oncateno plc oncateno plc
Annual Report and Accounts 2007
Concateno plc
10 Buckingham Street
London
WC2N 6DF
T +44 20 7004 2800  
F +44 20 7004 2801
E info@concateno.com
www.concateno.com
Concateno plc Annual Report and Accounts 2007
Contents >
01 Our highlights
02 Where we are 
04 Where we are going
06 Chairman’ s Statement
08 Chief Executive Officer’ s Review
12 Financial Review
16 Board of Directors
18 Directors’ Report 
22 Corporate Governance Report
25  Directors’ Remuneration  
Report
27  Statement of Directors’ 
Responsibilities
28 Independent Auditors’ Report
30  Consolidated Income 
Statement
30  Consolidated Statement of 
Recognised Income and 
Expense
31 Consolidated Balance Sheet
32  Consolidated Cash Flow 
Statement
33  Notes to the Consolidated 
Financial Statements
64 Company Balance Sheet
65  Notes to the Company  
Balance Sheet
68 Advisers
Concateno is a global provider of drug and alcohol testing  
products and services. It also manufactures and distributes a  
wide range of pathology and immunology products to forensic  
and clinical laboratories. 
Through its seven acquisitions to date, Concateno has created  
an organisation capable of meeting every type of drug testing  
need internationally. This includes point-of-care screening or full 
laboratory analysis which can be carried out on urine, hair, oral  
fluid or sweat samples.
Concateno’s unique global network of sample collectors and 
distribution network covering over 80 territories worldwide enables  
it to service an international client base comprising governmental 
organisations, healthcare agencies and public and private sector 
employees.  
Through its unique scale and continually developing range of  
offerings, Concateno is well positioned to exploit new sectors  
and geographical markets.  our business at a glance
1
 Laboratory based testing
 > Accuracy of results
 > Detailed specimen analysis
 > Legally defensible
 > Global collections network
2
 Point-of-care testing
 > Immediate result
 > On location
 > Use immediately after incident
 > Customer support and training
3
 Laboratory products
 > Specialist diagnostic reagents
 > Spinreact an established brand  
in the sector
 > Global distribution network
>
>
>
8
m
Drug tests carried out by 
Concateno per annum
8,000
Concateno customers 
worldwide
500
Concateno sample 
collectors worldwide
Urine
Oral fluid
> Extended history for testing, chronological analysis
> Medical and legal sectors, workplace
Hair
Cozart DDS/Cozart 
RapiScan – Objective 
electronic results
Quick Tests –  
Simple positive  
or negative result
Diagnostic reagents –
biochemistry, serology 
and immunochemistry
Diagnostic laboratory 
equipment
Own brand and bulk sales
> Ease of sample collection
> Public sector
> High volume, fully legally defensible
>
  Maritime and rail sector, workplace,  
HM Prison mandatory testing
> Forensic laboratories
> Clinical laboratories
> HM Prisons voluntary testing
> Healthcare
> Police forces
> Rehabilitation programmes
Our products and services
> Healthcare
Central to Concateno’s strategy is the 
belief that governments, employers  
and the public require expert, efficient 
and comprehensive solutions for the 
problems that misuse of drugs and 
alcohol create in society. 
Concateno believe that, with greater 
scale, and specialist toxicology 
resources, we are well placed to offer  
the highest levels of service and the 
widest range of solutions to meet our 
clients’ requirements.
Our business at a glance > our business at a glance
1
 Laboratory based testing
 > Accuracy of results
 > Detailed specimen analysis
 > Legally defensible
 > Global collections network
2
 Point-of-care testing
 > Immediate result
 > On location
 > Use immediately after incident
 > Customer support and training
3
 Laboratory products
 > Specialist diagnostic reagents
 > Spinreact an established brand  
in the sector
 > Global distribution network
>
>
>
8
m
Drug tests carried out by 
Concateno per annum
8,000
Concateno customers 
worldwide
500
Concateno sample 
collectors worldwide
Urine
Oral fluid
> Extended history for testing, chronological analysis
> Medical and legal sectors, workplace
Hair
Cozart DDS/Cozart 
RapiScan – Objective 
electronic results
Quick Tests –  
Simple positive  
or negative result
Diagnostic reagents –
biochemistry, serology 
and immunochemistry
Diagnostic laboratory 
equipment
Own brand and bulk sales
> Ease of sample collection
> Public sector
> High volume, fully legally defensible
>
  Maritime and rail sector, workplace,  
HM Prison mandatory testing
> Forensic laboratories
> Clinical laboratories
> HM Prisons voluntary testing
> Healthcare
> Police forces
> Rehabilitation programmes
Our products and services
> Healthcare
Central to Concateno’s strategy is the 
belief that governments, employers  
and the public require expert, efficient 
and comprehensive solutions for the 
problems that misuse of drugs and 
alcohol create in society. 
Concateno believe that, with greater 
scale, and specialist toxicology 
resources, we are well placed to offer  
the highest levels of service and the 
widest range of solutions to meet our 
clients’ requirements.
Our business at a glance > oncateno plc oncateno plc
Annual Report and Accounts 2007
Concateno plc
10 Buckingham Street
London
WC2N 6DF
T +44 20 7004 2800  
F +44 20 7004 2801
E info@concateno.com
www.concateno.com
Concateno plc Annual Report and Accounts 2007
Contents >
01 Our highlights
02 Where we are 
04 Where we are going
06 Chairman’ s Statement
08 Chief Executive Officer’ s Review
12 Financial Review
16 Board of Directors
18 Directors’ Report 
22 Corporate Governance Report
25  Directors’ Remuneration  
Report
27  Statement of Directors’ 
Responsibilities
28 Independent Auditors’ Report
30  Consolidated Income 
Statement
30  Consolidated Statement of 
Recognised Income and 
Expense
31 Consolidated Balance Sheet
32  Consolidated Cash Flow 
Statement
33  Notes to the Consolidated 
Financial Statements
64 Company Balance Sheet
65  Notes to the Company  
Balance Sheet
68 Advisers
Concateno is a global provider of drug and alcohol testing  
products and services. It also manufactures and distributes a  
wide range of pathology and immunology products to forensic  
and clinical laboratories. 
Through its seven acquisitions to date, Concateno has created  
an organisation capable of meeting every type of drug testing  
need internationally. This includes point-of-care screening or full 
laboratory analysis which can be carried out on urine, hair, oral  
fluid or sweat samples.
Concateno’s unique global network of sample collectors and 
distribution network covering over 80 territories worldwide enables  
it to service an international client base comprising governmental 
organisations, healthcare agencies and public and private sector 
employees.  
Through its unique scale and continually developing range of  
offerings, Concateno is well positioned to exploit new sectors  
and geographical markets.  growth
01
Concateno plc 
Annual Report and Accounts 2007
“Cozart
®
 DDS: an innovative oral fluid 
testing device, field proven with police 
forces and employers internationally.”
Financial highlights Operational highlights
Concateno established itself as Europe’s largest and 
most experienced provider of drug testing services 
and products following six acquisitions in 2007 with:
8,000 customers worldwide and a network of 
500 sample collectors worldwide;
state-of-the-art, UKAS accredited, drug testing 
laboratories; and
leading edge point-of-care technology.
Significantly enhanced research and development 
capabilities through the aggregation of leading 
toxicology knowledge and resources, resulting in  
a number of exciting technological developments 
including:
Assisting police forensics with the ability to 
identify the use of date rape drugs months  
after the event. 
The ability to test for long term chronic alcohol 
abuse.
Strengthening of the Board and Executive team 
ensuring that the management and systems 
infrastructure is in place to drive organic growth. 
>
>
>
>
>
>
>
>
1 2
%
Increase in unaudited  
pro forma
2
 revenue
2007: £41.8m  
(2006: £37.4m)
£26. 1
m
Revenue
(2006
1
: £1.4m)
63
%
Increase in unaudited  
pro forma
2
 adjusted EBITDA 
2007: £8.0m (2006: £4.9m)
£0.3
m
Profit before tax
(2006: loss £0.8m)
Our highlights >
1 Prior year statutory comparative period was the nine months ending  
31 December 2006
2 Pro forma results (unaudited) are annualised results as if all business combinations 
were in place on 1 January each year progress
02
Concateno plc 
Annual Report and Accounts 2007
Where we are >
In the past year Concateno has, 
through a process of acquisition, 
established the largest and most 
experienced drug and alcohol 
testing product and service 
provider in Europe. 
06
>
November acquisition of Medscreen for 
£30.0m* provides Concateno with Europe’s 
most experienced workplace testing 
business with a 20 year history of providing 
legally defensible urine testing to the 
maritime, workplace, and the HM Prison 
Service and transportation sectors  01a_MAINHEADING 
level 1
>
03
Concateno plc 
Annual Report and Accounts 2007
07
>
January Altrix acquisition for £11.0m* adds 
the largest provider of oral fluid drugs of 
abuse laboratory-based testing to the UK 
healthcare market with a blood borne virus 
testing capability and a range of support 
services focused on client treatment needs
February acquisition of TrichoTech for 
£11.25m* brings to the Group Europe’s 
largest hair testing laboratory with  
unrivalled knowledge and expertise  
in this specialist area and a wide  
client base in the legal sector
April acquisition of Euromed for £11.5m* 
adds to the Group a proven supplier of  
a range of point-of-care testing devices  
with a strong track record on quality 
assurance and technical support 
underscored by its longstanding  
contract with HM Prison Service
May and July acquisition of Marconova for 
£2.0m* provides the Group with its first 
international presence in Sweden and along 
with the acquisition of CPL for £0.8m* 
supplements the group’s maritime and 
medico-legal testing presence
October transformational acquisition of 
Cozart for £65.5m augments the Group’s 
expertise in oral fluid instant testing and 
adds in-house manufacturing and research 
and development
* On a cash free, debt free basis
Laing O’Rourke
“Everyone should have the right to go  
to work and return home safely and one 
of Laing O’Rourke’s key drivers is to 
reduce the risks associated with 
working on a construction site. 
As part of our Health and Safety 
programme, our staff and sub-
contractors are randomly tested for 
alcohol and drugs. Whilst the 
consequences of a positive test are 
made clear, counselling is also made 
available to those who seek support 
prior to testing. 
We are determined to eliminate injuries 
at work and to do that we have to 
change behaviours. We will not tolerate 
people working under the influence of 
substances affecting their own and 
other people’s safety.” 04
Concateno plc 
Annual Report and Accounts 2007
Where we are going >
Key drivers of our potential 
include:
> Use of drugs of abuse 
continues to grow with increasing 
pressures to test and treat 
problem users
> Concateno has consolidated 
a previously fragmented drugs of 
abuse testing market and taken a 
leading position
> Substantial opportunities to 
cross-sell and expand into new 
geographical markets
> Opportunities to exploit new 
markets such as roadside drug-
testing and infectious diseases
> Development of new 
technologies to meet our  
customer base’s evolving needs
Market growth driven by legislation and 
change in work practices
The use of Class A drugs is a growing 
phenomenon in the UK and Europe with 
25% of 16–24 year olds having used illegal 
drugs in the past year and 9% of 17–25 
year olds having driven under the influence 
of drugs. 74% of prisoners have taken  
at least one type of drug of abuse prior  
to prison.
Drug testing programmes have traditionally 
been confined to safety critical industries 
but employers and governments 
increasingly perceive that drug use has 
wider implications for society and real cost 
implications for business. 05
Concateno plc 
Annual Report and Accounts 2007
General Motors Luton
“At our plant in Luton we had recognised 
we had some serious drug and alcohol 
related issues. We wished to be seen 
as caring employer but one that 
enforced rules and high standards on 
our staff similar to those expected by 
the market from us as a group.
We enlisted the assistance of Cozart  
to assist us in writing our policy, 
communicating it to our staff and 
assisting us with union negotiations. 
Once completed we have undertaken 
periods of random testing and called 
upon the services of the new 
Concateno Group to assist us with  
post incident testing. We have an 
ongoing personal relationship with  
key group staff who continue to  
provide excellent service.”
Mark Noble
HR Manager
In addition, new legislation such as the 
Corporate Manslaughter Bill has focused 
corporate attention to risks associated with 
substance misuse in the workplace. 
Concateno works with clients through  
all stages of introducing a drug and  
alcohol policy from education and 
training, through to policy advice, 
Employee Assistance Programmes 
and the support and management 
of those who test positive. 
Innovation
Concateno is investing in new products 
and services. This includes the 
collaboration with Philips that will see the 
launch of the next generation of handheld 
drug testing devices in mid-2009. The 
Group is also developing new drug-testing 
applications such as for the testing of 
excessive alcohol use and the “date-rape” 
drug, GHB, through hair analysis and it is 
developing training and customer support 
programmes.
Integrating our services
Concateno has embarked on realising £3m 
of operational and corporate synergies, 
including the merger of four laboratories 
into three state-of-the-art laboratories 
based in Abingdon, Cardiff and London. 
The restructure and integration phase is  
on target to be completed before the end 
of 2008.
The sales and customer support functions 
are being re-aligned to focus on market 
sectors to best meet the needs of clients. 
10–20
%
historic industry annual  
organic growth rates
£500
m
global drugs of abuse testing market
4
%
of British companies have a drug testing 
policy compared with 40–50% in USA leadership
06
Concateno plc 
Annual Report and Accounts 2007
 Chairman’s 
Statement
>
“ 2007 has been a 
transformational year for 
Concateno. We have 
developed a unique offering in 
the European market for the 
testing of drugs-of-abuse and 
alcohol and are well placed to 
build on our leading position in 
this high growth and high 
margin sector.”
Keith T ozzi
Chairman 07
Concateno plc 
Annual Report and Accounts 2007
> Philips Collaboration
    “ The main aim of our work with Cozart 
is to develop an effective tool which 
can be used by the police and 
workplace sectors to identify those 
that are under the influence of drugs 
with similar speed and ease-of-use 
as the breath-analyser for alcohol. 
Using state-of-the-art magnetic bio-
sensor technology, illustrated below, 
our revolutionary product will be able 
to test for up to eight drug classes 
within 90 seconds. The project is 
progressing well.”
Dr Ad Leenaars, General Manager, 
Venture Handheld Drugs-of-Abuse 
Testing, Philips Healthcare Incubator
I am delighted to report Concateno’s 
financial results for the year ended 
31 December 2007. It has been a very 
busy period in which we have delivered the 
acquisition of six companies to supplement 
the acquisition of Medscreen in 2006.  
The integration of these businesses is 
progressing well and the reception from 
customers has been positive.
It is clear that we have created a market 
leading and powerful position in the 
European drug and alcohol testing sector. 
The Group also has the benefit of enjoying 
strong revenue visibility with many key 
customer contracts for periods of between 
three and five years. The nature of the 
services we offer also means Concateno 
benefits from low customer churn. These 
dynamics, coupled with the above average 
margins and significant growth rates seen 
across our markets has inspired the team 
to deliver an excellent performance during 
the period.
Revenue in the year to 31 December 2007 
was £26.1m (2006: £1.4m) and earnings 
before share-based payments, non-
recurring items, interest, tax, depreciation 
and amortisation (EBITDA) was £6.2m 
compared with a loss of £0.5m in the nine 
months to 31 December 2006. Group 
profit before interest and tax was £2.0m 
(2006: loss of £0.7m).
Our objectives
Our aim in 2007 was to build a group  
that could offer a comprehensive range  
of drug testing solutions to clients. By 
consolidating a traditionally fragmented 
market we are able to offer a single point  
of contact to a wide variety of customers. 
Looking back at 2007, it is clear that we 
have more than met our objective in terms 
of the service offerings now available to  
our customers. 
We will look to further augment our 
position in the UK market primarily by 
leveraging off our comprehensive product 
and service offering. In our key international 
markets we will look to grow organically 
and through targeted infill acquisitions. Our 
main focus will be in the Scandinavian and 
mainland European markets, and in 
Australia and New Zealand where we 
already have a presence.
The Board believes that the Company is 
successfully delivering on its strategy.
Management changes
During the year there have been a number 
of additions to the Board. Neil Elton joined 
the Board as Group Finance Director in 
September. Neil was previously Finance 
and Executive Director at Mecom Group 
plc, the European newspaper consolidator, 
and before that Group Finance Manager at 
Huntsworth plc, the international PR and 
communications group.
We welcomed two new Non-Executive 
Directors to the Board in October. Vin 
Murria has over 20 years experience of 
working for venture capital, private equity 
and publicly listed companies focused on 
the software sector. Dr Chris Hand joined 
the Board from Cozart plc, which he 
founded in 1993. 
I would like to thank everyone in the Group 
for their efforts in the past year and for their 
dedication and enthusiasm. I am confident 
that the Group will continue its high rate of 
organic revenue growth and exemplary 
level of customer service in 2008.
Annual General Meeting
The Annual General Meeting of the 
Company is to be held on 13 May 2008. 
The Notice convening the AGM 
accompanies this report.
Current trading and outlook
The outlook for the Group’s key markets 
remains positive. Elements of the public 
sector drug testing market remain 
challenging in parts but overall demand for 
our services in this sector remain robust. 
Workplace and legal sector growth rates 
are particularly strong. Overall trading 
performance in 2008 has started positively 
and in line with our expectations. With the 
management infrastructure in place and 
the integration phase well under way, we 
look to 2008 with confidence.
Keith Tozzi
Chairman
28 March 2008 expertise
08
Concateno plc 
Annual Report and Accounts 2007
“ Through scale, Concateno is 
able to offer a unique service  
to customers throughout the 
world, supported by a 
philosophy of high quality 
customer service, and product 
and service innovation.”
Fiona Begley
Chief Executive Officer
 Chief Executive 
Officer’s Review
> 09
Concateno plc 
Annual Report and Accounts 2007
>  Possession – personal use  
or supply?
      A UK police force arrested two men 
with substantial quantities of heroin 
and cocaine in their possession, but 
they claimed that the drugs were for 
their own personal use, for which 
the penalties are far less severe 
than if convicted of drug dealing. 
      The Senior Investigating Officer 
collected hair samples from each  
of the arrestees and requested a 
“TrichoTest”. Our analysis was able 
to prove there was a small amount 
of cocaine detected in one of the 
arrestees, but no heroin. No drugs 
were detected in the other arrestee. 
This evidence was used as part  
of the Crown Prosecution’s case 
that the two men were dealers  
and were not likely to have been  
in possession of the drugs for 
personal use.
Consolidation
In the space of a year Concateno has 
developed the leading European drug  
and alcohol testing business which had 
previously been differentiated through 
alternative testing methodologies in  
adjacent markets.
Concateno’s aim is to link these disparate 
practices and technologies to provide 
customers with a single-source solution  
to their drugs-of-abuse testing needs. This 
is achieved through offering a “chain” of 
services and giving clients the opportunity 
to fully outsource a legally defensible 
drugs-of-abuse programme with a  
global collection network and policy 
planning service.
Integration
At the time of the acquisition of Cozart plc 
the Group stated that it would seek to 
achieve annualised synergies of £3m by 
the end of 2008. Of this £1m was related  
to duplicate corporate costs, the savings 
for which were realised in October 2007.
The additional £2m is to be achieved 
through further operational, purchasing 
and revenue synergies and we are well 
progressed in realising these synergies. 
In November 2007, we appointed Nigel 
Withey as Chief Operating Officer to drive 
forward the integration process. Nigel’s 
career was spent managing, acquiring and 
integrating businesses within the standards 
certification and inspection industries. He 
has over 13 years of senior management 
experience with BSI Group and Inenco plc.
Over the past few months we have 
undertaken a thorough consultation 
process and as a result have taken the 
following steps:
Integration of the Warrington-based 
laboratory into our Abingdon site; 
completion is due in May 2008.
Closure of our Paddington office with 
the migration of operations to our 
Abingdon site; completion is due in 
June 2008.
Closure of our Liverpool office with the 
migration of the workstreams into our 
Cardiff and London operations; 
completion is due in May 2008.
Closure of our office in Gothenburg, 
Sweden with the migration of the 
workstreams into our London 
operations with support functions  
being continued through our office  
in Stockholm.
•
•
•
•
As previously reported the Board had 
considered moving the Canary Wharf 
operations to our Abingdon site but after a 
detailed review it was concluded that the 
£2m operational synergies were better 
achieved through the strategy outlined 
above and at less risk to the business.
At the end of the process we will have 
three state-of-the-art laboratories in  
the UK.
The London laboratory, at Canary 
Wharf, will specialise in high volume, 
rapid-turnaround urine testing.
The Abingdon laboratory will specialise 
in high volume, rapid-turnaround  
oral fluid testing, as well as being  
our main R&D and manufacturing  
centre in the UK.
The Cardiff site will be our lower  
volume hair testing and confirmation 
testing centre. Family law requires more 
detailed analysis of substance abuse 
over longer time periods and must be 
analysed in a more labour intensive 
process, often including the provision  
of written evidence reports for use  
in court.
We are negotiating further procurement 
synergies with our suppliers, many of 
whom supplied products to a number  
of the companies that we acquired in the 
year. These negotiations are ongoing and 
we expect to achieve material cost savings. 
Through our extensive sales, distribution 
and collection networks, we are able to 
offer a wider range of third-party solutions 
and products to customers and we are  
in active negotiations with a number  
of parties.
Through our in-house manufacturing of 
drug testing products we are investigating 
ways of replacing current third-party 
products to realise further margin 
improvements.
We are in the process of bringing together 
our UK and worldwide collections network 
so that we can offer one seamless service 
to all divisions of the Group and collections 
staff are being trained on all product 
offerings. The creation of this combined 
worldwide collection network allows us to 
provide a unique service to customers 
including the provision of an emergency 
response service.
•
•
•
Cardiff laboratory Collection facilities
Sales ofﬁces
Distribution ofﬁces
10
Concateno plc 
Annual Report and Accounts 2007
 Chief Executive Officer’s Review 
continued
>
Point-of-care testing (“POCT”)
Conceteno offers a full range of “best in 
class” rapid point of collection testing 
devices, instrumentation and support 
services. Products include the Cozart
®
 
RapiScan and DDS instrumentation used 
extensively by the UK Home Office Drug 
Intervention Programme in custody suites 
and other sites throughout the UK. As well 
as in-house POCT products Concateno 
also offers a range of other solutions 
including Surestep and other OEM devices.
Concateno supports its sales through 
expert customer services, helplines and 
programme management services such  
as “Retriever”.
Laboratory products
The in-house manufacture of laboratory 
products comprising the integrated 
research, manufacture and distribution 
operation of Spinreact in Girona, Spain, 
augmented by the Cozart microplate 
Our locations
Argentina
Australia
Austria
Bahrain
Belgium
Brazil
Canada
Czech  
Republic
Denmark
Estonia 
Finland
France
Germany
Greece
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
Kuwait
Liechtenstein
Luxembourg
Maldives
Mexico
Netherlands
New Zealand
Norway
Pakistan
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russia
Serbia
Seychelles
Sierra Leone
Singapore
Slovakia
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
Taiwan
Thailand
Tunisia
Turkey
Ukraine
United Arab 
Emirates
United 
Kingdom
United States
Venezuela
Vietnam
Sector  Description    Example Customers
Workplace   Pre-employment    London Underground, Esso, Emirates 
testing and testing of    Airlines, General Motors, Rolls-Royce,  
of employees   Civil Aviation Authority
Healthcare  Testing to support drug    Greater Manchester Probation Service, 
treatment, research     Southwark Safety Partnership,  
and monitoring   KCA (Kent Council on Addiction)  
   Edinburgh DTTO.
Criminal Testing to support    HM Prison Service, Home Office DIP,  
Justice judicial systems   UK, Italian, and Australian Police Forces
Maritime  Testing for international   Exxon Mobil, Norfolkline, Maersk and  
shipping   many other major shipping companies 
Laboratory  Reagents and   Forensic Science Service, LGC,  
Products laboratory products   Santé Lab Laboratoire (Algeria); Pera  
    Medikal (Turkey) An Nar Diagnóstica  
    (Colombia)
Medico Legal   Hair testing to support   Over 3,000 law firms, over 75% of UK 
family law, child protection    police forces
 and forensic casework 
Market sectors
Alongside these operational and 
procurement synergies we are re-aligning 
our sales and marketing and customer 
support service operations to better  
target and address the needs of various 
market sectors. Our sales, marketing  
and customer service teams have been 
integrated accordingly to meet the detailed 
requirements of each market sector.  
This is being executed through the 
Concateno brand name, with product 
offerings remaining associated with  
key acquired brands. 
Business units
The Group has three main business units.
Laboratory services
Our laboratories have the highest levels of 
Accreditation and Quality Assurance and 
work actively within the industry to improve 
upon existing best practice. This includes 
ISO 17025 (independently audited by 
UKAS), ISO9001:2000, Link-Up, 
ISO13485:2003 and CPA (Clinical 
Pathology Accredited). In addition, we are 
subject to a range of external and internal 
Quality Assurance programmes. We can 
test for all of the major types of drugs of 
abuse and have recently introduced 
Benzene testing for clients looking to meet 
Health and Safety policy requirements. 
Because Concateno is able to collect and 
test samples under a full chain of custody 
all the way from supervision of the initial 
sample collection, and despatch, through 
to the initial screening and any subsequent 
detailed confirmation work, we can ensure 
that there is a robust, unbroken and 
verifiable audit trail which allows the  
results to be used as evidence in court 
when required.
manufacturing arm in Abingdon creating  
a strong platform for margin improvement 
throughout the rest of the Concateno 
Group. 
Geographical reach
Concateno has offices in the UK, Sweden, 
Spain and Italy and distribution channels  
in over 80 countries throughout the world. 
Our aim is to focus the development of our 
laboratory services and POCT offerings in 
key markets, with initial focus in the UK, 
Scandinavia and Australia.
Our laboratory products offering has a 
wide spread of sales throughout the world 
including Europe and South America. 
China, India, Russia and Africa are seen  
as significant growth markets. 
New developments
Concateno continues to develop new 
technologies and applications. During the  11
Concateno plc 
Annual Report and Accounts 2007
past year we have launched blood borne 
virus testing for diseases such as HIV and 
hepatitis. In March UKAS confirmed that 
TrichoTech at our Cardiff site had gained 
accreditation to ISO 17025 standards for 
testing hair for EtG (an alcohol metabolite 
which enables testing for chronic long term 
alcoholism) and for GHB (a drug that can 
potentially be used in drug assisted sexual 
assaults and which has, until now, been 
undetectable unless tested immediately 
after the incident occurs). We continue  
to invest in the development of new 
applications and hope to make further 
announcements during the year.
Following an extensive trial programme 
with HM Prisons in 2007 the Group will 
commence buprenorphine testing in UK 
prisons from April 2008. After opiates and 
cannabis, buprenorphine is the third most 
abused drug in HM Prisons.
We have developed applications and 
services that enable us to better serve  
our clients including “Retriever”, a software 
product that enables clients to retrieve their 
results remotely and “ROMA” (“Record of 
My Achievement”), a programme that 
enables drug-users on rehabilitation 
programmes to track their progress.
We are currently undergoing research and 
initial operations in a number of countries 
outside Europe, including Australia where 
the State of Victoria police are trialling the 
Cozart
®
 DDS product at the roadside, and 
New Zealand.
Through our collaboration with Philips we 
are developing the next generation point-
of-care handheld testing device. The 
Cozart-Philips branded device will be able 
to test up to 8 drugs within 90 seconds 
and will be up to 100 times more sensitive 
and accurate than any other point-of-care 
analysers. Aimed primarily at the roadside 
testing market and workplace applications 
the product is due to launch in mid 2009 
and we believe that the product will 
revolutionise the market.
Through scale, Concateno is able to offer  
a unique service to customers throughout 
the world, supported by a philosophy of 
high quality customer service and product 
and service innovation. During 2008 we  
will complete the integration programme 
and build on the sales and marketing 
developments that are already  
progressing well.
Fiona Begley
CEO
28 March 2008
>  Detecting alcohol and GHB in hair
      In March 2008 Concateno’s Cardiff facility gained a 
double global first by gaining accreditation for two 
of its tests to the international standard, known as 
ISO 17025.
      Gammahydroxybutrate (GHB) is one of a number of 
drugs cited in drug-assisted assaults, often referred 
to as a “date rape”, and Ethylglucuronide (EtG) is a 
metabolite created when alcohol is consumed. 
      When ingested, drugs enter the bloodstream and 
because each hair follicle has its own blood supply, 
traces of drugs end up in the hair core. Hair grows 
at a rate of about a centimetre a month, so testing  
a 3 centimetre sample can profile drug use over 
approximately 3 months. As many drug assisted 
assaults are not reported until it is too late to 
conduct a test on a urine or blood sample, the 
ability to go back a few months testing a lock of  
hair could prove invaluable. 
      With alcohol, current blood tests provide either a 
snapshot view of liver damage or a two week profile 
of alcohol use. An elevated EtG result in hair will 
indicate a potential alcohol  concern over a longer 
period of about a month. Combining these alcohol 
tests help add to the picture that local authorities 
and children’s guardians need  to make critical 
decisions on children’s safety. The Department of 
Health estimates around one million children in the 
UK are raised in families where one or both parents 
misuse alcohol.  efficiency
12
Concateno plc 
Annual Report and Accounts 2007
“ Unaudited pro forma revenues 
in 2007 of £41.8m were 12% 
ahead of 2006 with EBITDA 
improvements in each division 
during the year.”
 Financial Review >
Neil Elton
Finance Director  Laboratory services 73%
 Point-of-Care testing 17%
 Laboratory products 10%
 UK 70%
 Continental Europe 19%
 ROW 11%
13
Concateno plc 
Annual Report and Accounts 2007
Overview
Results for the Group are stated for the 
year ending 31 December 2007 with 
comparatives for 9 months ending 
31 December 2006.
Revenue in the year to 31 December 2007 
was £26.1m (2006: £1.4m). Earnings before 
share-based payments, non-recurring 
items, interest, tax, depreciation and 
amortisation (“EBITDA”) were £6.2m (2006: 
loss £0.5m) and after charging depreciation 
of £0.6m (2006: £0.0m) EBITA were £5.6m 
(2006: loss £0.5m). Profit after tax for the 
year was £0.7m (2006: loss of £0.7m). 
The Group acquired six companies during 
2007 and their respective contributions to 
the Groups’ revenue and profit after tax are 
set out in note 10.
In order to aid shareholders’ understanding 
of year-on-year performance we have 
included aggregated unaudited pro forma 
numbers to show how the business would 
have performed had all the acquisitions 
occurred at 1 January 2006.
Pro forma unaudited group revenues for 
the year to 31 December 2007 were 
£41.8m (2006: £37.4m) and pro forma 
unaudited group EBITDA before non-
recurring items were £8.0m (2006: £4.9m).
Laboratory services
Laboratory Services comprise results for 
Medscreen, Altrix, TrichoTech, CPL, 
Marconova and part of Cozart. Revenues 
for the period were £19.1m and EBITDA 
was £5.8m. On a pro forma basis revenues 
increased from £19.9m in 2006 to £22.7m 
in 2007, a 14% year-on-year increase, and 
pro forma EBITDA increased from £3.7m to 
£6.8m, representing an increase in margin 
from 19% to 30%.
Point-of-care testing
Point-of-care Testing comprises results for 
Euromed and part of Cozart. Revenues for 
the period were £4.5m and EBITDA was 
£1.3m. On a pro forma basis, revenues 
increased from £8.9m in 2006 to £10.0m  
in 2007, a 12% year-on-year increase, and 
pro forma EBITDA increased from £1.6m to 
£1.9m, representing an increase in margin 
from 18% to 19%.
Laboratory products
Laboratory Products comprise primarily 
the results of Spinreact, a division of 
Cozart. Revenues for the period were 
£2.5m and EBITDA was £0.3m. On a pro 
forma basis revenues increased from 
£8.6m in 2006 to £9.1m in 2007, a 6% 
year-on-year increase, and pro forma 
EBITDA increased from £0.4m to £0.9m, 
representing an increase in margin from 
5% to 10%.
Interest and tax
Net interest in the year was £1.7m (2006: 
£0.0m).
The underlying tax rate for the full year is 
26.8%. This has been calculated by adding 
back non-recurring costs included in 
accounting loss before tax, and their 
related tax benefit, and by excluding both 
the tax effect of the 2008 change in rate  
of UK corporation tax (from 30% to 28%) 
and the prior year tax credit recognised  
in respect of a loss carryback in 
Medscreen Limited.
EPS
Basic earnings per share (“EPS”) for the 
year was 1.05p (2006: loss per share 
6.99p). Adjusted basic EPS
1
 for the year 
was 5.29p (2006: loss per share 5.17p) 
Cash and financing
Net borrowings at 31 December 2007 were 
£36.0m (2006: £8.3m). These comprised 
current loans and borrowings (£5.6m), non-
current loans and borrowings (£33.7m), 
cash (£3.9m) and net derivative financial 
instruments (£0.6m).
> 2007 revenue by division
Year ended 31 December  
Unaudited   2007 2006 Change Change 
pro forma   £m £m £m %
Laboratory services   22.7 19.9 2.8 14
Point-of-care testing   10.0 8.9 1.1 12
Laboratory products   9.1 8.6 0.5 6
Total	 	 	 41.8	 37.4	 4.4	 12
EBITDA   8.0 4.9 3.1 63
EBITDA margin   19% 13% 6% 46%
> 2007 revenue by geography
> Pro forma divisional performance
1 Adjusted EPS excludes the after tax impact of 
intangibles amortisation, £1.6m (2006: £0.1m), non-
recurring items, £0.7m (2006: £nil) and share-based 
payments, £0.4m (2006: £0.1m)  14
Concateno plc 
Annual Report and Accounts 2007
 Financial Review continued > Borrowings comprised £28.8m (£28.3m 
after unamortised debt issue costs) of 
conventional term loans repayable in the 
period until 31 December 2009. Each of the  
four debt tranches are subject to interest 
based on three month LIBOR. Further 
subordinated debt finance was raised as 
part of the acquisition of Cozart plc (£8.7m); 
this debt attracts interest, which is fully 
rolled-up, at a rate of 12.5% per annum and 
is convertible into equity on, or before  
1 January 2010. The balance of loans and 
borrowings comprise a value applied to the 
fair value of the convertible element of this 
loan (£0.4m), finance lease commitments  
(£0.4m) and zero interest bearing loans 
granted to fund R&D in Spain (£0.5m). 
Further details are given in Note 18.
The Company has entered into an interest 
rate hedge over 75% of the scheduled 
bank loan balances for a period of seven 
years. The effect of the hedge to is to cap 
interest rates payable on that proportion  
of the bank debt at 6.5%. Should LIBOR 
fall below 3.73% a strike-rate of 5.75% 
would be payable. The net fair value  
of this derivative financial instrument at 
31 December 2007 was £0.2m and has 
been charged to the hedging reserve. 
Further details are given in Note 19.
In the year to 31 December 2007, there 
was an operating cash inflow of £5.1m 
(2006: £0.3m). Investing activities 
represented a cash outflow for acquisitions 
of £101.6m (2006: £23.2m), and capital 
expenditure, net of disposals was £0.8m 
(2006: £0.0m).
Financing activities represented a net cash 
inflow of £98.9m (2006: £19.7m), being 
comprised primarily £71.5m (2006:£18.1m) 
through equity and £29.7m (2006: £8.8m) 
through debt finance.
Non-recurring items
The Group is undertaking a number of 
initiatives to restructure the business  
to realise operational synergies. The 
restructuring costs reported in 2007 
comprise charges incurred in the year of 
£0.4m related to redundancies. Further 
restructuring charges to be incurred  
in 2008 have not been provided for  
during 2007.
There were further non-recurring advisory 
fee charges of £0.4m being cost 
associated with legal cases, tax enquiries 
by HMRC and acquisition-related expenses 
which do not meet all the requirements to 
form part of the cost of acquisition.
Dividends
The Board is not recommending a dividend 
for the year to 31 December 2007  
(2006: £nil).
> ROMA
“ROMA has the potential to become widely used 
within services and, as understanding and 
awareness of it grows, to be a standard that courts 
and probation workers could use to measure an 
individual’s progress in their treatment.”
    Bill Puddicombe
    Independent Consultant to the NTA 15
Concateno plc 
Annual Report and Accounts 2007
> HM Prison Service case study
The most important aspect of any 
point-of-care test is the accuracy of 
the results it provides. It is usual for 
initial accuracy claims to be made by 
the manufacturer based on validation 
data. Independent data can provide  
a more objective picture of the  
overall accuracy of test products  
and the accuracy of a given testing 
programme. A national quality control 
study is currently being undertaken  
by HM Prison Service to evaluate 
Euromed’s SureStep products. The 
study comprising 136 testing sites has 
collated over 3500 results. The results 
generated by HM Prison Officers show 
true negatives of 99.7% and an overall 
false positive rate of 0.3%. This data 
demonstrates that Concateno’s rapid 
point-of-care testing is of a sufficiently 
high standard to be integrated within 
full chain of custody testing 
programmes.
It is the Board’s policy that dividends  
will be paid, subject to availability  
of distributable reserves, when it is 
appropriate and prudent to do so.  
The main focus of the Company  
continues to be delivering capital  
growth for shareholders.
IFRS
The Group financial statements have been 
prepared in accordance with International 
Financial Reporting Standards as adopted 
by the EU (“Adopted IFRS”) and the 
comparative figures for the nine months to 
31 December 2006 have been restated to 
reflect those changes.
A explanation of how the transition from UK 
GAAP to IFRS has affected the Group’s 
financial position and performance is 
provided in note 30 to the accounts. The 
most significant impacts on the results 
reported in previous periods are the 
differences between the amortisation 
charges under UK GAAP and IFRS and the 
impact of deferred taxation under IAS 12. 
Key Performance Indicators
Existing financial key performance 
indicators (“KPIs”) relate to revenue growth, 
EBITDA margins and growth as well as 
operating cash flow and free cash flow 
targets (free cash flow being cash flow after 
working capital movements, exceptional 
items, tax and capital expenditure but 
before interest and debt principal 
repayments). Other financial and 
operational KPIs used by each of the 
business units are tailored to those entities 
and include revenue forecast “gap” 
analysis, quote tracking, sample 
turnaround times and customer feedback.
As part of the integration process the 
Group is undertaking a review of detailed 
KPIs to be reported throughout the Group 
and to ensure consistency in the reporting 
of those KPIs. These agreed KPIs will be 
incorporated in the monthly reporting 
package to the Board.
Neil Elton
Finance Director
28 March 2008 16
Concateno plc 
Annual Report and Accounts 2007
 Board of Directors >
1. Dr Christopher Hand
Non-Executive Director
Chris has a DPhil from the Faculty of 
Medicine, University of Oxford; a BSc  
in Applied Biochemistry from Brunel 
University and is a Chartered Chemist and 
Member of the Royal Society of Chemistry. 
Chris founded Cozart Bioscience Ltd in 
1993 and was Chief Executive of Cozart 
plc following its listing onto AIM in 2004, 
until October 2007 when the company was 
acquired by Concateno plc. During this 
time the Company won three SMART 
awards from the Department of Trade and 
Industry, won Millennium Product Status 
for its ground-breaking Cozart
®
 RapiScan 
system and acquired companies in 
Sweden, Spain and the UK. 
Prior to founding Cozart, Chris was 
Director of Research for the European  
base of the medical diagnostics company 
DPC (now part of Siemens Healthcare 
Solutions).
2. Fiona Begley
Chief Executive Officer
Fiona holds a Bachelor of Science in 
Biochemistry from the National University 
of Ireland, Galway and an MBA from 
Henley Management College. Fiona joined 
Medscreen in 1996 as Sales and Marketing 
Manager. She was appointed General 
Manager in 1998, Managing Director in 
2000 and led the management buy out 
from PharmChem in 2002. Concateno plc 
acquired Medscreen as its platform 
acquisition in 2006.
From 1992 to 1995, Fiona held 
management roles for Syva UK and 
Behring Diagnostics UK with a focus on 
business development and marketing in 
the diagnostics industry. Prior to 1992 
Fiona was a product manager and 
biochemist in the pharmaceuticals and 
biotechnology sector.
3. James Corsellis
Non-Executive Director
James has a BA (Hons) from London 
University and is currently Managing 
Partner at Marwyn Investment 
Management. Over the past two years at 
Marwyn, James has undertaken over 50 
transactions raising in excess of £1 billion 
in acquisition funding for Marwyn backed 
management teams and special purpose 
acquisition vehicles. 
James is currently a director of Aldgate 
Capital plc, Drury Lane Capital plc, 
Entertainment One Ltd, Marwyn Value 
Investors, is currently deputy chairman of 
Catalina Holdings Ltd and was previously 
Chief Executive Officer of icollector plc. 17
Concateno plc 
Annual Report and Accounts 2007
4. Neil Elton
Finance Director
Neil qualified as a Chartered Accountant 
with Arthur Andersen. He was previously 
Finance and Executive Director of Mecom 
Group plc, the AIM listed regional 
newspaper group. Subsequent to its IPO in 
March 2005 Mecom, through a process of 
acquisition, developed into one of Europe’s 
largest regional newspaper publishers with 
a market cap of around £1.2 billion. 
Prior to Mecom, Neil was Group Finance 
Manager at Huntsworth plc, the 
international PR group, with oversight of 
their financial PR and healthcare divisions. 
Before that, Neil was Finance Director of 
MirrorTel, Mirror Group plc’s television and 
audiotex division, and financial co-ordinator 
of the integration with Trinity International 
plc following their merger in 1999 to form 
Trinity Mirror plc.
5. Vin Murria
Non-Executive Director
Vin has over 20 years’ experience of 
working for Venture Capital, Private Equity 
and publicly listed companies focused on 
the software sector. During this time, Vin 
has held a number of senior positions, 
including Chief Executive Officer of 
Computer Software Group plc, which she 
took private in May 2007. The company 
merged with IRIS in July 2007 and was 
subsequently exited to Hellman Friedman 
for $1 billion.
Vin is a Partner at Elderstreet Capital, and 
prior to this was European Chief Operating 
Officer for Kewill Systems Plc and 
Chairman of Leeds Group Plc. She remains 
a Chair or NED to a number of companies, 
including BSG plc, Innovise Plc and 
Mediasurface plc.
6. Keith Tozzi
Chairman
Keith has wide experience at board level  
in creating and developing successful 
businesses. He was Group Technical 
Director (one of three executive directors) 
of Southern Water plc from 1992-96. From 
1996-2000, he was Chief Executive of the 
British Standards Institution (a London 
based Independent Royal Charter 
Company) where he grew turnover to over 
£200 million and acquired businesses in 
the UK, South America and Eastern 
Europe to leverage the brand. From 2000-
2003, he was Group Chief Executive of 
Swan Group plc (owner Mid Kent Water) 
and led a management buyout backed by 
WestLB. 
Most recently, Keith was Chairman of 
Inspicio plc, an AIM-listed testing and 
inspection company that was listed as a 
special purpose vehicle in April 2005 and 
sold for £264 million in January 2008. Concateno plc 
Annual Report and Accounts 2007 18
Directors’ Report
For the year ended 31 December 2007
>
The Directors present their report and the audited financial statements for the year ended 31 December 2007.
Business review
The Company is required by the Companies Act to include a business review in this report. The Directors’ Report contains a fair review 
of the business and a description of the principal risks and uncertainties facing the Group. A review of the business strategy and a 
commentary on the performance of the business is set out in the Chairman’s Statement, the Chief Executive’s Review and the Financial 
Review on pages 6 to 15. A discussion of key performance indicators are included within the Financial Review on page 15. 
The Directors’ Report is prepared for the members of the Company and should not be relied upon by any other party or for any other 
purpose. Where the Directors’ Report (including the Chairman’s Statement, the Chief Executive’s Review and the Financial Review) 
contain forward-looking statement these are made by the Directors in good faith based on the information available to them at the time 
of their approval of this report. Consequently such statements should be treated with caution due to the inherent uncertainties, including 
both economic and business risk factors, underlying such forward-looking statements or information.
Principal activities
The principal activity of the Group is the development, manufacture and sale of medical diagnostic tests and services, predominantly 
those used for the detection of alcohol and drugs of abuse.
The principal activity of the Company is that of a holding Company. The subsidiary undertakings principally affecting the profits or net 
assets of the group in the year are listed in note 28 to the financial statements.
Going concern
After making enquiries the Directors have formed a judgement, at the time of approving the financial statements, that there is a 
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this 
reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
Results and dividends
The audited financial statements are set out on pages 18 to 67. The Group made a profit after taxation for the year ended 31 December 
2007 of £665,000 (2006: loss of £670,000).
The Directors do not recommend the payment of a dividend for the period (2006: £nil).
Directors and their interests
The Directors who held office during the year are detailed below. Unless specified otherwise, they have held office since 1 January 2007:
K Tozzi Chairman
F Begley Chief Executive Officer
N Elton Finance Director (Appointed 14/09/07)
J Corsellis Non-executive Director
V Murria Non-executive Director (Appointed 01/10/07)
C Hand Non-executive Director (Appointed 04/10/07)
J Corsellis retires by rotation in accordance with the Articles of Association and, being eligible, offers himself for re-election.
The Directors’ beneficial interests in the ordinary shares of 10p each (“ordinary shares”) of the Company, were as follows:
 
         Ordinary Ordinary 
         shares of 10p shares of 10p 
         31 December 31 December 
         2007 2006
K Tozzi         100,000 100,000
F Begley         941,177 941,177
N Elton         – –
J Corsellis         58,824 58,824
V Murria         – – 
C Hand         1,369,013 –
Details of the Directors’ share options and service contracts are shown in the Directors’ remuneration report on pages 25 and 26.
Biographical details of the Directors are given on pages 16 and 17. 19
Concateno plc 
Annual Report and Accounts 2007
Substantial shareholdings
The Directors are aware of the following who have an interest in 3% or more of the Company as at 17 March 2008:
         Ordinary  
         shares of 10p %
Marwyn Neptune Fund LP*         17,922,497 18.81%
Chase Nominees Ltd.         12,129,629 12.73%
Goldman Sachs Securities (Nominees)        11,954,274 12.54%
HSBC Global Custody Nominee (UK)        9,541,116 10.01%
BBHISL Nominees Ltd         6,686,484 7.02%
OMX Securities Nominees Ltd         3,684,992 3.87%
Vidacos Nominees Ltd         3,519,399 3.69%
* Marwyn Neptune Fund LP holds shares through Vidacos Nominees Ltd. Marwyn Ventures 1 LP holds 275,000 shares in its own right.
Group research and development activities
The research and development activities undertaken by the Group amounted to £306,000 (2006: £nil). All research and non-qualifying 
development costs were written off during the year in which they were incurred. During the year £247,000 (2006: £nil) of development 
expenditure was capitalised in line with the accounting policy set out in note 1 to the financial statements. 
Charitable and political contributions
During the year the Group made charitable donations of £1,731 (2006: £500) to charities serving the communities in which the Group 
operates. No political donations were made during the year.
Supplier payment policy
It is the Group’s policy to settle debts with its creditors on a timely basis, taking into consideration the terms and conditions offered by 
each supplier. At 31 December 2007, the number of creditor days outstanding for the Group was 36 days (2006: 34 days).
The Group does not follow a standard code or payment practice.
Risks relating to the business of Concateno
Internal controls
The Directors are responsible for the Group’s system of internal control and for reviewing its effectiveness whilst the role of management 
is to implement Board policies on risk management and control. It should be recognised that the Group’s system of internal control is 
designed to manage, rather than eliminate, the risk of failure to achieve the Group’s business objectives and can only provide 
reasonable, and not absolute, assurance against material misstatement or loss.
The Group is currently developing the risk management process, to embed it in normal management, and the governance process. 
These controls include, but are not limited to, the annual strategic planning and budgeting process, a clearly defined organisational 
structure with authorisation limits, reviews by senior management of monthly financial and operating information including comparisons 
with budgets, monthly treasury and cash flow reports and forecasts to the main Board and rules preventing speculation in derivatives.
The Board does not believe it is currently appropriate to establish a separate, independent internal audit function given the size of the 
Group. However, it will undertake a review during 2008 of all internal controls and has set up a Risk Review Committee to oversee this 
process.
Continued market growth
The Company is reliant upon growth in the drugs and alcohol screening market within the UK and Europe in order to increase trading 
volumes. The dependence upon governmental and industrial testing requirements and the growth of these requirements is a risk that 
the Company cannot directly control, but can mitigate by entering new markets. The failure of such market growth to continue could 
have a material adverse impact on the Group’s business, financial condition, trading performance and prospects.
Dependence upon key executives and personnel
The Company has several key executives and senior personnel, who are of considerable worth to the Company in terms of their market 
knowledge, strategic importance, and intellectual property value. In order to ensure minimal risk to the Company, key person insurances 
and contractual obligations are in place to minimise the impact of loss of any of these persons. The loss of any member of the Group’s 
senior operational management could harm or delay the business whilst management time is directed to finding suitable replacements 
or if no suitable replacement is available to the Group. In either case this could have a material adverse effect on the future of the 
Group’s business. Whilst the Group has entered into service agreements with these key personnel, the retention of their services cannot 
be guaranteed.
Investment strategy
The Company has made several acquisitions during 2007. The risks associated with these investments have been mitigated by due 
diligence testing and the exclusion of unreasonable terms in the offers to purchase the companies. Concateno plc 
Annual Report and Accounts 2007 20
Directors’ Report continued
For the year ended 31 December 2007
>
There can be no certainty that the Group will be able to successfully implement its strategy as set out in the Chairman’s statement. The 
ability of the Group to implement its strategy in a competitive market requires effective planning and management control systems. The 
Group’s future growth will depend on its ability to expand and improve operational, financial and management information and control 
systems in line with the Group’s growth. Failure to do so could have an adverse effect on the Group’s business and financial condition.
Law and regulation
The Company operates its normal business activities within relevant legal and regulatory compliance listings. These risks include 
industry legislation, regulatory control and health and safety compliance. The Company operates over international boundaries that 
entail the risk of litigation and governmental non-compliance with regulatory requirements. These risks are minimised primarily by 
contractual obligations with stakeholders (e.g. customers and suppliers) and by compliance within reasonable operating activities.
The drugs of abuse testing market, being the Group’s core market area, is subject to a large number of laws and regulations. The 
Group’s success in the future will be dependent on the legislative framework in which it operates and the directors have no influence 
over such matters.
Existing and future legislation, regulation and actions could cause additional expense, capital expenditure, restrictions and delays  
in the activities of the Group, the extent of which cannot be predicted. No assurance can be given that the new laws, rules and 
regulations will not be enacted or existing laws, rules and regulations will not be applied in a manner which could limit or  
curtail certain of the Group’s services.
Dependence on key customers
The Company has the risk of dependence upon key customers. This risk is mitigated by developing a close relationship with clients and 
entering into contracts where possible. Given the increased scale of the Group the dependence on any one client has been significantly 
reduced during the year. Where there is risk remaining and insufficient evidence of collectability of debts from customers, an allowance 
for impairment is made.
Price risk
The Group has no significant exposure to securities price risk as it holds no listed equity investments.
Financial Risk Management
The Board considers that the main risks arising from the Group’s financial instruments are currency risk, credit risk, interest rate risk, 
liquidity risk and covenant risk. The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors. 
The Group does not use derivative financial instruments for speculative purposes.
(i) Currency risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group uses foreign 
exchange forward contracts, where cost effective to do so, and otherwise uses natural hedging methods where possible to minimise 
exposure in this area.
(ii) Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other debtors.
The Group’s credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of allowances 
for doubtful debtors. An allowance for impairment is made where there is an identified loss event which, based on previous experience, 
is evidence of a reduction in the recoverability of the cash flows. The Group has no significant concentration of credit risk, with exposure 
spread over a large number of counterparties and customers.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit 
ratings assigned by international credit rating agencies. 
 
(iii) Interest rate risk and liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group 
uses a mixture of long-term and short-term debt finance. The Group’s policy throughout the year has been to minimise risk by placing 
funds in low risk cash deposits but also to maximise the return on funds placed on deposit. 
(iv) Covenant risk
The Group must comply with a number of financial covenants as part of the term loan facilities. The Group regularly monitors actual and 
forecast compliance with these covenants and makes regular reports to the banks.
Further details are provided in note 19 of the financial statements. 21
Concateno plc 
Annual Report and Accounts 2007
Annual General Meeting
The Annual General Meeting will be held at the offices of Collins Stewart, London on 13 May 2008 commencing at 10am. 
Auditors
Each of the persons who is a Director at the date of approval of this report confirms that:
(1) so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
(2) the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit 
information and to establish that the Company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s234ZA of the Companies Act 1985.
KPMG Audit plc have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be placed 
before the Annual General Meeting on 13 May 2008.
By order of the Board
Neil Elton 
Finance Director 
28 March 2008 Concateno plc 
Annual Report and Accounts 2007 22
AIM listed companies are not required to comply with the disclosure requirements of the New Combined Code on Corporate 
Governance. However, the Board supports the principles contained in the New Combined Code and is committed to applying the 
principles set out therein where they are appropriate, given the Company’s size. The following provides information on how these 
principles have been applied but does not constitute full compliance with the New Combined Code. 
Board of Directors
The Company is controlled by the Board of Directors which comprises three executive and three Non-Executive Directors. 
The Board is responsible to shareholders for the proper management of the Group and meets formally at least every two months to set 
the overall direction and strategy of the Group, to review financial and operating performance and to advise on senior management 
appointments. Financial policy and budgets, including capital expenditure, are approved and monitored by the Board. All key 
operational decisions are subject to Board approval. The Company Secretary is responsible for ensuring that Board procedures are 
followed and that applicable rules and regulations are complied with.
Different Directors hold the roles of Chairman and Chief Executive and there is a clear division of responsibilities between them. 
Individual Directors possess a wide variety of skills and experience; biographical details of the Directors are set out on pages 16 and 17.
The Non-Executive Directors are considered by the Board to be independent of management. The Board considers that the Non-
Executive Directors are of sufficient calibre and number to bring the strength of independence to the Board. The terms and conditions  
of appointment of non-executive Directors are available on request.
The Board believes that given its size and constitution it is not appropriate to specify a “senior” Non-Executive Director.
During the year, there have been 10 main Board meetings. The schedule on the following page gives attendance and non-attendance 
by Board member for meetings throughout the year.
All Board members receive monthly management accounts and regular management reports enabling them to review the Group’s 
performance against agreed objectives. Regular reports and papers are circulated to Directors in a timely manner in preparation for 
Board and Committee meetings. This information includes that specifically requested by the Non-Executive Directors from time to time.
Board evaluation
The Board is mindful of the requirement to undertake an annual evaluation of its performance and that of its committees and individual 
Directors. It is the intention of the Board to adopt the following procedures in order to conduct performance evaluation.
The performance of the Board, its committees, the Executive Directors and Non-Executive Directors will be evaluated by the Chairman 
on an ongoing basis.
Re-election
Directors are subject to election by shareholders at the first opportunity after their appointment and a third are subject to re-election at 
each Annual General Meeting.
Committees of the Board
Audit Committee 
The Audit Committee comprises two Non-Executive Directors; Dr C Hand (Chairman) and J Corsellis. It overviews the monitoring of  
the Group’s internal controls, accounting policies and financial reporting and provides a forum through which the external auditors 
report. It also reviews the scope and results of the external audit and the independence and objectivity of the auditors and makes 
recommendations to the Board on issues surrounding their remuneration, appointment, resignation or removal. The Board is satisfied 
that the Audit Committee has sufficient financial knowledge and experience. The Audit Committee should meet at least twice a year 
with the external auditors. 
During the year there have been two Audit Committee meetings. The meetings were attended by both committee members. 
Terms of reference for the Audit Committee are available on request. These include definition of its role and the authority delegated  
to it by the Board.
Remuneration Committee 
The Remuneration Committee comprises two Non-Executive Directors, J Corsellis (Chairman) and V Murria. K Tozzi stepped down  
on 17 October 2007. The Committee reviews, inter alia, the performance of the Executive Directors and sets the scale and structure  
of their remuneration and the basis of their service agreements with due regard to the interests of the shareholders. The Remuneration 
Committee also makes recommendations to the executive Directors concerning the allocation of share options to employees. The 
committee should meet at least twice a year.
During the year, there have been three Remuneration Committee meetings. The meetings were attended by both committee members 
at the time. 
Corporate Governance Report
For the year ended 31 December 2007
> 23
Concateno plc 
Annual Report and Accounts 2007
It is a policy of the Remuneration Committee that no individual participates in discussions or decisions concerning their  
own remuneration.
Terms of reference for the remuneration committee explain its role and the authority delegated to it by the Board. These are  
available on request.
The Directors’ remuneration report is set out on pages 25 and 26.
A summary of meeting attendances by the Board of Directors and its committees is given below.
 
      Main  Audit Remuneration 
      Board Committee Committee AGM EGM
Executive Directors
K Tozzi      10/10 2/2 3/3 1/1 1/1
F Begley      10/10 – – 1/1 1/1
N Elton      4/4 – – – –
Non-Executive Directors
J Corsellis      6/10 2/2 3/3 1/1 1/1
C Hand      2/2 – – – –
V Murria      2/2 – – – –
Internal control
The Directors have overall responsibility for ensuring that the Group maintains a system of internal control to provide them with 
reasonable assurance that the assets of the Group are safeguarded and that the shareholders’ investments are protected. The system 
includes internal controls covering financial, operational and compliance areas, and risk management. There are limitations in any 
system of internal control, which can provide reasonable but not absolute assurance with respect to the preparation of financial 
information, the safeguarding of assets and the possibility of material misstatement or loss.
The Board has considered and reviewed the effectiveness of the system of internal control. An assessment of the major risk areas for 
the business and methods used to monitor and control them was also considered. In addition to financial risk, the review covered 
operational, commercial, environmental, regulatory, and research and development risks. The risk review is an ongoing process with 
regular review by the Board at least annually. 
The key procedures designed to provide an effective system of internal control that have operated throughout the year and up to the 
date of the sign-off of this report are described below:
Control environment
The Group has a clearly defined organisational structure. Managers of operating units assume responsibility for, and exercise a high 
degree of autonomy in, running day-to-day trading activities. Employees are required to follow clearly laid out internal procedures and 
policies appropriate to the business and their position within the business.
Risk management
The Group employs Directors and senior executives with the appropriate knowledge and experience for the Company. A formal risk 
management review is performed annually as part of the process of determining the Group’s system of internal controls and risk 
mitigation procedures. 
Risk procedures are carried out via the quality assurance systems in place within each key Company in the Group. Each business 
currently holds separate certification/accreditation. ISO 17025 Testing and Calibration Laboratories Medscreen, Altrix, TrichoTech, 
Cozart; ISO 13485 Medical Devices Cozart, Spinreact; ISO 9001 Quality Management System Medscreen, Euromed, Spinreact, Cozart. 
There is a nominated management representative at each site responsible for maintaining compliance to the standards. Each 
management representative reports into a senior manager. Monthly Quality meetings are held at each site at Management level.  
A summary of issues are included in the monthly operations report by site which, in turn, is summarised by the Group Chief Operating 
Officer in the monthly Board Report. An early warning system is employed at each site to allow for immediate attention of any non-
conformances. It is planned to integrate the systems into a single group certificate for each standard, with a Group Quality Manager 
overseeing all activities. This role will be supported by site representatives based at Abingdon, Cardiff, Canary Wharf and Girona. 
Financial information 
The Group prepares detailed budgets and cash flow projections, which are approved annually by the Board and updated regularly 
throughout the year. Detailed management accounts and working capital cash flow projections are prepared on a monthly basis and 
compared to budgets and projections to identify any significant variances.
Management of liquid resources
The Board is risk adverse when investing the Group’s surplus cash funds. The Executive Directors monitor the Group’s cash position on 
a weekly basis. The Group’s treasury management policy is reviewed annually and sets out strict procedures and limits on how surplus 
funds are invested. Concateno plc 
Annual Report and Accounts 2007 24
Internal audit
The Board has considered it inappropriate to establish a formal internal audit function during the year, given the size of the Group. 
Although there has been no formal internal audit function, financial reviews have been performed between Group companies on a 
regular basis and work is underway to formalise this process more over the coming year.
Relations with shareholders
The Board attaches great importance to effective communication with both institutional and private shareholders. In fulfilment of the 
Chairman’s obligations under the new Combined Code, the Chairman gives feedback to the Board on issues raised with him by major 
shareholders. Regular communication is maintained with all shareholders through Company announcements, the Annual Report and 
Financial Statements, Preliminary Results and the Interim Report. 
All shareholders are sent copies of the interim and annual reports and are given notice to enable them to attend the Company’s Annual 
General Meeting and any Extraordinary General Meeting. Shareholders whose shares are held by nominees may receive the information 
on request. The annual general meeting is normally attended by all Directors, and shareholders are invited to ask questions during the 
meeting and to meet with Directors after formal proceedings.
In addition, the Company operates a website: www.concateno.com. It contains information on the Group and its activities, press 
releases and regulatory announcements, Annual Financial Statements and Interim Statements, and details of the Company’s  
share price. 
Corporate Governance Report continued
For the year ended 31 December 2007
> 25
Concateno plc 
Annual Report and Accounts 2007
The following information has been provided in accordance with best practice even though it is not all a requirement of the AIM Rules of 
the London Stock Exchange. The information presented in the Directors’ Remuneration Report is unaudited unless otherwise stated.
Remuneration policy
The Remuneration Committee currently comprises two Non-Executive Directors V Murria and J Corsellis. The Chief Executive Officer 
and other senior executives attend meetings from time to time at the invitation of the Committee. Remuneration levels are set in order to 
attract high calibre recruits and to retain and motivate those Directors and employees once they have joined the Group.
Remuneration package for executive Directors
The individual components of the remuneration package offered to Executive Directors are as follows:
(i) Basic salary
Basic salaries are reviewed on a regular basis. The review process is undertaken by having regard to the development of the Group and 
the contribution that individuals will continue to make. Consideration is also given to the need to retain and motivate individuals and 
information on the salary levels in comparable organisations. 
(ii) Annual performance incentives
Annual performance incentives in the form of cash bonus payments are reviewed on an annual basis and are designed to reward 
Executive Directors for exceptional performance.
During 2007 bonuses were paid to each of K Tozzi and F Begley, as disclosed below, in recognition of their efforts towards achieving 
the successful completion of various acquisitions during the year. The terms of these bonuses were approved by the Remuneration 
Committee, with K Tozzi, absenting himself when consideration was given to proposals for his bonus. The Remuneration Committee 
consider that these bonuses are exceptional in nature and do not envisage that similar bonuses will be awarded during 2008.
(iii) Pension and other benefits
The Company makes contracted contributions into personal pension schemes for the Executive Directors.
Other benefits provided to executive Directors are life assurance and private medical insurance.
(iv) Share options
Options granted to employees under the Company’s EMI or Employee Benefit Trust Incentive Scheme are recommended by the 
Executive Directors and approved by the Remuneration Committee. 
Executive Directors are awarded share options at the discretion of the Remuneration Committee. Share options are granted at the 
closing mid-market value of the Company’s ordinary shares on the day prior to grant, or where the Remuneration Committee consider 
that the share options are issued further to an acquisition event they are granted at the share price pertaining to that acquisition event.
Remuneration policy for Non-Executive Directors
The remuneration of the Non-Executive Directors is determined by the Board as a whole, based on a review of current practices  
in other companies. 
The Non-Executive Directors have service agreements which are reviewed by the Board annually. 
Audited information
Directors’ remuneration
The Directors received the following remuneration during the year:
     Salary  Taxable Pension Total Total 
     and fees Bonus benefits contributions 2007 2006 
Name of Director     £ £ £ £ £ £
Executive
K Tozzi     100,000 550,000
4
 7,306 10,000 667,306 182,500
F Begley     200,267 500,000
4
 12,573 30,750 743,590 34,617
N Elton
1
     45,303 – 2,906 4,600 52,809 –
Non-executive
J Corsellis     14,671 – – – 14,671 4,676 
V Murria
2
     8,750 – – – 8,750 –
C Hand
3
     16,666 – – – 16,666 –
     385,657 1,050,000 22,785 45,350 1,503,792 221,793
1 N Elton joined the Board 14/09/07.
2 V Murria joined the Board 01/10/07.
3 C Hand joined the Board 04/10/07. He received £5,000 for non-executive duties and £11,666 for work relating to the collaboration project with Philips.
4 Success fees on completion of business combinations (see note ii above). These fees are wholly and directly attributable to business combinations completed in the period and have 
been included in the cost of each acquisition on this basis.
Directors’ Remuneration Report
For the year ended 31 December 2007
> Concateno plc 
Annual Report and Accounts 2007 26
J F M A M J J A S O N D J F M
170
160
150
140
130
120
110
100
90
80
70
Concateno (£)
FTSE small share price index (£)
FTSE all share support SVS price index (£)
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company 
granted to or held by the Directors under the EMI Share Option Scheme. Details of the options are as follows:
 
   At Options Options Options At 
   1 January granted exercised lapsed 31 December Exercise Exercise Expiry 
Name of Director  Class 2007 Number Number Number 2007 price date date
K Tozzi
  A 50,000 – – – 50,000 85.0p 07/11/2009 07/11/2016
  B 49,999 – – – 49,999 85.0p 07/11/2009 07/11/2016
F Begley
  A 50,000 – – – 50,000 85.0p 07/11/2009 07/11/2016
  B 49,999 – – – 49,999 85.0p 07/11/2009 07/11/2016
N Elton   – – – – –
J Corsellis   – – – – –
V Murria   – – – – – 
C Hand   – – – – –
Employee Benefit Trust
Aggregate emoluments disclosed above do not include any amounts for the value of EBT ordinary shares in the Company granted to 
SG Hambros Trust Company (Channel Islands) Limited. SG Hambros Trust Company (Channel Islands) Limited, as trustee of a trust of 
which the Directors and certain of their relatives are potential beneficiaries, hold the following options and ordinary shares (please see 
note 24 to the accounts for conditions):
    Options/ Options/ Options/ 
   At shares shares shares At 
   1 January granted exercised lapsed 31 December Exercise Exercise Expiry 
Scheme  Class 2007 Number Number Number 2007 price date date
EBT Share Option Scheme  A – 700,000 – – 700,000 86.0p 06/11/2009 06/11/2016
EBT Share Option Scheme  B – 700,002 – – 700,002 86.0p 06/11/2009 06/11/2016
EBT Share Scheme   – 2,980,047 – – 2,980,047 N/A N/A N/A
Directors’ shareholdings
The Directors who served during the period, together with their beneficial interests in the shares of the Company, are detailed in the 
Directors’ report on pages 18 and 19.
 
Performance graph
The graph below shows a comparison between the Company’s total shareholder return performance compared with FTSE AIM All 
Share and Support Service sectors of the London Stock Exchange. The graph covers the period from 1 January 2007 to 17 March 
2007. The Directors have selected the Support Services sector as a comparison as they believe that the constituent companies most 
closely reflect the nature and operations of Concateno.
The market price of the Company’s shares as at 31 December 2007 was 128.5p and the range during the period between 1 January 
2007 and 31 December 2007 was 112.5p–180.5p. 
By order of the Board
Keith Tozzi
Chairman
28 March 2008
Directors’ Remuneration Report continued
For the year ended 31 December 2007
> 27
Concateno plc 
Annual Report and Accounts 2007
The Directors are responsible for preparing the Annual Report and the Group and parent company financial statements, in accordance 
with applicable law and regulations. 
Company law requires the Directors to prepare Group and parent company financial statements for each financial year. As required by 
the AIM Rules of the London Stock Exchange, they are required to prepare the Group financial statements in accordance with IFRSs as 
adopted by the EU and applicable law and have elected to prepare the parent company financial statements in accordance with UK 
Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
The Group financial statements are required by law and IFRSs as adopted by the EU to present fairly the financial position and the 
performance of the Group; the Companies Act 1985 provides in relation to such financial statements that references in the relevant part 
of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. 
The parent company financial statements are required by law to give a true and fair view of the state of affairs of the parent company. 
In preparing each of the Group and parent company financial statements, the Directors are required to: 
select suitable accounting policies and then apply them consistently; 
make judgements and estimates that are reasonable and prudent; 
for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU; 
for the parent company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any 
material departures disclosed and explained in the parent company financial statements; and 
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent 
company will continue in business. 
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial 
position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 1985. They 
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent 
and detect fraud and other irregularities. 
The Directors have decided to prepare voluntarily a Directors’ Remuneration Report in accordance with Schedule 7A to the Companies 
Act 1985, as if those requirements were to apply to the Company. The Directors have also decided to prepare voluntarily a Corporate 
Governance Statement as if the Company were required to comply with the Listing Rules of the Financial Services Authority in relation 
to those matters.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other 
jurisdictions.
By order of the Board
Fiona Begley
Chief Executive Officer
28 March 2008
•
•
•
•
•
Statement of Directors’ Responsibilities in respect of the Annual Report  
and the financial statements 
For the year ended 31 December 2007
> Concateno plc 
Annual Report and Accounts 2007 28
To the members of Concateno plc
We have audited the Group and parent company financial statements (the “financial statements”) of Concateno plc for the year ended  
31 December 2007 which comprise the Group Income Statement, the Group and Parent Company Balance Sheets, the Group Cash 
Flow Statement, the Group Statement of Recognised Income and Expense and the related notes. These financial statements have  
been prepared under the accounting policies set out therein. 
In addition to our audit of the financial statements, the Directors have engaged us to audit the information in the Directors’ Remuneration 
Report that is described as having been audited, which the Directors have decided to prepare (in addition to that required to be 
prepared) as if the Company were required to comply with the requirements of Schedule 7A to the Companies Act 1985.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985 and, in 
respect of the separate opinion in relation to Directors’ Remuneration Report and reporting on corporate governance, on terms that 
have been agreed Our audit work has been undertaken so that we might state to the Company’s members those matters we are 
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or 
assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report,  
or for the opinions we have formed. 
Respective responsibilities of Directors and auditors 
The Directors’ are responsible for preparing the Annual Report and the group financial statements in accordance with applicable  
law and International Financial Reporting Standards (IFRSs) as adopted by the EU, and for preparing the parent company financial 
statements in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set  
out in the Statement of Directors’ Responsibilities on page 27. 
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements give  
a true and fair view and whether the financial statements and the part of the Directors’ Remuneration Report to be audited have been 
properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in 
the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report includes that specific 
information presented in the Chairman’s Statement, Chief Executive’s Review and Financial Review that is cross referred from the 
Business Review section of the Directors’ Report.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the 
information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and other 
transactions is not disclosed. 
In addition to our audit of the financial statements, the Directors have engaged us to review their Corporate Governance Statement as if 
the Company were required to comply with the Listing Rules of the Financial Services Authority in relation to those matters. We review 
whether the Corporate Governance Statement reflects the Company’s compliance with the nine provisions of the 2006 Combined Code 
specified for our review by those rules, and we report if it does not. We are not required by the terms of our engagement to consider 
whether the Board’s statements on internal control cover all risks and controls, or to form an opinion on the effectiveness of the Group’s 
corporate governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial 
statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies 
with the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion 
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices 
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.  
It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial 
statements, and of whether the accounting policies are appropriate to the group’s and company’s circumstances, consistently applied 
and adequately disclosed. 
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order  
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’ 
Remuneration Report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In 
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the part  
of the Directors’ Remuneration Report to be audited. 
Independent Auditors’ Report 
For the year ended 31 December 2007
> 29
Concateno plc 
Annual Report and Accounts 2007
Opinion 
In our opinion: 
the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Group’s 
affairs as at 31 December 2007 and of its profit for the year then ended; 
the parent company financial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of 
the state of the parent company’s affairs as at 31 December 2007; 
the financial statements have been properly prepared in accordance with the Companies Act 1985; 
the information given in the Directors’ Report is consistent with the financial statements; and
the part of the Directors’ Remuneration Report which we were engaged to audit has been properly prepared in accordance with 
Schedule 7A to the Companies Act 1985, as if those requirements were to apply to the company.
KPMG PLC
Chartered Accountants
Registered Auditor
Arlington Business Park
Reading 
RG7 4SD
28 March 2008
•
•
•
•
• Concateno plc 
Annual Report and Accounts 2007 30
       Year ended  Nine months ended 
       31 December  31 December  
       2007  2006
      Notes £’000 £’000 £’000 £’000
Revenue      2  26,064  1,360
Cost of sales        (10,617)  (721)
Gross profit        15,447  639
Administrative expenses before the following items;     (10,055)  (1,171)
Non-recurring administrative expenses     3 (785)  –
Share-based payments       (439)  (63)
Amortisation of business combination intangible assets    11 (2,193)  (133)
Total administrative expenses        (13,472)  (1,367)
Operating profit/(loss)      4  1,975  (728)
Finance income      7 380  106
Finance expenses      7 (2,032)  (138)
Net finance costs        (1,652)  (32)
Profit/(loss) before taxation        323  (760)
Taxation      8  342  90
Profit/(loss) for the period attributable to equity shareholders of the Company    665  (670)
Earnings/(loss) per share      9
Basic (pence per share)        1.05p  (6.99p)
Diluted (pence per share)        1.04p  (6.99p)
The consolidated income statement has been prepared on the basis that all operations are continuing operations.
The accompanying notes are an integral part of the consolidated financial statements.
          Nine months 
         Year ended ended 
         31 December 31 December  
         2007 2006 
        Notes £’000 £’000
Foreign currency translation differences for foreign operations      22 298 –
Effective portion of changes in fair value of cash flow hedges      16 (184) –
Net change in fair value of cash flow hedges transferred to profit or loss     16 – –
Income and expense recognised directly in equity       114 –
Profit/(loss) for the period         665 (670)
Total recognised income and expense for the period attributable to equity shareholders of the Company  779 (670)
Consolidated Income Statement
For the year ended 31 December 2007
>
Consolidated Statement of Recognised Income and Expense
For the year ended 31 December 2007
> 31
Concateno plc 
Annual Report and Accounts 2007
         As at As at 
         31 December 31 December 
         2007 2006 
        Notes £’000 £’000
Assets
Non-current assets
Goodwill        11 97,938 23,440
Other intangible assets        11 46,183 9,695
Property, plant and equipment        12 3,410 367
Deferred tax assets        13 858 10
         148,389 33,512
Current assets
Inventories        14 3,855 86
Current tax assets         174 –
Trade and other receivables        15 11,819 1,604
Derivative financial instruments        16 3 –
Cash and cash equivalents        17 3,888 654
         19,739 2,344 
Total assets         168,128 35,856 
Liabilities
Current liabilities
Bank overdrafts        17 1,685 –
Loans and borrowings        18 3,931 722
Derivative element of convertible loan       18 417 –
Derivative financial instruments        16 184 –
Current tax liabilities         1,281 –
Trade and other payables        20 8,892 1,957 
Provisions        21 1,541 –
         17,931 2,679
Non-current liabilities
Loans and borrowings        18 33,651 8,206
Provisions        21 729 –
Deferred tax liabilities        13 12,629 2,715
         47,009 10,921 
Total liabilities         64,940 13,600
Shareholders’ equity attributable to equity shareholders of the Company
Share capital        22 9,530 2,794
Share premium account        22 89,875 20,008
Other reserves        22 7,958 706
Retained earnings        22 (4,175) (1,252)
Total shareholders’ equity attributable to equity shareholders of the Company     103,188 22,256
Total shareholders’ equity and liabilities        168,128 35,856
The financial statements were approved by the board of directors and authorised for issue on 28 March 2008. They were signed on its 
behalf by:
Fiona Begley Neil Elton
Chief Executive Officer Finance Director
28 March 2008 28 March 2008
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated Balance Sheet
As at 31 December 2007
> Concateno plc 
Annual Report and Accounts 2007 32
          Nine months 
         Year ended ended 
         31 December 31 December  
         2007 2006 
        Note £’000 £’000
Cash flows from operating activities
Profit/(loss) for the period         665 (670)
Depreciation and other non-cash items:
 Depreciation         569 24
 Amortisation of intangible assets and loan issue costs       2,395 165
 Share-based payments         439 63
 Loss on disposal of property, plant and equipment       (15) –
 Net finance costs         1,652 32
 Taxation         (342) (90)
         5,363 (476)
Increase in trade and other receivables        (247) (2)
(increase)/decrease in inventories         (262) 30
Increase in trade and other payables        227 720
Cash generated from operations        5,081 272
Tax (paid)/received, net         (33) –
Net cash flows from operating activities        5,048 272
Cash flows from investing activities
Acquisitions of businesses (net of cash acquired)       (101,613) (23,243)
Purchase of property, plant and equipment        (569) (8)
Development expenditure         (248) –
Net cash flows from investing activities        (102,430) (23,251)
Cash flows from financing activities
Net proceeds from issue of share capital        71,454 18,089
Proceeds from exercise of share options        136 –
Proceeds from borrowings         29,722 8,766
Repayment of borrowings (net of debt issue costs)       (1,250) (7,173)
Interest received         133 106
Interest paid         (1,264) (138)
Net cash flow from financing activities        98,931 19,650
Increase/(decrease) in cash and cash equivalents for the period      1,549 (3,329)
Cash and cash equivalents at start of period        654 3,983
Cash and cash equivalents at end of period      17 2,203 654
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated Cash Flow Statement
For the year ended 31 December 2007
> 33
Concateno plc 
Annual Report and Accounts 2007
1 Accounting policies
Concateno plc (“the Company”) is a company domiciled in the United Kingdom. The consolidated financial statements of the Company 
as at and for the year ended 31 December 2007 comprise the Company and its subsidiaries (together referred to as the “Group”  
or “Concateno”).
(a) Statement of compliance
The Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting 
Standards as adopted by the EU (“Adopted IFRSs”). The Company has elected to prepare its parent company financial statements in 
accordance with UK GAAP; these are presented on pages 65 to 67.
(b) Basis of preparation
The Group is preparing its financial statements in accordance with Adopted IFRS for the first time and consequently has applied IFRS 1. 
An explanation of how the transition to Adopted IFRSs has affected the reported financial position and performance of the Group is 
provided in note 30.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these 
consolidated financial statements and in preparing an opening IFRS balance sheet at 1 April 2006 for the purposes of the transition  
to Adopted IFRSs. These accounting policies are set out below and have been applied consistently throughout all periods.
In these financial statements the following Adopted IFRSs are effective for the first time:
IFRS 7 “Financial Instruments: Disclosures” (effective 1 January 2007).
The amendment to IFRS 1 “First-time adoption of International Financial Reporting Standards” as a result of IFRS 7 adoption 
(effective date of latest amendment 1 January 2007).
The amendment to IAS 1 “Presentation of financial statements” in relation to Capital disclosure (effective date of latest amendment  
1 January 2007).
The amendment to IAS 17 “Leases” as a result of IFRS 7 adoption (effective date 1 January 2007).
The amendment to IAS 33 “Earnings per Share” as a result of IFRS 7 adoption (effective date 1 January 2007).
The application of these Adopted IFRSs for the first time has not had a material affect on the financial statements, consequently, no 
change in accounting policy and prior year restatement has been required.
(c) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except that derivative financial instruments are 
stated at fair value.
(d) Functional and presentational currency
The consolidated financial statements are presented in sterling, which is the Company’s functional currency. All financial information 
presented in sterling has been rounded to the nearest one thousand. 
(e) Basis of judgement
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the 
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from 
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimated are recognised in the 
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that 
have the most significant effect on the amount recognised in the financial statements are described in the following notes:
Note 11 – Carrying amount of intangible assets and measurement of the recoverable amounts of cash generating units. Many 
intangible assets have been valued using management’s best estimate of future cash flows expected to arise.
Note 13 – Utilisation of tax losses. The proportion of deferred tax assets recognised is a result of management’s best estimate of 
future profit streams.
Note 21 – Provisions and contingencies. The value of provisions recognised in relation to ongoing enquiries is based on 
management’s best estimate of total costs still to be incurred. Judgement is also involved in assessing the amount of deferred and 
contingent consideration to be recorded; amounts recognised are based on management’s assessment of the likelihood of 
warranties impacting final payments and expectation in relation to future performance conditions being met.
•
•
•
•
•
•
•
•
Notes to the Consolidated Financial Statements
For the year ended 31 December 2007
> Concateno plc 
Annual Report and Accounts 2007 34
1 Accounting policies continued
(f) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the 
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that 
presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated 
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. 
Applicable trading and market conditions have been considered in this process in order to ensure that the policies are still appropriate  
to that subsidiary’s situation.
(ii) Transactions eliminated on consolidation
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated 
in preparing the consolidated financial statements.
(g) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate 
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are 
translated to sterling at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised 
in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated 
using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are 
stated at fair value are translated to sterling at foreign exchange rates ruling at the dates the fair value was determined.
(ii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a 
functional currency different from the presentation currency are translated into the presentation currency as follows:
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable 
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are 
translated at the dates of the transactions).
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity 
and translated at the closing rate.
Foreign currency differences are recognised directly in equity. Since 1 April 2006, the Group’s date of transition to IFRSs, such 
differences have been recognized in the foreign currency translation reserve. When a foreign operation is disposed of, in part or in full, 
the relevant amount in this reserve is transferred to profit or loss.
(h) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash 
equivalents (see note (o) below), loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any 
directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments 
are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are 
derecognised if the Group’s contractual rights to the cash flows from the financial assets expire of it the Group transfers the financial 
asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of 
financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial 
liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
•
•
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 35
Concateno plc 
Annual Report and Accounts 2007
1 Accounting policies continued
(i) Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from 
operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative 
financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading 
instruments. Derivative financial instruments are initially recognised at fair value of which the best estimate can be initial cost. The gain  
or loss on re-measurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge 
accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged. The fair value of interest rate 
swaps is the estimated amount that the Group would receive or pay to terminate the swap at the balance sheet date, taking into 
account current interest rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts 
is their quoted market price at the balance sheet date, being the present value of the quoted forward price.
(i) Cash flow hedges
When a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a 
highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly 
in equity. When the forecasted transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or  
the forecast transaction for a non-financial asset or non-financial liability the associated cumulative gain or loss is removed from equity 
and included in the initial cost or other carrying amount of the non-financial asset or liability. If a hedge of a forecasted transaction 
subsequently results in the recognition of a financial asset or a financial liability, then the associated gains and losses that were 
recognised directly in equity are reclassified into profit or loss in the same period or periods during which the asset acquired or liability 
assumed affects profit or loss (i.e. when interest income or expense is recognised).
For cash flow hedges, other than those covered by the preceding two policy statements, the associated cumulative gain or loss is 
removed from equity and recognised in profit or loss in the same period or periods during which the hedged forecast transaction affects 
profit or loss. The ineffective part of any gain or loss is recognised immediately in profit or loss. 
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but 
the hedged forecast transaction still is expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in 
accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to take place, then the 
cumulative unrealised gain or loss recognised in equity is recognised immediately in profit or loss.
(ii) Hedge of monetary assets and liabilities
When a derivative financial instrument is used as an economic hedge of the foreign exchange exposure of a recognised monetary asset 
or liability, hedge accounting is not applied and any gain or loss on the hedging instrument is recognised as part of foreign currency 
gains and losses.
(j) Compound financial instruments
The Group has convertible loan notes which are regarded as compound financial instruments, consisting of a liability component  
and a derivative component. At the date of issue, the fair value of the liability component is established using an estimate for a similar 
non-convertible debt. The difference between the proceeds of issue of the convertible debt and the fair value assigned to the debt 
component, representing the embedded option to convert the debt, is included as a separate component of liabilities (“derivative 
element of convertible loan”) unless it fully meets the definition of equity (in which case, it is charged directly in equity),
Any issue costs are apportioned between the liability and derivative components of the convertible loan notes based on the  
relative carrying amounts at the date of issue. The portion relating to the derivative component is not re-measured subsequent  
to initial recognition.
The interest expense on the debt component consists of the coupon rate and the element of the derivative component proportionate to 
the debt component outstanding. This latter part is added to the carrying amount of the convertible loan notes.
(k) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see 
accounting policy q). When parts of an item of property, plant and equipment have different useful lives, those components are 
accounted for as separate items of property, plant and equipment. Concateno plc 
Annual Report and Accounts 2007 36
1 Accounting policies continued
(ii) Leased assets
Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases.
(iii) Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item 
when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group and the  
cost of the item can be measured reliably. All other costs are recognised in profit or loss as an expense as incurred.
(iv) Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant 
and equipment. The estimated useful lives are as follows:
Leasehold buildings – over the remaining life of the lease
Plant and equipment – 3-10 years
The residual value, depreciation method and useful lives are reassessed annually.
(l) Intangible assets
(i) Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill has been recognised in acquisitions of 
subsidiaries. In respect of business acquisitions that have occurred since 1 April 2006, goodwill represents the difference between  
the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is no longer 
amortised but is tested annually for impairment (see accounting policy q).
(ii) Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding,  
is recognised in profit or loss as an expense as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes. 
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically  
and commercially feasible, future economic benefits are probable, and the Group intends, and has sufficient resources, to complete 
development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and an appropriate 
proportion of direct overheads. Other development expenditure is recognised in the income statement as an expense as incurred. 
Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see 
accounting policy q).
(iii) Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation (see below)  
and impairment losses (see accounting policy q). Other intangible assets include customer relationships and brands. Expenditure  
on internally generated goodwill and brands is recognised in profit or loss as an expense as incurred.
(iv) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied  
in the specific asset to which it relates. All other expenditure is expensed as incurred.
(v) Amortisation
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of intangible assets once they are 
available for use. Goodwill with an indefinite useful life is tested systematically for impairment at each annual balance sheet date.  
The estimated useful lives of intangible assets are as follows:
Customer relationships – 7-20 years
Customer contracts – 7-10 years
Commercial agreements – 10-12 years
Patents and trademarks – 10-20 years
Capitalised development costs – 3-5 years
•
•
•
•
•
•
•
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 37
Concateno plc 
Annual Report and Accounts 2007
1 Accounting policies continued
(m) Trade and other receivables
Trade and other receivables are initially measured on the basis of their fair value. Subsequently they will be carried at amortised cost 
using the effective interest method less any impairment losses (see accounting policy q).
(n) Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary 
course of business, less the estimated costs of completion and selling expenses.
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Any bank 
overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of 
cash and cash equivalents for the purpose of the statement of cash flows.
(p) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is more likely than 
not that an outflow of resources will be required to settle the obligations; and, the amount can be reasonably estimated. Provisions are 
split between current and non-current liabilities. Where appropriate, provisions are calculated by discounting the expected future cash 
flows at a pre-tax rate that reflects market assessments of the time value of money and the risks specific to the liability.
(q) Impairment (excluding inventories and deferred tax assets)
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of 
impairment. If any such indication exists, the asset’s recoverable amount is estimated. 
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is 
estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. 
Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill 
allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash 
generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows 
from other assets or groups of assets.
At the date of transition to Adopted IFRSs, no business combinations had been effected and the Company held no intangible assets or 
assets which had an indefinite useful life. 
When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective 
evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even 
though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the 
difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in 
profit or loss.
(i) Calculation of recoverable amount
The recoverable amount of the Group’s receivables carried at amortised cost are calculated as the present value of estimated future 
cash flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these 
financial assets). Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their net selling price 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. For an asset that does not generate largely independent cash inflows, the recoverable 
amount is determined for the cash-generating unit to which the asset belongs.
(ii) Reversals of impairment
An impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount 
can be related objectively to an event occurring after the impairment loss was recognised.
An impairment loss in respect of goodwill is not reversed.  Concateno plc 
Annual Report and Accounts 2007 38
1 Accounting policies continued
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and 
there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have 
been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(r) Non-recurring items
The Group presents as non-recurring items on the face of the income statement those material items of income and expenditure which 
because of their nature and/or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders 
to understand the elements of financial performance in the period, so as to facilitate comparison with prior periods.
(s) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, 
interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in 
profit or loss over the period of the borrowings on an effective interest basis.
(t) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily 
take a substantial period of time to get ready for their intended use of sale, are added to the cost of those assets, until such time as the 
assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the income statement in the period in which they are incurred.
(u) Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss as incurred.
(ii) Share-based payment transactions
The share option programme allows Group employees to acquire shares of the Company. The fair value of options granted is 
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over 
the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured 
using a binomial lattice model, taking into account the terms and conditions upon which the options were granted. The amount 
recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share 
prices not achieving the threshold for vesting.
(v) Revenue
(i) Goods sold 
Revenue represents the amounts receivable for goods and other sales related taxes.
The Group records transactions as sales when the significant risks and rewards have been transferred to the buyer in accordance with 
the terms of trade. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, 
associated costs or the possible return of goods. 
Transfer of risks and rewards vary depending on the individual terms of the contract of sale. For the majority of “Point-of-care testing” 
and “Laboratory Product” sales, transfer usually occurs when the product is received at the customer’s site; however, for some 
international shipments, transfer occurs upon loading goods onto the relevant carrier.
A bill and hold arrangement is in place with one UK customer for whom the Group stores the customers finished product, on their 
request, and arranges delivery as and when they require it, revenue is recognised when substantially all the risks and rewards of 
ownership have been transferred to the buyer, even though it has not all been dispatched to the customer’s site(s).
Income received in advance of the provision of goods is held in deferred income within the balance sheet until those goods have  
been delivered.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 39
Concateno plc 
Annual Report and Accounts 2007
1 Accounting policies continued
(ii) Services rendered
The Group provides services chiefly in respect of its “Laboratory Services” division. Revenue represents the amounts receivable for 
services provided less trade discounts, returns and allowances, VAT and other sales related taxes.
The Group records transactions as sales when the performance of services has taken place in accordance with the terms of trade. No 
revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or associated costs. 
Income received in advance of the provision of services is held in deferred income within the balance sheet until those services have 
been provided.
(w) Expenses
(i) Operating lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease 
incentives received are recognised in the income statement as an integral part of the total lease expense.
(ii) Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance  
charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance 
of the liability.
(iii) Finance costs
Financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on 
funds invested foreign exchange gains and losses, and gains and losses on hedging instruments that are recognised in profit or loss.
Interest income is recognised in profit or loss as it accrues, using the effective interest method. The interest expense component of 
finance lease payments is recognised in the income statement using the effective interest rate method.
(x) Income tax
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates  
to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the 
balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences 
are not provided for: initial recognition of goodwill, the initial recognition of assets or liabilities in a transation that is not a business 
combination that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that 
they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of 
realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance 
sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset 
can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(y) Adopted IFRSs not yet applied
IFRS 8 “Operating segments” is applicable for the Group’s 2009 financial statements. The application of IFRS 8 is not expected to have 
any impact on the balance sheet or income statement as the standard is concerned only with disclosure. Concateno plc 
Annual Report and Accounts 2007 40
2 Segmental information
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or 
in providing products or services within a particular economic environment (geographical segment), which is subject to risks and 
rewards that are different from those of other segments. The primary format, business segments, is based on the Group’s management 
and internal reporting structure. Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a 
reasonable basis. Unallocated items comprise mainly loans and borrowings and related expenses, corporate assets and head office 
expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets 
other than goodwill.
Business segments
The group comprises the following main business segments:
Laboratory services
Point-of-care testing products
Laboratory products
Other revenues include training and consultancy work performed for workplace customers. These revenues have been allocated to 
“Point-of-care” and “Laboratory services” in proportion to other work performed for these particular customers.
Results, split by business segment, are presented below.
 
 Laboratory services  Point-of-care  Laboratory products 
 
Eliminations  Consolidated
 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Total external revenues 19,080 1,360 4,470 – 2,514 – – – 26,064 1,360
Inter segment revenues 342 – 396 – 11 – (749) – – –
Total segment revenues  19,422 1,360 4,866 – 2,525 – (749) – 26,064 1,360
Segment result, before  
 non-recurring items 3,174 572 502 – 139 – – – 3,815 572
Non-recurring items (568) – (20) – – – – – (588) – 
Segment result, after
 non-recurring items 2,606 572 482 – 139 – – – 3,227 572
Unallocated (including  
 non-recurring) expenses         (1,252) (1,300)
Results from operating  
 activities         1,975 (728)
Net finance costs         (1,652) (32)
Income tax (expense)/ 
 credit         342 90
Profit/(loss) for the  
 period         665 (670)
Non-recurring items         785 –
Profit/(loss) for the  
 period before  
 non-recurring items         1,450 (670)
Segment assets 80,705 33,956 59,440 – 26,383 – – – 166,528 33,956
Unallocated assets         1,600 1,900
Total assets         168,128 35,856
Segment liabilities 11,264 4,672 8,166 – 4,434 – – – 23,864 4,672
Unallocated liabilities         41,076 8,928
Total liabilities         64,940 13,600
Capital expenditure 385 8 65 – 10 – – – 460 8
Unallocated capital  
 expenditure         109 –
Total capital expenditure         569 8
Depreciation 464 24 81 – 19 – – – 564 24
Unallocated depreciation         5 –
Total Depreciation 569 24
Amortisation of  
 intangible assets 1,478 133 640 – 115 – – – 2,233 133
•
•
•
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 41
Concateno plc 
Annual Report and Accounts 2007
2 Segmental information continued
Geographical segments
The Group’s business segments are managed on a worldwide basis, but operate in two principal geographical areas; the United 
Kingdom and Continental Europe (defined here as all European countries apart from the United Kingdom). In 2007, Continental Europe 
production facilities/sales offices are located in Spain (predominantly operating in the Laboratory Products business segment), Sweden 
(Laboratory Services and Point-of-care testing products) and Italy (Point-of-care testing products). 
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. 
Segment assets and capital expenditure are based on the geographical location of the assets.
 
    United Kingdom  Continental Europe  Rest of World  Consolidated
   2007 2006 2007 2006 2007 2006 2007 2006 
   £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Revenue from external customers   18,201 732 4,982 330 2,881 298 26,064 1,360
Segment assets   149,804 35,856 18,324 – – – 168,128 35,856
Capital expenditure   506 8 63 – – – 569 8
3 Non-recurring items
         2007 2006 
         £’000 £’000
Restructuring: employee costs         375 –
Restructuring: other operating costs        24 –
Legal and advisory         386 –
         785 –
Restructuring
Following the various acquisitions during the year the Company reviewed the operating structure of the business, as a result of which 
£375,000 was incurred in redundancy costs. Following the acquisition of Cozart plc in October 2007 the Group is undertaking a further 
review of its operations; at the end of 2007 £24,000 in non-recurring restructuring costs had been incurred relating to the rationalisation 
of the Group’s laboratories. The majority of the costs and benefits of this latter review will be incurred during 2008.
Legal and advisory 
The non-recurring legal and advisory costs relate to non-routine professional costs incurred during the period:
£20,000 of costs relate to two legal cases involving former Group employees; The first case has been completed and the only costs 
incurred by the Group were in relation to its own legal counsel as the charges against the Group were not upheld. The second case is 
ongoing and a hearing is expected during 2008. 
£169,000 relates to costs and advisory fees relating to tax enquiries by HMRC that are non-recurring in nature.
£54,000 relates to external advice given in relation to the transition to International Financial Reporting Standards and the review of  
that advice.
£143,000 relates to charges incurred on completed acquisitions that have not been included as part of the cost of acquisition, or to fees 
incurred relating to exploratory work on acquisitions that were not progressed during the year.
4 Operating profit/(loss)
Profit for the year has been arrived at after charging/(crediting):
         2007 2006 
         £’000 £’000
Net foreign exchange losses/(gains)        (85) 31
Research and development costs         59 –
Depreciation of property, plant and equipment        757 24
Amortisation of 
– capitalised development costs         40 –
– other intangible assets         2,193 133
– debt issue costs         162 32
Loss on disposal of fixed assets         16 –
Restructuring costs (included in “non-recurring costs”, see note 3)      399 –
Increase in provisions (see note 21)         2,270 –
Staff costs (see note 6)         7,533 623 Concateno plc 
Annual Report and Accounts 2007 42
5 Auditors’ remuneration
The analysis of auditors’ remuneration is as follows:
         2007 2006 
         £’000 £’000
Audit of these financial statements         82 30
Audit of financial statements of subsidiaries pursuant to legislation      148 20
Other services pursuant to such legislation        – 9
Other services relating to taxation         61 36
Services relating to corporate finance transactions entered into or proposed  
 to be entered into by or on behalf of the Company of the Group      443 –
Other services         7
         741 95
Amounts paid to the Company’s auditor in respect of services to the Company, other than the audit of the Company’s financial 
statements, have not been disclosed as the information is required instead to be disclosed on a consolidated basis.
6 Staff costs and numbers
The average monthly number of employees (including Directors) for the Group during the year, analysed by category, was:
 
         2007 2006 
         Number Number
Production and development         27 –
Laboratory services         66 4
Sales, marketing and distribution         39 2
Administration         70 9
         202 15
Their aggregate remuneration comprised:
         2007 2006 
         £’000 £’000
Wages and salaries         6,305 470
Share based payments         439 63
Social security costs         612 53
Other pension costs         177 37
         7,533 623
7 Finance income and expense
         2007 2006 
         £’000 £’000
Interest income         380 106
Interest expense on bank loans and overdrafts        (2,007) (136)
Finance charges in respect of finance leases and hire purchase contracts      (25) (2) 
         (1,652) (32)
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 43
Concateno plc 
Annual Report and Accounts 2007
8 Taxation
Recognised in the Income Statement:
         2007 2006 
         £’000 £’000
Current tax:
UK current year tax expense         439 –
Foreign current year tax expense         60 –
Adjustment in respect of prior periods        (351) – 
         148 –
Deferred tax:
Origination and reversal of temporary timing differences       (251) (90)
Adjustment due to 2008 rate change        (239) –
         (490) (90)
Total tax in the income statement        (342) (90)
Profit/(loss) before tax         323 (760)
Tax using the UK corporation tax rate of 30% (2006: 30%)       97 (228)
Non-deductible expenses         240 41
R&D tax relief         (82) –
Prior period adjustments         (351) –
Tax losses carried forward         4 97
Other tax reliefs         (20) –
Higher tax rate on overseas earnings        9 –
Adjustment due to 2008 rate change        (239) –
Total tax in the income statement        (342) (90)
9 Earnings per share
Earnings per share is calculated by dividing the profit/(loss) attributable to ordinary shareholders by the weighted average number of 
ordinary shares held during the year.
An adjusted earnings per share figure is also presented below in order to aid users understanding of underlying business performance. 
This is calculated by adjusting the profit/(loss) for the year for the post-tax effect of certain items which, the Directors believe, will allow 
shareholders to better understand the elements of financial performance in the period, so as to facilitate comparison with prior periods.
 
         Basic Basic  
         and diluted and diluted 
         2007 2006 
         £’000 £’000
For basic and diluted earnings per share
Profit/(loss) for the year         665 (670)
For adjusted earnings per share
 add back intangibles amortisation        1,579 122
 add back non-recurring costs         736 –
 add back share-based payments         357 54
Adjusted profit for the year         3,337 (494)
Weighted average number of ordinary shares
For basic earnings per share         63,020,125 9,558,236
Exercise of share options         912,274 –
1
Exercise of warrants         187,309 –
1
For diluted earnings per share         64,119,708 9,558,236
Basic earnings per share (pence per share)        1.05p (6.99)p
Diluted earnings per share (pence per share)        1.04p (6.99)p
Reconciliation to adjusted earnings per share: Basic
Impact of intangibles amortisation         2.50p 1,27p
Impact of non-recurring costs         1.17p –
Impact of share-based payments         0.57p 0.55p
Adjusted basic earnings per share (pence per share)       5.29p (5.17)p
Reconciliation to adjusted earnings per share: Diluted
Impact of intangibles amortisation         2.45p 1.27p
Impact of non-recurring costs         1.15p –
Impact of share-based payments         0.56p 0.55p
Adjusted basic earnings per share (pence per share)       5.20p (5.17)p
1 In 2006, the dilutive impact of options over 3,747,055 shares would have formed part of the dilutive calculation but were not included because of the loss making position of the 
Company. Concateno plc 
Annual Report and Accounts 2007 44
10 Acquisitions
During 2007, the Company acquired six companies. Details of each business combination are presented in note (i) to (vi) below.  
Had all business combinations been effected on the first day of the financial year, the revenue for the combined entity would have  
been £41,780,000 and loss after tax would have been £1,750,000 (profit before tax of £1,256,000 before non-recurring items).  
These unaudited pro forma figures were calculated using management accounts from each entity.
During 2006, the Company made one acquisition. Details of finalised far values relating to this acquisition are presenting in note (vii) on 
page 48.
(i) Acquisition of Altrix Healthcare plc
On 5 February 2007, the Group acquired all the shares in Altrix Healthcare plc (“Altrix”), based in Warrington, at fair value for £14,846,527 
in cash (including acquisition costs and payment for cash acquired). The company specialises in the provision of drug testing solutions. 
From the date of acquisition, Altrix contributed £131,000 of profit after tax to the Group.
The provisional fair value of net assets acquired was as follows:
         Altrix Altrix 
         Provisional Provisional 
        Altrix fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        455 – 455
Intangible assets        – 5,045 5,045
Inventories        302 – 302
Trade and other receivables        2,101 – 2,101
Cash and cash equivalents        2,434 – 2,434
Trade and other payables        (1,479) (6) (1,485)
Deferred tax        – (1,514) (1,514)
Net identifiable assets and liabilities       3,813 3,525 7,338
Goodwill on acquisition          7,509 
Total purchase cost          14,847
Being: Consideration paid in cash          13,615
   Cash paid for acquisition expenses         1,232
          14,847
Cash acquired          (2,434)
Net cash outflow in respect of purchase         12,413
Acquisition expenses include £300,000 completion bonus paid to Directors (see Directors Remuneration Report for details).
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£5,045,000), a holiday accrual at the date of acquisition (£6,000), and recognition of the deferred tax liability relating to intangible assets 
acquired (£1,514,000).
See note 11 for details of intangible assets identified on acquisition. The remaining goodwill is chiefly attributable to the value of the 
customer base and non-contractual customer relationships which do not fulfil the intangible assets recognition criteria under IFRS, the 
profitability of the business and the significant synergies expected to arise after acquisition. 
(ii) Acquisition of TrichoTech Limited
On 31 January 2007, the Group acquired all the shares in TrichoTech Limited (“TrichoTech”), based in Cardiff, at fair value for £1,337,000 
in cash (including acquisition costs), £1,062,500 in shares and £9,012,500 in loan notes. The company provides laboratory-based hair 
testing services for recreational drug abuse.
From the date of acquisition, TrichoTech contributed £491,000 of profit after tax to the Group.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 45
Concateno plc 
Annual Report and Accounts 2007
10 Acquisitions continued
The provisional fair value of net assets acquired was as follows:
         TrichoTech TrichoTech 
         Provisional Provisional 
        TrichoTech fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        577 – 577
Intangible assets        – 3,300 3,300
Inventories        39 – 39
Trade and other receivables        698 – 698
Cash and cash equivalents        250 – 250
Interest-bearing loans and borrowings       (309)  (309)
Trade and other payables        (915) (4) (919)
Deferred tax        (23) (990) (1,013)
Net identifiable assets and liabilities       317 2,306 2,623
Goodwill on acquisition          8,789
Total purchase cost          11,412
Consideration paid in shares (817,308 shares at 130p)        (1,063)
Consideration paid in loan notes          (9,012)
Payments in cash          1,337
Being: Consideration paid in cash          673
   Cash paid for acquisition expenses         664
          1,337 
Cash acquired          (249) 
Net cash outflow in respect of purchase         1,088
Acquisition expenses include £150,000 completion bonus paid to Directors (see Directors Remuneration Report for details).
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£3,300,000), a holiday accrual at the date of acquisition (£4,000), and recognition of the deferred tax liability relating to intangible assets 
acquired (£990,000).
The loan notes were redeemed December 2007 (£9,012,000).
See note 11 for details of intangible assets identified on acquisition. The remaining goodwill is chiefly attributable to the profitability of the 
business, the assembled workforce, its market-leading position in the field of hair testing and the significant synergies expected to arise 
after acquisition. 
(iii) Acquisition of Euromed Limited
On 30 March 2007, the Group acquired all the shares in Euromed Limited (“Euromed”), based in London, at fair value for £8,758,000 in 
cash (including acquisition costs) and £3,750,000 in shares. The company provides point-of-care testing devices for the detection of 
drugs of abuse primarily in the criminal justice and rehabilitation sectors.
From the date of acquisition, Euromed contributed £277,000 of profit after tax to the Group.
The provisional fair value of net assets acquired was as follows:
         Euromed Euromed 
         Provisional Provisional 
        Euromed fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        12 – 12
Intangible assets        – 6,138 6,138
Inventories        597 (417) 180
Trade and other receivables        572 – 572
Cash and cash equivalents        152 – 152
Trade and other payables        (585) – (585)
Deferred tax        – (1,842) (1,842)
Net identifiable assets and liabilities       748 3,879 4,627
Goodwill on acquisition          7,881
Total purchase cost          12,508
Consideration paid in shares (2,586,207 shares at 145p)        (3,750)
Payments in cash          8,758
Being: Consideration paid in cash          7,750
   Cash paid for acquisition expenses         1,008
          8,758
Cash acquired          (152)
Net cash outflow in respect of purchase         8,606 Concateno plc 
Annual Report and Accounts 2007 46
10 Acquisitions continued
Acquisition expenses include £250,000 completion bonus paid to Directors (see Directors Remuneration Report for details).
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£6,138,000)an opening provision for the revaluation of stock (£422,000), an amendment to the valuation of stock to bring Euromed in 
line with Group policy relating to the absorption of relevant overheads in the closing value of stock held (£5,000) and an opening 
provision for recognition of deferred taxation on intangible assets acquired (£1,842,000).
See note 11 for details of intangible assets identified on acquisition. The remaining goodwill is chiefly attributable to the profitability of the 
business, the assembled workforce and the significant synergies expected to arise after acquisition.
(iv) Acquisition of Marconova AB
On 22 May 2007, the Group acquired all the shares in Marconova AB (“Marconova”), based in Goteborg, Sweden, at fair value for 
£425,000 in cash and £1,000,000 in shares. The company is a specialist in drug and alcohol testing in the international maritime sector 
and the Swedish workplace market.
From the date of acquisition, Marconova contributed £121,000 of loss after tax to the Group.
The provisional fair value of net assets acquired was as follows:
         Marconova Marconova 
         Provisional Provisional 
        Marconova fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        19 – 19
Intangible assets        – 150 150
Purchased goodwill        804 (804) –
Inventories        10 – 10
Trade and other receivables        84 – 84
Trade and other payables        (987) – (987)
Deferred tax        – (45) (45)
Net identifiable assets and liabilities       (70) (699) (769)
Goodwill on acquisition          2,194
Total purchase cost          1,425
Consideration paid in shares (557,725 shares at 179.3p)        (1,000)
Payments in cash          425
Being: Consideration paid in cash          376
   Cash paid for acquisition expenses         49
          425
Cash acquired          –
Net cash outflow in respect of purchase         425
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£150,000), the write-down of own-company goodwill (£804,000) and recognition of the deferred tax liability relating to intangible assets 
acquired (£45,000).
See note 11 for details of intangible assets identified on acquisition. The remaining goodwill is chiefly attributable to the value of the 
customer base and non-contractual customer relationships which do not fulfil the intangible assets recognition criteria under IFRS and 
the significant synergies expected to arise after acquisition. 
(v) Acquisition of CPL International Services Limited
On 13 July 2007, the Group acquired all the shares in CPL International Services Limited (“CPL ”), based in Liverpool, at fair value  
for £795,000 in cash and £84,000 in shares. The company provides drug testing services in the medico-legal and international  
maritime sectors.
From the date of acquisition, CPL contributed £28,000 of profit after tax to the Group.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 47
Concateno plc 
Annual Report and Accounts 2007
10 Acquisitions continued
The provisional fair value of net assets acquired was as follows:
         CPL CPL 
         Provisional Provisional 
        CPL fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        282 – 282
Intangible assets        – 158 158
Inventories        2 – 2
Trade and other receivables        107 – 107
Cash and cash equivalents        14 – 14
Trade and other payables        (37) – (37)
Deferred tax        – (44) (44)
Net identifiable assets and liabilities       368 114 482
Goodwill on acquisition          397
Total purchase cost          879 
Consideration paid in shares (50,150 shares at 167.5p)        (84)
Payments in cash          795
Being: Consideration paid in cash          659
   Cash paid for acquisition expenses         136
          795
Cash acquired          (14)
Net cash outflow in respect of purchase         781
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£158,000), and recognition of the deferred tax liability relating to intangible assets acquired (£44,000).
See note 11 for details of intangible assets identified on acquisition. The goodwill is chiefly attributable to the profitability of the business 
and the significant synergies expected to arise after acquisition. 
(vi) Acquisition of Cozart plc
On 4 October 2007, the Group acquired all the shares (issued and to be issued) in Cozart plc (“Cozart”), based in Abingdon, at fair value 
for £67,269,000 in cash (including acquisition costs) and £1,778,000 in shares. The company is a specialist in the field of drugs-of-abuse 
testing with a portfolio of laboratory services, point-of-care products and laboratory products to offer its customers (who include those 
in the workplace, medical and criminal justice markets worldwide).
From the date of acquisition, Cozart contributed £376,000 of profit after tax to the Group.
The provisional fair value of net assets acquired was as follows:
         Cozart Cozart 
         Provisional Provisional 
        Cozart fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        1,912 – 1,912
Capitalised development costs        1,212 – 1,212
Intangible assets acquired        – 22,468 22,468
Inventories        2,895 – 2,895
Trade and other receivables        7,089 – 7,089
Cash and cash equivalents        2,826 – 2,826
Deferred tax asset        581 – 581
Trade and other payables        (6,942) (21) (6,963)
Loans and borrowings        (3,825) – (3,825)
Deferred tax liability        – (6,290) (6,290)
Net identifiable assets and liabilities       5,748 16,157 21,905
Goodwill on acquisition          47,142 
Total purchase cost          69,047
Consideration paid in shares (1,369,013 shares at 130p)        (1,778)
Payments in cash          67,269
Being: Consideration paid in cash          64,719
   Cash paid for acquisition expenses         2,550
          67,269
Cash acquired          (2,826)
Net cash outflow in respect of purchase         64,443
Acquisition expenses include £350,000 completion bonus paid to Directors (see Directors Remuneration Report for details). Concateno plc 
Annual Report and Accounts 2007 48
10 Acquisitions continued
The provisional fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination 
(£22,468,000), a holiday accrual at the date of acquisition (£21,000) and recognition of the deferred tax liability relating to intangible 
assets acquired (£6,290,000).
See note 11 for details of intangible assets identified on acquisition. The remaining value of goodwill relates to other intangible assets not 
identified under IFRS 3 chiefly being the following; 
The value of the customer base and non-contractual customer relationships which do not fulfil the intangible assets recognition 
criteria under IFRS 3.
Strategic premium, geographical positioning, market share and market leadership associated with the business.
The contribution of the assembled workforce.
Benefits derived from economies of scale.
(vii) Acquisition of Medscreen Holdings Limited and Medscreen Limited
On 6 November 2006, the Group acquired Medscreen Holdings Limited and its wholly owned subsidiary, Medscreen Limited (together 
“Medscreen”), based in Docklands, for a consideration of £24,116,000 in cash (including acquistion expenses) and £800,000 in shares.
The finalised fair value of net assets acquired was as follows:
         Medscreen Medscreen 
        Medscreen Fair value fair value to 
        Book value adjustment the Group 
        £’000 £’000 £’000
Property, plant and equipment        382 – 382
Intangible assets        – 9,828 9,828
Inventories        116 – 116
Trade and other receivables        1,908 – 1,908
Cash and cash equivalents        529 – 529
Trade and other payables        (9,131) (6) (9,137)
Deferred tax        (20) (2,715) (2,735)
Net identifiable assets and liabilities       (6,216) 7,107 891
Goodwill on acquisition          24,025
Total purchase cost          24,916
Consideration paid in shares (941,177 shares at 85p)        (800)
Payments in cash          24,116
Being: Consideration paid in cash          23,280
   Cash paid for acquisition expenses         836
          24,116
Cash acquired          (529)
Net cash outflow in respect of purchase         23,587
Acquisition expenses include £100,000 completion bonus paid to Directors in 2006.
The fair value adjustments above relate to recognition of intangible assets acquired as part of the business combination (£9,828,000), a 
holiday accrual at the date of acquisition (£6,000) and recognition of the deferred tax liability relating to intangible assets acquired 
(£2,715,000).
See note 11 for details of intangible assets identified on acquisition. The goodwill is chiefly attributable to the profitability of the business, 
the contribution of the assembled workforce and the significant synergies expected to arise after acquisition. 
•
•
•
•
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 49
Concateno plc 
Annual Report and Accounts 2007
11 Goodwill and other intangible fixed assets
     Development Customer Customer Commercial Patents and 
    Goodwill costs relationships contracts agreements trademarks Total 
    £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 April 2006    – – – – – – –
Acquisitions through business combinations   23,440 – 5,793 – – 4,035 33,268
At 31 December 2006 and 1 January 2007   23,440 – 5,793 – – 4,035 33,268
Adjustments to fair value of prior year acquisitions  586 – – – – – 586
 through business combinations    73,912 1,212 12,219 714 6,469 17,860 112,386
Additions    – 247 – – – – 247
At 31 December 2007    97,938 1,459 18,012 714 6,469 21,895 146,487
Amortisation
At 1 April 2006    – – – – – –
Amortisation for the year    – – 56 – – 77 133
At 31 December 2006 and 1 January 2007   – – 56 – – 77 133
Amortisation for the year    – 40 962 21 139 1,071 2,233
At 31 December 2007    – 40 1,018 21 139 1,148 2,366
Carrying amounts
At 1 April 2006    – – – – – –
At 31 December 2006 and 1 January 2007   23,440 – 5,737 – – 3,958 33,135
At 31 December 2007    97,938 1,419 16,994 693 6,330 20,747 144,121
Impairment testing for cash-generating units containing goodwill
Goodwill arising on a business combination is allocated at acquisition to the cash generating units (CGUs) that are acquired and is 
denominated in the functional currency of the CGU.
The Group reviews and tests goodwill for impairment on an annual basis, on 31 December each year, or more frequently in the event 
that there are any indications that it may have been impaired.
The Group compares the carrying amount and the recoverable amount in its testing for impairment. The recoverable amount of the 
CGU is determined from value in use calculations. These calculations include key assumptions in respect of forecast selling prices, 
forecast raw material and other direct costs, forecast exchange rates affecting the currencies in which transactions of the CGU are 
made, revenue growth rates and the discount rate. Each of these assumptions is included in the detailed plans prepared by 
management which support the impairment review. 
The calculations are based upon the most recent cash flow forecasts covering the next nineteen years. Growth rates are based on 
management’s assessment of the future conditions of the primary markets of the customers of the CGU and known changes to existing 
supply arrangements. Rates are summarised in the table below. 
Management estimate discount rates by reference to current market assessments of the time value of money adjusted by the specific 
risks of the CGU being measured. The discount rates used were also amended according to the conditions relating to each specific 
business unit operating within that CGU, where relevant. 
Changes to selling prices, raw materials, and other direct costs are based on past experience and management expectations of future 
market changes. The Group prepares cash flow projections from the most recent financial budget for the CGU approved by 
management and extrapolates cash flows after that period based on the assumptions noted above.
        Laboratory Point-of-care Laboratory 
        Services Testing Products
Growth rate: years 1 to 10        10 to 6% 16 to 7% 9 to 6%
      years 11 to 19        6 to 2% 7 to 4% 6 to 0%
Discount rate        12.0-16.0% 11.5-12.5% 12.3% Concateno plc 
Annual Report and Accounts 2007 50
11 Goodwill and other intangible fixed assets continued
Recoverability of development costs
There are two development projects which make up the “development costs” intangible asset; the Cozart
®
 DDS system and the Cozart-
Philips system development project. 
The Cozart
®
 DDS system was launched in July 2006 and has been amortised since the commencement of commercial production at 
that time. There have been no indications that the current carrying value of this asset is not supportable by the forecast cash flows. 
Accordingly, no impairment test was carried out at 31 December 2007.
The Cozart-Philips development project is ongoing and commercial production has not yet begun. Accordingly, no amortisation has yet 
been charged. The carrying amount of this intangible asset is supported by the future cash flows which are forecast to be generated 
from sale of this product when it is launched (currently planned to be in 2009). Forecast cashflows from the point of launch of the 
product are such that the current carrying value of this asset is fully supportable. Accordingly, no impairment losses have been 
recognised.
The Cozart-Philips project does not meet the definition of a Joint Venture, according to the terms set out in IAS 31, and has therefore 
not been accounted for as such. 
Intangible assets acquired as a result of acquisitions
Intangible assets acquired as a result of the acquisitions detailed in note 10 are summarised below:
 
      Customer Customer Commercial Patents and 
      relationships contracts agreements trademarks Total 
      £’000 £’000 £’000 £’000 £’000
Laboratory services      10,763 – – 10,320 21,083
Point-of-care testing      5,243 714 6,469 9,448 21,874
Laboratory products      2,006 – – 2,127 4,133
      18,012 714 6,469 21,895 47,090
Amortisation charged to date          (2,326)
Net book value at 31 December 2007         44,764
Intangible assets acquired are allocated at acquisition to the CGUs that are acquired and are denominated in the functional currency of 
the CGU.
The carrying amount of each asset is reviewed at least annually to ensure there are no indications of impairment. An impairment loss 
would be recognised whenever the carrying amount of the asset or its CGU exceeds its recoverable amount. There have been no such 
indications of impairment in the year to 31 December 2007, accordingly, no impairment losses have been recognised.
12 Property, plant and equipment
        Land and Plant and 
        buildings machinery Total 
        £’000 £’000 £’000
Cost
At 1 April 2006        – – –
Acquisitions through business combinations       15 368 383
Other additions        – 8 8
At 31 December 2006 and 1 January 2007       15 376 391
Acquisitions through business combinations       602 2,645 3,247
Other additions        71 498 569
Disposals        (2) (202) (204)
At 31 December 2007        686 3,317 4,003
Depreciation
At 1 April 2006        – – –
Depreciation for the year        1 23 24
At 31 December 2006 and 1 January 2007       1 23 24
Depreciation for the year        146 611 757
Disposals        – (188) (188)
At 31 December 2007        147 446 593
Carrying amounts
At 1 April 2006        – – –
At 31 December 2006 and 1 January 2007       14 353 367
At 31 December 2007        539 2,871 3,410
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 51
Concateno plc 
Annual Report and Accounts 2007
12 Property, plant and equipment continued
Leased plant and machinery
Included in the above table are assets held under finance leases as follows:
         2007 2006 
         £’000 £’000
Plant and machinery
Carrying value         490 132
Depreciation         95 7
Motor vehicles
Carrying value         10 –
Depreciation         2 –
Security
At 31 December 2007 UK based fixed assets of the Group with a carrying amount of £28,750,000 (2006: £9,000,000) are subject to a 
registered debenture to secure the term loan (see note 18). 
13 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
     Assets  Liabilities  Net
     2007 2006 2007 2006 2007 2006 
     £’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment     (192) – 95 – (97) –
Intangible assets     – – 12,533 2,715 12,533 2,715
Share-based payments     (104) (10) – – (104) (10)
Other temporary differences     (96) – – – (96) –
Tax loss carry forwards     (465) – – – (465) –
Tax (assets)/liabilities     (857) (10) 12,628 2,715 11,771 2,705
Movements in temporary differences have been as follows:
      Balance Recognised  Acquired in Balance 
      1 April in profit Recognised business 31 December 
      2006 or loss in equity combinations 2006 
      £’000 £’000 £’000 £’000 £’000
Property, plant and equipment      – – – – –
Intangible assets      – – – 2,715 2,715
Share-based payments      – (10) – – (10)
Other temporary differences      – – – – –
Tax loss carry forwards      – – – – –
      – (10) – 2,715 2,705
     Balance Recognised Impact  Acquired in Balance 
     1 January in profit of 2008 Recognised business 31 December 
     2007 or loss rate change in equity combinations 2007 
     £’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment     – (114) – – 17 (97)
Intangible assets     2,715 (614) (293) – 10,725 12,533
Share-based payments     (10) (82) 1 (13) – (104)
Other temporary differences     – (18) – – (78) (96)
Tax loss carry forwards     – 577 53 – (1,095) (465)
     2,705 (251) (239) (13) 9,569 11,771
At the balance sheet date, the Group has unutilised gross tax losses of approximately £4,988,736 (2006: £3,957,037) potentially 
available for offset against future taxable profits. A deferred tax asset of £465,104 (2006: nil) has been recognised in respect of 
£1,661,086 of gross trading losses. No deferred tax asset has been recognised in respect of the remaining £3,327,650 of gross losses, 
as these relate to management expenses carried forward where future profit streams are not expected to arise in the foreseeable future. Concateno plc 
Annual Report and Accounts 2007 52
14 Inventories
         2007 2006 
         £’000 £’000
Raw materials and consumables         2,217 38
Finished goods and goods for resale        1,728 50
Less: provisions against obsolete and excess stock       (90) (2)
         3,855 86
15 Trade and other receivables
         2007 2006 
         £’000 £’000
Trade receivables         9,577 1,376
Other debtors, prepayments and accrued income       2,242 228
         11,819 1,604
For detail regarding the deferred tax asset, see note 13.
At 31 December 2007 trade receivables are shown net of allowances for doubtful debts of £800,000 (2006: £322,000). The majority of 
this provision has been made in relation to trading with non-UK Laboratory-services customers (this division having been acquired 
during the year) whose payment record is such that concerns exist in relation to the full recoverability of their debt. The Group monitors 
debtor payment profiles closely and credit policies are in place which aim to reduce the Group’s exposure.
Receivables denominated in currencies other than the functional currency comprise £1,748,000 of trade receivables denominated in  
US dollars (2006: £332,000) and £679,000 of trade receivables denominated in euros (2006: £21,000).
16 Derivative financial instruments
       Current  Non-current
       2007 2006 2007 2006 
       £’000 £’000 £’000 £’000
Derivatives that are designated and effective as hedging instruments carried at fair value
Interest rate swaps       (184) – – –
Derivatives that are held at fair value through profit or loss (or designated as such)
 Forward foreign currency contracts      3 – – –
       (181) – – –
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments 
related to hedge transactions that have not yet occurred. £184,000 has been charged to the hedging reserve for the year ended  
31 December 2007 (see note 22). Where derivative instruments are not designated and effective as hedging instruments, changes  
in fair market value are recognised in the income statement as they arise. A credit of £3,000 has been recognised in the income 
statement for the year ended 31 December 2007.
Further details of derivative financial instruments are provided in note 19.
17 Cash and cash equivalents
         2007 2006 
         £’000 £’000
Cash and cash equivalents         3,888 654
Bank overdrafts         (1,685) –
Cash and cash equivalents in the statement of cash flows       2,203 654
Cash and cash equivalents comprise bank deposits and cash in hand.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 53
Concateno plc 
Annual Report and Accounts 2007
18 Loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more information 
about the Group’s exposure to interest rate, liquidity, and foreign currency risk, see note 19.
         2007 2006 
         £’000 £’000
Current liabilities
Current portion of secured bank loans        3,521 675
Current portion of other unsecured loans        197 –
Current portion of finance lease liabilities        213 47
         3,931 722
Non-current liabilities
Secured bank loans         24,737 8,091
Convertible loans         8,343 –
Other loans         352 –
Finance lease liabilities         219 115
         33,651 8,206
         37,582 8,928
 
Debt costs arising on arranging the debt facilities are being amortised over the life of the loans to which they relate. As at 31 December 
2007, the unamortised element amounted to £492,000 (2006: £234,000). The balances disclosed above are net of these unamortised 
debt costs.
In addition to the amounts disclosed above, the derivative element of a convertible financial loan instrument was valued at £417,102 at 
the date of issue. This derivative element does not fully meet the definition of a component of equity and is therefore held as a current 
liability on the Balance Sheet. The carrying value of the loan to which is related is held at £8,343,000 as at the year-end. Movement in 
fair value of £40,246 has been recognised in the income statement.
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
       31 December 2007  31 December 2006
     Nominal  Face Carrying Face Carrying 
     Interest rate Year of value amount value amount 
    Currency % maturity £’000 £’000 £’000 £’000
Secured bank loan    GBP 8.29* 2007 – – 750 675
      2008 3,750 3,521 1,500 1,350
      2009 25,000 24,737 6,750 6,741
Convertible loan    GBP 12.5 2009 8,720 8,343 – – 
Unsecured other loan    EUR 0 2008 109 109 – – 
      2009 380 380
      2010 – 
      2012 60 60 – –
Finance lease liabilities    GBP 5.8–8 2008–2013 432 432 162 162
       38,451 37,582 9,162 8,928
* The effective interest rate changes with the underlying LIBOR rate (being set as three month LIBOR + 2% + margin), but is correct as at 31 December 07
The bank loans are secured over the assets of the holding company and all subsidiaries and security be created over shares or quotes 
in the capital of all companies that fall within the Concateno Group with a carrying amount of £28.8m (2006: £8.8m).
Loan repayment dates
The secured bank loan detailed above is repayable in tranches. Repayment dates and amounts to be repaid (at face value) are 
summarised below:
      Tranche A Tranche B Tranche C Tranche D Total  
Repayment date      £’000 £’000 £’000 £’000 £’000
31 March 2008      375 125 125 – 625
30 June 2008      375 125 125 417 1,042
30 September 2008      375 125 125 417 1,042
31 December 2008      375 125 125 416 1,041
31 March 2009      500 167 167 625 1,459
30 June 2009      500 167 167 626 1,460
30 September 2009      500 166 166 626 1,458
31 December 2009      5,250 1,750 1,750 11,873 20,623
      8,250 2,750 2,750 15,000 28,750 Concateno plc 
Annual Report and Accounts 2007 54
18 Loans and borrowings continued
Finance lease liabilities
Finance lease liabilities are payable as follows:
     Minimum   Minimum 
     lease   lease 
     payments Interest Principal payments Interest Principal 
     2007 2007 2007 2006 2006 2006 
     £’000 £’000 £’000 £’000 £’000 £’000
Less than one year     213 24 189 47 5 42 
Between one and five years     219 21 198 115 10 105
More than five years     – – – – – –
     432 45 387 162 15 147
19 Financial instruments
The Group’s principal financial instruments comprise bank loans, convertible loan instruments, cash and short-term deposits, the main 
purpose of which is to provide finance for the Group’s operations. The Group has other financial assets and liabilities such as trade 
receivables and trade payables, which arise directly from its operations. The Group also enters into derivative transactions, including 
principally interest rates collars and forward currency contracts.
The Group’s policies relating to financial risk management are set out in the Directors Report on page 20.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group operates a credit 
review process for all potential customers on a case-by-case basis and reviews the aging of debts on a regular basis with reports 
reviewed by the Board on a monthly basis. 
The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties with AAA credit rating. The 
Group does not require collateral in respect of financial assets.
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by 
the carrying amount of each financial asset, including derivatives in the balance sheet.
Interest rate risk
The Group’s interest rate risk relates primarily to the Group’s long-term debt obligations with a floating interest rate. The Group’s policy is 
to reduce the interest rate risk by entering into interest rate hedges on at least 70% of its variable rate interest borrowings.
During 2007 the Group has entered into an interest rate hedge that caps the variable rate of interest payable on 75% of the Group’s 
bank loans to LIBOR at 6.5%, with a floor set at 3.73%. If LIBOR falls below 3.73% in any calendar quarter a strike rate of 5.75% is 
payable on the hedged borrowings in that quarter. The interest rate hedge expires on 31 December 2014 and reduces during that 
period to match 75% of the scheduled underlying bank debt outstanding at each calendar quarter end. Payments of the interest rate 
hedges have been set up so as to match the dates on which the interest payments on the underlying borrowings are due for payment.
Note 18 summarises the nature of the Group’s exposure to underlying fixed rate and variable borrowings. The table below shows the 
value of interest rate hedges on the underlying variable rate borrowings at the end of each financial year.
          Value of hedge 
          £’000
31 December 2008          18,750
31 December 2009          14,905
31 December 2010          12,655
31 December 2011          10,406
31 December 2012          8,155
31 December 2013          5,905
31 December 2014          –
Based on the gross interest bearing debt and interest rate derivatives existing at 31 December 2007, a parallel upward shift in yield 
curves of 1% would reduce the Group’s annualised profit before tax by £178,000.
Liquidity risk
The Group aims to mitigate liquidity risk by managing the cash generation of its operations. The Group’s liquidity risk arises from timing 
differences between cash inflows and outflows. The Group manages these risks through a centralised treasury function and through 
committed credit facilities.
At 31 December the Group had in place a committed credit facility in place of £2m for working capital purposes. At the year-end the 
Group facility was £901,000 in credit.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 55
Concateno plc 
Annual Report and Accounts 2007
19 Financial instruments continued
Foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than the 
respective functional currencies of Group entities. The currencies giving rise to this risk are primarily euro and US dollars (USD).
The Group reviews its exposure to foreign currency risk in respect of forecast sales and purchases over the medium term. The Group is 
in the main internally hedged in respect of inflows and outflows of US dollars and euros. The Group has a US dollar foreign exchange 
instrument in place to purchase US dollars.
The instrument, which was entered into in June 2007, protects the Group from a devaluation of the British Pound (GBP) against the US 
dollar (USD) such that if the exchange rate falls below 1.956 in any calendar month the company has a right to buy a prescribed amount 
of USD with GBP at the “floor” rate at the end of that calendar month. Conversely if the exchange rate exceeds 2.082 (the “cap rate”) in 
any calendar month the Company is obliged to purchase USD with GBP at the “cap” rate at the end of that month.
The table below summarises the value of USD over which the Company has foreign exchange hedges in place over the coming years. 
There were no foreign exchange derivative instruments in place at the end of 2006.
         2007 2006 
         $’000 $’000
Year ended 31 December 2008         2,550 –
Year ended 31 December 2009         900 –
In respect of other monetary assets and liabilities held in currencies other than GBP, the Group ensures that the net exposure is kept to 
an acceptable level by buying or selling foreign currencies at spot rates where necessary to address short-term imbalances.
Forecast transactions
The Group classifies its forward exchange contracts hedging forecast transactions as cash flow hedges. The net fair value of forward 
exchange contract at 31 December 2007 was £181,000 (2006: £nil), comprising assets of £3,000 (2006: £nil) and liabilities of £184,000 
(2006: £nil), 
Further detail in respect of risks facing the Group is given in the Directors’ Report on pages 18 and 21.
20 Trade and other payables
         2007 2006 
         £’000 £’000
Other trade payables         3,994 1,119
Non trade payables         1,404 30
Accruals and deferred income         3,494 808
         8,892 1,957
Payables denominated in currencies other than the functional currency comprise £576,000 of trade payables denominated in US dollar 
(2006: £94,000), £42,000 trade payables in euros (2006: £3,000), £10,000 in Japanese yen (2006: £nil) and £5,000 in Swedish krona 
(2006: £nil) .
21 Provisions for liabilities and charges
         Deferred and 
       Rental Legal contingent 
       provision and advisory consideration Total 
       £’000 £’000 £’000 £’000
Balance at 1 January 2007       – – – –
Acquired in a business combination      705 165 1,425 2,295
Provisions made during the period       – – – –
Provisions used during the period       (25) – – (25)
Provisions reversed during the period      – – – –
At 31 December 2007       680 165 1,425 2,270
Current       101 165 1,275 1,541
Non-current       579 – 150 729
At 31 December 2007       680 165 1,425 2,270
Fair value provision
On the acquisition of Cozart plc, a provision for £705,000 was made in respect of the spreading of rental costs on one of the Group’s 
buildings. This provision will be released over the remaining life of the building’s operating lease.
Legal and advisory
A provision of £165,000 has been made for the best estimate of advisory costs expected to be incurred in relation to various enquiries 
which had not been concluded at the year-end. Concateno plc 
Annual Report and Accounts 2007 56
21 Provisions for liabilities and charges continued
Deferred consideration
£1,025,000 has been provided for in relation to deferred consideration which is payable to the vendors of Spinreact SA in September 
2008. Spinreact is a subsidiary of Cozart plc who Concateno acquired during the year. There are no performance conditions attached 
to the award of this deferred consideration payment (which consists of €1,350,000 plus interest accrued from September 2007). 
However, warranties in place could give rise to amendments to the final amounts settled; they are therefore classified as provisions.
Contingent consideration
£400,000 is expected to become payable to the vendors of Nemesis Scientific Limited in March 2008 and March 2009 (£250,000 and 
£150,000 respectively). There are performance conditions attached to the award of this deferred consideration. Management believe 
that these performance conditions will be met and, therefore, that the whole of the deferred consideration will fall due. 
22 Capital and reserves
     Share 
    Share premium Hedging Merger Translation Retained 
    capital account reserve reserve reserve earnings Total 
    £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2006    500 4,118 – – – (645) 3,973
Issue of ordinary shares     2,294 16,501 – 706 – – 19,501
Cost of share issue    – (611) – – – – (611)
Exercise of share options    – – – – – – –
Share-based payments    – – – – – 63 63
Total recognised income and expense   – – – – – (670) (670)
At 31 December 2006 and 1 January 2007   2,794 20,008 – 706 – (1,252) 22,256
Issue of ordinary shares    6,722 73,233 – 7,138 – (4,381) 82,712
Cost of share issue    – (3,488) – – – – (3,488)
Exercise of share Options    14 122 – – – – 136
Share-based payments in respect of employee options   – – – – – 439 439
Share based payments in respect of third-party warrant   – – – – – 354 354
Total recognised income and expense    – – (184) – 298 665 779
At 31 December 2007    9,530 89,875 (184) 7,844 298 (4,175) 103,188
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments 
related to hedge transactions that have not yet occurred.
Merger reserve
The merger reserve contains the premium on shares issued as consideration for business combinations during the period.
Translation reserve
The translations reserve comprises all foreign currency differences arising from the translation of the financial statement of  
foreign operations.
         2007 2006 
         £’000 £’000
Authorised share capital:
150,050,000 ordinary shares of £0.10 each (2006: 100,050,000 shares)      15,005 10,005
Allotted, called up and fully paid
95,299,415 ordinary shares of £0.10 each (2006: 27,941,178 shares)      9,530 2,794
During the year the following ordinary shares of £0.10 were issued by the Company in respect of share options:
 
        Total nominal Total share Total 
       Number of value premium consideration 
       shares £’000 £’000 £’000
Exercise of share options       136,054 14 122 136
 
23 Employee benefits
Defined contributions plans
The Group operates defined contribution retirement benefit plans for all qualifying employees. The assets of the scheme are held 
separately from those of the Group. Contributions of £15,000 (2006: £nil) were outstanding at the end of the year. The charge to the 
income statement representing the contribution payable by the Group was £177,000 (2006: £37,000).
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 57
Concateno plc 
Annual Report and Accounts 2007
24 Share options and warrants
Share options 
The Group operates an Enterprise Management Incentive (“EMI”) share option scheme and an Employee Benefit Trust Incentive 
Scheme (“EBT”) as a means of encouraging ownership and aligning interests of staff and external shareholders. Share options are 
granted at the discretion of the remuneration committee taking into account the need to motivate, retain and recruit high calibre 
employees. Options will normally be granted with a fixed price equal to the market price of the shares under the options at the  
date of grant.
Options have been granted over £0.10 ordinary shares as follows:
         EMI EBT 
         Number Number
At 31 December 2006         549,996 1,800,002
Granted during the year         748,308 769,730
Exercised during the year         (136,054) –
Lapsed during the year         (25,000) (31,973)
At 31 December 2007         1,137,250 2,537,759
As at 31 December 2007, the outstanding share options, which include the share options granted to Directors as stated in the Directors’ 
remuneration report, are shown below.
  At    At 
  1 January Options Options Options 31 December 
  2007 granted exercised lapsed 2007 Date Exercise Exercise Expiry 
Class  Number Number Number Number Number granted price date date
Enterprise Management Incentive share option (10p ordinary shares):
A  274,998 – – (12,500) 262,498 07/11/2006 85.0 07/11/2009 07/11/2016
B  274,998 – – (12,500) 262,498 07/11/2006 85.0 07/11/2009 07/11/2016
C  – 374,154 (68,027) – 306,127 05/04/2007 (see below) 05/04/2010 05/04/2017
D  – 374,154 (68,027) – 306,127 05/04/2007 (see below) 05/04/2010 05/04/2017
Options issued to SG Hambros Trust Company (Channel Islands) Limited,  
 as trustee of a trust of which employees and certain of their relatives are  
 potential beneficiaries, holds the following options under Employee 
 Benefit Trust Incentive Scheme:
A  900,000 – – – 900,000 06/11/2006 86.0 06/11/2009 06/11/2016
B  900,002 – – – 900,002 06/11/2006 86.0 06/11/2009 06/11/2016
C  – 384,865 – (15,986) 368,879 05/04/2007 147.00 05/04/2010 05/04/2017
D  – 384,865 – (15,987) 368,878 05/04/2007 147.00 05/04/2010 05/04/2017
  2,349,998 1,518,038 (136,054) (56,973) 3,675,009
The weighted average share price at the date of exercise for options exercised during the year was 120 pence (2006: none exercised).
There are certain performance criteria to be met before share options are exercisable and these are summarised:
EMI Class A and EBT Class A options are exercisable after holders satisfy or employees beneficiaries a period of three years  
continual services.
EMI Class B and EBT Class B options are exercisable after holders satisfy or employees beneficiaries a period of three years continual 
service, subject to the 30 day average mid market share price of an ordinary share being equal to, or greater than, 133% of the placing 
price of shares at 6 November (acquisition of Medscreen) and before the tenth anniversary of that date. The placing price of shares on 
6 November 2006 was 85p.
The shares issued to the Employee Benefit Trust will be held on the following terms:
In the event that there is a Change of Control, as defined in the share Plan and generally subject to the Rules of the Plan as to Vesting 
and when Shares Vest, prior to the seventh anniversary of the date of Acquisition of the Shares, the Shares shall Vest as follows:
(i) If the Exit Price is £2.75 or more the Shares shall Vest in full;
(ii) If the Exit Price is £2.50 or more but less than £2.75 the Shares shall Vest as to three-quarters; 
(iii) If the Exit Price is £2.25 or more but less than £2.50 the Shares shall Vest as to half;
(iv) If the Exit Price is below £2.25 then no Shares shall Vest.
The above condition based on the performance of a share price at a Change of Control and shall constitute the Performance Condition.
The Exit Price is the value per Share to be obtained by a holder as a result of the Change of Control and as calculated by the Directors 
of the Company and communicated to the Trustee. The Trustee shall be entitled to rely on the Director’s Exit Price. In the event there is a 
reorganisation etc. involving the Company which, in the opinion of the Directors, renders the hurdle Exit Prices of £2.25, £2.50 and 
£2.75 inappropriate for the purposes of Vesting, then the Directors shall fairly adjust the hurdle Exit Prices so that the Performance 
Condition, in terms of achievability, remains constant.  Concateno plc 
Annual Report and Accounts 2007 58
24 Share options and warrants continued
EMI and EBT option assumptions
The options pricing model used was the binomial model. The inputs to this model were:
Vesting period (years) 3.0
Expected volatility 30%
Option life (years) 7
Expected life (years) 3
Risk free rate 5.25%/4.60%
Expected dividends expressed as dividend yield 0%
Options issued to employees under EMI Scheme
 
  Share price Exercise  Shares  Vesting Expected 
 Grant at grant price at Number of under option Fair period share price Expected Risk-free  
Class  date date (p) grant date (p) employees at grant value (p) (years) volatility life rate
A  07/11/2006 85.0 85.0 9 262,498 28.2 3.00 30% 3 5.25%
B  07/11/2006 85.0 85.0 9 262,498 28.2 3.00 30% 3 5.25%
C – Altrix Tranche 05/04/2007 147.0 100.0 2 68,027 64.2 3.00 30% 3 4.60%
C –  TrichoTech  
Tranche 05/04/2007 147.0 130.0 3 102,042 42.6 3.00 30% 3 4.60%
C – Euromed Tranche 05/04/2007 147.0 145.0 4 136,058 42.2 3.00 30% 3 4.60%
D – Altrix Tranche 05/04/2007 147.0 100.0 2 68,027 64.2 3.00 30% 3 4.60%
D –  TrichoTech  
Tranche 05/04/2007 147.0 130.0 3 102,042 42.6 3.00 30% 3 4.60%
D – Euromed Tranche 05/04/2007 147.0 145.0 4 136,058 42.2 3.00 30% 3 4.60%
Options issued to SG Hambros Trust Company (Channel Islands) Limited, as trustee of a trust of which employees and certain of 
their relatives are potential beneficiaries, holds the following options under EBT Scheme
 
    Number of 
    employees 
  Share price Exercise who can Shares  Vesting Expected 
 Grant at grant price at potentially under option Fair period share price Expected Risk-free  
Class  date date (p) grant date (p) benefit at grant value (p) (years) volatility life rate
A 06/11/2006 86.0 86.0 4 900,000 28.7 3.00 30% 3 5.25%
B 06/11/2006 86.0 86.0 4 900,002 28.2 3.00 30% 3 5.25%
C 05/04/2007 147.0 147.0 9 368,879 41.4 3.00 30% 3 4.60
D 05/04/2007 147.0 147.0 9 368,878 41.4 3.00 30% 3 4.60%
The Group recognised total expenses of £63,000 and £439,000 related to equity-settled share-based payment transactions in 2006 
and 2007 respectively. 
Warrants
Under a warrant instrument dated 26 October 2006 Marwyn Neptune Fund is entitled to subscribe for 1,397,059 shares in Concateno. 
The exercise price of the warrants is 85 pence, the placing price at the time of the Medscreen acquistion.
The first 50% of the Marwyn Warrant is exercisable at any time after the date of grant subject to the mid market price of an ordinary 
share of Concateno being equal to or greater than 125% of the Medscreen Placing Price at any date after 6 November 2006. 
Accordingly these warrants became exercisable on 15 December 2006.
The second 50% of the Marwyn Warrant will be exercisable at any time after the date of grant subject to the mid market price of an 
ordinary share of Concateno being equal to or greater than 150% of the Medscreen Placing Price at any date after 6 November 2006. 
Accordingly these warrants became exercisable on 11 January 2007.
The Marwyn Warrant is also exercisable on a takeover offer being made for the whole of the issued share capital of Concateno (or a 
general offer in respect of one class of Concateno`s shares is made) and control of Concateno is thereby obtained. The Marwyn Warrant 
is freely transferable by Marwyn Neptune Fund and is unlisted.
In the event of any variation in the share capital of Concateno, auditors can be instructed to determine what adjustment, if any, should 
be made to the number and nominal value of the shares subject to the warrant and/or the exercise price as fairly reflects that change in 
Concateno’s share capital.
Warrant option valuation assumptions
The options pricing model used was the binomial model. The inputs to this model were:
Vesting period (years) 1.0
Expected volatility 30%
Option life (years) 7
Expected life (years) 3
Risk free rate 5.25%
Expected dividends expressed as dividend yield 0%
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 59
Concateno plc 
Annual Report and Accounts 2007
25 Operating leases
Annual commitments under non-cancellable operating leases are as follows:
       2007  2006
       Land and Plant and Land and Plant and 
       buildings equipment buildings equipment 
       £’000 £’000 £’000 £’000
Operating leases which expire:
 Less than one year       7 11 – –
 Between one and five years       – 108 – –
 More than five years       693 – – –
       700 119 – –
The Group leases a number of warehouse and factory facilities under operating leases. The leases run for an average of three years  
with the longest lease running until 2014. 
Three operating companies within the Group have operating leases in place for items of plant and equipment. This equipment is  
used in the three main laboratories across the UK and production facilities in Abingdon.
During the year ended 31 December 2007, £271,000 was recognised as an expense in the income statement in respect of  
operating leases.
26 Capital commitments and contingencies
Capital commitments had been made in respect of one piece of laboratory equipment (£6,000) and two pieces of production machinery 
(total payments outstanding £53,100). Commitments will be settled within the first six months of the next financial year. 
There are no contingencies to note. 
27 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not 
disclosed in this note.
Marwyn Partners Ltd, Marwyn Investment Management LLP and Marwyn Capital LLP were deemed to be related parties of Concateno 
plc during 2007 by virtue of a common director, J Corsellis. Marwyn 10 Buckingham Street LLP is deemed to be a related party by 
virtue of two common partners, K Tozzi and J Corsellis.
       2007  2006
        Amounts  Amounts 
       Provision of due to Provision of due to 
       goods and related goods and related 
       services parties services parties 
       £ £ £ £
Marwyn Partners Ltd       5,000 – 45,000 5,000
Marwyn Capital LLP       1,846,000 32,000 535,750 30,000
Marwyn 10 Buckingham Street LLP      98,442 13,000 – –
       1,949,442 45,000 580,750 35,000
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.
The Group has a corporate advisory agreement with Marwyn Capital LLP. Under the terms of the appointment, Marwyn Capital LLP 
provided general strategic and corporate financial services to the Group for a fixed monthly fee of £15,000 plus expenses. In addition, 
Marwyn Capital LLP received fees of £1,650,000 in respect of the acquisitions of Cozart plc, Altrix plc, TrichoTech Ltd and Euromed Ltd. 
The Group also has an arrangement with Marwyn 10 Buckingham Street LLP for the provision of accommodation and associated back 
office support services for a fee of £6,666 per month.
Marwyn Neptune Fund LP, and Marwyn Venture 1 LP shareholders in the Company, are managed on an arms length basis by Marwyn 
Investment Management LLP. Marwyn Neptune Fund and Marwyn Ventures 1 LP held 17,772,497 ordinary shares in the company as at 
28 March 2008. Under the terms of an instrument dated 1 November 2006 Marwyn Neptune Fund LP was granted a warrant to 
subscribe for 1,397,058 new ordinary shares in the company at 85p (the “Marwyn Warrant”). 
Inspicio plc was deemed to be a related party of Concateno plc by virtue of a common director, K Tozzi until 4th February 2008.
During the year Inspicio plc sold 5 per cent of the share capital of Concateno plc (being valued at £1.2m) for £2.0m net of costs. 
C Hand is engaged by the Group as a Non-Executive Director under the terms of a letter of appointment. Under the terms of the same 
letter of appointment he is entitled to remuneration of £1,000 per working day for any special project work agreed in relation to the 
Phillips collaboration. In 2007, he received remuneration of £11,666 (2006: £nil) for special project work.
V Murria has a related party holding of 100,000 ordinary shares as part of a pension fund through her spouse. Concateno plc 
Annual Report and Accounts 2007 60
27 Related party transactions continued
Concateno plc entered into a lease on 10 Buckingham Street, London which is a property owned by Marwyn 10 Buckingham Street 
LLP, of which K Tozzi and J Corsellis are partners.
At the time of the offer for Cozart plc and its subsidiaries, the Company entered into an agreement with the Marwyn Neptune Fund LP, 
whereby the Marwyn Neptune Fund LP undertook to provide the Company with an unsecured long-term facility (the “Marwyn Loan”) in 
order to meet any shortfall between the cash amount due to the shareholders of Cozart plc under the terms of the offer, and the funds 
available to the Company at that time. In consideration for providing this facility, Marwyn Neptune Fund LP charged an interest rate, fully 
rolled-up, of 12.5% per annum (not compounded) on the full amount advanced to the Company pursuant to such a facility. £8,720,291 
of the Marwyn Loan was drawn down on 4th October 2007 as disclosed in note 18.
There were no other transactions or contracts with related parties.
Transactions with the Directors of the Company are disclosed in the Remuneration Report on pages 25 to 26.
28 Group entities
Details of the subsidiary companies of Concateno plc, all of which have been consolidated as at 31 December 2007, are as follows:
 
         Percentage of  
         equity shares held
Subsidiary undertaking Country of incorporation Principal activity 2007 2006
Medscreen Holding Limited* United Kingdom Holding company 100% 100%
Medscreen Limited United Kingdom Sale of medical diagnostic services 100% 100%
Altrix Healthcare Limited* United Kingdom Sale of medical diagnostic products and services 100% 0%
TrichoTech Limited* United Kingdom Sale of medical diagnostic services 100% 0%
Euromed Limited* United Kingdom Sale of medical diagnostic products 100% 0%
Marconova AB* Sweden Sale of medical diagnostic services 100% 0%
CPL International Services Limited* United Kingdom Sale of medical diagnostic services 100% 0%
Cozart Limited* United Kingdom Holding company 100% 0%
Cozart Bioscience Limited United Kingdom Manufacture, sale and development of 100% 0%
   medical diagnostic products and services
Cozart Italia srl Italy Sale of medical diagnostic products and services 100% 0%
Cozart Bioscience Inc. United States of America Non-trading 100% 0%
Medib Skandinavien AB Sweden Sale of medical diagnostic products and services 100% 0%
Spinreact SA Spain Manufacture, sale and development of 
   medical diagnostic products and services 100% 0%
Cozart International sarl France Sale of medical diagnostic products and services 100% 0%
HL Scandinavia AB Sweden Sale of medical diagnostic products and services 100% 0%
Nemesis Scientific Limited United Kingdom Sale of medical diagnostic products and services 100% 0%
* Held directly by Concateno plc.
29 Subsequent events
On 17 January 2008 the Board approved the granting of 1,004,957 options under the Concateno Enterprise Management Incentives 
(“EMI”) Scheme. Following these grants the total number of options and shares in the Concateno employee incentive scheme is 
7,776,430 representing approximately 8.2% of the issued share capital of the Company. N Elton, a Board director, was granted 76,923 
of these EMI options.
On 21 January 2008, V Murria purchased 100,000 shares, K Tozzi purchased 20,000 shares, and F Begley purchased 20,000 shares in 
the Company. Following these purchases, they held a total of 100,000, 120,000 and 961,177 shares respectively in the Company.
On 21 January 2008 and 25 January 2008, Marwyn Neptune Fund LP acquired 722,965 and 150,000 shares respectively. J Corsellis is 
a partner of Marwyn Investment Management LLP, the investment manager of the Marwyn Neptune Fund LP.
 
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2007
> 61
Concateno plc 
Annual Report and Accounts 2007
30 Conversion to International Financial Reporting Standards (“IFRSs”)
This is the first full year that the Group has presented its financial statements under IFRS. Details of the restatements made to the 
opening balances at 1 April 2006, and to the financial statements for the year to 31 December 2006 are set out below.
Principal areas of impact summary
The principal effects of IFRS on the financial statements of the Group are as follows;
Presentation – IAS 1 “Presentation of Financial Statements”
The presentation format of IFRS is different from UK GAAP.
Goodwill arising on acquisitions – IFRS 3 “Business combinations”
IFRS 3 required that goodwill arising upon acquisition of businesses is not amortised but is subject to impairment reviews. The 
exemption available to companies not to restate business combinations prior to the date of transition has no impact on the Group since 
all acquisitions have been made since 1 April 2006.
Employee option and performance share schemes – IFRS 2 “Share-based Payments”
All transactions within the scope of IFRS 2 are valued based on the fair value of the option or award at grant date and expensed to the 
income statement over the vesting period of the scheme. The Company had already adopted the UK GAAP Share-based payments 
standard, FRS 20, for the period ended 31 December 2006.
Hedging instruments – IAS 32 “Financial Instruments: Disclosure and Presentation” and IAS 39: “Financial Instruments: Recognition and 
Measurement”
IAS 39 determines that any instruments held to hedge the Group’s foreign exchange or interest rate exposure are required to be valued 
at each period end, with the movement in the fair value being reflected as income or expense for the period, unless the instrument 
qualifies for hedge accounting in accordance with IFRS. Prior to 1 January 2007, the Group had no such hedging instruments in place. 
Adoption of this standard under IFRS therefore has no impact on restated prior period balances.
 
  Concateno plc 
Annual Report and Accounts 2007 62
Reconciliations of Consolidated Balance Sheets between UK GAAP to IFRS 
Opening Consolidated Balance Sheet at 1 April 2006 and  
Consolidated Balance Sheet at 31 December 2006
>
      Effect of   Effect of 
      transition to   transition to 
     UK GAAP to IFRS IFRS UK GAAP to IFRS IFRS 
     1 Apr 2006 1 Apr 2006 1 Apr 2006 31 Dec 2006 31 Dec 2006 31 Dec 2006 
    Notes £’000 £’000 £’000 £’000 £’000 £’000
Assets
Non-current assets
Goodwill    1, 2, 3 – – – 30,304 (6,864) 23,440
Other intangible assets    1, 4 – – – – 9,695 9,695
Property, plant and equipment     – – – 367 – 367
Deferred tax asset    5 – – – – 10 10
     – – – 30,671 2,841 33,512
Current assets
Inventories     – – – 86 – 86
Trade and other receivables     30 – 30 1,604 – 1,604
Cash and cash equivalents     3,983 – 3,983 654 – 654
     4,013 – 4,013 2,344 – 2,344
Total assets     4,013 – 4,013 33,015 2,841 35,856
Liabilities
Current liabilities
Borrowings     – – – 722 – 722
Trade and other payables     40 – 40 1,957 – 1,957
     40 – 40 2,679 – 2,679
Non-current liabilities
Borrowings     – – – 8,206 – 8,206
Deferred tax liabilities    2 – – – – 2,715 2,715
     – – – 8,206 2,715 10,921 
Total liabilities     40 – 40 10,885 2,715 13,600
Shareholders’ equity attributable to equity shareholders  
 of the Company
Share capital     500 – 500 2,794 – 2,794
Share premium account     4,118 – 4,118 20,008 – 20,008
Merger reserve     – – – 706 – 706
Retained earnings     (645) – (645) (1,378) 126 (1,252)
Total shareholders’ equity attributable to equity shareholders  
 of the Company     3,973 – 3,973 22,130 126 22,256
Total shareholders’ equity and liabilities    4,013 – 4,013 33,015 2,841 35,856
Notes
1 IFRS 3 requires an acquirer to recognise separately at the acquisition date any intangible assets which meet the definition of an intangible asset in IAS 38 “Intangible Assets” 
providing its fair value can be measured reliably. Customer relationships and brands were separately recognised for acquisitions made in the periods above (£9,828,000).
2 The deferred tax adjustment arises from the recognition of a deferred tax liability in respect of intangible assets (£2,715,000) which also increases the value of goodwill by  
this amount. 
3 Reversal of goodwill amortisation under UK GAAP (£249,000). 
4 Amortisation of intangible assets (£133,000). 
5 A deferred tax asset has been recognised in respect of Share-based payments (£10,000).
6 A proportion of the deferred tax asset arising on amortisation of intangible assets has been released in the period (£36,000). 63
Concateno plc 
Annual Report and Accounts 2007
         Effect of 
         transition 
        UK GAAP to IFRS IFRS 
       Notes £’000 £’000 £’000
Revenue        1,360 – 1,360
Cost of sales        (721) – (721)
Gross profit        639 – 639
Administrative expenses       3, 4, 6 (1,447) 80 (1,367)
Operating profit/(loss)        (808) 80 (728)
Net finance costs        (32) – (32)
Profit/(loss) before taxation        (840) 80 (760)
Taxation       5, 6 44 46 90
Profit/(loss) for the period attributable to equity shareholders of the Company    (796) 126 (670)
Earnings/(loss) per share
Basic and diluted (pence per share)       (8.33p) 1.34p (6.99p)
Reconciliation of Consolidated UK GAAP Profit and Loss account to 
Consolidated IFRS Income Statement 
for the period ended 31 December 2006
>
Reconciliation of Consolidated UK GAAP cash flows to Consolidated IFRS 
cash flows
for the period ended 31 December 2006
>
         Effect of 
         transition 
        UK GAAP to IFRS IFRS 
       Notes £’000 £’000 £’000
Cash flows from operating activities
Profit/(loss) for the period        (796) 126 (670)
Depreciation and other non-cash items:
 Depreciation        24 – 24
 Amortisation       3, 4, 6 245 (80) 165
 Share-based payments        63 – 63
(Increase)/decrease in trade and other receivables      (2) – (2)
(increase)/decrease in inventories        30 – 30
(Decrease)/increase in trade and other payables      5, 6 766 (46) 720
Finance costs        32 – 32
Taxation        (90) – (90)
Cash generated from operations       272 – 272
Tax received        – – –
Net cash flows from operating activities       272 – 272
Cash flows from investing activities
Acquisitions of businesses (net of cash acquired)      (23,243) – (23,243)
Purchase of property, plant and equipments       (8) – (8)
Net cash flows from investing activities       (23,251) – (23,251)
Cash flows from financing activities
Proceeds from issue of share capital       18,089 – 18,089
Proceeds from borrowings        8,766 – 8,766
Repayment of borrowings (net of debt issue costs)      (7,173) – (7,173)
Interest received        106 – 106
Interest paid        (138) – (138)
Net cash flow from financing activities       19,650 – 19,650
Increase/(decrease) in cash and cash equivalents for the period     (3,329) – (3,329)
Cash and cash equivalents at start of period       3,983 – 3,983
Cash and cash equivalents at end of period      654 – 654
Notes
1 IFRS 3 requires an acquirer to recognise separately at the acquisition date any intangible assets which meet the definition of an intangible asset in IAS 38 “Intangible Assets” 
providing its fair value can be measured reliably. Customer relationships and brands were separately recognised for acquisitions made in the periods above (£9,828,000).
2 The deferred tax adjustment arises from the recognition of a deferred tax liability in respect of intangible assets (£2,715,000) which also increases the value of goodwill by  
this amount. 
3 Reversal of goodwill amortisation under UK GAAP (£249,000). 
4 Amortisation of intangible assets (£133,000). 
5 A deferred tax asset has been recognised in respect of Share-based payments (£10,000).
6 A proportion of the deferred tax asset arising on amortisation of intangible assets has been released in the period (£36,000). Concateno plc 
Annual Report and Accounts 2007 64
         2007 2006 
        Notes £’000 £’000
Fixed assets
Investments        C3 135,033 24,572
Tangible Assets        C4 104 –
         135,137 24,572
Current assets
Debtors        C5 8,755 7,164
Cash at bank and in hand         691 67
         9,446 7,231
Creditors: amounts falling due within one year       C6 (12,505) (1,548)
Net current assets         (3,059) 5,683
Total assets less current liabilities        132,078 30,255
Creditors: amounts falling due after more than one year      C6 (33,458) (8,090)
Provisions for liabilities and charges        – –
Net assets         98,620 22,165
Capital and reserves
Called up share capital        C7 9,530 2,794
Share premium account        C8 89,875 20,008
Merger reserve        C8 7,844 706
Profit and loss account        C8 (8,629) (1,343)
Equity shareholders’ funds         98,620 22,165
The financial statements were approved by the board of directors and authorised for issue on 28 March 2008. They were signed on its 
behalf by:
Fiona Begley Neil Elton
Chief Executive Officer Finance Director
28 March 2008 28 March 2008
The accompanying notes are an integral part of the consolidated financial statements.
Company Balance Sheet
As at 31 December 2007
> 65
Concateno plc 
Annual Report and Accounts 2007
C1 Accounting policies
Basis of preparation
The separate financial statements of the Company are presented as required by the Companies Act 1985. They have been prepared 
under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards and law.
The Company is taking advantage of the exception in s230 of the Companies Act 1985 not to present its individual profit and loss 
account and related notes that form part of these approved financial statements.
The principal accounting policies are summarised below and as part of the notes to the Company balance sheet. They have all been 
applied consistently throughout the year and the preceding year.
Debit issue costs
In accordance with FRS 25 the separately identifiable costs on the issue of debt instruments are capitalised and dosclosed within 
creditors as a deduction from the related debt. Issue costs are amortised over the life of the debt instruments they relate to and the 
associated charge to the profit and loss account is included as an interest expense.
Pension costs
The Company operates defined contribution pension schemes. The amount charged against profits represents the contributions 
payable to the scheme in respect of the account period. The assets of the schemes are held separately from those of the Company.
Taxation
The charge for taxation is based on the result for year and takes into account taxation deferred because of timing differences between 
the treatement of certain items for taxation and accounting purposes. Deferred tax is recognised, without discounting, in respect of all 
timing differences between the treatment of certain items for taxation and accounting purposees which have arisen but not reversed by 
the balance sheet date, except as otherwise required by FRS 19.
Employee share schemes
The fair value of options granted is recognised as an expense together with corresponding increase in equity. The fair value is 
recognised at grant date and spread over the period employees become uncondtionally entitled to the option. Fair value is based on 
market value using a binomial option-pricing model. Non market vesting conditions are included in the assumption concerning the 
number of options that are expected to become exercisable. At each balance sheet date, the Company revises its estimate of the 
number of options that are expected to vest for changes in non market conditions.
Foreign currencies
The funtional currency of the Company is sterling. Transactions denominated in foreign currencies are translated into sterling at the  
rate of exchange on the day the transaction occurs. Monetary assets and liabilities, which are denominated in a foreign currency, are 
translated at the rate of exchange ruling at the balance sheet date, and the gains and losses on translation are included in the profit and 
loss account.
C2 Staff numbers and costs
The average monthly number of employees (including Directors) for the Group during the year, analysed by category, was:
 
         2007 2006 
         Number Number
Finance and administration         5 1
At the end of the year there were nine members of staff in Concateno Plc.
Their aggregate remuneration comprised:
         2007 2006 
         £’000 £’000
Wages and salaries         1,812 418
Share-based payments         149 63
Social security costs         178 18
Other pension costs         76 10
         2,215 509
Notes to the Company Balance Sheet > Concateno plc 
Annual Report and Accounts 2007 66
C3 Investments
Fixed Asset Investments in subsidiaries are shown at cost less any provision for impairment.
For investments in subsidiaries acquired for consideration, including the issue of shares qualifying for merger relief, cost is measured by 
reference to the nominal value only of the shares issued.
The Company has investments in the following subsidiaries which principally affected the profits or net assets of the Group:
Please see note 28 for a complete listing of subsidiaries and holdings.
 
Cost          £’000
At 1 January 2007          24,572
Additions          110,461
At 31 December 2007          135,033
C4 Tangible assets
         Plant and 
         machinery Total 
         £’000 £’000
Cost
At 1 January 2007         – –
Additions         109 109
At 31 December 2007         109 109
Depreciation
At 1 January 2007         – –
Depreciation for the year         5 5
At 31 December 2007         5 5
Carrying amounts
At 1 January 2007         – –
At 31 December 2007         104 104
C5 Debtors 
         2007 2006 
         £’000 £’000
Trade debtors         – –
Amounts owed by Group undertakings        7,967 6,980
Other debtors, prepayments and accrued income       627 184
Corporation tax debtor         161 –
         8,755 7,164
Notes to the Company Balance Sheet continued > 67
Concateno plc 
Annual Report and Accounts 2007
C6 Creditors 
Creditors: amounts falling due within one year
         2007 2006 
         £’000 £’000
Bank loans and overdrafts         5,206 675
Trade creditors         1,142 770
Amounts owed to Group undertakings        5,464 –
Accruals and deferred income         693 103
         12,505 1,548
Creditors: amounts falling due after more than one year
         2007 2006 
         £’000 £’000
Bank loans         24,738 8,090
Other loans         8,720 –
         33,458 8,090
Debt costs arising on arranging the bank loans above are being amortised over the life of the loans to which they relate. As at  
31 December 2007, the unamortised element amounted to £492,000 (2006: £234,000). The balances disclosed above are net  
of these unamortised debt costs.
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
       31 December 2007  31 December 2006
     Nominal  Face Carrying Face Carrying 
     Interest rate Year of value amount value amount 
    Currency % maturity £’000 £’000 £’000 £’000
Secured bank loan    GBP 8.29* 2007 – – 750 675
      2008 3,750 3,521 1,500 1,350
      2009 25,000 24,738 6,750 6,740
Convertible loan    GBP 12.5 2009 8,720 8,720 – – 
       37,470 36,979 9,000 8,765
* The effective interest rate changes with the underlying LIBOR rate (being set as three month LIBOR + 2% + margin), but is correct as at 31 December 07.
The bank loans are secured over the assets of the holding company and all subsidiaries and security be created over shares or quotes 
in the capital of all companies that fall within the Concateno group with a carrying amount of £28.8m (2006: £8.8m).
The full repayment profile, by tranche, of the secured bank loan is detailed in note 18 to the Consolidated Group accounts.
C7 Called-up share capital
         2007 2006 
         £’000 £’000
Authorised share capital:
150,050,000 ordinary shares of £0.10 each (2006: 100,050,000 shares)      15,005 10,005
Allotted, called up and fully paid
95,299,415 ordinary shares of £0.10 each (2006: 27,941,178 shares)      9,530 2,794
C8 Reserves
       Share  Profit 
       premium Merger and loss 
       account reserve account Total 
       £’000 £’000 £’000 £’000
Balance at 1 January 2007       20,008 706 (1,343) 19,371
Premium arising on issue of ordinary shares      73,233 7,138 (4,381) 75,990
Cost of share issue       (3,488) – – (3,488)
Exercise of share options       122 – – 122
Share-based payment regarding employee options     – – 149 149
Share-based payment regarding third-party warrant     – – 354 354
Loss for the financial year       – – (3,408) (3,408)
At 31 December 2007       89,875 7,844 (8,629) 89,090 Concateno plc 
Annual Report and Accounts 2007 68
Registered Office
Concateno plc
20 Blackfriars Lane
London
EC3V 6HD
Registered Number
05396234 England and Wales
Nominated Adviser and Broker
Collins Stewart (Europe) Limited
9th Floor
88 Wood Street
London
EC2V 7QR
Solicitors to the Company
Jones Day
21 Tudor Street
London
EC4A 0DJ
Auditors
KPMG Audit Plc
Arlington Business Park
Theale
Reading
RG7 4SD
Principal Bankers
Barclays Bank plc
Head office Branch
1 Churchill Place
London
E14 5HP
Public Relations Advisers
Financial Dynamics 
Holborn Gate
26 Southampton Buildings
London WC2A 1PB
Company Secretary
Mayer Brown International LLP
11 Pilgrim Street,
London EC4V 6RW
Registrars
Capita
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Patent Agents
Marks and Clark
4220 Nash Court
Oxford Business Park South
Oxford OX4 2RU
Advisers > our business at a glance
1
 Laboratory based testing
 > Accuracy of results
 > Detailed specimen analysis
 > Legally defensible
 > Global collections network
2
 Point-of-care testing
 > Immediate result
 > On location
 > Use immediately after incident
 > Customer support and training
3
 Laboratory products
 > Specialist diagnostic reagents
 > Spinreact an established brand  
in the sector
 > Global distribution network
>
>
>
8
m
Drug tests carried out by 
Concateno per annum
8,000
Concateno customers 
worldwide
500
Concateno sample 
collectors worldwide
Urine
Oral fluid
> Extended history for testing, chronological analysis
> Medical and legal sectors, workplace
Hair
Cozart DDS/Cozart 
RapiScan – Objective 
electronic results
Quick Tests –  
Simple positive  
or negative result
Diagnostic reagents –
biochemistry, serology 
and immunochemistry
Diagnostic laboratory 
equipment
Own brand and bulk sales
> Ease of sample collection
> Public sector
> High volume, fully legally defensible
>
  Maritime and rail sector, workplace,  
HM Prison mandatory testing
> Forensic laboratories
> Clinical laboratories
> HM Prisons voluntary testing
> Healthcare
> Police forces
> Rehabilitation programmes
Our products and services
> Healthcare
Central to Concateno’s strategy is the 
belief that governments, employers  
and the public require expert, efficient 
and comprehensive solutions for the 
problems that misuse of drugs and 
alcohol create in society. 
Concateno believe that, with greater 
scale, and specialist toxicology 
resources, we are well placed to offer  
the highest levels of service and the 
widest range of solutions to meet our 
clients’ requirements.
Our business at a glance > oncateno plc oncateno plc
Annual Report and Accounts 2007
Concateno plc
10 Buckingham Street
London
WC2N 6DF
T +44 20 7004 2800  
F +44 20 7004 2801
E info@concateno.com
www.concateno.com
Concateno plc Annual Report and Accounts 2007
Contents >
01 Our highlights
02 Where we are 
04 Where we are going
06 Chairman’ s Statement
08 Chief Executive Officer’ s Review
12 Financial Review
16 Board of Directors
18 Directors’ Report 
22 Corporate Governance Report
25  Directors’ Remuneration  
Report
27  Statement of Directors’ 
Responsibilities
28 Independent Auditors’ Report
30  Consolidated Income 
Statement
30  Consolidated Statement of 
Recognised Income and 
Expense
31 Consolidated Balance Sheet
32  Consolidated Cash Flow 
Statement
33  Notes to the Consolidated 
Financial Statements
64 Company Balance Sheet
65  Notes to the Company  
Balance Sheet
68 Advisers
Concateno is a global provider of drug and alcohol testing  
products and services. It also manufactures and distributes a  
wide range of pathology and immunology products to forensic  
and clinical laboratories. 
Through its seven acquisitions to date, Concateno has created  
an organisation capable of meeting every type of drug testing  
need internationally. This includes point-of-care screening or full 
laboratory analysis which can be carried out on urine, hair, oral  
fluid or sweat samples.
Concateno’s unique global network of sample collectors and 
distribution network covering over 80 territories worldwide enables  
it to service an international client base comprising governmental 
organisations, healthcare agencies and public and private sector 
employees.  
Through its unique scale and continually developing range of  
offerings, Concateno is well positioned to exploit new sectors  
and geographical markets.