finance charges, are included in creditors. 
Rentals under operating leases are charged on a straight‑line basis over the lease term.
(p) Significant areas of judgement
In applying the aforementioned accounting policies, management has made appropriate estimates in key areas and the actual outcome may 
differ from those calculated. The key sources of estimation and judgement uncertainty at the balance sheet date that have a significant risk 
of causing material adjustment to the carrying amount of assets and liabilities in the next financial year are:
Forecasts and discount rates
The carrying value of a number of items on the balance sheet is dependant on the estimates of future cash flows arising from the Group’s operations:
  the impairment test for capitalised development costs is dependant upon forecasts of the cash flows resulting from expected sales and 
cost of sales over the projected life of the relevant product. Allowance is also made for any future costs of associated product development. 
An impairment charge of £334,000 (2009: nil) resulted from the annual impairment testing conducted in 2010; and
  the realisation of deferred tax assets recognised is dependant on the generation of sufficient future taxable profits. The Group recognises 
deferred tax assets where it is likely that the benefit will be realised and recognises no more than three years (2009: five years) of future 
profitability given uncertainty after this timeframe.
Trade receivables
The Group provides, in certain agreed situations, products on extended credit terms in order to establish a presence in an export market. 
The Directors constantly review the likelihood of realisation of these receivables and make provision based on their best estimates when 
the full value of the receivable will not be recoverable.
(q) Provisions
The Group measures provisions at the Directors’ best estimates of the expenditure required to settle the obligation at the balance sheet date. 
These estimates are made taking account of information available and different possible outcomes. 
(r) Equity
Equity is broken down into the elements listed below:
  “Share capital” represents the nominal value of equity shares;
  “Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses 
of the share issue;
  “Capital reserve” represents the excess over nominal value of the fair value consideration attributed to equity shares issued in part 
settlement for subsidiary company shares acquired; and
  “Retained earnings” .
As at 31 December 2010, the following standard and interpretation is in issue but not yet effective:
  IAS 24 (revised 2009) Related Party Disclosures (effective 1 January 2011).
The effect of the adoption of this new standard is expected to be presentational only. Annual report and accounts 2010      Surgical Innovations Group plc 45
 Accounts 36 - 61
2. Segmental reporting
For management purposes the Group is organised into three business segments: SI Brand, OEM and Industrial. These revenue streams are 
the basis on which the Group reports its segment information.
Segment results, assets and liabilities include assets directly attributable to a segment as well as those that can be allocated on a reasonable 
basis. Unallocated items comprise mainly corporate assets and liabilities and head office expenses. 
These operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results.
Business segments
The principal activities of the SI Brand business unit are the research, development, manufacture and distribution of SI branded minimally invasive devices.
The principal activities of the OEM business unit are the research, development, manufacture and distribution of minimally invasive devices 
for third party medical device companies through either own label or co‑branding.
The principal activities of the industrial business unit are the research, development, manufacture and sale of minimally invasive technology 
products for industrial application.
The following segmental analysis has been produced to provide a reconciliation between the information used by the key decision maker 
within the business and the information as it is presented under IFRS.
      SI Brand OEM Industrial Total 
Year ended 31 December 2010     £’000 £’000 £’000 £’000
Revenue     3,852 2,506 687  7 ,045
Result      
Segment result     1,151 930 390 2,471
Unallocated expenses     — — — (892)
Profit from operations     — — — 1,579
Finance income         — — — 9
Finance costs     — — — (39)
Profit before taxation     — — — 1,549
Tax      — — — 239
Profit for the year     — — — 1,788
Included within the segment/operating results are the following significant non‑cash items:
     SI Brand OEM Industrial Unallocated Total 
     £’000 £’000 £’000 £’000 £’000
Depreciation of property, plant and equipment    262 70 — 108 440
Amortisation of intangible assets    134 50 — — 184
Impairment of intangible assets    63 4 267 — 334
Share‑based payments    — — — 8 8
Capitalisation of intangible assets    884 635 115  —  1,634
      SI Brand OEM Industrial Total 
Year ended 31 December 2009     £’000 £’000 £’000 £’000
Revenue      2,956 1,463 122 4,541
Result      
Segment result     1,240 255 70 1,565
Unallocated expenses     — — — (1,274)
Profit from operations     — — — 291
Finance income         — — — 13
Finance costs     — — — (40)
Profit before taxation     — — — 264
Tax      — — — 261
Profit for the year     — — — 525 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 46
Notes to the consolidated financial statements continued
2. Segmental reporting continued
Business segments continued
Included within the segment/operating results are the following significant non‑cash items:
     SI Brand OEM Industrial Unallocated Total 
     £’000 £’000 £’000 £’000 £’000
Depreciation of property, plant and equipment    193 35 — 117 345
Amortisation of intangible assets    101 — — — 101
Impairment of intangible assets    — — — — —
Share‑based payments    — — — 75 75
Capitalisation of intangible assets    638 305 122 — 1,065
Unallocated costs include those costs that cannot be split between segments.
The reportable segment assets and liabilities at 31 December 2010 and capital expenditure are as follows:
     SI Brand OEM Industrial Unallocated Total 
     £’000 £’000 £’000 £’000  £’000
Assets    7,317 2,122 55 4,046 13,540
Liabilities     — — — 13,540 13,540
        Assets Liabilities 
        £’000  £’000
Segment assets/liabilities       9,494 —
Unallocated:
Property, plant and equipment       477 —
Prepayments and accrued income       232 —
Other debtors       283 —
Cash and cash equivalents       2,622 —
Deferred tax asset       432 —
Borrowings       — 2,180
Trade and other payables       — 607
Accruals       — 165
Equity       — 10,588
        13,540 13,540
The reportable segment assets and liabilities at 31 December 2009 and capital expenditure are as follows:
     SI Brand OEM Industrial Unallocated Total 
     £’000 £’000 £’000 £’000  £’000
Assets    7,124 707 150 3,557 11,538
Liabilities       — — — 11,538  11,538
        Assets Liabilities 
        £’000 £’000
Segment assets/liabilities       7,981 —
Unallocated:     
Property, plant and equipment       396 —
Prepayments and accrued income       299 —
Other debtors       161 —
Cash and cash equivalents       2,508 —
Deferred tax asset       193 —
Borrowings       — 1,886
Trade and other payables       — 818
Accruals       — 194
Equity       — 8,640
        11,538  11,538 Annual report and accounts 2010      Surgical Innovations Group plc 47
 Accounts 36 - 61
2. Segmental reporting continued
Business segments continued
Segment assets consist primarily of property , plant and equipment, intangible assets, inventories and trade and other receivables. Assets not 
allocated to a segment primarily consist of tangible fixed assets, prepayments and accrued income and cash and cash equivalents.
Liabilities are not capable of allocation to individual segments.
Geographical analysis
        2010 2009 
        £’000 £’000
United Kingdom       2, 119 1,454
Europe       2,908 1,827
US        1,410 624
Rest of World       608 636
        7 ,045 4,541
Revenues are allocated geographically on the basis of where revenues were received from and not from the ultimate final destination of use.
During 2010, £1, 110,000 (16%) of the Group’s revenue depended on a single customer in the OEM segment (2009: £606,000 (15%)).
3. Operating profit
The profit for the year is stated after charging:
        2010  2009 
        £’000  £’000
Depreciation of owned assets        231 273
Depreciation of assets held under finance lease        217 72
Amortisation of capitalised development costs       184 101
Impairment of capitalised development costs       334 —
Research and development costs       160 —
Foreign exchange losses       31 169
Auditor’s remuneration:  
– fees payable to the Company’s auditor for the audit of the Company’s annual financial statements   22 25
– tax compliance fees        15 15
Operating lease rentals:  
– land and buildings        151 150
The amortisation and impairment of capitalised development costs are accounted for within other operating expenses within the 
Consolidated statement of comprehensive income.
4. Employees
The average monthly number of employees (including Executive Directors) employed by the Group during the year was as follows:
        2010  2009 
        Number Number
Directors       1 1
Production       39 39
Development       21 12
Administration        13 11
        74 63
The costs incurred in respect of these employees were:
        2010  2009 
        £’000  £’000
Wages and salaries        1,820 1,262
Social security costs        165 119
Pension costs        48 37
        2,033 1,418
A detailed analysis of Directors’ emoluments is shown in the table on page 32. Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 48
Notes to the consolidated financial statements continued
4. Employees continued
Key management including non‑executives
        2010  2009 
        £’000  £’000
Salaries       484 371
Social Security costs       44 38
Pension costs       16 14
Share‑based payments       8 75
Total       552 498
5. Finance costs
        2010  2009 
        £’000  £’000
On finance leases       22 14
On bank overdrafts       17 26
        39 40
6. Taxation
Tax on profit
        2010  2009 
        £’000  £’000
Over provision from previous years        — 202
Deferred tax credit recognised in year        239 59
Tax credit on profit       239 261
Factors affecting the tax charge for the year
The taxation assessed for the year is lower than the standard rate of Corporation Tax in the UK at 28% (2009: 28%). The differences are 
explained as follows:
        2010  2009 
        £’000  £’000
Profit on ordinary activities before taxation        1,549 264
Corporation Tax at standard rate of 28% (2009: 28%)       434 74
Effects of:  
Research and development enhanced expenditure        (386) (250)
Expenses not tax deductible        8 22
Capital allowances for the year in excess of depreciation        (237) (411)
Other short‑term timing differences       — 506
Over provision from previous years        — (202)
Utilisation and recognition of trading losses        (58) —
Tax credit for the year       (239) (261)
Deferred taxation
The movement in the deferred taxation account during the year was:
        2010  2009 
        £’000  £’000
Balance brought forward        193 134
Consolidated statement of comprehensive income movement arising during the year    239 59
Balance carried forward        432 193
The deferred taxation recognised in the financial statements at 27% is set out below:
        2010  2009 
        £’000  £’000
Trade losses        432 193 Annual report and accounts 2010      Surgical Innovations Group plc 49
 Accounts 36 - 61
6. Taxation continued
Deferred taxation continued
The recoverability of the deferred tax asset is dependent on future taxable profits in excess of those arising from the reversal of deferred tax 
liabilities. The recognition of the deferred tax assets is based upon profit forecasts for the three‑year period ending 31 December 2013.
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:
        2010 2009 
        £’000 £’000
Deferred tax assets       4,347 4,594
Deferred tax liabilities       (839) (651)
Net unrecognised deferred tax assets       3,508 3,943
At the balance sheet date, the Group has unused tax losses of £17 .7 million (2009: £15.3 million) available for offset against certain future 
profits. A deferred tax asset of £432,000 (2009: £193,000) has been recognised in respect of such losses. No deferred tax asset has been 
recognised in respect of the remaining £16. 1 million (2009: £14.6 million) of such losses due to the difficulty in making reliable predictions 
of future profit streams.
7 . Earnings per ordinary share
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share for the year ended 31 December 2010 was based upon the profit attributable to ordinary 
shareholders of £1,788,000 (2009: £525,000) and a weighted average number of ordinary shares outstanding for the year ended 31 December 2010 
of 375,812,587 (2009: 373,841,902).
Diluted earnings per ordinary share
The calculation of diluted earnings per ordinary share for the year ended 31 December 2010 was based upon the profit attributable to ordinary 
shareholders of £1,788,000 (2009: £525,000) and a weighted average number of ordinary shares outstanding for the year ended 31 December 2010 
of 397 ,339,910 (2009: 373,841,902). All share options at the financial year end were anti‑dilutive.
        2010 2009 
Earnings       £’000  £’000
Earnings for the purpose of basic and diluted earnings per ordinary share     1,788 525
8. Property, plant and equipment
      Office and  Improvements  
     Plant and computer Placed to leasehold  
    Tooling machinery equipment equipment property Total 
    £’000 £’000 £’000 £’000 £’000 £’000
Gross carrying amount 31 December 2009   1,521 1,638 719 183 257 4,318
Accumulated depreciation and impairment   (1, 129) (482) (556) (71) (24) (2,262)
Carrying amount 31 December 2009   392 1, 156 163 112 233 2,056
Gross carrying amount 31 December 2010   1,661 2, 126 811 277 312 5, 187
Accumulated depreciation and impairment   (1,233) (651) (641) (133) (52) (2,710)
Carrying amount 31 December 2010   428 1,475 170 144 260 2,477
      Office and  Improvements  
     Plant and computer Placed to leasehold  
    Tooling machinery equipment equipment property Total 
    £’000 £’000 £’000 £’000 £’000 £’000
Carrying amount 1 January 2009   342 562 151 91 197 1,343
Additions – separately acquired   139 700 107 54 58 1,058
Depreciation   (89) (106) (95) (33) (22) (345)
Carrying amount 31 December 2009   392 1, 156 163 112 233 2,056
Additions – separately acquired   140 488 92 94 55 869
Depreciation   (104) (169) (85) (62) (28) (448)
Carrying amount 31 December 2010   428 1,475 170 144 260 2,477 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 50
Notes to the consolidated financial statements continued
8. Property, plant and equipment continued
Leased plant and equipment
The Group leases tooling, plant and machinery and fixtures and fittings under a number of finance lease arrangements. The carrying amount 
and depreciation charge for such assets are disclosed below: 
        2010  2009 
        £’000  £’000
Tooling  
Net book value       70 115
Depreciation charge for the year       46 23
Plant and machinery  
Net book value       1,329 982
Depreciation charge for the year       142 76
Office and computer equipment  
Net book value       89 27
Depreciation charge for the year       29 12
Security
At 31 December 2010, the property, plant and equipment of the Group are subject to a fixed and floating charge to secure both the bank loan 
and overdraft facility.
9. Intangible assets
        Capitalised Capitalised 
        development development 
        costs costs 
        2010 2009 
        £’000 £’000
Cost  
At 1 January 2010       2,310 1,244
Additions       1,674 1,066
At 31 December 2010       3,984 2,310
Accumulated amortisation  
At 1 January 2010       171 70
Charge for the year       184 101
Impairment charge for the year       334 —
At 31 December 2010       689 171
Carrying amount  
At 31 December 2010       3,295 2,139
At 31 December 2009       2, 139 1,174
The £3,984,000 of capitalised development costs, net of £73,000 of Government grant, represents expenditure that fulfils the requirements 
of IAS 38. These costs will be amortised over the future commercial life of the product, commencing on the sale of the first commercial item, 
up to a maximum product life cycle of ten years, and taking account of expected market conditions and penetration.
Included within the above are assets that are currently unavailable for use and these have been assessed for annual impairment as required 
by the Group’s accounting policies; Intangible Assets and Impairment of Non Financial Assets.
10. Inventories
        2010  2009 
        £’000  £’000
Raw materials        1,396 990
Finished goods        637 1,057
        2,033 2,047
Included in the analysis above are provisions against inventory amounting to £14,000 (2009: £200,000). Annual report and accounts 2010      Surgical Innovations Group plc 51
 Accounts 36 - 61
10. Inventories continued
In 2010 a total of £3,068,000 of inventories was included in profit and loss as an expense within cost of sales (2009: £2,210,000). Cost 
of sales included an amount of £164,000 resulting from write down of inventories (2009: £323,000).
Inventories are pledged as securities for bank overdrafts.
The Group’s inventories are comprised of products which are not generally subject to rapid obsolescence on account of technological, 
deterioration in condition or market trends. Consequently, management considers that there is little risk of significant adjustments to the 
Group’s inventory assets within the next financial year.
11. Trade and other receivables
        2010  2009 
        £’000  £’000
Trade receivables       2, 168 2,135
Prepayments and accrued income       231 299
Other debtors       282 161
        2,681 2,595
All amounts are short term. The carrying value of trade receivables is considered a reasonable approximation to fair value.
Of the trade receivables, £1,028,276 relates to five customers (2009: £1, 104,000).
All of the Group’s trade and other receivables have been reviewed for indicators of impairment. Certain trade receivables were found 
to be impaired and a provision of £19,000 (2009: £33,000) was recorded accordingly.
In addition some of the unimpaired trade receivables are past due at the reporting date. The age of financial assets past due but not impaired 
is shown below:
        2010  2009 
        £’000  £’000
Not more than three months       109 101
More than three months but not more than six months       13 60
More than six months but not more than one year       — 156
More than one year       61 96
The Group is exposed to credit risk through offering extended credit terms to those customers operating in markets where extended payment 
terms are themselves taken by local government and state organisations. This risk is managed through constant review and personal 
knowledge of the customer concerned. Payment plans are agreed and monitored in all such cases to minimise credit risk. 
12. Financial instruments
The Group is exposed to market risk through its use of financial instruments. The Group’s risk management is co‑ordinated by the Directors 
who focus actively on securing the Group’s short to medium‑term cash flows through regular review of all the operating activities of the 
business. Long‑term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant 
financial risks to which the Group is exposed are described in the following sections.
Foreign currency sensitivity
Exposures to currency exchange rates arise from the Group’s overseas sales and purchases, most of which are denominated in Euros and Dollars.
To mitigate the Group’s exposure to foreign currency risk, cash flows in Euros and Dollars are monitored on an ongoing basis.
Foreign currency denominated financial assets and liabilities are set out below:
      2010  2009 2010 2009 
      €’000  €’000 $’000  $’000
Financial assets     360 310 839 907
Financial liabilities     2 123 41 4
Short‑term exposure     358 187 798 903
The Group has no long‑term foreign exchange exposure. Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 52
Notes to the consolidated financial statements continued
12. Financial instruments continued
Foreign currency sensitivity continued
The Group has significant short‑term exposure to the Dollar at 31 December 2010. An analysis of the effect of a reasonable possible movement of the 
currency rate against the Dollar during 2011 of +3% shows potential foreign currency gains of £9,000 on 31 December 2010 Dollar trade receivables.
The Group gives consideration to the use of forward currency contracts to reduce foreign currency exposure and, at 31 December 2010, there 
are partial forward currency contracts with the value of £20,000.
Credit risk analysis
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date and which are 
set out below:
        2010  2009 
        £’000  £’000
Cash and cash equivalents       2,622 2,508
Trade and other receivables       2,450 2,296
        5,072 4,804
The Group continually monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.
Management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good 
credit quality, including those that are past due.
In respect of trade and other receivables that are not impaired, the Group is not exposed to any significant credit risk exposure to any single 
counterparty or any group of counterparties having similar characteristics. The credit risk for liquid funds is considered negligible, since the 
counterparty is a reputable bank with a high quality external credit rating.
Liquidity risk analysis
The Group manages its liquidity needs by carefully monitoring all scheduled cash outflows. Liquidity needs are monitored in various time 
bands, on a day‑to‑day and week‑to‑week basis, as well as on the basis of a rolling four‑week projection. Longer‑term needs are monitored 
as part of the Group’s regular rolling monthly re‑forecasting process.
The Group maintains cash to meet its liquidity requirements for up to twelve‑month periods. 
Funding for long‑term liquidity is additionally secured by an adequate amount of committed credit both through working capital and asset 
finance facilities.
During the year ended 31 December 2010, the Group continued to have access to sufficient funds to meet its business expansion needs. 
Excess cash is placed on short‑term interest‑bearing deposit accounts.
The Group policy is to generate sufficient cash from operating activities to adequately meet cash requirements for investment activities.
The Group’s liabilities have contractual maturities which are summarised below:
       Current  Non-cur r ent
       Within Within Over 
       6 months 6–12 months 12 months 
31 December 2010      £’000 £’000 £’000
Finance lease obligations      178 177 817
Trade and other payables      607 — —
Bank overdraft      1,177 — —
       1,962 177 817
       Current  Non‑current
       Within Within Over 
       6 months 6–12 months 12 months 
31 December 2009      £’000 £’000 £’000
Finance lease obligations      153 139 593
Trade and other payables      818 — —
Bank overdraft      1,123 — —
       2,094 139 593 Annual report and accounts 2010      Surgical Innovations Group plc 53
 Accounts 36 - 61
12. Financial instruments continued
Maturity profile of borrowings
        2010  2009 
        £’000  £’000
Gross lease payments not later than one year       355 292
Later than one year but not more than five years       817 593
Future finance charges       (169) (122)
Summary of financial assets and liabilities by category
        2010  2009 
        £’000  £’000
Loans and other receivables  
Trade and other receivables       2,450 2,296
Cash        2,622 2,508
        5,072 4,804
        2010  2009 
        £’000  £’000
Current liabilities  
Trade payables: financial liabilities measured at amortised cost      607 818
Other short‑term financial liabilities       1,527 1,375
        2, 134 2,193
Non‑current liabilities        653 511
        2,787  2,704 
Net financial assets and liabilities       2,285 2,100
Management is of the opinion that the carrying value of the above assets and liabilities is equal to their fair value.
The Group’s capital management objectives are:
  to ensure its ability to continue as a going concern; and
  to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The Group monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presented on the face of the 
balance sheet.
The financial assets of SI Group plc are cash and cash equivalents and trade receivables, and fair value is deemed to be not materially 
different to the carrying value.
13. Share capital
        2010  2009 
        £’000  £’000
Authorised 600,000,000  
(2009: 600,000,000) ordinary shares of 1p each       6,000 6,000
Allotted, called up and fully paid 381,491,902  
(2009: 373,841,902) ordinary shares of 1p each        3,815 3,738 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 54
Notes to the consolidated financial statements continued
13. Share capital continued
At 31 December 2010, the following share options were outstanding:
 Number of shares  Exercise dates
  At Exercised Lapsed At Option Date from which  
  1 January in during 31 December price per option may Date on which 
Scheme and date of grant 2010 year year 2010 1p share be exercised option expires
Executive       
November 2000* 1,000,000 1,000,000 — — 3.0p November 2003 November 2010
Non‑executive unapproved
November 2000 3,000,000 3,000,000 — — 1.7p November 2003 November 2010
April 2001 5,000,000 — — 5,000,000 1.7p April 2004 April 2011
November 2007 6,000,000 — — 6,000,000 1.7p November 2009 November 2017
January 2009 4,000,000 — — 4,000,000 1.5p November 2009 January 2019
November 2009 1,600,000 — — 1,600,000 1.7p November 2009 November 2019
Enterprise management
July 2001 2,200,000 2,050,000 150,000 — 2.0p July 2004 July 2011
November 2007 5,545,454 — — 5,545,454 3.5p November 2010 November 2017
January 2009 2,000,000 — — 2,000,000 3.5p January 2012 January 2019
Unapproved       
April 2001 1,000,000 1,000,000 — — 2.0p April 2004 April 2011
November 2007 1,454,546 — — 1,454,546 1.7p November 2009 November 2017
January 2009 2,000,000 600,000 — 1,400,000 1.5p November 2009 January 2019
November 2009 2,200,000 — — 2,200,000 1.7p November 2009 November 2019
*  These share options do not fall within the recognition and measurement of IFRS 2 and as such no charge for share‑based payments is recognised in the 
Consolidated statement of comprehensive income in respect of them.
Share‑based payments
The total share‑based payment charge for the year was £8,000.
Share options were exercised during the current year (2009: none).
The fair values of options granted during the year were determined using the Black‑Scholes pricing model. All the options issued in the year 
vested immediately. The following principal assumptions were used in the valuation:
Volatility – 20%
Option life – 1 year
Risk‑free investment rate – 2.5%
Certain share options issued prior to 7 November 2002 (and so were outside the scope of the recognition and measurement requirements 
of IFRS 2) had their option price reduced during the year. Under IFRS 2, where an award granted before 7 November 2002 is modified after 
IFRS 2’s effective date, the incremental fair value (measured as the difference in the fair value of the award calculated immediately before 
and immediately after modification) should be expensed over the remaining vesting period. 
The following principal assumptions were used in the valuation:
Volatility – 20%
Option life – 1 year
Risk‑free investment rate – 2.5%
In total £8,000 of employee remuneration expense (all of which related to equity‑settled share‑based payment transactions) has been 
included in the profit for 2010 (2009: £75,000) and credited to retained earnings. Annual report and accounts 2010      Surgical Innovations Group plc 55
 Accounts 36 - 61
14 Share premium
         Share 
         premium 
         £’000
Balance as at 31 December 2009        18,809
Reorganisation        (18,809)
Issue of ordinary share capital        75
Balance as at 31 December 2010        75
Share premium comprises the cumulative difference between the net proceeds and nominal value of the Company’s issued equity share capital.
During the year the Group obtained court approval to offset the accumulated share premium at 1 January 2010 against the accumulated 
retained earnings at 1 January 2010.
15. Contingent liabilities and financial commitments
These are as follows:
(a) Contingent liabilities
There were no contingent liabilities at 31 December 2010 (2009: £nil).
(b) Operating leases
At 31 December 2010 the Group had annual commitments under non‑cancellable operating leases as follows: 
        2010  2009 
        Land and  Land and 
        buildings  buildings 
        £’000  £’000
Within one year       147 147
One to five years        590 590
Over five years       218 365
(c) Capital commitments
At 31 December 2010 the Group had no capital commitments (2009: £nil).
16. Transactions with related parties
A summary of transactions during the year and outstanding amounts at the balance sheet date is as follows:
        Amounts Amounts  
        invoiced  payable at  
        to the 31 December 
        Company 2010 
        £’000  £’000
Quest Investments Limited
1
       25 3
Winburn Glass Norfolk
2
        23 2
Getz Bros & Co. Inc.
3
       15 —
N G Bowland
4
       — 19
ACP
5
       107 54
As disclosed in the Report on remuneration:
1. Director’s fees for D B Liversidge CBE are paid to Quest Investments Limited, a company of which he is a Director.
2. Director’s fees and advisory fees for C Glass are paid to Winburn Glass Norfolk, a firm of which he is a partner.
3. Director’s fees and advisory fees for R Simkins are paid to Getz Bros & Co. Inc., a company of which he is Vice President.
4. At 31 December 2010 £18,600 from a loan of £20,000 made available to N G Bowland in 2009 was still repayable.
5.  ACP acts as the master distributor for Surgical Innovations in the Far East. During the year Surgical Innovations invoiced ACP £106,933 for products and 
at 31 December 2010 there was an amount owing to Surgical Innovations of £54, 141. 13. R Simkins is the ultimate beneficial owner of ACP .
There is no controlling party at Surgical Innovations Group plc. 
17 . Pensions
The Company currently operates a defined contribution Group personal pension plan for the benefit of employees. Company contributions 
in 2010 were £48,000 (2009: £37 ,000). Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 56
Report of the independent auditor – Company
to the members of Surgical Innovations Group plc
Independent auditor’s report to the members of Surgical Innovations Group plc
We have audited the parent company financial statements of Surgical Innovations Group plc for the year ended 31 December 2010 which 
comprise the Company balance sheet and the related notes. The financial reporting framework that has been applied in their preparation 
is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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 auditor
As explained more fully in the Statement of Directors’ responsibilities set out on pages 28 and 29, the Directors are responsible for the 
preparation of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit 
and express an opinion on the Group financial statements in accordance with applicable law and International Standards on Auditing (UK and 
Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the parent company financial statements:
  give a true and fair view of the state of the Company’s affairs as at 31 December 2010; 
  have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
  have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors for the financial year for which the financial statements are prepared 
is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
  adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from 
branches not visited by us;
  the parent company financial statements are not in agreement with the accounting records and returns;
  certain disclosures of Directors’ remuneration specified by law are not made; or
  we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of Surgical Innovations Group plc for the year ended 31 December 2010.
Timothy Lincoln
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountant
Leeds
19 April 2011 Annual report and accounts 2010      Surgical Innovations Group plc 57
 Accounts 36 - 61
Company balance sheet
as at 31 December 2010
  2010  2009
    Notes £’000  £’000  £’000  £’000
Fixed assets     
Investments    2  1,018  1,018
Current assets     
Debtors    3 3,319  3,508 
Cash at bank     2,536  2,345 
     5,855  5,853 
Creditors: amounts falling due within one year   4 (68)  (94) 
Net current assets      5,787  5,759
Net assets     6,805  6,777
Capital and reserves     
Called up share capital    5  3,815  3,738
Share premium account    6 75  18,809 
Accumulated profit/(losses)    6 2,915  (15,770) 
      2,990  3,039
Shareholders’ funds      6,805  6,777
The accompanying accounting policies and notes form part of these financial statements.
The financial statements on pages 37 to 55 were approved by the Board of Directors on 19 April 2011 and were signed on its behalf by:
D B Liversidge CBE
Director
19 April 2011
Company number: 2298163 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 58
Notes to the Company financial statements
1. Accounting policies
(a) Basis of preparation
The financial statements have been prepared under the historical cost basis and UK GAAP .
(b) Investment in subsidiary undertakings
The Company’s investment in subsidiary undertakings is stated at cost less any provision for impairment. 
(c) Share‑based compensation
All share‑based payment arrangements granted after 7 November 2002 that had not vested by 1 January 2006 are recognised in the financial 
statements. The Group issues share options to certain employees which are measured at fair value and recognised as an expense in the profit and loss 
account with a corresponding increase in profit and loss reserve. The fair value of the employee services received in exchange for the grant of the options 
is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted.
The fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become unconditionally 
entitled to the awards. At each balance sheet date, the Group revises its estimate of the number of options that are expected to vest. It recognises 
the impact of the revision to original estimates, if any , in the profit and loss account, with a corresponding adjustment to retained earnings.
2. Investments
Company         £’000
Cost 
At 31 December 2010 and 1 January 2010        1,551
Provision for diminution in value 
At 31 December 2010 and 1 January 2010        533
Net book value at 31 December 2010 and 1 January 2010        1,018
The principal trading subsidiaries of the Group comprise:
    Country of  
    incorporation Proportion 
Company Description of shares held Nature of business and operation held
Surgical Innovations Limited Ordinary £1 shares Design and manufacture of minimally invasive devices Great Britain 100%
Haemocell Limited Ordinary £1 shares Design and manufacture of autologous blood products Great Britain 100%
3. Debtors
        2010  2009 
        £’000  £’000
Prepayments and accrued income        10 9
Other debtors        42 44
Amounts due from subsidiary undertakings       3,267 3,455
        3,319 3,508 Annual report and accounts 2010      Surgical Innovations Group plc 59
 Accounts 36 - 61
4. Creditors: amounts falling due within one year
        2010  2009 
        £’000  £’000
Accruals and deferred income        56 75
Other creditors        12 19
        68 94
5. Share capital
        2010  2009 
        £’000  £’000
Authorised 600,000,000   
(2009: 600,000,000) ordinary shares of 1p each       6,000 6,000
Allotted, called up and fully paid 381,491,902   
(2009: 373,841,902) ordinary shares of 1p each        3,815 3,738
Details of the share options are contained in note 13 of the consolidated financial statements.
During the year the following ordinary shares of 1p were issued in respect of exercised share options:
 600,000 at 1.5p
  3,000,000 at 1.7p
  3,050,000 at 2.0p
  1,000,000 at 3.0p
A total of 7 ,650,000 ordinary shares with a total nominal value of £76,500 were issued for consideration amounting to £151,000.
6. Reserves
        Share  Accumulated 
        premium profits/(losses) 
        £’000  £’000
At 1 January 2010       18,809 (15,770)
Premium on shares issued        75 —
Reorganisation of reserves       (18,809) 18,809
Loss for the year        — (132)
Employee share‑based payments       — 8
At 31 December 2010        75 2,915 Accounts
Surgical Innovations Group plc      Annual report and accounts 2010 60
7 . Reconciliation of movements in shareholders’ funds
        2010  2009 
        £’000  £’000
Loss for the financial year        (132) (233)
Issue of shares       152 —
Employee share‑based payments        8 75
Net increase/(decrease) in shareholders’ funds       28 (158)
Opening shareholders’ funds        6,777 6,935
Closing shareholders’ funds        6,805 6,777
8. Loss for the financial year of Surgical Innovations Group plc
The loss for the financial year dealt with in the financial statements of the holding company, Surgical Innovations Group plc, was £132,000 
(2009: £232,700).
As permitted by Section 408 of the Companies Act 2006, the profit and loss account has not been included in these financial statements.
9. Transactions with related parties
A summary of transactions during the year and outstanding amounts at the balance sheet date is as follows:
         Amounts  
        Amounts  payable at  
        invoiced to 31 December 
        the Group 2010 
        £’000  £’000
Quest Investments Limited
1
       25 3
Winburn Glass Norfolk
2
        23 2
Getz Bros & Co. Inc.
3
        15 —
As disclosed in the Report on remuneration:
1. Director’s fees for D B Liversidge CBE are paid to Quest Investments Limited, a company of which he is a Director.
2. Director’s fees and advisory fees for C Glass are paid to Winburn Glass Norfolk, a firm of which he is a partner.
3. Director’s fees and advisory fees for R Simkins are paid to Getz Bros & Co. Inc., a company of which he is Vice President.
Notes to the Company financial statements continued Annual report and accounts 2010      Surgical Innovations Group plc 61
 Accounts 36 - 61
 IFRS
    2010  2009  2008 2007 2006 
    £’000  £’000  £’000  £’000  £’000 
Revenue    7 ,045 4,541 4,312 4,770 4,460
Cost of sales    (3,526) (2,447)  (2,032) (2,377) (2,593)
Gross profit    3,519 2,094 2,280 2,393 1,867
Other operating expenses    (1,932) (1,528)  (1,500) (1,708) (1, 132)
Operating profit   1,587 566 780 685 735
Losses from discontinued operations   — (200) — — —
Share‑based payments    (8) (75) — — —
Finance income   9 13 118 96 —
Finance costs   (39) (40)  (78) (50) (39)
Profit before taxation   1,549 264 820 731 696
Taxation   239 261  (190) 34 —
Retained profit for the year    1,788 525 630 765 696
Earnings per ordinary share (basic)   0.48p 0.14p 0.17p 0.24p 0.27p
Earnings per ordinary share (diluted)   0.46p 0.14p 0.17p 0.23p 0.27p
Five-year summary Shareholder information
Surgical Innovations Group plc      Annual report and accounts 2010 62
Notice is hereby given that the Annual General Meeting of the Company will be held at Clayton Wood House, 6 Clayton Wood Bank, Leeds 
LS16 6QZ on 20 June 2011 at 1.00pm. You will be asked to consider the following resolutions: 
Ordinary business
To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary resolutions:
1 To receive and adopt the audited accounts for the year ended 31 December 2010 and the Reports of the Directors and auditor thereon.
2  To re‑elect Mr D B Liversidge CBE as a Director of the Company, in accordance with article 107 of the Company’s articles of association, 
who offers himself for re‑election as a Director. 
3  To re‑elect Mr N G Bowland as a Director of the Company, in accordance with article 107 of the Company’s articles of association, 
who offers himself for re‑election as a Director.
4  To re‑appoint Grant Thornton UK LLP as auditor of the Company to hold office until the conclusion of the next general meeting at which 
accounts are laid before the Company and to authorise the Directors to determine the auditor’s remuneration.
5  To authorise the Board generally and unconditionally pursuant to Section 551 of the Companies Act 2006 (the Act) to exercise all powers of 
the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into such shares in the Company 
(Rights) up to an aggregate nominal amount of £1,313,059.67 (being approximately one‑third of the issued share capital of the Company 
as at the date of this notice) provided that this authority shall expire on the earlier of the date falling six months from the expiry of the 
Company’s current financial year and the date of the next Annual General Meeting of the Company after the passing of this resolution 
unless varied, revoked or renewed by the Company in general meeting, save that the Board may before the expiry of the authority granted 
by this resolution make a further offer or agreement which would or might require shares to be allotted or Rights to be granted after such 
expiry and the Board may allot shares and grant Rights in pursuance of such an offer or agreement as if the authority conferred by this 
resolution had not expired and the authority granted by this resolution is in substitution for all previous authorities granted to the Directors 
to allot shares and grant Rights which (to the extent that they remain in force and unexercised) are revoked but without prejudice to any 
allotment or grant of Rights made or entered into prior to the date of this resolution 4.
Special business
To consider, and if thought fit, pass the following resolutions which will be proposed as special resolutions.
6  To empower the Board (subject to the passing of the previous resolution) pursuant to Sections 570 and 573 of the Act to allot equity 
securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred upon them by the previous resolution 
as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to:
 6. 1  the allotment of equity securities in connection with a rights issue in favour of ordinary shareholders where the equity securities 
respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective 
numbers of ordinary shares held by them but subject to such exclusions or other arrangements as the Directors may deem 
necessary or expedient in relation to fractional entitlements, treasury shares, record dates or legal or practical problems under the 
law of, or the requirements of, any recognised regulatory body or any stock exchange in any territory; and
 6.2  the allotment (otherwise than pursuant to sub‑paragraph 6.1 above) of equity securities up to an aggregate nominal amount 
of £393,917 .90 (being approximately 10% of the issued share capital of the Company at the date of this notice),
  and shall expire on the earlier of the date falling six months from the end of the current financial year of the Company and the date of the 
next Annual General Meeting after the passing of this resolution save that the Company may, before the expiry of any power contained in 
this resolution, make a further offer or agreement which would or might require equity securities to be allotted after such expiry and the 
Board may allot equity securities in pursuance of such offer or agreement as if the power conferred by this resolution had not expired.
Notice of Annual General Meeting Annual report and accounts 2010      Surgical Innovations Group plc 63
 Shareholder information 62 - 68
Special business continued
7  To authorise the Company generally and unconditionally for the purpose of Section 701 of the Act to make one or more market purchases 
(within the meaning of Section 693(4) of the Act) of ordinary shares of 1p each in the capital of the Company (Ordinary Shares) provided that:
 7 . 1  the maximum aggregate number of Ordinary Shares authorised by this resolution to be purchased is 39,391,790 shares 
(representing approximately 10% of the Company’s issued share capital as at the date of this notice);
 7 .2  the minimum price which may be paid for such Ordinary Shares is 1p per share (exclusive of advance corporation tax and expenses);
 7 .3  the maximum price (exclusive of advance corporation tax and expenses) which may be paid for an Ordinary Share is not more 
than the higher of 5% above the average of the middle market quotations for an Ordinary Share as derived from the London Stock 
Exchange Daily Official List for the five business days immediately preceding the day on which the Ordinary Share is purchased 
and the amount stipulated by Article 5(1) of the Buy‑back and Stabilisation Regulation (Commission Regulation 2273/2003); and
 7 .4  unless previously revoked or varied, the authority conferred by this resolution shall expire on the earlier of the date falling six 
months from the end of the current financial year of the Company and the date of the next Annual General Meeting of the Company 
save that the Company may, before such expiry, make a contract or contracts to purchase Ordinary Shares after such expiry as if the 
power conferred by this resolution had not expired.
By order of the Board
N G Bowland          Registered office:
Company Secretary         Clayton Wood House
19 April 2011          6 Clayton Wood Bank
           Leeds LS16 6QZ Shareholder information
Surgical Innovations Group plc      Annual report and accounts 2010 64
Notice of Annual General Meeting continued
Notes
1.  This notice is the formal notification to shareholders of the Company’s Annual General Meeting, its date, time and place, and the matters 
to be considered. If you are in doubt as to what action to take you should consult an independent adviser.
2.  Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001 (as amended) and Section 360B of the Companies Act 2006, 
only those shareholders registered in the register of members of the Company at 1.00pm on 16 June 2011 as holders of ordinary shares 
of 1p each in the capital of the Company shall be entitled to attend and vote at the meeting in respect of the number of shares registered 
in their name at that time. Changes to entries in the register of members of the Company after 1.00pm on 16 June 2011 shall be disregarded 
in determining the rights of any person to attend and vote at the meeting.
3.  A member entitled to attend, speak and vote may appoint a proxy to attend, speak and vote instead of him or her. A member may appoint 
more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share 
or shares held by that member. A proxy need not be a member of the Company. A form of proxy is included at the end of this document and 
contains notes for its completion.
  To be valid, the form of proxy and any power of attorney or the authority under which it is signed (or a notarially certified copy of it) must 
be completed and lodged at the Registrars of the Company, Capita Registrars, at PXS, 34, Beckenham Road, Beckenham, Kent BR3 4TU 
not later than 1.00pm on 16 June 2011.
4.  Completion and return of a form of proxy does not preclude a member from subsequently attending and voting at the meeting. If a member 
appoints a proxy or proxies and then decides to attend the Annual General Meeting in person and vote using his poll card, then the vote 
in person will override the proxy vote(s). If the vote in person is in respect of the member’s entire holding, then all proxy votes will be 
disregarded. If, however, the member votes at the meeting in respect of less than the member’s entire holding, then if the member indicates 
on his polling card that all proxies are to be disregarded, that shall be the case, but if the member does not specifically revoke proxies, then 
the vote in person will be treated in the same way as if it were the last received proxy and earlier proxies will only be disregarded to the 
extent that to count them would result in the number of votes being cast exceeding the member’s entire holding. 
5.  To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut‑off time for 
receipt of proxy appointments (see note 3 above) also apply in relation to amended instructions; any amended proxy appointment received 
after the relevant cut‑off time will be disregarded.
  Where you have appointed a proxy using the hard copy proxy form and would like to change the instructions using another hard copy proxy 
form, please contact Capita Registrars at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
   If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will 
take precedence.
6.  In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating your intention 
to revoke your proxy appointment to Capita Registrars. In the case of a member which is a company, the revocation notice must be executed 
under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any 
other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the 
revocation notice.
  The revocation notice must be received by Capita Registrars at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU no later than 1.00pm 
on 16 June 2011. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject 
to paragraph 5 above, your appointment will remain valid. Annual report and accounts 2010      Surgical Innovations Group plc 65
 Shareholder information 62 - 68
Notes continued
7 .  Copies of the following documents will be available for inspection at the registered office of the Company during normal business hours 
until the date of the Annual General Meeting and on that day, at the place of the meeting from at least 15 minutes prior to the meeting until 
its conclusion:
   Directors’ service contracts; and
   letters of appointment for Non‑executive Directors.
8.  As at 19 April 2011 (being the last practicable business day prior to the publication of this notice) the Company’s issued share capital 
consisted of 393,917 ,902 ordinary shares of 1p each, with one voting right per share. 
9.  If a corporation is a member of the Company, it may by resolution of its directors or other governing body authorise one or more persons 
to act as its representative or representatives at the Meeting and any such representative or representatives shall be entitled to exercise 
on behalf of the corporation all the powers that the corporation could exercise if it were an individual member of the Company.
  Corporate representatives should bring with them either an original or certified copy of the appropriate board resolution or an original 
letter confirming the appointment, provided it is on the corporation’s letterhead and is signed by an authorised signatory and accompanied 
by evidence of the signatory’s authority.
10.  A member may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in this Notice 
of Meeting (or in any related or accompanying document (including the form of proxy) to communicate with the Company for any purposes 
other than those expressly stated.  Shareholder information
Surgical Innovations Group plc      Annual report and accounts 2010 66
Explanatory notes to the Notice of Annual General Meeting
The notes on the following pages give an explanation of the proposed resolutions.
Resolutions 1 to 5 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the 
votes cast must be in favour of the resolution.
Resolutions 6 to 9 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three quarters 
of the votes cast must be in favour of the resolution.
Resolution 1 – Accounts
The Directors will present their report, the auditor’s report and the audited financial statements for the financial year ended 31 December 2010 
to the meeting as required by law.
Resolutions 2 and 3 – Re-election of Directors
At each general meeting one‑third of the directors for the time being are required to retire. If the number of relevant directors is not a multiple 
of three, the number nearest to but not exceeding one‑third of Directors should be obliged to retire. Directors due to retire by rotation are 
those longest in office since their last re‑election and as between persons who become or were last re‑elected on the same day those due 
to retire shall (unless otherwise agreed among themselves) be determined by lot. A retiring Director is eligible for re‑election. In line with past 
practice, two Directors will retire by rotation. Doug Liversidge and Graham Bowland retire by rotation and are offering themselves for re‑election.
Resolution 4 – Re-appointment of auditor 
The Company is required to appoint an auditor at each general meeting at which accounts are laid, to hold office until the next general meeting.
The present auditor, Grant Thornton UK LLP , is willing to continue in office for a further year and this resolution proposes its reappointment 
and, in accordance with standard practice, authorises the Directors to determine the level of the auditor’s remuneration.
Resolution 5 – Authority to allot shares
The resolution grants the Directors authority to allot relevant securities up to an aggregate nominal amount of £1,313,059.67 being 
approximately one‑third of the Company’s ordinary share capital in issue at 19 April 2011. It is not the Directors’ current intention to allot 
relevant securities pursuant to this resolution. This authority replaces the existing authority to allot relevant securities but does not affect 
the ability to allot shares under the share option schemes.
Resolution 6 – Disapplication of statutory pre-emption rights
This resolution disapplies the statutory pre‑emption rights which would otherwise apply on an issue of shares for cash pursuant to a rights 
issue where the securities attributable to the interests of all shareholders are proportionate (as nearly as may be) to the number of shares 
held and generally up to a further £393,917 .90 being 10% of the Company’s ordinary share capital in issue at 19 April 2011. This replaces 
the existing authority to disapply pre‑emption rights and expires at the conclusion of the next Annual General Meeting of the Company .
Resolution 7 – Purchase of own shares
In certain circumstances it may be advantageous for the Company to purchase its own shares and this resolution seeks authority to do this. 
The Directors would only consider making purchases if they believed that such purchases would be in the best interests of shareholders 
generally, having regard to the effect on earnings per share and the Company’s overall financial position.
The resolution gives general authority for the Company to make purchases of up to 39,391,790 ordinary shares (being 10% of the 
Company’s ordinary share capital in issue at 19 April 2011) at a minimum price of 1p and a maximum price being the higher of 5% above 
the average of the middle market quotations for ordinary shares for the five business days prior to the purchase and the price stipulated by 
Article 5(1) of the Buy‑back and Stabilisation Regulations 2003 (being the higher of the price of the last independent trade and the highest 
current independent bid on the trading venue where the purchase is carried out).
Companies are permitted to retain any of their own shares which they have purchased as treasury stock with a view to possible re‑issue 
at a future date, rather than cancelling them. The Company will consider holding any of its own shares that it purchases pursuant to the 
authority conferred by this resolution as treasury stock. This would give the Company the ability to re‑issue treasury shares quickly and cost 
effectively, and would provide the Company with additional flexibility in the management of its capital base. Annual report and accounts 2010      Surgical Innovations Group plc 67
I/We, the undersigned, being (a) member/member(s) of Surgical Innovations Group plc, hereby appoint the Chairman of the Meeting or,
Name of proxy .................................................................................................................. Number of shares ..................................................................
(IN BLOCK CAPITALS PLEASE)  
as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at Clayton Wood House, 
6 Clayton Wood Bank, Leeds LS16 6QZ on 20 June 2011 at 1.00pm and at any adjournment thereof. I/We wish my/our proxy to vote as shown 
below in respect of the resolutions set out in the Notice of the Meeting.
Please indicate by ticking the box if this proxy appointment is one of multiple appointments being made. *
For the appointment of one or more proxy, please refer to explanatory note 2 (overleaf).
  For Against Vote 
    withheld*
1 To receive and adopt the audited accounts for the year ended 31 December 2010 and the 
 Reports of the Directors and auditor thereon.
2 To re‑elect Mr D B Liversidge CBE as a Director of the Company. 
3 To re‑elect Mr N G Bowland as a Director of the Company.
4 To re‑appoint Grant Thornton UK LLP as auditor of the Company and to authorise the 
 Directors to determine the auditor’s remuneration.
5 To authorise the Board to allot shares in the Company and to grant rights to subscribe  
 for or to convert any security into such shares.
6 To empower the Board to allot equity securities for cash.
7  To authorise the Company to make one or more market purchases of ordinary shares of 1p 
 each in the capital of the Company (Ordinary Shares).
If you want your proxy to vote in a certain way on the resolutions specified, please place an “X” in the appropriate box. If you fail to select any of 
the given options your proxy can vote as he/she chooses or can decide not to vote at all. The proxy can also do this on any other resolution that 
is put to the meeting. 
*  The “Vote Withheld” option is to enable you to abstain on any particular resolution. However, it should be noted that a “Vote Withheld” is not a 
vote in law and will not be counted in the calculation of the proportion of the votes “For” and “Against” a resolution. 
Signed .......................................................................................... Dated this  ......................................... day of  ........................................................ 2011
Name ......................................................................................................................................................................................................................................
Address...................................................................................................................................................................................................................................
Form of proxy
Surgical Innovations Group plc
 Shareholder information
Surgical Innovations Group plc      Annual report and accounts 2010 68
Notes:
1.  Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder as his/her proxy to exercise all 
or any of his/her rights, to attend, speak and vote on their behalf at the meeting. If you wish to appoint a person other than the Chairman, 
please insert the name of your chosen proxy holder in the space provided (see above). If the proxy is being appointed in relation to 
less than your full voting entitlement, please enter in the box next to the proxy holder’s name (see above) the number of shares in 
relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your 
full voting entitlement (or if this proxy form has been issued in respect of a designated account for a shareholder, the full voting 
entitlement for that designated account).
2.  To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in 
relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). 
Please also indicate if the proxy instruction is one of multiple instructions being given. 
3.  The “Vote Withheld” option is provided to enable you to abstain on any particular resolution. However, it should be noted that a “Vote 
Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “For” and “Against” a resolution.
4.  Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, entitlement to attend and vote at the meeting and the 
number of votes which may be cast thereat will be determined by reference to the Register of Members of the Company at 6.00pm 
on the day which is two days before the day of the meeting or adjourned meeting. Changes to entries on the Register of Members after 
that time shall be disregarded in determining the rights of any person to attend and vote at the meeting. 
5.  To appoint one or more proxies or to give an instruction to a proxy (whether previously appointed or otherwise) via the CREST system, 
CREST messages must be received by the issuer’s agent (ID number RA10) not later than 48 hours before the time appointed for holding 
the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp generated by the CREST 
system) from which the issuer’s agent is able to retrieve the message. The Company may treat as invalid a proxy appointment sent by 
CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
6.  The completion and return of this form will not preclude a member from attending the meeting and voting in person. If you attend the 
meeting in person, your proxy appointment will automatically be terminated.
7 .  To be effective, all votes must be lodged not less than 48 hours before the time of the meeting at the office of the Company’s registrars 
at: Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
Form of proxy continued
Surgical Innovations Group plc
 Over the last year, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence 
concerning investment matters. These are typically from overseas based “brokers” who target UK shareholders, offering to sell them what 
often turn out to be worthless or high risk shares in US or UK investments. These operations are commonly known as “boiler rooms” . These 
“brokers” can be very persistent and extremely persuasive and a 2006 survey by the Financial Services Authority (FSA) has reported that 
the average amount lost by investors is around £20,000.
It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years. 
Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. 
If you receive any unsolicited investment advice:
  make sure you get the correct name of the person and organisation;
  check that they are properly authorised by the FSA before getting involved by visiting www.fsa.gov.uk/register;
  report the matter to the FSA either by calling 0845 606 1234 or visiting www.moneymadeclear.fsa.gov.uk; and
    if the calls persist, hang up.
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme. 
The FSA can be contacted by completing an online form at www.fsa.gov.uk/pages/doing/regulated/law/alerts/overseas.shtml.
Details of any share dealing facilities that the Company endorses will be included in Company mailings.
More detailed information on this or similar activity can be found on the FSA website www.moneymadeclear.fsa.gov.uk.
Warning to shareholders – boiler room scams Think surgery ...
...Think surgical innova Tions
surgical innovations group plc
Clayton Wood House 
6 Clayton Wood Bank 
Leeds LS16 6QZ
T. +44 (0) 113 230 7597 
F . +44 (0) 113 230 7598 
W. www.sigroupplc.com
For investor relations enquiries please email: 
si@surginno.co.uk
For sales enquiries please email: 
sales@surginno.co.uk
For general enquiries please email: 
si@surginno.co.uk