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Innovative products for consumer health
FUTURA MEDICAL plc
Annual report and accounts 2011
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Futura Medical plc (“Futura”) develops 
innovative products for the consumer 
healthcare market.
The Company’s strategy is to develop innovative products and out-license 
their manufacture and distribution to major pharmaceutical and 
healthcare groups.
Futura is developing a portfolio of products in sexual healthcare and pain 
relief management and is evaluating further therapeutic opportunities as 
potential additions to its pipeline.
Futura’s shares trade on the AIM market of the London Stock Exchange 
and the Company is based at The Surrey Research Park, Guildford, Surrey.
Our business strategy is centred on selecting and 
developing products based on five key criteria:
•	 Return on Investment: we focus on consumer 
healthcare products that offer the potential for a 
significant return on the costs of development.
•	 Product Profile: we focus on topically applied 
medicines, either stand-alone or in combination with a 
medical device. We only incorporate existing chemical 
entities into our products which gives our development 
activities a lower risk profile.
•	 Transdermal Delivery: our aim is to produce safe and 
effective products which are delivered through the skin. 
•	 Strong Intellectual Property: the products are 
underpinned by our developing and retaining valuable 
intellectual property including: know-how, patents and 
trademarks, to protect their commercial position.
•	 Licensing: we aim to out-license our products during 
their development to established pharmaceutical 
and healthcare groups which offer the best potential 
commercial opportunities.
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Highlights
● ● Significant progress across the Company and in particular with two products, CSD500 and 
PET500 
● ● CSD500 – CE mark awarded in August 2011 clearing the regulatory hurdle to allow for 
product launch by Reckitt Benckiser as a Durex
®
 branded condom
● ● PET500 – Worldwide rights licensed to Ansell Limited in February 2011 with upcoming US 
launch under the LifeStyles
®
 brand 
● ● TPR100-Rx – Prescription pain relief product with key territory rights under evaluation with 
pharmaceutical group
● ● CRF100 – New cellulite treatment product opportunity under evaluation
● ● John Clarke appointed as Non-Executive Chairman to lead the next stages in the Company’s 
development
● ● Further in-house new product opportunities identified and currently under evaluation
● ● Net loss of £1.81 million (2010: Net loss of £1.09 million)
● ● Placing of 4,737,402 new ordinary shares at 67.50 pence per share in March 2011 raised 
£3.20 million (£3.07 million net of expenses), strengthening Futura’s capital resources
● ● Cash resources of £2.58 million at 31 December 2011 (31 December 2010: £0.82 million),  
tax credit receivable £0.26 million at 31 December 2011 (31 December 2010: £0.15 million)
   Company Overview
01  Highlights
02  Futura at a Glance
03  Product Pipeline
04  Chief Executive’s Review 
09  Chairman’s Statement 
10  Directors’ Report: Financial Review
13  Directors’ Report: Business Review
17  Directors’ Report: Corporate Governance
23  Directors’ Report: Remuneration Report
Contents
28  Directors’ Report: Statement of Responsibilities
29  Independent Auditor’s Report
31  Group Statement of Comprehensive Income
32  Group Statement of Changes in Equity
33  Group Statement of Financial Position
34  Group Statement of Cash Flows
35  Notes to the Group Financial Statements
55  Parent Company Balance Sheet
56  Notes to the Parent Company Financial Statements
59  Company Information
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We have several products in our development pipeline for sexual healthcare and pain relief management and we are also 
working on the next generation of product opportunities. 
 — Our 
proprietary drug delivery 
technology
Futura has developed a highly efficient and proprietary 
transdermal delivery technology, DermaSys
®
, for 
the absorption of active molecules through the skin. 
DermaSys
®
 is a versatile technology in that it can be 
tailored to suit the specific active compound being used 
and the therapeutic indication. Such targeted delivery 
offers an optimised profile in terms of dose, onset time 
and duration of effect, as well as an improved safety 
profile through lower systemic uptake and the reduced risk 
of side effects.
Whilst developing PET500, our product for enhanced 
sexual control, we also expanded the DermaSys
®
 delivery 
technology platform and produced a new and unique 
delivery system, DermaSys
®
 AquaFree, which does not 
contain water. DermaSys
®
 AquaFree enables drugs 
that are water sensitive (hydrolytically unstable or which 
have only limited hydrolytic stability) to be developed 
into potentially commercially attractive products with the 
additional benefit of rapid transdermal delivery.
To maximise the value of these intellectual property 
assets, we continue to evaluate their use with a range of 
compounds.
Futura has a development agreement with 
GlaxoSmithKline plc (“GSK”) for TPR100, our product for 
pain relief. Under the terms of the agreement GSK will 
fund and be responsible for all clinical and regulatory 
development. GSK will also make modest annual 
payments to Futura whilst development work proceeds. 
Subject to satisfactory clinical outcomes and regulatory 
approvals both parties expect to enter into a commercial 
distribution agreement.
Futura signed an exclusive worldwide agreement in 
February 2011 with Ansell Limited (“Ansell”), one of 
the world’s major sexual health companies for the 
commercialisation of PET500 our product for enhanced 
sexual control.
Our licensing partnerships
Futura has a global distribution agreement with the world’s 
largest branded condom manufacturer and distributor, 
Reckitt Benckiser (“RB”), makers of the Durex
®
 condom 
range, for CSD500 for the lifetime of its patents. CSD500 is 
a condom aimed at helping healthy men maintain a firmer 
erection during intercourse whilst wearing a condom. 
CSD500 was awarded the marketing authorisation “CE 
mark” in August 2011.
Futura has also signed a global development and licensing 
agreement with RB for MED2002, our topical treatment for 
erectile dysfunction.
Futura at a Glance
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The principal activity of the Group is the research and development of medical devices and pharmaceutical drugs 
and their commercial exploitation with the focus being on transdermal products for sexual healthcare and pain relief 
management.
Sexual healthcare
Pain relief management
Concept Commercialisation
CSD500 
                                                                                                                   Next milestone: EU launch
CSD500 is a condom that incorporates an erectogenic compound which comes into contact with the penis on 
application of the condom. This is aimed at helping healthy men maintain a firmer erection during intercourse 
whilst wearing a condom.
PET500  
                                                                        Next milestone: Pivotal clinical trial
 
                                                                              Next milestone: Commercial launch
PET500 is a performance enhancement spray for men. It contains anaesthetic compounds which reduce 
sensitivity to help prolong sexual intercourse. Delivered by  
MED2002 
                                 Next milestone: Formulation enhancement
MED2002 is a topical gel applied directly to the penis for the treatment of male erectile dysfunction. It is expected 
to be the first over the counter (“OTC”) treatment for men with erectile dysfunction. Delivered by  
Concept Commercialisation
TPR100 
                                                Next milestone: Ongoing development
TPR100 is a product for the provision of topical pain relief. Early clinical work has shown superiority in terms of 
skin penetration of the active compound compared with the market-leading product. Delivered by  
TPR100-Rx 
Next milestone: Pivotal clinical trial-Licensing agreement
TPR100-Rx will be a higher strength topical product available on prescription for the treatment of more profound 
indications such as osteoarthritis and rheumatic pain. Delivered by 
EU
USA
Product Pipeline
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2011 was a landmark year for Futura in that we received CE mark approval for CSD500, our innovative 
condom to help healthy men maintain a firmer erection. CSD500 is the first product that Futura has 
conceived, developed and guided through the regulatory process to approval. In addition, we made 
considerable progress with other products in our pipeline and strengthened our Board with the 
appointment of John Clarke as Chairman, to lead the Company through the next stages in its corporate 
development.
I would like at this point to convey my profound thanks to Bill Potter, the Company’s former Chairman, 
and to acknowledge his pivotal role in the evolution of Futura to date. I am delighted that Bill’s invaluable counsel and scientific 
expertise will continue to be available to Futura in his new role as Chief Scientific Officer. 
John Clarke, the former President of GlaxoSmithKline’s Consumer Healthcare division, joined as Chairman in February 2012.  
He was attracted to Futura because of the Company’s untapped potential and opportunity for growth through innovation.
David Davies, Futura’s Product Development Director, became Chief Development Officer in November 2011, reflecting the 
Company’s increasing emphasis on its product pipeline.
Futura’s prime objective is to become profitable with income streams from multiple products and the expectation of the launch 
this year of two of its products will be significant progress towards this objective.
An important part of Futura’s strategy is licensing its products to major global companies who are best placed to commercialise 
them. Futura demonstrated continued success with its licensing strategy during the year when in February 2011 we announced 
an exclusive worldwide agreement with Ansell Limited, one of the world’s major sexual health companies, for PET500, our 
innovative spray for enhanced sexual control.
Futura now has commercial relationships with three global companies: Reckitt Benckiser, GlaxoSmithKline and Ansell. 
In addition, we recently entered into an evaluation agreement with a pharmaceutical company in connection with TPR100-Rx, 
our prescription-strength topical pain relief product. We continue to be in discussion with potential partners interested in our other 
products.
With two products close to launch, we placed an increased emphasis during the year on building up our early stage product 
opportunities. We have generated a number of potential new products. One of these, CRF100 for the treatment of cellulite, has 
already successfully completed formulation development and has exciting commercial potential.
CRF100, which uses our highly efficient transdermal delivery system, DermaSys
®
, is a cosmoceutical. We believe that CRF100 
presents an interesting commercial opportunity, which will be developed in line with the robust scientific principles applied 
throughout the Company’s portfolio of products.
Chief Executive’s Review 
James Barder
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Our business model continues to be based on a modest cash burn and at the end of the year we had cash resources of  
£2.6 million. In March 2011 we strengthened our financial position through a placing that raised £3.1 million (net of expenses). 
A further £0.5 million was raised in the year through the issue of shares to employees following share option exercises and the 
subscription for shares awarded and accrued under the long-term incentive scheme.
We expect our first recurring income to commence during the current financial year, as the Company moves towards its key 
objective of becoming a profitable R&D company at the forefront of topical drug innovation.
We continue to manage our financial resources carefully, we work only on projects where the commercial and clinical 
opportunities are compelling and we own the intellectual property rights to all our products, hence protecting and maximising 
the potential commercial and shareholder return.
Portfolio updates — Sexual healthcare
CSD500: Condom safety device
The formal award of the CE mark for CSD500 took place in August 2011, authorising CSD500 to be marketed in 29 European 
territories and in a number of other non-European territories that recognise the CE mark process.
CSD500 represents the biggest innovation in the condom industry since the advent of latex condoms. We are in discussions 
with Reckitt Benckiser in connection with launch timing and we will update our shareholders as soon as we are able to do so.
CSD500 benefits from three marketing claims, clinically proven and approved by the regulatory authorities: the maintenance of 
a firmer erection, increased penile size and a longer lasting sexual experience for women. These claims were established in a 
statistically significant user study involving 108 couples.
The product’s unique intellectual property position has been protected throughout the world including the principal consumer 
markets within Europe, the USA and Canada through patents now granted or proceeding to grant in 35 countries with one 
application pending.
As previously reported, the results of our own market research reinforce the commercial potential of CSD500 for men and 
women who already use condoms as well as for men and women who do not currently use condoms. Market research, 
conducted by an internationally recognised research company, showed that 88% of existing condom users would be interested 
in purchasing CSD500 and that 49% of non-condom users would be interested in purchasing the product. The research also 
showed that 46% of men had experienced some loss of sensitivity when using a condom during sexual intercourse, which 
can lead to loss of erection. This is one reason why some men avoid condoms, thereby increasing the risks of unwanted 
pregnancies and contracting or spreading sexually transmitted infections.
Chief Executive’s Review 
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MED2002: Treatment for erectile dysfunction
MED2002, our topical gel for the treatment of men with erectile dysfunction, is also licensed to Reckitt Benckiser and shares 
the same active ingredient as CSD500. MED2002 has the potential to become the world’s first non-prescription pharmaceutical 
treatment for erectile dysfunction, a condition that affects, to some degree, as many as 52% of men aged 40 or over¹.
As previously reported, initial discussions have taken place with regulators to identify the most appropriate regulatory pathway. 
We look forward to providing a further update in due course.
PET500: Enhanced sexual control
PET500 is a topical spray that combines our DermaSys
®
 AquaFree delivery system with a well-known mild topical anaesthetic. 
It is designed to delay male ejaculation and to take effect rapidly.
In February 2011 we were delighted to announce that Ansell Limited, one of the world’s major sexual health companies, had 
signed an exclusive worldwide agreement to commercialise PET500. Under the terms of the agreement with Ansell, Futura will 
receive a significant royalty rate on sales under the terms of this agreement.
PET500 was designed to comply with the current USA Food and Drug Administration (“FDA”) monograph for male genital 
desensitisers. The product can therefore be marketed in the USA without any further regulatory approval or clinical data. Futura 
will work closely with Ansell on the successful completion of any clinical work in territories where regulators require additional 
data.
PET500 will be marketed as part of Ansell’s LifeStyles
®
 brand and it is expected that it will be launched from July in a phased 
roll-out throughout the USA. We expect recurring royalty income to begin to flow this year but as the launch is phased the initial 
royalties are likely to be relatively modest.
Our commercial agreement with Ansell precludes further comment but we look forward to updating shareholders at the 
appropriate time.
Chief Executive’s Review (continued)
Note
¹ Massachusetts Male Aging Study (MMAS), J Urol. 1994 Jan; I5I (1): 54-61
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Portfolio updates — Pain relief management
TPR100: Topical pain relief
TPR100 uses our highly efficient transdermal delivery system, DermaSys
®
, for the delivery of a non-steroidal anti-inflammatory 
drug (“NSAID”). As previously announced, clinical tests carried out by Futura have shown that TPR100 achieves approximately 
35 times higher bioavailability than that achieved by the market-leading product. TPR100’s speed of permeation brings potential 
benefits including the rapid onset of action of pain relief.
Futura has a development agreement for TPR100 with GlaxoSmithKline Consumer Healthcare (“GSK”) under which GSK is 
responsible for all clinical and regulatory development including its funding. GSK is also making modest annual payments to 
Futura whilst development work proceeds.
Development work is progressing well. As previously reported TPR100 will begin its pivotal clinical programme in 2012, which is 
expected to complete towards the end of 2013. Assuming satisfactory clinical outcomes and regulatory approval both parties 
expect to enter into a commercial distribution agreement.
TPR100-Rx: Higher strength topical pain relief for prescription based indications
TPR100-Rx contains a higher dose of the same NSAID as TPR100. This will require it to be regulated as a prescription product 
for the treatment of more profound pain associated with conditions such as osteoarthritis and rheumatic pain. Its targeted 
delivery through the skin has the potential benefit of avoiding the systemic side-effects seen in the use of oral NSAIDs.
We are pleased to announce that we have entered into an evaluation agreement with a pharmaceutical company in connection 
with the development and commercialisation of the product in certain key territories. We look forward to providing an update on 
this evaluation agreement in due course.
Discussions are also continuing with other potential partners.
CRF100: Topical treatment for cellulite
CRF100 is a topically applied cream for the treatment of cellulite, the condition characterised by dimpled skin, which we added 
to our early stage pipeline in December 2011. It comprises a well-characterised chemical species (an alkaloid) within Futura’s 
DermaSys
®
 delivery system. The alkaloid is already used by a number of major cosmetics companies in the treatment of cellulite 
and its use, at levels sufficient to produce a physiological effect, is supported by a growing body of scientific literature.
We intend to develop CRF100 using robust scientific principles and we were therefore delighted to have appointed Professor 
Anthony Rawlings, a Visiting Professor at the London School of Pharmacy and expert in the science of cosmetics, as an adviser 
to assist in the product’s clinical development.
Chief Executive’s Review (continued)
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CRF100 has been shown in vitro to achieve at least an eight-fold improvement in delivery of the alkaloid through the skin 
compared with a number of market-leading comparator products. It is intended that CRF100 will be a cosmetic product and 
will be licensed at an appropriate time to a major global company for commercialisation. A number of patent applications are 
in various stages of grant or prosecution and further applications may be considered pending the achievement of successful 
clinical outcomes.
We are currently using Raman spectroscopy to define the absorption profile of the active through the skin to ensure that it can 
be delivered successfully in appropriate quantities to the target site and to have the desired cosmetic effect. Once this work 
is completed we intend to conduct a placebo-controlled clinical trial which is scheduled to commence in the first half of 2012 
with the integrated report available during the second half of 2012. This trial would be carried out by an experienced contract 
research organisation in continental Europe, and has been designed under the guidance of Professor Rawlings to be conducted 
in accordance with Futura’s robust scientific principles.
RAD100: Rapid anaesthetic delivery
RAD100 is designed to achieve rapid topical anaesthesia of the skin prior to injection, vaccination or cannulation. In early in vitro 
work, as previously reported, we have shown a 250% increase in the rate of permeation of a topical anaesthetic across the skin 
using RAD100 when compared with an established product.
Our objective is to create a product with a substantially increased speed of onset of skin desensitisation compared with current 
treatments (which take at least 30 to 45 minutes to provide anaesthesia). We do not believe that the current formulation of 
RAD100 is optimised to give a sufficiently rapid speed of onset to be commercially attractive so the product is being redesigned 
with the objective of achieving an onset of action of less than 15 minutes. We will advance the product only if this speed of 
onset can be achieved.
Early Stage Product Development
We have a rigorous approach to vetting potential new products and our interest is contingent upon robust evidence-based 
outcomes. Our initial evaluation includes five key criteria: performance, aesthetics, stability, defensible intellectual property and 
commercial potential. Unless a new opportunity gives a clear indication of meeting these criteria then the product concept will 
not progress to the next stage of development.
Futura’s highly efficient DermaSys
®
 delivery system is a versatile asset and we are currently working on a number of potential 
products at various stages. We look forward to providing further updates as appropriate.
People
I would like to offer my sincere thanks to all of our staff, scientific advisers and commercial partners for their contribution to the 
development of the Company throughout the year.
Outlook
During 2012 Futura expects to make a transformational step in its development by receiving its first recurring income. We also 
expect to continue to make progress during the year with our product pipeline. We look forward to the future with confidence.
James Barder
Chief Executive
Chief Executive’s Review (continued)
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Chief Executive’s Review (continued)
It is a pleasure to write my inaugural Chairman’s Statement just a few weeks after joining Futura.
Firstly, I would like to convey my sincere thanks on behalf of everyone at Futura to Bill Potter, the 
Company’s former Chairman, and to acknowledge his pivotal role in the development of the Company. 
I am delighted that Bill’s scientific and technical expertise will continue to be available to Futura in his 
new role as Chief Scientific Officer.
I would also like to take this opportunity to outline why I was attracted to the Chairmanship of Futura 
and to give my assessment of the Company’s potential. 
I joined Futura after more than 35 years at GlaxoSmithKline, most recently as the President of its Consumer Healthcare division. 
My executive career has given me considerable experience of the consumer healthcare sector, which I believe is reliant on one 
thing: innovation.
Futura is a company with innovation at its core. It also has a great team of people, which it is a privilege for me to join. Its 
DermaSys
®
 delivery system is at the forefront of transdermal drug delivery, a delivery route that is particularly appealing for OTC 
products. DermaSys
®
 creates the opportunity for Futura to develop organically into a substantial business.
It is my intention to help Futura realise the full potential of its market opportunities whilst also using my experience of global 
companies to assist in its licensing strategy.
2012 promises to be a very exciting year for Futura with two products close to launch and a pipeline of further opportunities at 
various stages of development. I look forward to contributing to the Company’s success.
John Clarke
Chairman
Chairman’s Statement
John Clarke
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The Group ended the year with costs firmly under control, a more advanced and diverse development 
portfolio and the prospect of recurring royalty revenues.
International Financial Reporting Standards
The Financial Review should be read in conjunction with the Group financial statements and the Notes 
to the Group Financial Statements set out on pages 31 to 54.
The Annual Report and Accounts (“Annual Report”) for the Group is presented under International 
Financial Reporting Standards (“IFRSs”) as adopted by the European Union. The financial statements of the Company are 
prepared in accordance with United Kingdom Generally Accepted Accounting Practice (“UK GAAP”) and are set out on  
pages 55 to 58.
Revenue
Group revenue for the year ended 31 December 2011 was £158,055 (2010: £125,000).
Losses
The Group continues to maintain a focus on tight control of all expenditure.
The Group’s operating loss for the year ended 31 December 2011 was £2.10 million (2010: £1.34 million).
The Group’s loss after taxation for the year ended 31 December 2011 was £1.81 million (2010: £1.09 million).
Loss per share for the year ended 31 December 2011 was 2.53 pence (2010: 1.61 pence).
No dividends were paid and none are proposed by the Board of Directors (“the Board”) (2010: £nil).
Financial instruments
The financial instruments held by the Group are disclosed in note 12 of the Notes to the Group Financial Statements. The 
Group policy on exposure to financial risk is disclosed in note 2 of the Notes to the Group Financial Statements.
Group research and development costs
The Group aims to achieve cost effective research and development (“R&D”) and to bring products to market through licensing 
partners as soon as is practicable.
Group R&D costs each year reflect the number of products being developed, the stage of development reached for each and 
the impact on their progress of external factors.
R&D costs of £1,480,774 (2010: £760,637) were higher compared to 2010, due largely to an increase in early stage 
development evaluation following the completion of the fundraising in March. The 2011 figure also includes costs of £197,204 
in respect of the settlement of awards under the long-term incentive scheme (2010: £nil).
Directors’ Report: Financial Review
Derek Martin 
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Group research and development costs (continued)
The table below shows the trend in our R&D costs and other administrative costs over the past five years ended 31 December:
2011
£
 2010
£
 2009
£
 2008
£
 2007
£
 R&D costs 1,480,774 760,637 810,188 1,390,616 1,508,269
 Other administrative costs 776,154 700,399 796,186 1,007,964 1,227,320
 Total operating costs 2,256,928 1,461,036 1,606,374 2,398,580 2,735,589
 R&D ratio 66% 52% 50% 58% 55%
The R&D ratio is the percentage of R&D costs relative to total operating costs. The Board monitors this ratio closely. Total R&D 
spend since the formation of the business in 1997 totals £12.24 million (55.8% of total cumulative operating costs). During 
the year, the sole subsidiary, Futura Medical Developments Limited continued to incur this R&D expenditure which has been 
accounted for as explained in accounting policy note 1.7 of the Notes to the Group Financial Statements and has been written 
off as incurred for all reporting periods prior to and including the year ended 31 December 2011.
The Board considers that this overall total R&D spend relative to its pipeline of later stage products and emerging new products 
distinguishes the Group’s lower funding requirements and risk profile from more typical businesses in the wider pharmaceutical 
industry. The Group’s strategy is to focus on medical devices and pharmaceutical drugs that offer the potential for a significant 
return on the costs of development. As well as progressing its existing R&D programme, the Group continues to seek new 
opportunities for potential products to add to its portfolio.
Other administrative costs
Other administrative costs for the year ended 31 December 2011 were £776,154 (2010: £700,399). These comprised all other 
operating costs excluding those relating to product development and associated intellectual property. The main constituents 
and their relative proportions were:
Year ended 
31 December
 2011
Year ended 
31 December
 2010
 Wages and salaries 67% 63%
 Legal and professional advisers 20% 22%
 Office costs and staff expenses 12% 13%
 Licensing negotiations 1% 2%
100% 100%
Supplier payment policy
The Group’s policy concerning the payment of its trade payables is to pay on the basis of the agreed terms of payment 
established with each supplier, providing that all terms and conditions have been complied with and are in accordance with the 
Group’s financial control procedures.
The average credit period for the Group (expressed as creditor days) during the year ended 31 December 2011 was 33 days 
(2010: 45 days). At the year end the Company had trade creditors totalling £19,513 (2010: £19,107) giving rise to an average 
credit period for the year ended 31 December 2011 of 54 days (2010: 90 days).
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Charitable and political contributions
No political donations were made during either year. Charitable donations of £70 were made during the year (2010: £162).
Taxation
A tax credit of £259,704 (2010: £225,731) in respect of R&D expenditure incurred has been recognised in the Group financial 
statements. The increase compared to 2010 reflects a widening of the scope of qualifying indirect activities included in the level 
of R&D expenditure undertaken.
Capital structure and funding
The Group remains funded primarily by equity share capital. Equity funding (net of expenses) received since the formation of the 
business until 31 December 2011 totalled £20.48 million.
Cash held by the Group at 31 December 2011 totalled £2.58 million. This comprised cash and cash equivalents shown below 
at each year ended 31 December:
2011
£m
 2010
£m
 2009
£m
 2008
£m
 2007
£m
 Cash and cash equivalents 2.58 0.82 1.79 0.78 2.64
The Group had no bank borrowings at 31 December 2011 (2010: £nil).
On 10 March 2011, the Group raised £3.20 million (£3.07 million net of expenses) by way of a placing of 4,737,402 new ordinary 
shares at 67.50 pence per share. The net proceeds raised were for general corporate and research and development purposes.
During the year the following sums were raised following the issue of shares under the employee share option scheme:
 Date
Capital 
Raised
Number of 
Shares Issued
Cost 
per Share
 25 March 2011 £41,750 100,000 41.75 pence
 19 May 2011 £12,525 30,000 41.75 pence
 19 May 2011 £28,125 50,000 56.25 pence
 20 June 2011 £74,500 100,000 74.50 pence
 7 December 2011 £24,250 100,000 24.25 pence
8 December 2011 £10,913 45,000 24.25 pence
 £192,063 425,000
On 28 September 2011 the Group raised £306,993 following the issue of 417,678 shares to four Directors at 73.50 pence per 
share under the long-term incentive scheme.
Other significant sources of funding received for the Group from formation of the business until 31 December 2011 comprised: 
R&D tax credits £1.73 million, bank interest £0.90 million and R&D grants £0.28 million.
Derek Martin
Secretary
Directors’ Report: Financial Review (continued)
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Principal activity
The principal activity of the Group is the research and development of pharmaceutical drugs and medical devices and their 
commercial exploitation. The Chief Executive’s Review on pages 4 to 8 and the Directors’ Report: Financial Review on pages 10 
to 12 set out in more detail the Group’s activities during the year and anticipated future developments.
Research and development activities
The main area of R&D continues to be in the field of innovative pharmaceutical drugs and medical devices for the consumer 
healthcare market with the focus being on sexual healthcare and pain relief management. In addition the Group is seeking to 
develop a product for the treatment of cellulite, an opportunity in the lifestyle category which has arisen as a result of further 
evaluation of our DermaSys
®
 technology.
Group strategy
The Group strategy is to focus on developing innovative products for the consumer healthcare market. This strategy responds 
to the well publicised demographic change of an ageing population, increasing prosperity, Government initiatives to increase 
self-medication, the natural desire for improved quality of life and the Directors’ expectations that consumer healthcare 
spending will increase as a result. The objective is to develop products such that each on its own has the potential to generate 
significant annual revenues in excess of our total Group annual operating costs.
The Group business strategy is centred on selecting and developing products based on five key criteria:
● ● Return on Investment: we focus on consumer healthcare products that offer the potential for a significant return on the 
costs of development.
● ● Product Profile: we focus on topically applied medicines, either stand-alone or in combination with a medical device. We 
only incorporate existing chemical entities into our products which gives our development activities a lower risk profile.
● ● Transdermal Delivery: our aim is to produce safe and effective products which are delivered through the skin.
● ● Strong Intellectual Property: the products are underpinned by our developing and retaining valuable intellectual property 
including: know-how, patents and trademarks, to protect their commercial position.
● ● Licensing: we aim to out-license our products during their development to established pharmaceutical and healthcare groups 
which offer the best potential commercial opportunities.
Our products CSD500 and MED2002 involve the application of the same chemical active compound, in each case in the sexual 
healthcare field. In pain relief our products TPR100 and TPR100-Rx also involve the application of the same chemical active 
compound. The development of our proprietary transdermal delivery technology, DermaSys
®
, has enabled the expansion of 
our product pipeline to include other new active compounds. PET500, RAD100 and, new in 2011, CRF100 represent the next 
applications of our DermaSys
®
 delivery technology to our product pipeline.
Long lead times for product development characterise the pharmaceutical industry. However, the Board seeks to drive the business 
through to revenue generation as soon as is practicable with due regard to regulatory standards and an appropriate commercial 
approach. This is achieved through swift decision-making, highly capable staff and the involvement of external expertise.
At the same time, the Board remains committed to keeping regular or fixed costs restricted to an appropriate level through the 
continued and judicious use of external consultants and professional advisers. Clearly, the lower the Group’s costs the earlier 
that revenue generation would lead to a key future financial milestone of monthly break-even and profitability.
Directors’ Report: Business Review
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The consumer healthcare market and competitive environment
The Group develops products that address the needs of the consumer healthcare market. The Group considers there to be two 
distinct categories in which it operates.
The first category is the global transdermal delivery market, valued at US$21.5 billion in 2010¹. Although the Group develops 
transdermal products for prescription, over the counter (“OTC”) and cosmetic use, its focus is on developing non-prescription 
drugs. These comprise the sexual healthcare products PET500 and MED2002 and the pain relief products TPR100, TPR100-
Rx (prescription only product) and RAD100 (may be a prescription only product). The global topical OTC analgesics market 
is valued at US$3.8 billion in 2010
2
 and the market leader for topical OTC analgesics has annual sales of US$374 million
3
. As 
PET500 and MED2002 could form new categories within the OTC market, no published data is available on the OTC sexual 
healthcare market to substantiate market size estimates. The prescription market for erectile dysfunction treatments was 
estimated to be in excess of US$4.2 billion
4
 in 2010.
The second category is the global consumer medical devices market. The Directors estimate that the market for consumer 
medical devices is worth between US$23 billion and US$26 billion. The consumer medical device being developed by the 
Group is the condom product CSD500, which fits within the US$4.2 billion global condom market
5
 and where our distribution 
partner RB, the makers of Durex
®
, are the global leader with 35% of the branded condom market
6
.
These consumer healthcare markets are dominated by global pharmaceutical and consumer healthcare groups with established 
distribution networks. Smaller R&D companies, such as Futura, seek to out-license their innovative products to these larger entities.
Futura offers its licensing partners its ability to identify commercially attractive consumer healthcare product opportunities 
coupled with a lower cost, expert and fast development model, backed by strong patent protection. In return for this, Futura 
seeks significant royalties from future sales of these products through its partners and their established distribution networks.
Key performance indicators
The Directors consider the successful achievement of development, licensing and commercialisation milestones and the 
number of products under development (beyond the evaluation stage) to be the major drivers of value creation for the Group. 
These are measures of the progress of the business towards its revenue generation goal and are considered by the Directors to 
be the key non-financial performance indicators used to determine achievement of Group strategy. The Group’s performance 
with regard to such milestones is discussed in the Chief Executive’s Review on pages 4 to 8.
The Directors consider Group cash and the absolute values of, and the ratio between, R&D costs and other administrative 
overhead costs as being the Group’s key financial performance indicators. The cost related indicators assist in monitoring 
financial control to reduce the hurdle to achieving a key future financial milestone of monthly break-even and profitability. The 
monitoring of cash gives due consideration to anticipated future spend required to prioritise development opportunities and to 
plan the resources required to achieve the goals of the business. The Directors’ Report: Financial Review on pages 10 to 12 
considers these financial performance indicators.
Notes
¹ Transdermal Medicine Review and Outlook 2011, Pharmalive
2
 2010 calendar year. Source: OTC Yearbook 2011 (MSP), Nicholas Hall & Company
3 
Futura estimate based on 2010 calendar year. Source: OTC Yearbook 2011 (MSP), Nicholas Hall & Company
4 
Futura estimate based on erectile dysfunction product sales data from 2010 Annual Reports for Pfizer, Lilly and Bayer
5 
2010 estimate. Source: “Condoms: A Global Strategic Business Report”, Aug. 2010, Global Industry Analysts, Inc
6 
SSL International plc Annual Report and Accounts 2009 
Directors’ Report: Business Review (continued)
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Principal risks and uncertainties
The development of pharmaceutical drugs and medical devices requires the necessary safety, stability and efficacy to be 
demonstrated in clinical programmes in order to meet the requirements of the appropriate regulatory bodies. These clinical 
programmes may not achieve their endpoints. The Directors consider that the key risks of the Group are:
Clinical development and regulatory risk
There can be no guarantee that any of the Group’s products will be able to obtain or maintain the necessary regulatory 
approvals in any or all of the territories in respect of which applications for such approvals are made. Where regulatory 
approvals are obtained, there can be no guarantee that the conditions attached to such approvals will not be considered too 
onerous by the Group or its distribution partners in order to be able to market its products effectively.
The Group seeks to reduce this risk by developing products using safe, well-characterised active compounds, by seeking 
advice from regulatory advisers, consultations with regulatory approval bodies and by working with experienced distribution 
partners.
Commercial risk
There can be no guarantee that the Group will succeed in establishing and maintaining the necessary contractual relationships 
with licensing partners for the Group’s products under development.
Even if the Group’s products are successfully developed and approved by the appropriate regulatory bodies, they may not be 
successfully launched by the Group’s licensing partners or enjoy commercial acceptance.
The Group seeks to reduce this risk by selecting experienced licensing partners, maintaining and developing its relationship with 
these partners and seeking the development of new products of interest to these partners.
Funding risk
The Group continues to incur substantial operating expenses. Until the Group generates positive net cash inflows from the 
successful development and commercialisation of its products it remains dependent upon additional funding through the 
injection of equity capital from share issues. The Group may not be able to generate positive net cash inflows in the future or to 
attract such additional required funding at all, or on suitable terms. In such circumstances the development programmes may 
be delayed or cancelled and business operations cut back.
The Group seeks to reduce this risk by keeping a tight control on expenditure, avoiding long-term supplier contracts (other 
than clinical trials), prioritising development spend on products closest to potential revenue generation, obtaining government 
grants (where applicable), maintaining a focused portfolio of products under development and keeping shareholders informed of 
progress.
As described in the Chief Executive’s Review on pages 4 to 8 and the Directors’ Report: Financial Review on pages 10 to 12 
the current economic environment is challenging and the Group has reported an operating loss for the year. Whilst measures 
have been implemented to preserve cash and secure additional funding, these circumstances create uncertainty over future 
availability of funding.
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Principal risks and uncertainties (continued)
As explained in the Chief Executive’s Review on page 5, equity funding of £0.50 million was obtained in 2011 following share 
option exercises and under the long-term incentive scheme. In addition equity funding of £3.20 million (£3.07 million net of 
expenses) was raised by way of a placing in March 2011.
As a result of this the Directors have a reasonable expectation that the Group and the Company has adequate resources 
to continue in operational existence for the foreseeable future. For these reasons the Directors continue to adopt the going 
concern basis in preparing the financial statements.
Treasury and financial risk
Treasury and financial risk management policy is concerned with financial instruments and management of interest rate risk and 
foreign exchange rate risk. Financial risks are quantified in note 2 of the Notes to the Group Financial Statements and were not 
considered significant at the Group Statement of Financial Position date.
Competition risk
The Group’s current and future potential competitors include, amongst others, major multinational pharmaceutical and 
healthcare companies with substantially greater resources than those of the Group. There can be no assurance that 
competitors will not succeed in developing systems and products that are more effective or economic than any of those 
developed by the Group, with its distribution partners, or which would render the Group’s products obsolete or otherwise non-
competitive.
The Group seeks to reduce this risk by securing patent registration protection for its products, maintaining confidentiality 
agreements regarding Group know-how and technology, monitoring technological developments and by selecting leading 
businesses in their respective fields as licensing partners capable of addressing significant competition, should it arise.
Intellectual property risk
The commercial success of the Group and its ability to compete effectively with other companies depend, amongst other 
things, on its ability to obtain and maintain patents sufficiently broad in scope to provide protection for the Group’s intellectual 
property rights against third parties and to exploit its pharmaceutical products. The absence of any such patents may have a 
material adverse effect on the Group’s ability to develop its business. The Group seeks to reduce this risk by only developing 
products where legal advice indicates patent protection would be available, seeking patent protection for the Group’s products, 
maintaining confidentiality agreements regarding Group know-how and technology and monitoring technological developments 
and the registration of patents by other parties.
The commercial success of the Group also depends upon not infringing patents granted, now or in the future, to third parties 
who may have filed applications or who have obtained, or may obtain, patents relating to business processes which might 
inhibit the Group’s ability to develop and exploit its own products.
Directors’ Report: Business Review (continued)
Derek Martin
Secretary
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Directors’ Report: Corporate Governance
Introduction
The Board is committed to maintaining appropriate standards of corporate governance. Although not mandatory for companies 
trading on AIM, the Group accepts the principles of good corporate governance as embodied in The UK Corporate 
Governance Code (“the Code”). A copy of the Code is provided on the Financial Reporting Council’s website at 
www.frc.org.uk/corporate/ukcgcode.cfm.
There have been no material changes to our corporate governance processes and our compliance with the Code following our 
annual review.
Statement of compliance
The Board considers that given the size and nature of the Group’s activities it does not intend to comply with the Code in 
respect of the items listed below. This is considered by the Board to be reasonable and does not compromise the overall 
principles of corporate governance which the Board strongly supports:
● ● The Remuneration Committee, in deciding on remuneration at its annual review, evaluates the performance of the Group as 
a whole and that of the individual Directors. The precise nature of this performance evaluation is not specified in the Annual 
Report (Code B.6.1).
● ● Where the Board permits Executive Directors to serve in roles with other companies, as long as they do not compromise 
the individual’s ability to perform those services to the Group, the earnings from such roles need not be disclosed to the 
Board nor paid to the Group (Code D.1.2).
The Board considers that the remuneration of Executive Directors should include a performance related element which is 
almost entirely based on the award of share options or other share-based incentives as recommended by the Remuneration 
Committee and details are set out in the Directors’ Report: Remuneration Report on pages 23 to 27.
Board of Directors
The Board of Directors has overall responsibility for the Group.
From 1 February 2012 the Board comprises a Non-Executive Chairman (“Chairman”), a Chief Executive, two independent Non-
Executive Directors and two further Executive Directors. The Chairman and the Non-Executive Directors receive part of their 
remuneration in the form of shares but this does not constitute a material business relationship with the Group and is not considered 
to impair the independence of the two independent Non-Executive Directors. The Board is satisfied that it has an appropriate mix of 
experience in its Non-Executive Directors. The roles of Chairman and Chief Executive are intended to remain separate.
John Clarke succeeded Bill Potter as Chairman of the Company. Bill Potter stepped down from the Board on 31 January 2012 
but will continue to play a key role as Futura’s Chief Scientific Officer and adviser to the Board. In November 2011 David Davies, 
Futura’s Product Development Director, became Chief Development Officer, reflecting the Company’s increasing emphasis on 
its product pipeline.
The Chairman provides strategic and operational guidance bringing to bear his extensive experience of the healthcare sector. 
He also oversees the duties performed by the Chief Executive and ensures that they are in line with Board expectations with a 
particular emphasis on monitoring product development. The Chief Executive manages the day-to-day running and strategic 
direction of the Company in line with policy decisions given by the Board and shareholder expectations with particular emphasis 
on the commercial direction of the Group.
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Board of Directors (continued)
The Board retains full control of the Group with day-to-day operational control delegated by the Board to the Executive 
Directors. The full Board meets bi-monthly and on any other occasions it considers necessary. During 2011, there were 14 
Board meetings, three meetings of the Remuneration Committee, three meetings of the Audit Committee and three meetings of 
the Nominations Committee. All meetings were fully attended by their constituent Directors.
The Board is responsible for approving interim and annual financial statements, formulating and monitoring Group strategy, 
approving financial plans and reviewing performance, as well as complying with legal, regulatory and corporate governance 
matters. There is a schedule of matters reserved for the Board.
Biographies of the Board members are as follows.
John Clarke
Non-Executive Chairman — appointed 1 February 2012
John Clarke became Chairman on 1 February 2012. He has extensive experience of the healthcare 
sector, having worked at GSK for more than 35 years. In 2006 he was appointed President of GSK 
Consumer Healthcare, a position from which he stepped down in October 2011. Under his leadership, 
GSK Consumer Healthcare became one of the fastest-growing companies in its industry. He is also a 
Director of the US-based Consumer Healthcare Products Association.
Dr Bill Potter, PhD
Executive Chairman — resigned 31 January 2012
Bill Potter stepped down as Chairman on 31 January 2012 but he continues to provide advice and 
expertise to the Board on a consultancy basis on product development matters in his role as Chief 
Scientific Officer, bringing to bear his considerable experience gained over 30 years in R&D including 
bringing a wide range of new medical device products to market. He has extensive knowledge of 
worldwide regulatory procedures, intellectual property issues and licensing. He previously worked at 
London International Group plc, including seven years as Group Scientific Affairs Director and at Smith 
& Nephew plc.
James Barder
Chief Executive
James Barder joined the Company as Chief Executive in June 2001. He assists the Remuneration 
Committee and the Nominations Committee (but is not a member of and does not vote on either). 
He has overall responsibility for all activities of the Group, is a principal contact for all shareholder and 
investor relations matters and leads licensing and distribution negotiations and new product development 
activities. He first became involved with the Group as an investor in 1997 and has been a Director of 
the subsidiary since 1998. Prior to becoming Chief Executive, he was Managing Director of Aon Capital 
Markets Limited. He has predominantly worked in the field of insurance and finance including firms he 
founded and co-owned and is also a Non-Executive Director of Lorega Limited.
Directors’ Report: Corporate Governance (continued)
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David Davies, BSc (Hons), MBA
Chief Development Officer
David Davies joined the Board in September 2001. He is responsible for all product development 
programmes for the Group. Prior to joining the Company, he was Director of Project Management 
at Clintrials Research Limited. He has over 25 years of experience in pharmaceutical and healthcare 
product development, within pharmaceutical companies and global contract clinical research 
organisations. Previous employers include Porton Down, Glaxo Group Research, Wellcome 
Research, Zambon Limited and PPD Pharmaco Limited. He is a Director and Company Secretary of 
Pharmaceutical Contract Management Limited and is also Company Secretary of the registered charity 
Ordinary 2 Extraordinary Limited.
Derek Martin, BSc (Hons), ACA
Finance Director and Company Secretary
Derek Martin joined the Board in September 2008. He oversees the Group’s finance function and also 
its compliance procedures. He qualified as a Chartered Accountant in 1984 and has over 20 years 
of experience in a variety of senior accounting roles in a diverse range of industries including retail, 
software, telecoms and media.
Jonathan Freeman, BA (Hons), MBA
Senior Independent Non-Executive Director and Chairman of Remuneration Committee and 
Audit Committee
Jonathan Freeman joined the Board in July 2003 and was appointed Senior Independent Non-
Executive Director in November 2003. As well as chairing the Audit Committee and the Remuneration 
Committee, he is also a member of the Nominations Committee. He provides guidance on City 
regulatory matters, corporate finance and investor relations. He has worked in the UK financial services 
sector for over 20 years with previous roles including: Director of Beeson Gregory (now Evolution 
Securities), Director of a number of quoted investment companies and, most recently, Group Chief 
Executive Officer of Syndicate Asset Management plc.
Lisa Arnold
Independent Non-Executive Director and Chair of Nominations Committee
Lisa Arnold joined the Board in March 2008. As well as chairing the Nominations Committee, she 
is also a member of the Remuneration Committee and the Audit Committee. She has extensive 
experience of the investment and healthcare sectors. She worked in the investment banking industry 
from 1984 to 2001, holding senior positions including Sector Head of Pharmaceuticals and Healthcare 
at UBS and Commerzbank. Since 2001, she has worked in consultancy and non-executive roles 
predominantly in the pensions, healthcare and technology sectors. She is currently a Non-Executive 
Director of the UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”), where she also 
chairs the Risk & Audit Committee, and is an adviser to the Allied Domecq Pension Funds and the Kraft 
UK Pension Fund (Trustees).
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Audit Committee
The Audit Committee comprises the Non-Executive Directors, Jonathan Freeman and Lisa Arnold, and is chaired by Jonathan 
Freeman as Senior Independent Non-Executive Director. It meets as required and specifically to review the Interim Report 
and Annual Report and to consider the suitability and monitor the effectiveness of the internal control processes. There were 
three Audit Committee meetings during 2011. The Audit Committee reviews the findings of the external auditors and reviews 
accounting policies and material accounting judgements.
The independence and effectiveness of the external auditor is reviewed annually and audit partners are rotated every five years. 
The possibility of undertaking an audit tender process is considered on a regular basis. The Audit Committee (with no Executive 
Director present) meets at least once per calendar year with the auditors to discuss their independence and objectivity, the 
Annual Report, any audit issues arising, internal control processes, appointment and fee levels and any other appropriate 
matters. As well as providing audit related services, the auditors also provide taxation advice. The fees in respect of audit and 
tax services are disclosed in Note 4 of the Notes to the Group Financial Statements. Fees for non-audit services paid to the 
auditors are not deemed to be of such significance to them as to impair their independence and therefore the Audit Committee 
considers that the objectivity and independence of the auditors is safeguarded.
The terms of reference of the Audit Committee are set out in the Investors/Governance section on the Group’s website at 
www.futuramedical.com.
Internal control
The Board is responsible for establishing and maintaining the Group’s system of internal control and for reviewing its 
effectiveness. The system of internal control is designed to manage, rather than eliminate, the risk of failure of the achievement 
of business objectives and can only provide reasonable but not absolute assurance against material misstatement or loss.
The Audit Committee continues to monitor and review the effectiveness of the system of internal control and report to the Board 
when appropriate with recommendations.
The annual review of internal control and financial reporting procedures did not highlight any issues warranting the introduction 
of an internal audit function. It was concluded, given the current size and transparency of the operations of the Group, that an 
internal audit function was not required.
The main features of the internal control system are outlined below:
● ● A control environment exists through the close management of the business by the Executive Directors. The Group has a 
defined organisational structure with delineated approval limits. Controls are implemented and monitored by the Executive 
Directors.
● ● The Board has a schedule of matters expressly reserved for its consideration and this schedule includes acquisitions and 
disposals, major capital projects, treasury and risk management policies and approval of budgets.
● ● The Group utilises a detailed budgeting and forecasting system. Detailed budgets are prepared annually by the Executive 
Directors before submission to the Board for approval. Forecasts are updated at least quarterly to reflect changes in the 
business and are monitored by the Board including future cash flow projections. Actual results are monitored against 
annual budgets in detail on a six-monthly basis, with variances highlighted to the Board.
Directors’ Report: Corporate Governance (continued)
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Internal control (continued)
● ● Financial risks are identified and evaluated for each major transaction for consideration by the Board and senior 
management.
● ● Standard financial control procedures are operated throughout the Group to ensure that the assets of the Group are 
safeguarded and that proper accounting records are maintained.
● ● A risk review process is in operation whereby the Chief Executive and Finance Director present a report to the Board each 
year on the key business risks.
Going concern
As disclosed in the Directors’ Report: Business Review on page 16 the Group financial statements have been prepared on the 
going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in 
operational existence for the foreseeable future.
Directors’ qualifying third party indemnity provisions
The Group has made qualifying third party indemnity provisions in favour of the Directors against liability in respect of 
proceedings brought by third parties and these remain in force at the date of this Directors’ Report.
Nominations Committee
The Nominations Committee comprised the two independent Non-Executive Directors and is chaired by Lisa Arnold. Bill 
Potter was invited to attend and acted as an adviser to the Nominations Committee because of his knowledge of the industry, 
however, by virtue of his executive role, he was not considered to be independent and was excluded from voting. John Clarke 
who succeeded Bill Potter as Chairman on 1 February 2012 has joined the Nominations Committee.
The Nominations Committee monitors the requirements of the Group in respect of Board composition as the Group evolves 
and with regard to succession planning. There were three meetings during 2011. The terms of reference of the Nominations 
Committee are set out in the Investors/Governance section on the Group’s website at www.futuramedical.com.
Employees
At 31 December 2011, the Group’s employees comprised: four Executive Directors and three full-time and one part-time 
member of staff, all of whom are employed by the subsidiary.
The Executive Directors keep staff informed of the progress and development of the Group regularly through formal and 
informal meetings and employee feedback is encouraged. The Group has a policy of offering share options or other share-
based incentives to all eligible employees with due consideration to the level of dilution to shareholders.
The Group does not discriminate between employees and prospective employees on the grounds of age, race, disability, 
religion or gender.
The Board recognises its obligation towards its employees to provide a safe and healthy working environment. The Group 
complies with health and safety legislation including conducting regular inspections and risk assessments.
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Environmental, social and community matters
As a result of the size and nature of our operations, the impact of the Group’s operations on the local community and 
the environment is not considered to be significant. Recycling of office supplies is undertaken where possible. The Group 
operates in a highly regulated industry and clinical trials are conducted in compliance with regulatory requirements. The Group 
undertakes regular reviews of corporate social responsibility matters with policy updates and implements improvements to its 
operations where identified.
Relationship with shareholders
The Directors seek to build a mutual understanding of objectives between the Company and its shareholders. The Company 
reports formally to shareholders in its Interim Report and Annual Report setting out details of its activities. In addition, the Group 
keeps shareholders informed of events and progress through the issue of regulatory news in accordance with the AIM Rules 
for Companies (“AIM Rules”) of the London Stock Exchange. The Chief Executive and Finance Director meet with institutional 
shareholders following interim and final results. The Group also maintains investor relations pages and other information 
regarding the business, its products and activities on its website at www.futuramedical.com.
The Annual Report is made available to shareholders at least 20 working days before the Annual General Meeting (“AGM”) 
along with notice of the AGM. Directors are required to attend the AGM, unless unable to do so for personal reasons or due to 
pressing commercial commitments, and shareholders are given the opportunity to vote on each separate resolution proposed 
at the AGM. The Company counts all proxy votes and will indicate the level of proxies lodged for each resolution, after it has first 
been dealt with by a show of hands.
Derek Martin
Secretary
Directors’ Report: Corporate Governance (continued)
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Directors’ Report: Remuneration Report
Remuneration Committee: composition and terms of reference
The Remuneration Committee comprised the two independent Non-Executive Directors and is chaired by Jonathan Freeman. 
Bill Potter was invited to attend and acted as an adviser to the Remuneration Committee because of his knowledge of the 
industry. However, by virtue of his executive role, he was not considered to be independent and was excluded from voting. 
John Clarke who succeeded Bill Potter as Chairman on 1 February 2012 has joined the Remuneration Committee.
The purpose of the Remuneration Committee is to ensure that the Executive Directors and other employees are fairly rewarded 
for their individual contribution to the overall performance of the Group. The Committee considers and recommends to the 
Board the remuneration of the Executive Directors and is kept informed of the remuneration packages of senior staff and invited 
to comment on these. There were three Remuneration Committee meetings during 2011.
The Board retains responsibility for overall remuneration policy. The terms of reference of the Remuneration Committee are set 
out in the Governance pages of the Investors section on the Group’s website at www.futuramedical.com.
Policy on Executive Directors’ remuneration
Executive remuneration packages are designed to attract and retain executives of the necessary skill and calibre to run the 
Group. Direct benchmarking of remuneration is difficult given the specialised nature and size of the Group. The Remuneration 
Committee recommends to the Board remuneration packages by reference to individual performance and uses the knowledge 
and experience of the Committee members, published surveys relating to AIM companies, the pharmaceutical industry 
and market changes generally. The Remuneration Committee has responsibility for recommending any long-term incentive 
schemes.
The Board determines whether or not Executive Directors are permitted to serve in roles with other companies. Such 
permission is only granted where a role is on a strictly limited basis, where there are no conflicts of interest or competing 
activities and providing there is not an adverse impact on the commitments required to the Group. Earnings from such roles are 
not disclosed to the Group.
There are four main elements of the remuneration package for Executive Directors and staff:
(i) Basic salaries and benefits in kind
Basic salaries are recommended to the Board by the Remuneration Committee, taking into account the performance of the 
individual and the rates for similar positions in comparable companies. Benefits in kind comprising death in service cover and 
private medical insurance are available to all staff and Executive Directors. Benefits in kind are non-pensionable.
(ii) Share options and other share-based incentives
The Company operates approved and unapproved share option schemes for the Executive Directors and other employees to 
motivate those individuals through equity participation. Unapproved share options are occasionally granted to key consultants. 
Exercise of share options under the schemes is subject to specified exercise periods and compliance with the AIM Rules.
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Policy on Executive Directors’ remuneration (continued)
The schemes are overseen by the Remuneration Committee which recommends to the Board all grants of share options 
based on the Remuneration Committee’s assessment of personal performance and specifying the terms under which eligible 
individuals may be invited to participate.
The Code refers to the requirement for the performance related elements of remuneration to form a significant proportion 
of the total remuneration package of Executive Directors and should be designed to align their interests with those of the 
shareholders. In the development phase of the Group and during the early stages of revenue generation, the Remuneration 
Committee currently considers that the best alignment of these interests is through the continued use of incentives for 
performance through the award of share options or other share-based arrangements.
The Company operates a long-term incentive scheme (“LTIS”). The quantum of any awards receivable by the Executive 
Directors will depend on the Company achieving set milestones and the share price at the time relative to targets set in 
advance. As a guide, if all of the approved milestones are achieved at the share price targets over the next 48 months and if the 
Company exercised its discretion to settle the awards in equity then the additional shares issued in after tax settlement would 
be equivalent to approximately 3% of the issued share capital.
(iii) Bonus scheme
The Group has a discretionary bonus scheme for staff and Executive Directors.
(iv) Pension contributions
The Group pays a defined contribution to the pension scheme of Executive Directors and other employees. The individual 
pension schemes are private and their assets are held separately from those of the Group.
Salaries and benefits were reviewed in January 2012 to cover the period from 1 February 2012 to 31 December 2012. Future 
reviews will be undertaken on an annual basis for implementation from 1 January each year to enable the Group’s performance 
over the preceding financial year and the strategy for the forthcoming year to be considered.
Service contracts
The Executive Directors are employed under service contracts requiring six months’ notice by either party. Non-Executive 
Directors and the Chairman receive payments under appointment letters which are terminable by three months’ notice by either 
party. The service contracts of the Non-Executive Directors are made available for inspection at the AGM.
All Directors are also Directors of the subsidiary company, Futura Medical Developments Limited.
Directors’ Report: Remuneration Report (continued)
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Policy on Non-Executive Directors’ remuneration
The Non-Executive Directors and the Chairman each receive a fee for their services as a director, which is approved by 
the Board, mindful of the time commitment and responsibilities of their roles and of current market rates for comparable 
organisations and appointments. Non-Executive Directors and the Chairman are reimbursed for travelling and other incidental 
expenses incurred on Group business.
The Board encourages the ownership of Futura shares by Executive and Non-Executive Directors alike and in normal 
circumstances does not expect Directors to undertake dealings of a short-term nature.
In a revision to the previous policy the three Non-Executive Directors will, from 2012 onward, receive a proportion of their 
remuneration in the form of shares. The quantum of shares will be determined at the start of each calendar year based on the 
average closing mid-price of the last ten trading days prior to the year end. For the 2012 award this has been determined as 
84.10 pence. The Non-Executive Directors will receive the shares at the end of the 2012 financial year.
The Board considers ownership of Futura shares by Non-Executive Directors as a positive alignment of their interest with 
shareholders. The Board will periodically review the shareholdings of the Non-Executive Directors and will seek guidance from 
its advisers if, at any time, it is concerned that the shareholding of any Non-Executive Director may, or could appear to, conflict 
with their duties as an independent Non-Executive Director of the Company.
Directors’ emoluments
The emoluments of the Directors, who represent the key management personnel, were as follows:
Year ended 31 December 2011
Total £
 Year ended 
31 December  
2010 
Total £
Salary & 
Directors’ 
Fees  £ Bonus  £
Benefits In 
Kind  £ Pension £
Executive Directors
Bill Potter 31,375 – – – 31,375 30,000
James Barder 182,503 12,000 5,136 25,643 225,282 203,651
David Davies 135,555 12,000 2,736 41,891 192,182 172,045
Derek Martin 103,206 12,000 3,102 10,367 128,675 110,576
Non-Executive Directors
Jonathan Freeman 27,692 – – – 27,692 26,500
Lisa Arnold 27,692 – – – 27,692 26,500
Totals 508,023 36,000 10,974 77,901 632,898 569,272
The above fees and emoluments exclude reimbursed expenditure incurred in the conduct of Group business.
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Directors’ emoluments (continued)
In addition to the above emoluments the following settlements were made in the year in respect of the long-term incentive 
scheme, specifically the achievement of the milestone in respect of the award of the CE mark for CSD500: Bill Potter £96,880, 
James Barder £109,094, David Davies £102,347 and Derek Martin £73,500. The awards were designed to be cash neutral 
and the Directors reinvested the proceeds in new ordinary shares of the Company. There were no cash bonuses or settlements 
under the LTIS in 2010.
In addition to the above emoluments, Bill Potter provided consulting services to Futura Medical Developments Limited, the 
wholly owned subsidiary, through the consulting company Stapleford Scientific Services Limited. These services were provided 
for fees of £83,600 plus reimbursed expenditure of £1,481 (2010: fees £83,600 plus expenses £2,717).
Directors’ interests in shares
 31 December 2011 31 December 2010
Beneficial 
Interests
Non-
beneficial 
Interests
Beneficial 
Interests
Non-
beneficial 
Interests
Bill Potter 207,424 – 131,098 –
James Barder 521,330 349,000 328,712 416,500
David Davies 631,306 – 532,572 –
Derek Martin 225,000 – 125,000 –
Totals 1,585,060 349,000 1,117,382 416,500
Other than as shown in the table, no Director had any interest in the shares of the Company or in the subsidiary company, 
Futura Medical Developments Limited, at 31 December 2011 or at 31 December 2010.
Directors’ interests in share options
The Board uses share options to align Directors’ and employees’ interests with those of shareholders in order to provide 
incentives and reward them based on improvements in Group performance.
The total number of share options held by the Directors at 31 December 2011 and the related share-based payment expense 
are set out below:
 31 December 2011 31 December 2010
Options 
Held
Share-based 
Payment 
Expense
Options 
Held
Share-based 
Payment 
Expense
Bill Potter 300,000 11,539 200,000 7,701
James Barder 700,000 27,631 450,000 17,162
David Davies 600,000 23,077 400,000 15,405
Derek Martin 550,000 14,942 500,000 12,595
Totals 2,150,000 77,189 1,550,000 52,863
Directors’ Report: Remuneration Report (continued)
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Directors’ interests in share options (continued)
The share options of the Directors under the Futura Medical plc Enterprise Management Incentive Scheme (included in totals on 
page 26) are set out below:
 
Grant 
Date
Number 
Awarded
Exercise 
Price/Share
Earliest 
Exercise Date
Expiry 
Date
Derek Martin 9 July 2007 100,000 56.25 pence 1 February 2009 31 January 2014
Derek Martin 23 July 2009 90,721 24.25 pence 1 August 2011 31 July 2016
Derek Martin 28 September 2011 73,894 56.50 pence 1 October 2013 30 September 2018
James Barder 23 July 2009 200,000 24.25 pence 1 August 2011 31 July 2016
James Barder 6 July 2010 176,543 40.50 pence 1 August 2012 31 July 2017
David Davies 23 July 2009 200,000 24.25 pence 1 August 2011 31 July 2016
David Davies 6 July 2010 176,543 40.50 pence 1 August 2012 31 July 2017
Totals 1,017,701
   
In addition, on 28 September 2011 the following options were granted under the Futura Medical plc Unapproved Share Option 
Scheme at 56.50 pence per share with an earliest exercise date of 1 October 2013 and an expiry date of 30 September 2018: 
James Barder 250,000, David Davies 200,000, Bill Potter 100,000 and Derek Martin 76,106. All share options were granted 
with an exercise price at or above market value on the date of grant.
The main vesting condition of the share options is that the Director remain employed with the Group as at the date of exercise 
or continues to provide consultancy services as at the date of exercise in the case of Bill Potter.
Directors’ interests in long-term incentive scheme
Assuming that each remaining milestone is met, at the target share price and before the next target date ends, and if the 
awards were to be equity-settled then the numbers of shares that could be awarded before tax to the participants are:
 
2012 2013 2014 2015
Bill Potter – in his role as a consultant 26,250 26,250 26,250 26,250
James Barder 26,250 26,250 26,250 26,250
David Davies 26,250 26,250 26,250 26,250
Derek Martin 26,250 26,250 26,250 26,250
At discretion of Remuneration Committee 445,000 445,000 445,000 445,000
Totals 550,000 550,000 550,000 550,000
The Directors consider that until a milestone has been met it is not appropriate to recognise any share-based remuneration 
charge in the Group Statement of Comprehensive Income in respect of the long-term incentive scheme.
Jonathan Freeman
Chairman of the Remuneration Committee
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Directors’ Report: Statement of Responsibilities
Adequacy of information supplied to auditors
Each Director has taken all reasonable steps to make themself aware of any information needed by the Group’s auditors for 
the purpose of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any 
relevant audit information of which the auditors are unaware.
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report 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 are 
required to prepare the Group financial statements in accordance with International Financial Reporting Standards (“IFRSs”) as 
adopted by the European Union and have elected to prepare the Company financial statements in accordance with applicable 
law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice (“UK GAAP”)). 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 of the Group and Company and of the total comprehensive profit or loss for the Group for that period. The 
Directors are also required to prepare the financial statements in accordance with the rules of the London Stock Exchange for 
companies trading securities on the Alternative Investment Market.
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;
● ● state whether they have been prepared in accordance with IFRSs as adopted by the European Union,  
subject to any material departures disclosed and explained in the financial statements;
● ● prepare a Directors’ Report and Directors’ Remuneration Report which comply with the requirements of the 
Companies Act 2006.
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 Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and 
other irregularities.
Website publication
The Directors are responsible for ensuring that the Annual Report and the financial statements are made available on a website. 
Financial statements are published on the Company’s website, www.futuramedical.com, in accordance with legislation in the 
United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other 
jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ 
responsibility also extends to the ongoing integrity of the financial statements contained therein.
By order of the Board
Derek Martin
Secretary
12 March 2012
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Independent Auditor’s Report 
Independent auditor’s report to the members of Futura Medical plc 
We have audited the financial statements of Futura Medical plc for the year ended 31 December 2011, which comprise: Group 
Statement of Comprehensive Income, Group Statement of Changes in Equity, Group Statement of Financial Position, Group 
Statement of Cash Flows, Parent Company Balance Sheet and the related notes. The financial reporting framework that 
has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting 
Standards (“IFRSs”) as adopted by the European Union. The financial reporting framework that has been applied in preparation 
of the parent company financial statements 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 auditors
As explained more fully in the Directors’ Report: Statement of Responsibilities, the Directors are responsible for the preparation 
of the 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 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 financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs as at  
31 December 2011 and of the Group’s total comprehensive loss for the year then ended;
● ● the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
● ● the parent company financial statements have been properly prepared in accordance with United Kingdom Generally 
Accepted Accounting Practice; and
● ● the financial statements have been prepared in accordance with the requirements of the Companies Act  2006.
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Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared 
is consistent with the 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; or
● ● the parent company financial statements are not in agreement with the accounting records and returns; or
● ● 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.
Simon Brooker (senior statutory auditor)
For and on behalf of BDO LLP , statutory auditor
Reading
United Kingdom
12 March 2012
 
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report (continued)
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Group Statement of Comprehensive 
Income
For the year ended 31 December 2011
Notes
Year ended 
31 December
 2011
 £
Year ended 
31 December
 2010
 £
Revenue 1.5 158,055 125,000
Research and development costs (1,480,774) (760,637)
Administrative costs (776,154) (700,399)
Operating loss 4 (2,098,873) (1,336,036)
Finance income 7 24,209 19,265
Loss before tax (2,074,664) (1,316,771)
Taxation 8 259,704 225,731
Total comprehensive loss for the year attributable to 
owners of the parent company (1,814,960) (1,091,040)
Basic and diluted loss per share (pence) 9 (2.53 pence) (1.61 pence) 
All amounts relate to continuing activities.
The notes on pages 35 to 54 form part of these Group financial statements.
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Group Statement of Changes in Equity
For the year ended 31 December 2011
Notes
Share 
Capital
 £
Share
 Premium
 £
Merger
 Reserve
 £
 Retained
 Losses
 £
 Total 
Equity
 £
At 1 January 2010 134,967 15,556,647 1,152,165 (14,990,970) 1,852,809
Total comprehensive loss for the year – – – (1,091,040) (1,091,040)
Share-based payment 17 – – – 71,976 71,976
Shares issued during the year 16 320 66,480 – – 66,800
At 1 January 2011 135,287 15,623,127 1,152,165 (16,010,034) 900,545
Total comprehensive loss for the year – – – (1,814,960) (1,814,960)
Share-based payment 17 – – – 103,071 103,071
Shares issued during the year 16 11,160 3,685,643 – – 3,696,803
Cost of share issues – (127,910) – – (127,910)
At 31 December 2011 146,447 19,180,860 1,152,165 (17,721,923) 2,757,549
Share premium represents amounts subscribed for share capital in excess of nominal value, less the related costs of share 
issues.
Merger reserve represents the reserve arising on the acquisition of Futura Medical Developments Limited in 2001 via a share for 
share exchange accounted for as a group reconstruction using merger accounting under UK GAAP .
Retained losses represent cumulative net losses recognised in the Group Statement of Comprehensive Income. The total 
comprehensive loss for the year represents the total recognised income and expense for the year.
The notes on pages 35 to 54 form part of these Group financial statements.
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Group Statement of Financial Position
As at 31 December 2011
Notes
As at 
31 December
 2011
 £
As at 
31 December
 2010
 £
Assets
Non-current assets
Plant and equipment 10 4,520 8,407
Total non-current assets 4,520 8,407
Current assets
Inventories 11 8,400 9,378
Trade and other receivables 13 96,632 64,314
Taxation 8 259,704 146,380
Cash and cash equivalents 14 2,582,609 824,821
Total current assets 2,947,345 1,044,893
Liabilities
Current liabilities
Trade and other payables 15 (194,316) (152,755)
Total liabilities (194,316) (152,755)
Total net assets 2,757,549 900,545
Capital and reserves attributable to 
owners of the parent company
Share capital 16 146,447 135,287
Share premium 19,180,860 15,623,127
Merger reserve 1,152,165 1,152,165
Retained losses (17,721,923) (16,010,034)
Total equity 2,757,549 900,545
The Group financial statements were approved and authorised for issue by the Board on 12 March 2012.
The notes on pages 35 to 54 form part of these Group financial statements.
By order of the Board
James Barder
Chief Executive
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Group Statement of Cash Flows
For the year ended 31 December 2011
Notes
Year ended 
31 December
 2011
 £
Year ended 
31 December
 2010
 £
Cash flows from operating activities
Loss before tax (2,074,664) (1,316,771)
Adjustments for:
Depreciation 10 3,887  7,516 
Finance income 7 (24,209) (19,265)
Share-based payment charge 17 103,071 71,976
Cash flows from operating activities before changes in working capital  (1,991,915) (1,256,544)
Decrease in inventories 11 978  1,447 
(Increase)/decrease in trade and other receivables 13 (33,416)  81,193 
Increase/(decrease) in trade and other payables 15 41,561  (71,777) 
Cash used in operations  (1,982,792) (1,245,681)
Income tax received  146,380 198,640
Net cash used in operating activities  (1,836,412) (1,047,041)
Cash flows from investing activities 
Purchase of plant and equipment 10 – (5,630)
Interest received  25,307  21,519 
Cash generated by investing activities  25,307 15,889
Cash flows from financing activities 
Issue of ordinary shares 16 3,696,803 66,800
Expenses paid in connection with share issues  (127,910) –
Cash generated by financing activities  3,568,893 66,800
Increase/(decrease) in cash and cash equivalents 1,757,788  (964,352) 
Cash and cash equivalents at beginning of year 824,821 1,789,173
Cash and cash equivalents at end of year 14 2,582,609 824,821
The notes on pages 35 to 54 form part of these Group financial statements.
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1. Accounting policies
1.1 Basis of preparation
The Group financial statements have been prepared and approved by the Directors in accordance with International 
Financial Reporting Standards (“IFRSs”) as adopted by the European Union.
The accounting policies set out below, have been applied to all periods presented in these Group financial statements and 
are in accordance with IFRSs as adopted by the European Union, and International Financial Reporting Interpretations 
Committee (“IFRIC”) interpretations that were applicable for the year ended 31 December 2011.
1.2 Going concern
The Group raised £3.20 million (£3.07 million net of expenses) following a private placing of 4,737,402 shares at 67.50 
pence per share on 11 March 2011 and had cash balances of £2.58 million at 31 December 2011, with a net cash inflow 
of £1.76 million in the period.
The Group financial statements have been prepared on the going concern basis which assumes that the Group will 
continue in operational existence for the foreseeable future. The Group financial statements do not reflect any adjustments 
that would be required if they were to be prepared on a basis other than the going concern basis.
1.3 Accounting developments
The following new standards, amendments to standards or interpretations, effective for the first time from 1 January 2011, 
have not had a material effect on the Group financial statements:
● ● ‘Annual Improvements to IFRSs 2010’
● ● IAS 24 (Revised) ‘Related Party Disclosures’
The following new standards, amendments to standards or interpretations have been issued but are not effective for the 
year ended 31 December 2011 and have not been adopted early as the Directors do not expect them to have a material 
effect on the Group financial statements:
● ● IFRS 10 ‘Consolidated Financial Statements’
● ● IAS 1 (Amended) ‘Presentation of Financial Statements’
● ● IAS 19 (Amended) ‘Employee Benefits’
Notes to the Group Financial Statements
For the year ended 31 December 2011 
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1. Accounting policies (continued)
1.4 Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another 
entity or business, so as to obtain benefits from its activities, it is classified as a subsidiary. The Group financial statements 
present the results of the Company and its sole subsidiary Futura Medical Developments Limited as if they formed a single 
entity (“the Group”). Intra-group transactions and balances are eliminated in preparing the Group financial statements.
1.5 Revenue
Revenue comprises the fair value received or receivable for: exclusivity arrangements, consultancy fees, milestone income 
or royalties, net of value added tax.
The accounting policies for the principal revenue streams of the Group are as follows:
(i) Exclusivity arrangements and similar agreements are recognised as revenue in the accounting period in which the 
related services, or required activities, are performed or specified conditions are fulfilled in accordance with the terms 
of completion of the specific transaction.
(ii) Consultancy fees are recognised as revenue in the accounting period in which the revenue becomes receivable.
(iii) Non-refundable milestone income is recognised as revenue in the accounting period in which the milestones are 
achieved. If any milestone income is creditable against royalty payments then it is deferred and released to the Group 
Statement of Comprehensive Income over the accounting periods in which the royalties would otherwise be 
receivable.
(iv) Royalty income relating to the sale by a licensee of licensed product is recognised on an accruals basis in 
accordance with the substance of the relevant agreement and based on the receipt from the licensee of the relevant 
information to enable calculation of the royalty due.
1.6 Leased assets
Leases, which contain terms whereby the Group does not assume substantially all the risks and rewards incidental 
to ownership of the leased item are classified as operating leases. Operating lease rentals are charged to the Group 
Statement of Comprehensive Income on a straight-line basis over the lease term. The Group does not hold any assets 
under finance leases.
1.7 Intangible assets
Research and development (“R&D”)
Expenditure incurred on the development of internally generated products is capitalised if it can be demonstrated that:
● ● it is technically feasible to develop the product for it to be sold;
● ● adequate resources are available to complete the development;
● ● there is an intention to complete and sell the product;
● ● the Group is able to out-licence or sell the product;
● ● sale of the product will generate future economic benefits; and
● ● expenditure on the project can be measured reliably.
Notes to the Group Financial Statements (continued)
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1. Accounting policies (continued)
1.7 Intangible assets (continued)
Capitalised development costs are amortised over the periods in which the Group expects to benefit from selling the 
products developed but not exceeding five years. The amortisation expense is included in R&D costs recognised in 
the Group Statement of Comprehensive Income. The useful life and the value of the capitalised development cost are 
assessed for impairment at least annually. The value is written down immediately if impairment has occurred and the 
unimpaired cost amortised over the reduced useful life. The Directors consider that the criteria to capitalise development 
expenditure are not met for a product prior to that product being commercially launched in at least one country.
Development expenditure, not satisfying the above criteria, and expenditure on the research phase of internal projects are 
included in R&D costs recognised in the Group Statement of Comprehensive Income as incurred.
Patents and trademarks
The costs incurred in establishing patents and trademarks are either expensed or capitalised in accordance with the 
corresponding treatment of the development expenditure for the product to which they relate.
1.8 Plant and equipment
Plant and equipment is initially recognised at cost, and subsequently at cost less accumulated depreciation and any 
accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. 
Depreciation is charged to the Group Statement of Comprehensive Income at rates calculated to write off the cost, less 
estimated residual value, of each asset on a straight-line basis over their estimated useful lives.
The assets’ residual values and useful lives are determined by the Directors and reviewed and adjusted if appropriate at 
each Group Statement of Financial Position date.
  
1.9 Impairment of non-financial assets
Assets that are subject to depreciation are reviewed for impairment on a half-yearly basis and when events or 
circumstances suggest that the carrying amount may not be recoverable. For the purpose of assessing impairment, 
assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). An 
impairment loss is recognised immediately in the Group Statement of Comprehensive Income for the amount by which the 
asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of fair value, less disposal costs, and value in use. In assessing value in use, the 
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the asset.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of 
its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have 
been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss is 
recognised immediately in the Group Statement of Comprehensive Income.
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1. Accounting policies (continued)
1.10 Inventories
Inventories are materials and supplies to be consumed in the course of R&D and are initially recognised at cost, and 
subsequently at the lower of cost and net realisable value. Cost includes materials, related contract manufacturing costs 
and other direct costs. Cost is calculated using the first-in, first-out method. Net realisable value is based on estimated 
selling price, less further costs expected to be incurred to completion and disposal.
A provision is recognised immediately in the Group Statement of Comprehensive Income in respect of obsolete, slow-
moving or defective items, where appropriate.
1.11 Financial instruments
Financial assets
The Group classifies its financial assets in the category of loans and receivables, comprising ‘trade and other receivables’ 
and ‘cash and cash equivalents’. They are recognised initially at fair value and subsequently at amortised cost using the 
effective interest rate method.
Trade and other receivables are recognised initially at fair value and are subsequently measured at amortised cost using 
the effective interest rate method, less an estimate made for impairment based on a review of all past due amounts at the 
year end. A provision for impairment of trade and other receivables is established when there is objective evidence that the 
Group will not be able to collect all amounts due. If an impairment loss is required the carrying amount of the trade or other 
receivable is reduced through the use of an allowance account and the amount of the loss recognised immediately in the 
Group Statement of Comprehensive Income in administrative costs.
Medium-term deposits, comprising sterling fixed rate deposits, with original maturities of more than three months are 
included in trade and other receivables.
Cash and cash equivalents are financial assets and comprise cash in hand and sterling fixed rate short-term deposits 
with original maturities of three months or less which are held by the Group so as to be available to meet short-term cash 
commitments.
The Group assesses at each Statement of Financial Position date whether there is objective evidence that a financial asset 
is impaired.
Financial liabilities
The Group’s financial liabilities comprise ‘trade and other payables’ recognised initially at fair value and subsequently at 
amortised cost using the effective interest rate method.
1.12 Government grants
Government grants are recognised at fair value where there is a reasonable assurance that the grant will be received 
and the Group will comply with all attached conditions. Government grants relating to costs defrayed are accrued and 
recognised in the Group Statement of Comprehensive Income over the period required to match them with the costs 
which they reimburse.
Notes to the Group Financial Statements (continued)
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1. Accounting policies (continued)
1.13 Taxation
Income tax is recognised or provided at amounts expected to be recovered or to be paid using the tax rates and tax laws 
that have been enacted or substantively enacted at the Group Statement of Financial Position date. R&D tax credits are 
recognised on an accruals basis and are included as an income tax credit under current assets.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability on the Group Statement 
of Financial Position date differs from its tax base, except for differences arising on:
● ● the initial recognition of an asset or liability in a transaction which is not a business combination and which at the time 
of the transaction affects neither accounting profit nor taxable profit; and
● ● investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal 
of the difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profits will be available 
against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the 
Group Statement of Financial Position date and are expected to apply when the deferred tax liabilities/(assets) are settled/
(recovered). Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and 
liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
● ● the same taxable group company; or
● ● different group entities which intend to settle current tax assets and liabilities on a net basis, or to realise the assets 
and settle the liabilities simultaneously, on each future period in which significant amounts of deferred tax assets or 
liabilities are expected to be settled or recovered.
1.14 Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates 
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from 
the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are 
recognised in the Group Statement of Comprehensive Income in the period in which they arise.
 
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1. Accounting policies (continued)
1.15 Employee benefits
(i) Defined contribution plans
The Group provides retirement benefits to all employees and Executive Directors who wish to participate in defined 
contribution pension schemes. The assets of these schemes are held separately from those of the Group in independently 
administered funds. Contributions made by the Group are charged to the Group Statement of Comprehensive Income in 
the period in which they become payable.
(ii) Accrued holiday pay
Provision is made at each Group Statement of Financial Position date for holidays accrued but not taken at the salary of 
the relevant employee at that date. The expected cost of compensated short-term absence (i.e. holidays) is charged to the 
Group Statement of Comprehensive Income on an accruals basis.
(iii) Share-based payment transactions
The Group operates an equity-settled share-based compensation plan. For all share options awarded to employees, and 
others providing similar services, the fair value of the share options at the date of grant is charged to the Group Statement 
of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the 
number of equity instruments expected to vest at each Group Statement of Financial Position date so that, ultimately, the 
cumulative amount recognised over the vesting period is based on the number of share options that eventually vest. There 
are no market vesting conditions. If the terms and conditions of share options are modified before they vest, the change in 
the fair value of the share options, measured immediately before and after the modification, is also charged to the Group 
Statement of Comprehensive Income over the remaining vesting period.
The proceeds received when share options are exercised, net of any directly attributable transaction costs, are credited 
to share capital (nominal value) and the remaining balance to share premium. All employee share option holders enter into 
an HM Revenue & Customs joint election to transfer the employers’ national insurance contribution potential liability to the 
employee, therefore no Group asset or liability arises.
(iv) Long-term incentive scheme
The Group operates a long-term incentive scheme for the Executive Directors. The quantum of any awards receivable 
by the Executive Directors will depend on the Group achieving set milestones and the share price at the time relative to 
targets set in advance. The Group can exercise discretion in settling any award in equity or in cash.
1.16 Finance income
Interest income is recognised on a time-proportion basis using the effective interest rate method.
 
Notes to the Group Financial Statements (continued)
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1. Accounting policies (continued)
1.17 Critical accounting estimates and judgements
Critical accounting estimates, assumptions and judgements are continually evaluated by the Directors based on available 
information and experience. As the use of estimates is inherent in financial reporting, actual results could differ from these 
estimates.
Judgements
(i) Revenue recognition
Fees invoiced in respect of non-refundable milestones have been recognised as revenue in the Group Statement of 
Comprehensive Income in the period as all criteria for revenue recognition have been met.
(ii) Intangible asset recognition
The Directors consider that the criteria to capitalise development expenditure are not met for a product prior to that 
product being commercially launched in at least one country.
(iii) Deferred tax recognition
The Directors consider that, given the current stage of development of the business, deferred tax assets should not be 
recognised before the Group is generating recurring royalty revenue.
Estimates and assumptions
(iv) Useful lives of plant and equipment
Plant and equipment is amortised or depreciated over its useful life. Useful lives are based on the Directors’ estimates of 
the periods over which the assets will be used in developing revenue generating products and the estimates are reviewed 
annually for continued appropriateness. The estimated useful lives are between two and five years for computer equipment 
and between three and ten years for furniture and fittings. Changes to estimates can result in significant variations in the 
carrying value and amounts charged to the Group Statement of Comprehensive Income in specific periods.
(v) Fair value of financial instruments
The Group determines the fair value of financial instruments using valuation techniques which can be significantly affected 
by the assumptions used, including interest and discount rates and estimates of future cash flows.
(vi) Inventories
The Group reviews the net realisable value of its inventories on a half-yearly basis to provide assurance that recorded 
inventories are stated at the lower of cost or net realisable value. Factors that could impact realisable value include: the 
timing and success of future technological innovations in relation to product R&D, competitor and Government actions, 
supplier prices and economic trends.
(vii) Share-based payments
The Group operates an equity-settled share-based compensation plan as detailed in note 17. Employee (and similar) 
services received and the corresponding increase in equity are measured by reference to the fair value of the equity 
instruments as at the date of grant.
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2.  Financial risk management
2.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange rate risk, cash flow 
interest rate risk and fair value interest rate risk); credit risk and liquidity risk.
It is Group policy not to enter into speculative positions using complex financial instruments. The Group’s primary treasury 
objective is to minimise exposure to potential capital losses whilst at the same time securing favourable market rates of 
interest on Group cash deposits using money market deposits with banks. Cash balances used to settle the liabilities from 
operating activities are also maintained in current accounts which earn interest at variable rates.
(i) Market risk
Foreign exchange rate risk
The Group primarily enters into supplier contracts which are to be settled in sterling. However, some contracts involve other 
currencies including the US Dollar and the Euro. Where supplier contracts of more than £100,000 total value are to be settled 
in foreign currencies consideration is given to settling the sums to be paid through conversion of sterling deposits to the 
appropriate foreign currency holdings at the outset of the contract to minimise the risk of adverse currency fluctuations.
 
For contracts with smaller values the foreign exchange rate risk is not considered sufficient to require the establishment of 
foreign currency accounts unless specific circumstances are identified which warrant this.
At 31 December 2011 the Group had no trade payables denominated in a foreign currency (31 December 2010: £nil).
 
Cash flow interest rate risk and fair value interest rate risk
The Group’s interest rate risk arises from short-term money market deposits. Deposits which earn variable rates of interest 
expose the Group to cash flow interest rate risk. Deposits at fixed rates expose the Group to fair value interest rate risk. 
The Group analyses its interest rate exposure on a dynamic basis.
The impact in the year ended 2011, of a defined interest rate shift of a 1% higher rate of interest earned per annum applied 
to the term deposits over the period of the deposit, on the post-tax loss for the year and net assets would have been 
£22,164 lower/higher (2010: £12,501 lower/higher).
The impact in the year ended 2011, of a defined interest rate shift of a 1% lower rate of interest earned per annum applied 
to the term deposits over the period of the deposit, on the post-tax loss for the year and net assets would have been 
£18,403 higher/lower (2010: £12,281 higher/lower).
(ii) Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well as credit 
exposure in relation to outstanding receivables. The Group policy is to spread deposits over at least two institutions with 
investment grade A+ or better (Standard & Poor’s credit rating) and deposits are made in sterling only. The Group does not 
expect any losses from non-performance by these institutions.
Notes to the Group Financial Statements (continued)
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2.  Financial risk management (continued)
(iii) Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in 
meeting its financial obligations as they fall due. Prudent liquidity risk management involves maintaining sufficient cash and 
cash equivalents and the monitoring of rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.
The Group had trade and other payables at the Group Statement of Financial Position date of £194,316 (2010: £152,755) 
as disclosed in note 15, which mature within one year.
2.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order 
to provide returns for equity holders of the Company and benefits for other stakeholders and to maintain an optimal capital 
structure to minimise the cost of capital.
2.3 Fair value estimation
The Group uses amortised cost, using the effective interest rate method, to determine subsequent fair value, after initial 
recognition, for its financial instruments.
3.  Segment reporting
The Group is organised and operates as one business segment, being the development of pharmaceutical drugs and 
medical devices and their commercial exploitation. The main area of R&D continues to be in the field of innovative products 
for the consumer healthcare market with the focus being on sexual healthcare and pain relief management.
The Group manages any overseas R&D from the UK, the primary business segment. Segment revenue is based on the 
geographical location of the Group’s customers. Since there is currently only one business segment and one geographical 
segment, no separate segment reporting has been prepared.
4.  Operating loss
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Operating loss is stated after charging
Depreciation of plant and equipment (note 10) 3,887  7,516 
Inventories consumed in R&D 978 1,447
Realised exchange loss – 39
Wages and salaries (note 5) 1,454,072 880,050
Operating lease costs (note 19) 60,836 59,217
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4. Operating loss (continued)
The fees of the Group’s auditor, BDO LLP , for services provided are analysed below:
 
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Audit services
Parent company 25,000 24,480
Subsidiary 3,600 3,570
Tax compliance services
Parent company 800 765
Subsidiary 3,360 3,315
Total fees 32,760 32,130
5.  Wages and salaries
The average monthly number of persons (including all Directors) employed by the Group during the year was 10 (by 
category: R&D 4, administration 6), (2010:10, by category: R&D 4, administration 6) and their aggregate emoluments were:
 
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Wages and salaries 734,084 641,433
Wages and salaries re LTIS 162,519 –
Social security costs 93,054 72,198
Social security costs re LTIS 22,428 –
Other pension and insurance benefits costs 116,139 113,930
Other pension costs re LTIS 219,303 –
Total cash-settled emoluments 1,347,527 827,561
Accrued holiday pay 3,474 (19,487)
Share-based payment remuneration charge (note 17) 103,071 71,976
Total emoluments 1,454,072 880,050
All employees of the Group are employed by Futura Medical Developments Limited.
Notes to the Group Financial Statements (continued)
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6.  Directors’ emoluments
 
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Aggregate emoluments 554,997 493,310
Company pension contributions 77,901 75,962
Long-term incentive scheme payments 404,250 –
Emoluments disclosed above include the following amounts in respect of the highest paid Director:
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Aggregate emoluments 199,639 178,833
Company pension contributions 25,643 24,818
Long-term incentive scheme payments 110,250 –
 
During the year, three Directors (2010: three Directors) participated in a private money purchase defined contribution 
pension scheme.
During the year, one Director (2010: no Directors) exercised share options under the Company share option scheme and 
realised a gain of £21,928.
Emoluments for individual Directors are disclosed within the Directors’ Report: Remuneration Report on page 25.
7.  Finance income
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Interest receivable on fixed rate short-term deposits 24,209 19,265
 
 
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8.  Taxation
Current tax
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
UK corporation tax credit on loss for the year 259,704  146,380 
Adjustment for over-provision in prior years – 79,351
Taxation credit reported in the 
Group Statement of Comprehensive Income 259,704 225,731
The tax assessed for the year is different from the standard rate of corporation tax in the UK.
The differences are explained below:
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Loss on ordinary activities before tax 2,074,664  1,316,771 
Loss on ordinary activities at an average standard rate of corporation tax 
in the UK of 20.25% (2010: 21.00%) 420,119 276,522
Expenses not deductible for tax purposes (278) (128)
Difference between depreciation and capital allowances (787) (396)
Other short-term timing differences (21,588) (11,023)
Unutilised tax losses (214,590) (147,570)
Schedule 23 deduction for share options 26,201 5,996
Additional relief attaching to R&D tax credit claims 50,627  22,979 
Over-provision in prior years – 79,351
Taxation credit reported in the 
Group Statement of Comprehensive Income 259,704 225,731
 
The Group has tax losses of £12,708,661 (2010: £11,649,224) available for offset against future taxable profits.
Notes to the Group Financial Statements (continued)
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8.  Taxation (continued)
Deferred tax
Deferred tax assets amounting to £2,722,826 (2010: £2,436,068) have not been recognised on the basis that their future 
economic benefit is not certain. Assuming a prevailing tax rate of 20% (2010: 20%) when the timing differences reverse, 
the unrecognised deferred tax asset comprises:
 
 Year ended 
 31 December
  2011
£
 Year ended  
31 December
  2010
£
Depreciation in excess of capital allowances 11,390 10,612
Schedule 23 reclaim for share options 166,836 93,451
Other short-term timing differences 2,867 2,160
Unutilised tax losses 2,541,733 2,329,845
 2,722,826 2,436,068
9.  Loss per share (pence)
The calculation of the loss per share is based on a loss of £1,814,960 (2010: loss of £1,091,040) and on a weighted 
average number of shares in issue of 71,769,963 (2010: 67,563,969).
The loss attributable to equity holders of the Company for the purpose of calculating the fully diluted loss per share is 
identical to that used for calculating the basic loss per share. The exercise of share options, details of which are disclosed 
in note 17, or the issue of shares under the long-term incentive scheme, would have the effect of reducing the loss per 
share and is therefore anti-dilutive under the terms of IAS 33 ‘Earnings per Share’.
10. Plant and equipment
Computer
 Equipment 
£
Furniture 
and Fittings
£
Total
£
Cost
At 1 January and 31 December 2011 50,664 52,146 102,810
Depreciation
At 1 January 2011 43,223 51,180 94,403
Charge for year 3,521 366 3,887
At 31 December 2011 46,744 51,546 98,290
Net book value
At 31 December 2011 3,920 600 4,520
At 31 December 2010 7,441 966 8,407
 
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10. Plant and equipment (continued)
Computer
 Equipment 
£
Furniture 
and Fittings
£
Total
£
Cost
At 1 January 2010 58,517 53,044 111,561
Additions 5,630 – 5,630
Disposals (13,483) (898)  (14,381)
At 31 December 2010 50,664  52,146 102,810
Depreciation
At 1 January 2010 51,208 50,060 101,268
Disposals (13,483) (898) (14,381)
Charge for year 5,498 2,018 7,516
At 31 December 2010 43,223 51,180 94,403
Net book value
At 31 December 2010 7,441 966 8,407
At 31 December 2009 7,309 2,984 10,293
All fixed assets of the Group are held in Futura Medical Developments Limited.
11.  Inventories
 31 December
  2011
£
31 December
  2010
£
Raw materials and consumables 8,400 9,378
Notes to the Group Financial Statements (continued)
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12. Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:
 31 December
  2011
£
31 December
  2010
£
Assets as per Group Statement of Financial Position 
Loans and receivables
Trade and other receivables (note 13) 96,632 64,314
Cash and cash equivalents (note 14) 2,582,609 824,821
Total loans and receivables 2,679,241 889,135
 
 31 December
  2011
£
31 December
  2010
£
Liabilities as per Group Statement of Financial Position
Total trade and other payables (note 15) 194,316 152,755
13. Trade and other receivables
 31 December
  2011
£
31 December
  2010
£
Amounts receivable within one year:
Other receivables 20,811 16,829
Prepayments and accrued income 75,821 47,485
96,632 64,314
Trade and other receivables do not contain impaired assets. The Group does not hold any collateral as security and 
the maximum exposure to credit risk at the Group Statement of Financial Position date is the fair value of each class of 
receivable.
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14. Cash and cash equivalents
 31 December
  2011
£
31 December
  2010
£
Cash at bank and in hand 101,104 51,215
Sterling fixed rate short-term deposits of up to three months maturity 2,481,505 773,606
2,582,609 824,821
15. Trade and other payables
 31 December
  2011
£
31 December
  2010
£
Trade payables 97,396 75,903
Social security and other taxes 26,572 24,097
Accrued expenses and deferred income 70,348 52,755
194,316 152,755
16. Share capital
Authorised
31 December 
2011
Number
31 December 
2010
Number
31 December 
2011
 £
 31 December 
2010
£
Ordinary shares of 0.2 pence each 500,000,000 500,000,000 1,000,000 1,000,000
 
Allotted, called up and fully paid
31 December 
2011
Number
31 December 
2010
Number
31 December 
2011
 £
 31 December 
2010
£
Ordinary shares of 0.2 pence each 73,223,391 67,643,311 146,447 135,287
Notes to the Group Financial Statements (continued)
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16. Share capital (continued)
The number of issued ordinary shares as at 1 January 2010 was 67,483,311.
During the year ended 31 December 2010, the Company issued shares of 0.2 pence each as follows:
 
Month Reason for issue
Gross 
Consideration
£
 Shares 
Issued
Number
October 2010 Share option exercise at 41.75 pence per share 66,800 160,000
The number of issued ordinary shares as at 1 January 2011 was 67,643,311.
During the year ended 31 December 2011, the Company issued shares of 0.2 pence each as follows:
 
Month Reason for issue
Gross 
Consideration
£
 Shares 
Issued
Number
March 2011 Placing at 67.50 pence per share 3,197,747 4,737,402
March 2011 Share option exercise at 41.75 pence per share 41,750 100,000
May 2011 Share option exercise at 41.75 pence per share 12,525 30,000
May 2011 Share option exercise at 56.25 pence per share 28,125 50,000
June 2011 Share option exercise at 74.50 pence per share 74,500 100,000
September 2011 Long-term incentive scheme at 73.50 pence per share 306,993 417,678
December 2011 Share option exercise at 24.25 pence per share 35,163 145,000
3,696,803 5,580,080
17.  Share options
At 31 December 2011, the number of ordinary shares of 0.2 pence each subject to share options granted under the 
Group’s Approved and Unapproved Share Option Schemes were:
 
Exercise Period
Exercise 
Price per 
Share
 Pence
At 1
 January 
2011
Number
 Grants 
During 
Year
 Number
Options 
Exercised
 Number
At 
31 December 
2011
Number
1 February 2008 — 31 January 2013 74.50 200,000 – (100,000) 100,000
1 February 2009 — 31 January 2014 56.25 300,000 – (50,000) 250,000
1 February 2010 — 31 January 2015 41.75 130,000 – (130,000) –
1 August 2011 — 31 July 2016 24.25 965,000 – (145,000) 820,000
1 August 2012 — 31 July 2017 40.50 840,000 – – 840,000
1 October 2013 — 30 September 2018 56.50 – 890,000 – 890,000
2,435,000 890,000 (425,000) 2,900,000
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17. Share options (continued)
On 28 September 2011 share options over 890,000 new ordinary shares were granted to employees (including Directors).
Details of share options exercised by employees in 2011 are given in note 16, these generated additional funds of 
£192,063 for the Company.
The share options outstanding at 31 December 2011 represented 4.0% of the issued share capital as at that date (2010: 
3.6%) and would generate additional funds of £1,257,025 (2010: £946,238) if fully exercised. The weighted average 
remaining life of the share options was 62 months (2010: 63 months), with a weighted average remaining exercise price of 
43.35 pence (2010: 38.86 pence).
The share options exercisable at 31 December 2011 totalled 1,170,000 (2010: 630,000) with an average exercise price of 
35.38 pence (2010: 59.05 pence) and would generate additional funds of £413,975 (2010: £372,025) if fully exercised.
The Group’s share option scheme rules apply to 2,725,000 of the share options outstanding at 31 December 2011 
(31 December 2010: 2,260,000) and include a rule regarding forfeiture of unexercised share options by a Director or 
employee upon the cessation of their employment (except in specific circumstances).
There were no market vesting conditions within the terms of the grant of the share options.
The Black-Scholes-Merton formula is the option pricing model applied to the grants of all share options made in respect of 
calculating the fair value of the share options.
 31 December
  2011
31 December
  2010
Inputs to share option pricing model
Grant date 28 September 6 July
Number of shares under option 890,000 840,000
Share price as at date of grant 56.50 pence 40.50 pence
Option exercise price 56.50 pence 40.50 pence
Expected life of options – based on previous exercise history 3 years 3 years
Expected volatility – based on 30 day annualised history 42.78% 52.94%
Dividend yield – no dividends assumed 0% 0%
Risk-free rate – yield on treasury stock as at date of grant 0.87% p.a. 1.40% p.a.
  
Notes to the Group Financial Statements (continued)
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17. Share options (continued)
 31 December
  2011
31 December
  2010
Outputs generated from share option pricing model
Fair value per share under option 16.85 pence 14.86 pence
Total expected charge over the vesting period £149,965 £124,824
 31 December
  2011
£
31 December
  2010
£
Recognised in the Group Statement of Comprehensive Income
The share-based remuneration charge (note 5) comprises:
Share-based payments 103,071 71,976
18.  Pension costs
The pension charge represents contributions payable by the Group to independently administered funds which during 
the year ended 31 December 2011 amounted to £318,133 (2010: £98,180). Pension contributions payable one month in 
arrears at 31 December 2011 totalled £3,496 (2010: £3,433) and are included in accrued expenses at the relevant Group 
Statement of Financial Position date.
19.  Commitments
At 31 December 2011 the Group had operating lease commitments in respect of property leases cancellable on one 
month’s notice of £5,575 (2010: £5,412).
20.  Related party transactions
Related parties, as defined by IAS 24 ‘Related Party Disclosures’, are the wholly owned subsidiary company, Futura 
Medical Developments Limited, and the Board. Transactions between the Company and the wholly owned subsidiary 
company have been eliminated on consolidation and are not disclosed in this note.
Bill Potter, a Director of the Company until 31 January 2012, provides consulting services to the wholly owned subsidiary, 
Futura Medical Developments Limited, through Stapleford Scientific Services Limited. Of the total fees and expenses, 
excluding VAT, invoiced during the year of £85,081 (2010: £86,317), the amount outstanding at 31 December 2011 
including VAT was £8,424 (2010: £8,186), which has since been settled in cash. The amount invoiced during the year 
is considered to be a related party transaction disclosable under Rule 19 of the AIM Rules for Companies as it exceeds 
0.25% in the relevant class tests.
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20.  Related party transactions (continued)
Key management compensation
The Directors represent the key management personnel. Details of their compensation and share options are given in note 
6 and within the Directors’ Report: Remuneration Report on pages 23 to 27.
21.  Events after statement of financial position date
On 10 January 2012 the Group raised £119,000 following the issue of 490,721 shares to three Executive Directors at 
24.25 pence per share under the employee share option scheme.
On 31 January 2012 Bill Potter resigned as Executive Chairman of the Company but he will continue to play a key role 
as Futura’s Chief Scientific Officer and adviser to the Board providing consulting services to the wholly owned subsidiary, 
Futura Medical Developments Limited, through Stapleford Scientific Services Limited.
On 1 February 2012 John Clarke was appointed as Non-Executive Chairman of the Company.
Notes to the Group Financial Statements (continued)
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Notes
As at
31 December
 2011
 £
As at
31 December
 2010
 £
Fixed assets
Investment 3 497,369 394,298
Current assets
Debtors – due within one year 4 13,182 14,345
Debtors – due after more than one year 4 16,503,894 14,548,550
Total debtors 16,517,076 14,562,895
Cash at bank and in hand 2,496,823 783,686
Total current assets 19,013,899 15,346,581
Creditors: amounts falling due within one year 5 (48,913) (47,651)
Net current assets 18,964,986 15,298,930
Total net assets 19,462,355 15,693,228
Capital and reserves
Called up share capital 6 146,447 135,287
Share premium account 7 19,180,860 15,623,127
Profit and loss account 7 135,048 (65,186)
Equity shareholders’ funds 19,462,355 15,693,228
These financial statements were approved and authorised for issue by the Board on 12 March 2012.
The notes on pages 56 to 58 form part of these parent company financial statements.
By order of the Board
James Barder
Chief Executive
 
Parent Company Balance Sheet
For the year ended 31 December 2011
Company no. 4206001
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1.  Accounting policies
The parent company financial statements have been prepared under the historical cost convention and in accordance with 
UK GAAP .
 
Share-based employee remuneration
The Company has no employees but does issue shares to satisfy share option awards made by its subsidiary company. 
The Company has applied Financial Reporting Standard 20 ‘Share-based Payment’ to all share options granted to 
employees of the subsidiary. The Company’s investment in the subsidiary is increased by the capital contribution 
equivalent to the fair value of the share-based payment charge incurred by the subsidiary.
Taxation
Current tax, including UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates 
and laws that have been enacted or substantively enacted by the balance sheet date.
A deferred tax asset in respect of unutilised tax losses amounting to £97,385 (2010: £194,548) has not been recognised 
on the basis that the future economic benefit is not certain. Assuming a prevailing tax rate of 20% (2010: 20%) when the 
timing differences reverse, the unrecognised deferred tax asset is £19,477 (2010: £38,909).
2.  Loss attributable to shareholders
As permitted by section 408 of the Companies Act 2006 no separate Company profit and loss account has been included 
in these financial statements. The Group loss for the year includes a profit after tax of £97,163 (2010: loss after tax 
£71,477) which is dealt with in the financial statements of the Company. The total fees of the Company’s and Group’s 
auditor, BDO LLP , for services provided are analysed in note 4 to the Group financial statements.
3.  Investment
The investment represents 100% of the issued ordinary shares in the subsidiary undertaking Futura Medical Developments 
Limited, a company incorporated in England and Wales, and is stated at cost plus capital contribution to the subsidiary 
in respect of share-based payment charge, less any provision for impairment. The results of the subsidiary company are 
included in the Group financial statements on pages 31 to 54.
 31 December
  2011
£
31 December
  2010
£
Cost 497,369 394,298
 
Notes to the Parent Company Financial Statements 
For the year ended 31 December 2011
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4.  Debtors
 
 31 December
  2011
£
31 December
  2010
£
Amounts receivable within one year: prepayments 13,182 14,345
Amounts receivable after more than one year:
Amounts owed by subsidiary 16,503,894 14,548,550
5.  Creditors: amounts falling due within one year
 31 December
  2011
£
31 December
  2010
£
Trade creditors 19,513 19,107
Accruals and deferred income 29,400 28,544
48,913 47,651
6.  Called up share capital
Authorised
31 December 
2011
Number
31 December 
2010
Number
31 December 
2011
 £
 31 December 
2010
£
Ordinary shares of 0.2 pence each 500,000,000 500,000,000 1,000,000 1,000,000
 
Allotted, called up and fully paid
31 December 
2011
Number
31 December 
2010
Number
31 December 
2011
 £
 31 December 
2010
£
Ordinary shares of 0.2 pence each 73,223,391 67,643,311 146,447 135,287
Details of shares issued by the Company in the year are given in note 16 to the Group financial statements and details of 
share options outstanding are given in note 17 to the Group financial statements.
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7.  Reserves
Share
 Premium
 Account
£
 Profit
 and Loss 
Account
£
At 1 January 2010 15,556,647 (65,685)
Retained loss for the year – (71,477)
Share-based payment – 71,976
Shares issued during the year 66,480 –
At 1 January 2011 15,623,127 (65,186)
Retained profit for the year – 97,163
Share-based payment – 103,071
Shares issued during the year 3,685,643 –
Costs of share issues (127,910) –
At 31 December 2011 19,180,860 135,048
8.  Related party transactions
Details are given in note 20 to the Group financial statements.
9.  Events after balance sheet date
Details are given in note 21 to the Group financial statements.
Notes to the Parent Company Financial Statements 
(continued)
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Company number
4206001
Directors
John Clarke  Non-Executive Chairman (appointed 1 February 2012) 
Dr Bill Potter  Executive Chairman (resigned 31 January 2012)
James Barder Chief Executive
David Davies  Chief Development Officer
Derek Martin  Finance Director
Jonathan Freeman  Non-Executive Director
Lisa Arnold  Non-Executive Director
Audit committee Remuneration committee Nominations committee
Jonathan Freeman Jonathan Freeman Jonathan Freeman
Lisa Arnold Lisa Arnold Lisa Arnold
John Clarke John Clarke 
Secretary and registered office Auditors Registrars
Derek Martin BDO LLP Capita Registrars
Futura Medical plc Kings Wharf The Registry
Surrey Technology Centre 20-30 Kings Road 34 Beckenham Road
40 Occam Road Reading Beckenham
Guildford Berkshire Kent
Surrey RG1 3EX BR3 4TU
GU2 7YG
Nominated adviser and broker Patent attorneys Public relations advisers
Nomura Code Securities Limited Withers & Rogers LLP Buchanan Communications Limited
1 Carey Lane 4 More London Riverside 107 Cheapside
London London London
EC2V 8AE SE1 2AU EC2V 6DN
Principal solicitors Principal bankers
Memery Crystal LLP Butterfield Private Bank
44 Southampton Buildings 99 Gresham Street
London London
WC2A 1AP EC2V 7NG
Company Information
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www.futuramedical.com
Surrey Technology Centre
40 Occam Road, Guildford,
Surrey, GU2 7YG
Telephone: +44 (0) 1483 685670
Fax: +44 (0) 1483 685671
Email: info@futuramedical.com
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