annual report and accounts 2009
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surgical innovations group plc annual report and accounts 2009 surgical innovations group plc si  
specialises in the design and 
manufacture of innovative devices 
for use in minimally invasive surgery 
mis and industrial markets 
review of the year
 1 highlights
 2 our group at a glance
 2 our strategy
 4 chairman’s statement
 8 strengthening our manufacturing
 10 investing in development
 12 intensifying our sales and marketing
 14 business review
governance
 20 directors
 22 senior management and advisers
 24 clinical advisory board
 25 surgical innovations’ trade marks
 26 report of the directors
 30 report on remuneration
 33 corporate governance
accounts
 35  report of the independent 
auditor – group
 36  consolidated statement 
of comprehensive income
 37 consolidated balance sheet
 38 consolidated cash flow statement
 39  consolidated statement of changes 
in equity
 40  notes to the consolidated 
financial statements
 56  report of the independent 
auditor – company
 57 company balance sheet
 58  notes to the company financial 
statements
 60 fiveyear summary
 ibc  warning to shareholders  
– boiler room scams
our vision is to be a leading supplier of high quality costeffective 
instrumentation empowering surgeons to provide patients with 
an improved quality of life and to create engineering solutions 
which truly focus on the user’s needs
over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence 
concerning investment matters these are typically from overseas based “brokers” who target uk shareholders offering to sell them what 
often turn out to be worthless or high risk shares in us or uk investments these operations are commonly known as “boiler rooms”  these 
“brokers” can be very persistent and extremely persuasive and a 2006 survey by the financial services authority fsa has reported that 
the average amount lost by investors is around £20000
it is not just the novice investor that has been duped in this way many of the victims had been successfully investing for several years 
shareholders are advised to be very wary of any unsolicited advice offers to buy shares at a discount or offers of free company reports 
if you receive any unsolicited investment advice
w   make sure you get the correct name of the person and organisation
w   check that they are properly authorised by the fsa before getting involved by visiting wwwfsagovukregister
w   report the matter to the fsa either by calling 0845 606 1234 or visiting  wwwmoneymadeclearfsagovuk and
w   if the calls persist hang up
if you deal with an unauthorised firm you will not be eligible to receive payment under the financial services compensation scheme 
the fsa can be contacted by completing an online form at wwwfsagovukpagesdoingregulatedlawalertsoverseasshtml
details of any share dealing facilities that the company endorses will be included in company mailings
more detailed information on this or similar activity can be found on the fsa website wwwmoneymadeclearfsagovuk
warning to shareholders – boiler room scams surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 1
governance accounts review of the year
w  revenue increased to £4541000 2008 £4312000 
w  retained profit at group level lower at £525000 2008 £630000 due principally to 
 w  unavoidable third party issues now resolved which resulted in delay in the delivery  
of a major industrial devices order prior to year end
 w  a write down of autologous blood transfusion assets following a strategic review
w  ebitda of core operating company increased by 11 to £1 103000 2008 £995000
w  net cash of £1400000 generated from operating activities
w  continuing and significant investment in new product development in laparoscopic instrumentation
w  major investment in “stateoftheart” manufacturing facility and cleanroom
w  employees more than doubled to reflect increased demand for products
w  successfully launched logi
®
flex to assist with the accurate placement of gastric bands
w  new laparoscopic training centre operational during the year and officially opened by lord davies of abersoch 
minister for trade investment and small business
w  largest ever order for industrial devices based on core technology
w  negotiations during the year with major us group purchasing organisation gpo premier successfully 
concluded in january 2010
view online at  
ar09surginnoircom
this year we have produced an interactive 
online version of the annual report as part of 
our environmental strategy to reduce the 
amount of paper printed and distributed 
to shareholders
retained profit for the year 
£’000
ebitda of mis segment 
£’000
net cash from operations 
£’000
£525
£630
£765
£696
09 08 07 06
£802
£746
£538
09 08 07 06
£1439
£7
£428
£625
09 08 07 06
earnings per ordinary share 
basic p
0 14p
0 17p
024p
027p
09 08 07 06
highlights
  there was no mis 
segment in 2006 and 
therefore no figures 
are available 2 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
our group at a glance
the growth strategy of the business is based 
upon the distribution of si branded products 
through our worldwide independent dealer network 
and the manufacturing of original equipment 
manufacture oem laparoscopic devices
our strategy
the next phase of our growth will come from focus on the following areas
w  strengthening oem relationships
w  technology transfer within the medical and industrial sectors
w  us expansion
w  accessing new international markets
 for more information please see pages 8 to 13
timeline
19992000
developed 
yelloport
®
 and logic
®
 reusable 
laparoscopic instrumentation
creation
the resposable
®
 product concept
1992
founded 
surgical innovations founded 
by professor michael mcmahon 
and peter moran to develop the 
endoflex
®
 retractor
2005
developed
quick
®
range
2006
concept and development
yelloportplus
®
2001
launched
logi
®
cut scissors at eaes maastricht
logi
®
cut scissors
1998
licencing
worldwide licence agreement signed 
with genzyme for endoflex
®
aim admission
admitted to aim following merger with 
haemocell plc
yelloportplus
® surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 3
review of the year governance accounts
timeline
2007
established 
master dealer in the us
clinical advisory board
institutional investment
successful fundraising of £4000000
launch
worldwide launch of yelloportplus
®
2003
developed 
yelloport
®
 single use valve concept 
2002
introduced
pencil point trocar to yelloport
®
 range
2004
launched
quick
®
cut fully disposable 
laparoscopic scissors
collaboration
collaboration agreement signed with 
rolls royce for industrial applications 
of flex technology
2008
relocation
moved into new premises with 
32000 square feet of manufacturing 
and design space
2009
internal investment
inhouse manufacturing facilities enabling 
more effective and efficient manufacture 
of products
£13 million investment 
in manufacturing facilities
£1 million investment in product development 
employee numbers more than doubled to 90
development of the yelloportplus
®
 
instrumentation
endoflex
®
 retractor licensed to genzyme 
in 1998
surgical innovations
port access 
systems
retraction  
systems
our product portfolio
yelloport
®
yelloportplus
®
logi
®
range logic
®
 reusable quick
®
range fastclamp diamondflex
®
laparoscopic 
instrumentation 4 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
chairman’s statement
introduction
i am pleased to report another year of 
significant progress during which the group 
has substantially scaled up its operations 
to take full advantage of the opportunities 
in the global laparoscopic surgery market 
some revenue growth was achieved in 2009 
with sales of £4541000 2008 £4312000 
resulting in retained profits of £525000 2008 
£630000 at first glance the results may seem 
disappointing but shareholders should be 
encouraged by the comments and explanations 
on both current performance and the outlook 
given later in the statement i believe that the 
current year will show a significant advance 
in all areas of the business as the investment 
made starts to produce impressive returns
the business has undergone a transformation 
since the move into the new building in 
april 2008 and particularly in the last 
twelve months during this time the group 
has invested £13 million in machinery 
and infrastructure £10 million in product 
development and more than doubled the 
total number of employees to approximately 
90 people this demonstrates belief in the 
group’s strategy of focusing on the core 
business of minimally invasive surgery mis 
and flex technology  the group has seen notable 
commercial gains in the last month of 2009 
and first quarter of 2010 testament to the 
investment made since moving into our 
new facility 
minimally invasive surgery mis
the group is confident that its mis business 
will develop in accordance with its threeyear 
plan our laparoscopic instrumentation 
is becoming increasingly accepted as we 
expand our costeffective product offerings 
to complement the laparoscopic business 
and buoyed by previous successes in 
technology transfer  we are actively moving 
into new areas of keyhole surgery we are 
currently working with surgeons in the fields 
of arthroscopy  cardiovascular and veterinary 
as we look to apply our instrumentation 
intellectual property and expertise into 
these new markets
us success
during 2009 the group reviewed its 
us operations to maximise the opportunities 
open to it i am pleased to announce that 
we have successfully established a route 
to market and actively raised the awareness 
of the surgical innovations brand and our 
product portfolio across america
the group’s strategy was to separate our 
yelloportplus
®
 laparoscopic port access 
system from our us master dealer si usa 
enabling us to sell these products directly 
to distributors and laparoscopic instrument 
management companies also known as tray 
companies this has been achieved and as a 
result we have now appointed a network of 
independent distribution partners covering the 
east coast west coast and central states
this has enabled our us master dealer to 
focus their efforts solely on the logi
®
range 
of resposable instruments a move which 
resulted in the signing of two threeyear 
contracts with premier purchasing partners lp  
the group purchasing unit of premier inc 
“premier” one of the largest group purchasing 
organisations gpos in the us gpos help 
hospitals reduce costs by aggregating volume 
to negotiate favourable purchasing terms 
doug liversidge cbe
nonexecutive chairman
summary of chairman’s statement
w  we are now focused on our core mis 
business and developing this outside 
of the laparoscopic field
w  the current year will show a significant 
advance in all areas of the business
w  substantial growth in scale through 
our oem partnerships 
view the chairman’s statement online at 
ar09surginnoir comchairman surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 5
review of the year governance accounts
with vendors and this agreement provides 
an opportunity for si to gain access to their 
2200 member hospitals this represents a 
considerable proportion of all us hospitals 
and provides the group with significant access 
to the us laparoscopic instrumentation market 
estimated to be worth 150 million per annum 
one contract for our resposable instruments 
has already commenced and another for our 
reusable instruments is due to commence 
in april 2010 the group is delighted with the 
current level of instrument business it is now 
achieving in the us justifying the approach 
we have taken 
the group continues to develop relationships 
with some of the largest tray companies in 
the us such as surgical service inc ssi 
which will see yelloportplus
®
 placed in their 
tray systems in hospitals throughout the 
country si’s resposable
®
 concept offers a 
“win win” situation for tray companies as it 
combines both disposal and reusable elements 
offering both functionality and cost 
effectiveness 
international launch of logi
®
flex
during 2009 we successfully launched 
logi
®
flex an articulating instrument 
designed to assist laparoscopic surgeons 
with the accurate placement of gastric 
bands the device was unveiled at the world 
congress of the international federation 
for the surgery of obesity and metabolic 
disorders ifso and was well received 
at the event being described by surgeons 
as an ‘innovative costeffective solution’ 
it was clear from the outset that the key 
market for this instrument is the us due 
to the fact that obesity affects more than 
60 million us citizens and is the second 
largest cause of preventable death it is 
also estimated that there are 250000 
annual bariatric procedures in the us 
where the logi
®
flex device can be used 
as a consequence we have submitted a 
510k for fda approval for logi
®
flex and 
anticipate that this will be received in the 
second quarter of 2010
our master dealer is currently preparing 
a product launch involving both attendance 
at bariatric exhibitions and obtaining inclusion 
within the current premier contracts as soon 
as fda approval is received the group looks 
forward to reporting further on this later in 
the year
original equipment manufacture oem
the group plans for si to achieve substantial 
growth in scale over the next twelve months 
and beyond through our oem partnerships 
with major medical device companies it is 
notable how the development resources of 
these companies have become stretched as 
a result of consolidation and the number of 
products they have to support si can offer 
an effective solution providing expertise in 
the design and development of an instrument 
combined with the manufacturing capability 
to produce a final device ready for ultimate sale
the solution proved to be extremely effective in 
2009 culminating in negotiations with one of 
our oem partners which we expect to result in 
a major contract in the second quarter of 2010
single port access spa
to complement the increasing number 
of single rather than traditional multi port 
access systems we took the strategic decision 
to concentrate our development focus on the 
flexible instrumentation required for successful 
spa surgery we have a worldwide reputation 
for flex technology and this is proving beneficial 
as we continue to receive interest from a number 
of leading companies wishing to gain access 
to this technology 
the group has substantially scaled up its 
operations to take full advantage of the 
opportunities in the global laparoscopic 
surgery market 6 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
chairman’s statement continued
minimally invasive surgery mis continued
licensing
following our decision to improve our 
licensed diamondflex
®
 product we created 
new intellectual property with a new innovative 
flex device we are in negotiations with our 
licensee regarding the new technology 
and the group looks forward to providing 
a further update in due course 
whilst licensing our own ip  we are also 
in discussions with various companies 
to license technology into si this will result 
in exclusive manufacturing and sales rights 
to si and royalty payments or joint venture 
arrangements sharing both risk and reward 
there has been increased activity in this 
area as a consequence of si’s enhanced 
reputation within the medical device sector 
and is testament to our strategy of inhouse 
manufacturing and design 
industrial solutions
we are excited about the growth of the group’s 
business providing industrial solutions for major 
international companies the solutions are 
based on our core technology developed over 
the years in our surgical instruments business
during the year our design team was involved 
extensively in the development of an industrial 
solution for one of our key industrial partners 
as a result of our efforts we received an order 
for £616000 of which £480000 was due to 
be invoiced in december 2009 due to third 
party technical difficulties which were outside 
of our control we were unable to deliver our 
contractually completed part of the order prior 
to the year end this had a significant impact 
on the results for the year
i am however pleased to report that the 
technical issues have now been resolved 
and we are scheduled to deliver the completed 
order in april 2010 encouragingly we have 
received a further order for a new prototype 
based on the success of the first project 
this should result in a substantial device 
order for delivery in the second half of 2010 
we believe that there is scope to develop and 
expand the business using our core technology  
to maximise this potential and to provide clear 
differentiated focus we may relocate this 
business to a more appropriate geographical 
setting with close customer proximity
autologous blood transfusion abt
i indicated in my previous chairman’s statement 
that difficult issues had to be addressed in 2009 
including a decision on our abt business 
after a strategic review of the opportunities 
for abt the board concluded that the 
investment required both in cash and 
management time will be too great to 
support within the company especially 
given the evergrowing opportunities 
in the core business
therefore the board has made the decision 
to look for a purchaser for the abt business 
operated under the haemocell brand or 
alternatively for a joint venture partner 
in addition to the knowhow there are 
attractive tax losses potentially available 
to a new owner of the business
whilst a suitable exit is being sought 
the board has made the decision to 
writeoff all assets relating to the abt 
business resulting in a £200000 reduction 
in the group’s operating profits 
employees and infrastructure 
over the last twelve months the group 
has invested £13 million in both machinery 
and infrastructure £10 million in product 
development and more than doubled the 
total number of employees to approximately 
90 people at a time when other companies 
have been forced to make redundancies 
we have made staff appointments in all 
areas of the business production design 
quality hr and business development 
as part of this investment we commissioned 
a “stateoftheart” class 100000 cleanroom 
with an employee base of 90 and investment 
in all areas of the organisation we are able 
to meet the challenges of rapid growth within 
the business experienced in the later months 
of 2009 and start of 2010 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 7
review of the year governance accounts
to improve the efficiency and quality of our 
manufacturing processes the enhanced 
cleanroom resources will give us sufficient 
capacity to assemble increasing volumes 
of our own and oem single use devices 
additionally it provides a platform to move 
into the next phase of our manufacturing 
strategy bringing plastic injection moulding 
back inhouse during 2010 
in 2009 we invested in the creation of our 
laparoscopic training centre which was 
officially opened by business minister 
lord davies in february 2010 the training 
centre is ideal for product evaluation as it 
allows members of the si design team to 
view at first hand surgeons using si prototypes 
within a simulated clinical environment
outlook
the group has resolved the difficult issues 
and financially they are accounted for within 
the 2009 results we are now focused on our 
core mis business and developing this outside 
of the laparoscopic field with an employee 
base of 90 and investment in all areas of the 
organisation we are able to meet the challenges 
of rapid growth within the business experienced 
in the later months of 2009 and start of 2010
with 2010 yeartodate revenue at an all time 
high and a £2 million shortterm order book 
coupled with new oem contracts in prospect 
i am extremely confident about the future 
for the group 
to reflect this confidence the board has 
decided to apply to the court to offset the 
holding company’s accumulated losses 
against the share premium account if as 
we expect this proposal is ultimately approved 
by shareholders in general meeting the board 
will be in a position to implement a dividend 
strategy we are conscious that si has over 
4500 shareholders and whilst the primary 
objective is capital gain we feel that when 
appropriate payment of a dividend will be 
made to reflect the loyalty of our many 
private investors
in conclusion i am extremely proud of 
the progress being made and in particular  
of graham bowland our managing director 
who has worked tirelessly and with great 
commitment to develop the company  i am 
also grateful for the support of my fellow 
directors and to our loyal and able workforce 
for their contribution to the company
i look forward to reporting on a very exciting 
period in the development of the company
doug liversidge
chairman
31 march 2010
we are excited about the 
growth of the group’s business 
providing industrial solutions for 
major international companies
£13m
invested in machinery and infrastructure
£10m
invested in product development 8 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
strengthening our manufacturing
we currently manufacture our own successful 
brand of resposable
®
 products
we are an oem supplier to several of the 
leading medical device manufacturers
si strategy
“inhouse” manufacturing
w  phase i – turned parts 2009
w  phase ii – plastic injection moulding 2010
w  phase iii – silicone injection moulding 2011
new manufacturing facility
in line with our strategy the group continues to invest in machinery 
and infrastructure in 2008 si moved location from a 10000 square feet 
premises to a 32000 square feet facility of which 24000 square feet 
is assigned to manufacturing assembly and warehouse this dramatic 
increase in size has allowed us to expand significantly and has led to 
the purchase of four cutting edge sliding head lathes two machining 
centres and two turning centres
class 100000 assembly cleanroom
as part of this investment si commissioned 
a “stateoftheart” class 100000 cleanroom to 
improve the efficiency and quality of our manufacturing 
processes these modern inhouse cleanroom facilities 
ensure optimum hygiene standards are maintained 
through all product lines and give us flexibility to 
respond to all of our customer requirements knowing 
quality is of the highest standard surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 9
review of the year governance accounts
strengthening our manufacturing
our innovative design is complemented by manufacturing 
expertise from small batch runs through to volume production 
our manufacturing and quality engineers apply extensive 
knowledge and experience to ensure our customers’ 
requirements are met
quality 
si’s established procedures and detailed documentation ensure 
total control throughout all stages of the product development cycle 
we operate a rigorous quality system approved to iso 9001 and iso 13485 
standards and are fda registered these approvals allow us to brand 
our products with worldwide recognised regulatory standards
original equipment manufacture oem
we are proud to be an oem supplier to several leading medical 
device manufacturers and continue to develop these relationships 
it is testament to our design and manufacturing skills that our products 
are in demand by highly renowned medical companies 10 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
investing in development
our design philosophy is focused on delivering 
the most innovative costeffective ergonomic 
and precisely engineered solutions for our 
medical and industrial customers
si strategy
development
w  development of flexible instrumentation for spa surgery
w  technology transfer into new areas of mis
w  expand and develop resposable
®
 laparoscopic 
instrumentation
w  focus on obesity surgery solutions
expansion of our portfolio
the group’s reputation for designing and manufacturing innovative 
high quality medical devices has enabled us to develop important 
relationships with major medical companies
si works with clinicians to develop tomorrow’s innovations
si is pleased to be working with medipex – the nhs innovation hub 
for the yorkshire and humber region – in a unique forum that allows 
clinicians and industry to work together more closely to share ideas 
and develop new products surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 11
review of the year governance accounts
investing in development
our goal is for si to be a leading worldwide innovator 
in flexible instrumentation
new oem laparoscopic products
the logi
®
flex
the new logi
®
flex product which aids surgeons in the deployment 
of gastric bands in obesity surgery was recently launched at the 
world’s largest obesity congress the international federation for 
the surgery of obesity and metabolic disorders ifso in paris 
the rise in obesity has led to a significant increase in the number 
of gastric band procedures and we are now well placed to become 
a major provider to both obesity surgeons and manufacturers of 
gastric bands the logi
®
flex was described by surgeons at the 
congress as an innovative costeffective solution 12 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
intensifying our sales and marketing
our sales philosophy is built around 
resposable
®
 instrumentation which delivers 
costeffective high quality solutions
si strategy
view our interview with graham bowland
si has received a lot of media coverage throughout the year in the uk 
and across the globe to watch graham being interviewed go to 
youtubecomgrahambowland or alternatively visit  
http wwwyoutubecomwatchvs34k30eipye
si attends international exhibitions
we have been pleased to exhibit our world leading laparoscopic 
instrumentation products at a number of international exhibitions 
throughout the us latin america europe and the middle east
international exhibitions are the perfect platform for us to launch 
our pioneering resposable
®
 instrumentation to international surgeons 
discuss their individual needs and meet with our dedicated team 
of worldwide distributors to further enhance relationships
w  investment in us market
w  accessing new markets
w  exhibiting at key strategic 
international exhibitions
w  ongoing development of the group’s 
websitesmarketing material
w  increased pr activity through medilink 
yorkshire and humber
w  enhancing relationships with 
international distributors surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 13
review of the year governance accounts
intensifying our sales and marketing
veterinary surgeons perform on average 
600000 open abdominal procedures annually 
but it is believed that less than 1 of them 
currently practice laparoscopic surgery
si has donated specialist surgical instruments to edinburgh zoo to enable 
them to carry out the world’s first keyhole surgery on a reindeer – just in time 
for christmas
leading vet romain pizzi successfully carried out the surgery on eskimo 
a reindeer at the zoo removing one of his testes which had been lodged 
in its abdomen since birth the zoo was concerned that the retained testicle 
was developing into a tumour giving off abnormal hormones and that this 
could become lifethreatening
although laparoscopic surgery is routine in humans the standard procedure 
in animals is still open abdominal surgery romain a veterinary surgeon for the 
royal zoological society of scotland based at edinburgh zoo said “the operation 
has been a great success and eskimo has made a speedy recovery laparoscopic 
surgery is still very uncommon in veterinary medicine even amongst common 
species such as dogs cats and horses so for keyhole surgery to be carried out 
on a reindeer shows a great advancement in veterinary surgery” 
veterinary surgeons perform on average 600000 open abdominal procedures 
annually but it is believed that less than 1 of them currently practice 
laparoscopic surgery
veterinary laparoscopic pioneer romain believes that with the right 
instrumentation developed by companies such as si uk vets now have 
the opportunity to introduce laparoscopic techniques as part of their 
operating procedure for more on eskimo visit surginnocomnews
surgical innovations saves christmas 
a reindeer at edinburgh zoo is the first in the world 
to receive keyhole surgery
view this page online at 
ar09surginnoir comcasestudy
resposable
®
 laparaoscopic
instrument system 14 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
overview
2009 was a year of investment both in terms 
of physical assets and product development 
and importantly in building relationships with 
our key oem partners
the reward from this investment started to 
be seen at the end of 2009 and has continued 
in the new year revenues are now running 
at their highest ever levels and with new oem 
business in the pipeline and the potential 
for increased revenues from the us we are 
extremely excited about the future growth 
of the business
in order to understand the opportunities 
and potential of the group it is important 
to focus on the operating results for the main 
mis business which is the principal driver 
of profitability the mis business derives 
revenue from the design manufacture and 
sale of our own brand medical devices such 
as yelloportplus
®
 and logi
®
cut together 
with a strong oem revenue stream 
the mis business generated turnover of 
£4023000 2008 £3726000 and operating 
profits of £354000 2008 £507 000 operating 
profits were subject to increased depreciation 
charges resulting from the investment in the 
group’s manufacturing and design facilities 
encouragingly ebitda for the mis business 
increased by 7 5 to £802000 in 2009 
from £746000 in 2008
significantly the group acquired a 
substantial amount of new plant and 
machinery in the second half of 2009 
the impact of this investment in terms 
of improved margins and efficiencies is 
not fully reflected in the results for 2009 
we continue to make investment in the 
manufacturing area to provide longterm 
benefits for the group
during the year  the group generated net cash 
of over £1400000 from operating activities 
and was therefore in a strong position to fund 
investment in both machinery and product 
development holding company operating costs 
of £331000 accounted for the small reduction 
in net funds this principal is adopted within our 
threeyear plan accordingly the group is well 
placed to deliver on its planned objectives 
without the need to raise additional funds 
manufacturing
our strategy of implementing full “inhouse” 
manufacturing is a key driver in the growth 
of the business we continue to see the benefits 
from site visits made by surgeons distributors 
and potential oem partners as they gain 
confidence from seeing our production 
resources and capabilities
the group has increased the assembly 
team from 13 people to the current levels 
of 28 people all of whom have been inducted 
through a rigorous training programme 
in addition we have increased the number 
of employees in our machine shop to 13 people 
including ten fully trained engineers they 
currently run on a three shift system five days 
a week with each person having responsibility 
for their own specific cell of machines 
during the year we invested over £800000 
in tooling plant and machinery to ensure 
we have the facilities in place to sustain our 
projected growth the highlight of 2009 was 
the installation of our “stateoftheart” class 
100000 cleanroom which is a 6000 square feet 
facility and incorporates within it our class 
10000 cleanroom the facility provides si with 
the flexibility to assemble and manufacture 
sterile components on site to the rigorous 
standards set by all medical device regulatory 
bodies including most importantly the food 
and drug administration fda
the investment has radically changed our 
assembly capabilities and with the facility 
running 16 hours a day we are achieving 
effective utilisation and a significant return 
on capital employed
in october 2009 the group purchased a 
willemin macodel 408b machine to further 
enhance our inhouse manufacturing 
capabilities this high specification bar 
fed milling machine gives us the ability to 
manufacture complex high tolerance milled 
components and complements our range of 
sliding head lathes as the largest ever single 
investment made by si in a manufacturing 
machine we are delighted with the utilisation 
running 24 hours a day five days a week 
given its success we are contemplating the 
purchase of additional machines to provide 
capacity for our increasing oem business
business review
graham bowland
chief executive officer
summary of business review
w  we continue to make investment in the 
manufacturing area to provide longterm 
benefits for the group
w  we continue to see expansion 
of the yelloportplus
®
 user base
w  with new si and oem branded products 
coming to market we look forward to a 
successful 2010 and beyond
view the business review online at 
ar09surginnoir combusinessreview surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 15
accounts
as a design and manufacturing company 
we are fully aware of the challenges faced 
in bringing new internally designed products 
into commercial manufacture to ensure an 
effective transition we have now employed a 
team of five production engineers who will also 
have responsibility for ensuring continuous 
improvement to all existing product lines 
this move ensures the design team can 
fully concentrate on implementing our 
new product development strategy 
with the majority of investment in the 
year focused on computer numerical control 
cnc machinery 2010 will see investment 
in injectionmoulding with our aim to have 
all plastic injection parts made inhouse 
by the end of the year a specialist has been 
employed and we anticipate the project to 
commence by the third quarter of 2010
the group continues to work closely with 
local universities and i am delighted that 
we have launched a new knowledge transfer 
partnership ktp in conjunction with the 
university of leeds to investigate ways to 
improve the manufacturing process of a 
specific product line
we are particularly pleased that our 
manufacturing achievements have been 
recognised by our peers with the award of sme 
manufacturer of the year at the prestigious 
yorkshire post excellence in business awards 
lord davies of abersoch cbe minister for trade investment and 
small business with peter moran one of the two founder members 
of surgical innovations limited
review of the year governance
ebitda of mis segment 
£’000
net cash from operations 
£’000
£802
£746
£538
09 08 07 06
£1439
£7
£428
£625
09 08 07 06
  there was no mis 
segment in 2006 and 
therefore no figures 
are available 16 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
sales and marketing 
throughout 2009 the group’s aim has 
been to raise the profile of si and establish 
our corporate image and brand identity this 
has been done in a number of ways including 
launching our new website to complement 
the investor relations section and reviewing all 
our marketing and sales literature establishing 
a brand that communicates the group’s values 
and mission statement together with our 
reputation for designing and manufacturing 
high quality instrumentation is a key part 
of our business strategy we will continue 
to develop the brand over the coming year 
three business development associates 
have been employed to further enhance 
relationships with our global partners and 
distributors as well as to seek opportunities 
in new international markets the team has 
attended a number of international exhibitions 
across the us the middle east europe and 
latin american to raise the profile of si 
throughout the year we have continued 
to promote our resposable
®
 range of 
instrumentation as a costeffective high 
quality solution for hospitals and surgeons 
given the current cost constraints within 
the global healthcare sector
as mentioned in the chairman’s statement 
the group has enjoyed success in the us 
through a mixture of collaborative work with 
our master dealer and the appointment of a 
network of independent distributors who cover 
the east coast west coast and central states 
this continued work has enabled us to establish 
a route to market and has helped raise the 
awareness of our brand and portfolio 
of products we have already started 
to see rewards from this work which has 
resulted in the signing of the contract with 
premier purchasing partners lp  one of the 
largest group purchasing organisations gpos 
in the us the group will continue to invest 
in the us over the coming year 
to further raise our profile both in the 
uk and international markets we have 
introduced an ongoing communication 
programme delivered by medilink yorkshire 
and humber  this programme is promoting 
our world class inhouse design and 
manufacturing expertise 
product development
in line with our innovation strategy the group 
invested in the region of £10 million in product 
development throughout 2009
this substantial and ongoing investment 
enables the group to remain at the forefront 
of innovative medical device design and 
development the year has seen both new 
product innovation and enhancements to 
the existing product portfolio our philosophy 
is one of continual product improvement 
as we aim to build the si brand within the 
laparoscopic surgical community
one highlight of the year was the development 
of a new innovative handle for one of our key 
oem partners as well as generating new 
intellectual property ip for si we have 
established a unique platform for revenue 
generation from the sale of associated 
single use instrumentation 
the group’s flagship port access product 
yelloportplus
®
 was launched into the market 
in july 2007  in the early stages of the product’s 
lifecycle we introduced our new improved 
patented armoured swingt op
®
 the new version 
allows the yelloportplus
®
 system to be used 
in more complex and lengthy laparoscopic 
procedures by maintaining the integrity 
of the seal the system has proved to be a 
success and ensures we remain technically 
competitive within the trocar market
si has a worldwide reputation for flexible 
instrumentation and in 2009 we launched 
the logi
®
flex device for gastric band 
deployment the group’s design team was 
able to create new ip based on the flexible 
hinge and we are currently awaiting fda 
approval for the device following submission 
of the 510k documentation in the early part 
of 2010 in order to create a costeffective 
product the design team is currently engaged 
in the development of new mould tools these 
will ultimately be housed at si as part of the 
2010 inhouse manufacturing strategy 
the group invested design resource in 
the development of a new bariatric retraction 
device to complement logi
®
flex this concept 
successfully utilises our licensed segment 
technology and importantly  innovative steps 
were introduced for the shaping of the device 
to date clinical evaluations have proved 
successful and we look forward to bringing 
this product through to market by the end 
of 2010 
business review continued
establishing a brand that communicates 
the group’s values and mission statement 
together with our reputation for designing 
and manufacturing high quality instrumentation 
is a key part of our business strategy surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 17
review of the year governance accounts
other new devices currently in development 
include single use devices for percutaneous 
incision and resposable
®
 flexible 
instrumentation which will both act as 
aids in the area of single port access spa 
surgery one interesting opportunity being 
explored relates to the development of 
smaller handles for female surgeons with 
increasing numbers of female surgeons we 
believe that traditional handles are often too 
large and cumbersome for the smaller hand 
we aim to satisfy this need with our new 
smaller ergonomically designed handles
2009 was an important year for the 
industrial division of the business 
we successfully developed a working 
prototype for our key industrial partner 
leading to an order of £616000 of devices 
unfortunately as a consequence of a last 
minute third party technical issue we were 
unable to deliver our completed part of 
the order i am delighted that the issue 
has been resolved and the devices are to 
be delivered shortly we have once again 
through the talents of our design team 
created developed and manufactured 
a complex industrial solution and the group 
believes that with continuing investment 
the industrial division of the business 
could flourish and generate ongoing 
revenues and high margins 
product performance 
the mis revenues are generated from 
two main product areas our port access 
systems yelloport
®
 and yelloportplus
®
 
and our instrumentation logi
®
range and 
quick
®
range in addition we generated 
significant revenues from our oem business 
partners through the manufacture and sale 
of their own branded products
our port access strategy is based upon 
development of the yelloportplus
®
 system 
as well as seeking out new markets and 
end users wherever possible we encourage 
replacement of the yelloport
®
 system to 
the technically improved yelloportplus
®
 
product we continue to see expansion of 
the yelloportplus
®
 user base and since 
the product’s launch in june 2007 over 
9000 cannulas have been sold which 
act as a revenue generator from the sale 
of associated single use swingt op
®
 valves 
and seals
notable increases in business have 
been achieved in south africa the uk and 
belgium which was expected given they were 
early adopters of the system encouragingly 
we are seeing new opportunities develop in 
the middle east and far east and the group 
will be building on these successes through 
planned visits in 2010 substantial investment 
was made during 2009 in australia and the 
us and this is now producing a return with 
increased orders received in the first quarter 
of 2010 expectations are high for the current 
year and with a targeted revenue growth rate 
of 60 for yelloport
®
yelloportplus
®
 we look 
forward to increased market share in both 
current and newly established markets
our instrumentation range is focused 
around the resposable
®
 logi
®
cut scissors we 
continued to see increases in revenues during 
the year in europe 43 rest of the world 51 
and the uk 83 as the costeffective 
concept became an attractive one to hospital 
procurement managers worldwide
revenues in the us from logi
®
cut business 
fell in 2009 as a result of a policy of inventory 
reduction by our distributors importantly 
this has now been resolved and logi
®
cut sales 
have improved substantially in the first quarter 
of 2010 and with the gpo contract having 
come into force from february 2010 we are 
targeting overall revenue growth of 46 
for the product line
to complement the logi
®
cut business we 
have additional line extensions and these 
all gained market share in 2009
our oem business continued to develop 
during 2009 and with new oem products 
due to market in 2010 we are looking forward 
to substantial growth in this area oem devices 
generated 27 of revenue in the year and the 
group’s objective is to increase this to 35 
in 2010 
we are delighted with the opportunities 
now arising from the mis business and 
current trading indicates our resposable
®
 
product strategy is the correct way to generate 
longterm revenue streams with new si and 
oem branded products coming to market to 
reinforce the current product ranges we look 
forward to a successful 2010 and beyond
review of the year governance
one highlight of the year was the development of a new innovative handle for one of our key 
oem partners 18 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
business review continued
financial summary
revenue
sales revenue increased by 53 to £4541000 
2008 £4312000 this increase was primarily 
as a result of an 8 increase in mis sales 
of £297 000 2008 decrease of £165000 
with minimal change in licence fees and 
other products
gross margin
gross margin excluding nonrecurring 
costs reduced to 46 2008 53 primarily 
from the policy of absorbing an increased 
proportion of company overheads in our 
internally manufactured product cost with 
increasing volumes operational efficiencies 
and substantial investment in machinery 
the group is targeting an improvement 
to gross margins in 2010 
operating expenses
the group’s operating expenses increased 
in 2009 by only £43000 29 partly as 
a consequence of reallocating a level of 
overheads to manufacturing 
employee numbers increased substantially 
during the year in areas which will add future 
value to the business and provide a level of 
customer service that befits our organisation 
as a consequence operating expenses are 
projected to increase in 2010 but at levels 
that provide overall group profitability 
within planned objectives 
notwithstanding our investment in personnel 
the group continues to rigorously control costs 
and is aware of the need to generate cash 
within the business as a means of funding 
future capital and product investment
finance income and costs
the net financial expense for the year 
was £27 000 compared to a net income 
of £40000 in 2008 this reflects the reduced 
returns available on the group ’ s cash deposits 
coupled with the cost of asset finance 
we continue to finance assets used in the 
manufacturing processes of the business 
ensuring funds remain within the group 
for both internal product development 
and our working capital needs
profitability
the group’s operating profit for 2009 was 
£291000 2008 £780000 this is after 
charging £200000 of nonrecurring costs 
on discontinued operations and a further 
£75000 of noncash expenditure relating to 
sharebased payments we remain committed 
to our objective of a 20 operating margin 
and are encouraged by the return on our 
current activities moving into 2010
capitalised development costs
the group has a policy of continuous 
product development both for si and our 
oem partners as in previous years the board 
is confident in the success of these products 
and accordingly £1066000 of costs have been 
capitalised during the year  increasing the total 
amount of capitalised costs to £2310000 
yelloportplus
®
 revenue continues to be 
received and under the group’s accounting 
policy £101000 of development costs were 
amortised in the period in addition the board 
reviewed the carrying value of development 
costs and at 31 december 2009 confirmed that 
no provision for impairment was necessary
foreign currency
the group maintains foreign currency bank 
accounts and wherever possible supplier 
payments are made in euros or dollars to 
utilise currency receipts
the group has used forward exchange contracts 
and will continue to monitor the need for such 
contracts depending upon the level of natural 
hedging achievable
taxation
the group recognised a tax credit of £261000 
resulting from a £202000 over provision of 
corporation tax payable in previous years and 
a deferred tax credit of £59000 reflecting the 
extent to which recoverability of tax losses can 
be foreseen with reasonable certainty  the group 
holds deferred tax assets on the balance sheet 
of £193000 2008 £134000 in addition there 
is a further £14600000 2008 £13500000 
of tax losses that have not been recognised 
earnings per share eps
the group achieved 0 14p 2008 0 17p 
underlying basic eps in 2009 there were 
no shares issued during the year and full 
details of all eps calculations are set out 
in note 8 to the accounts on page 48
substantial and ongoing investment enables 
the group to remain at the forefront of innovative 
medical device design and development  surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 19
review of the year governance accounts
cash and net funds
at the end of 2009 the group had £622000 
2008 £1294000 in net funds net funds 
are defined as cash and cash equivalents 
less financial liabilities
working capital
working capital decreased to £3630000 
2008 £4259000 as a result of a significant 
reduction of £1029000 in trade receivables 
to £2 135000 2008 £3 164000 the board 
monitors the payment terms offered and 
continues to look to reducing receivables 
to more commercially acceptable levels 
as and when each market becomes 
established the business generated 
net cash from operations of £1439000 
2008 £7 000 however after accounting 
for the acquisition of noncurrent assets 
of £1517 000 2008 £961000 there 
was a net cash decrease in the year of 
£316000 2008 decrease £1039000
a budget of £2700000 has been allocated 
for investment in plant and machinery and 
product development in 2010 this investment 
will be met through a mixture of generated 
cash from operations and asset finance 
the resulting benefits of improved gross 
margin and increased revenues are targeted 
to be seen in 2011
graham bowland 
chief executive officer
31 march 2010
graham bowland talking to uk business ambassador lord darzi 
on the surgical innovations stand at arab health 2010 the largest 
healthcare exhibition in the middle east
we remain committed to our objective of a 
20 operating margin and are encouraged 
by the return on our current activities moving 
into 2010 20 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
directors
3
1 2
4
5 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 21
 1 doug liversidge cbe
 nonexecutive chairman
doug age 73 was educated in sheffield and 
graduated in metallurgy in 1957  employed 
for 21 years at british steel doug attained 
the position of chief quality manager
after moving to g w thornton as managing director 
and subsequently appointed chief executive 
doug guided the company through its flotation on 
the london stock exchange in march 1987 and 
was instrumental in the company winning numerous 
prestigious business awards including the queen’s 
award to industry for export achievement and twice 
the cutlers acclaim award for corporate growth 
in 1991 doug was awarded south yorkshire 
businessman of the year
until recently he was chairman of medilink 
yorkshire and humber and proud to hold the 
office of master cutler in hallamshire from 1998 
to 1999 in 2000 doug was appointed chairman 
of the south yorkshire learning  skills council 
by government office leeds and awarded the 
cbe in the 2000 new year’s honours list for 
services to industry
 2 graham bowland
  chief executive officer and company secretary
graham age 48 graduated from cardiff university 
with an honours degree in physics in 1982 he qualified 
as a chartered accountant in 1987 whilst working 
for a local firm of chartered accountants
deciding his acquired skills would be better 
employed in an industrial setting graham joined 
a software house in harrogate where he delivered 
significant returns for the owners however  wishing 
to gain experience of a larger company in 1990 
graham moved to agj holdings plc where he was 
appointed director of an associate company and 
experienced a taste of international business when 
he was responsible for appointing agents and 
distributors throughout the middle east
due to a decline in the textiles industry graham 
moved to countrywide leisure before joining 
surgical innovations in 1999 as financial controller 
but soon after he was promoted to the group board 
as finance director and company secretary
appointed joint managing director of surgical 
innovations limited in 2000 and made sole 
managing director in 2008 graham has been 
instrumental in building upon the company’s 
reputation within the industry for innovation 
and “inhouse” manufacturing
 3 colin glass
 nonexecutive director
colin age 66 is a chartered accountant and a 
partner in winburn glass norfolk he is a founder 
director of surgical innovations limited and was 
instrumental in securing early funding and in the 
reverse takeover of haemocell plc in 1998 which 
resulted in the quotation of the company on aim 
colin is a nonexecutive director of several 
companies including straight plc and getech 
group plc he is the chairman of surgical 
innovations audit committee and a member of 
the surgical innovations remuneration committee 
using his expertise in financial and corporate advisory 
matters colin has built up a wide range of contacts 
from various industries and organisations which 
benefit the companies with which he is involved
 4 ray simkins
 nonexecutive director
ray age 66 is a mechanical engineer by 
training and has qualifications from buckingham 
technical college and massachusetts institute 
of technology mit 
he has worked for getz since 1966 where he has 
represented their business interests in the us 
japan thailand malaysia and singapore he is 
currently president of the getz group with interests 
throughout the asiapacific region
ray has been a nonexecutive director since 1996 
and was instrumental in securing investment from 
getz prior to the reverse takeover of haemocell plc 
in 1998 ray is a member of both the surgical 
innovations audit and remuneration committees 
and with a wealth of experience in international 
distribution management he provides invaluable 
input into many aspects of the board’s activities
 5 professor mike mcmahon 
 nonexecutive clinical director
mike age 67 a founder director of surgical 
innovations limited became a nonexecutive 
clinical director in october 2007  holds a chair in 
surgery at the university of leeds and is consultant 
surgeon at the nuffield hospital leeds 
he is the immediate past president of the 
association of laparoscopic surgeons of great 
britain and ireland als and was recently a 
royal college of surgeons tutor in minimally 
invasive surgery he also established the leeds 
institute for minimally invasive therapy limit 
mike’s past roles include president of the 
pancreatic society of great britain and ireland 
and chairman of the education committee of the 
european association of endoscopic surgery
review of the year governance accounts 22 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
senior management and advisers
1
3
2
4
company secretary 
and registered office
n graham bowland 
clayton wood house 
6 clayton wood bank 
leeds ls16 6qz
registered number 
2298163
nominated adviser 
westhouse securities limited 
6th floor 
west one 
wellington street 
leeds ls1 1ba
solicitors
walker morris 
kings court 
12 king street 
leeds ls1 2hl
auditor
grant thornton uk llp 
no 1 whitehall riverside 
leeds ls1 4bn
broker
westhouse securities limited 
one angel court 
london ec2r 7hj
registrars
capita registrars 
the registry 
34 beckenham road 
beckenham 
kent br3 4tu
bankers
hsbc bank plc 
7 prospect crescent 
harrogate hg1 1rn
financial public relations
abchurch communications limited 
125 old broad street 
london ec2 n1ar surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 23
 1 mike white
 product development director
mike age 36 graduated from brunel university 
with a first class honours degree in product design 
in 1996 after winning the james dyson award for 
product design at london’s new designers exhibition 
he worked for dyson appliances before joining 
surgical innovations as a design engineer in 1997 
the first project that mike was involved with at 
surgical innovations “logic
®
”  went on to win best 
medical device in the 1999 plastics and rubber 
weekly prw awards for excellence and 
has patents filed worldwide
a member of the chartered society of designers 
since 2002 mike was appointed to the management 
board of surgical innovations as design director in 
2006 and is dedicated to expanding the company’s 
product portfolio with innovative ergonomic and 
commercially successful instrumentation
 2 paul birtles
 manufacturing director
paul aged 44 joined the company as 
manufacturing director in 2005 he has a 
background in mechanical engineering with 
extensive experience of manufacturing both 
in the uk and overseas 
paul began his career as an apprentice at 
renolds power transmission in bradford before 
moving into management at a subcontract 
engineering company in heckmondwike he then 
moved into production management at pinco 
bradford a textile engineering manufacturer 
paul also spent eight months in the us where he 
was responsible for setting up a textile engineering 
plant before returning to the uk when he joined 
surgical innovations 
paul has been instrumental in the recent setting 
up of inhouse manufacturing thereby enabling the 
more effective and efficient manufacture of products
 3 duncan pidsley
 financial controller
duncan age 53 studied business studies 
at sheffield polytechnic completing his studies 
in 1977  he then went on to study for his professional 
accountancy examinations becoming an associate 
member of the chartered institute of management 
accountants cima in 1984
duncan has spent the majority of his professional 
career working in both civil and mechanical 
engineering businesses he joined surgical 
innovations in 2008 as a member of the senior 
management team and has since built a strong 
financial and administrative team providing 
valuable support to the board of directors 
and the company 
 4 stephen seed
 quality manager
stephen age 44 was educated in sheffield and 
graduated in mineral processing in 1988 he began 
his quality career in the county durham mining 
industry soon moving into the chemical industry 
and then into engineering
stephen now has over 20 years’ experience as a 
quality manager  he is a chartered quality professional 
member of the chartered quality institute and is 
a qualified lead auditor for iso 13485 the medical 
device manufacturing standard
stephen joined surgical innovations as quality 
manager in 2006 since when he has completely 
rewritten the company’s quality systems and 
employed his lean six sigma experience to 
continually improve procedures and practices 
review of the year governance accounts 24 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
clinical advisory board
from left to right gary gecelter alberic fiennes peter sagar ian brayshaw 
professor mike mcmahon alfred cutner phillippe grange
gary gecelter
gary comes to us as the director of surgery 
at st francis hospital ny with an international 
reputation in minimally invasive surgery and 
surgical oncology  having trained in south africa 
as a gastrointestinal surgical oncologist he 
pioneered numerous laparoscopic techniques 
and was responsible for the development of flexible 
laparoscopy which has become an integral part 
of minimally invasive intraabdominal solid tumour 
resection and minimally invasive esophagectomy mie
he spent the past decade as chief of general surgery 
at long island jewish medical center and in 2005 
was appointed vice chairman of surgery for the 
nslij health system and site director for surgery 
at lij medical center he is associate professor 
of clinical surgery at the albert einstein college 
of medicine 
upon immigrating to the us gary was appointed 
assistant professor of surgery at suny stony brook 
during that tenure he was appointed medical director 
of the operating room at university hospital and 
was appointed chairman of the medical executive 
committee in 1998
he has published extensively in his field and has 
been invited to lecture throughout the world including 
britain south africa chile argentina and colombia 
he is also a standing member of the american college 
of surgeons’ ultrasound education faculty
gary has patents in surgical safety devices and has 
lectured internationally on optimising the surgical 
care environment he participates on many national 
clinical trials in novel cancer therapies and is on 
the clinical advisory board of numerous cutting 
edge technology companies
alberic fiennes
alberic was senior lecturer in surgery at 
st george’s hospital medical school from 1990 
to 2003 consultant general and upper digestive 
surgeon at st george’s hospital from 2004 to 2007 
and director of bariatric surgery at university college 
london hospital from 2007 to 2009
he has been a council member of the british 
obesity surgery society boss for four years and 
is currently president of the society he chairs the 
national bariatric surgery registry data committee
he first undertook laparoscopic cholecystectomy 
in 1991 tepp hernia repair in 1992 and was the 
first uk surgeon to offer daycase laparoscopic 
cholecystectomy and hernia repair 
he has been active in bariatric surgery since 1995 
when he took on the aftercare of a cohort of patients 
who had undergone weightloss surgery in the 1970s 
and 80s the team he now leads has 14 years’ 
experience in the nhs and the independent sector 
peter sagar
peter qualified from leeds medical school in 
1983 with honours after initially gaining a first 
class honours degree in pathology in 1980 after 
basic surgical training at the general infirmary in 
leeds and becoming a fellow of the royal college 
of surgeons he went on to complete a doctorate in 
medicine with research into new techniques in the 
surgery for inflammatory bowel disease this work 
was awarded the prestigious patey prize by the 
surgical research society in 1990 
his research interests continued as a lecturer 
in surgery at the university of liverpool before 
working as a chief resident at the mayo clinic 
rochester minnesota 
in 1996 he was appointed to the staff at the 
leeds general infirmary and has gone onto develop 
a national referral practice for the management 
of recurrent pelvic malignancy he has been involved 
in the laparoscopic management of colon and rectal 
disease since its inception and currently runs 
an active training and research fellowship he has 
lectured throughout the world and has published 
over 160 papers
ian brayshaw
ian graduated as an operating department 
practitioner in 1994 he has continued to train 
in this area and in 2004 completed a diploma in 
advanced surgical practice at huddersfield university 
and went on to complete the royal college of surgeons 
basic skills course he is a surgical first assistant 
for the leeds general infirmary where he has 
worked since 1981 
ian specialises in laparoscopic bariatric surgery  
upper gi and cholorectal surgery he has been 
the first assistant in over 500 bariatric cases 
and 50 colorectal pouch procedures in the uk
alfred cutner
alfred consultant at university college 
hospital london achieved a distinction in 
obstetrics and gynaecology in 1985 and went 
on to obtain his doctorate in medicine from 
the university of london in 1993
alfred gained his part ii to become a member of the 
royal college of obstetricians and gynaecologists 
in 1993 having obtained part i in 1987 
he has written a book entitled “basic urogynaecology” 
1993 and has also contributed to many others 
including “the investigation and management of 
urinary incontinence in women” 1995 and a more 
recent chapter is r kearney a cutner “laparoscopic 
colposuspension and paravaginal repair”  alfred has 
been a member of several committees and currently 
holds the position of president of the bsge
philippe grange
philippe qualified from medical school in nancy 
and then qualified from poitiers in general surgery 
in 1986 and urology in 1989 he is now a consultant at 
king’s college hospital in london honorary professor 
of urology at the beijing hospital and honorary 
consultant laparoscopist at guy’s hospital and 
university college of london hospital 
his main field of interest lies in pioneering laparoscopic 
procedures and he has performed over 2000 major 
laparoscopic procedures in oncological urology 
urogynaecology and abdominal surgery 
philippe has been teaching and mentoring 
radical prostatectomy in 40 centres for the past 
three years he is currently a course director for 
laparoscopic skills baus china rcs uclh esi 
and is an adviser to the royal college surgeons 
for laparoscopic skills courses and faculty on mis 
training the trainers courses he is adviser on the 
board of the international society of cryosurgery surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 25
surgical innovations’ trade marks
as at 9 april 2010
review of the year governance accounts
       south 
    uk eu us africa
logi   
™
 
®
 
™ ™
logic   
® ® ® ®
quick   
®
 
™ ™ ™
resposable   
® ®
 
™ ™
surgical innovations   
™ 
®
 ™ ™
swingtop   
® ® ® 
™
yelloport   
® ® ® 
™
yelloportplus   
® ® ® 
™ 26 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
the directors present their annual report together with the audited financial statements for the year ended 31 december 2009
principal activities and business review
the company is the holding company of a group whose principal activities in the year involved the design development and manufacture 
of devices for use in minimally invasive surgery mis and industrial markets surgical devices are targeted at the operating theatre environment 
in both public and private hospitals in international markets the group sells through independent healthcare distributors through original 
equipment manufacture oem and licensing contracts with major suppliers of medical equipment a review of the group’s activities during 
the period is included within the chairman’s statement on pages 4 to 7 and the business review and financial review on pages 14 to 19
results and dividends
the consolidated statement of comprehensive income for the year is set out on page 36 
the directors do not recommend the payment of a dividend
research and development
the group’s activities in this area have focused principally on the continuing development of innovative instruments for use in the field of mis
employees
the commitment and ability of our employees are key factors in achieving the group’s objectives
employment policies are based on the provision of appropriate training whilst annual personal appraisals support skill and career development
the board encourages management feedback at all levels to facilitate the development of the group’s business the group seeks to 
keep its employees informed on all matters affecting them by regular management and departmental meetings the company operates 
a save as you earn saye share option scheme
directors
the names of the current directors of the company and their biographical details are set out on pages 20 and 21 all directors served 
throughout the year
directors’ interests
the interests in the share capital of the company of those directors in office at the end of the year were as follows
ordinary shares of 1p each
      31 december 1 january 
      2009 2009 
      beneficial  beneficial
d b liversidge cbe     4 171821 3071821
n g bowland      1617 498 517 498
c glass      3881602 2781602
r simkins     2369461 1269461
m j mcmahon     12 188281 10368932
apart from the interests disclosed above and the options referred to on page 32 no directors were interested at any time during the year 
in the share capital of the company or other group companies there have been no changes in directors’ interests between the year end 
and 31 march 2010
otherwise than as disclosed in note 16 no director has an interest in any material contract other than contracts of service and employment 
to which the group was a party
copies of the directors’ service contracts are available for inspection at the registered office of the company clayton wood house 
6 clayton wood bank leeds ls16 6qz and will be available at this year’s annual general meeting agm for 15 minutes prior to and during 
the whole course of the meeting
report of the directors surgical innovations group plc
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review of the year governance accounts
substantial shareholdings
other than the directors’ own holdings the board has been notified that as at 4 march 2010 the following shareholders on the company’s 
share register were interested in 3 or more of the issued ordinary share capital of the company
      number  
      of shares  
getz bros  co bvi inc     49248810 13 17
barclayshare nominees limited     31030 178  830
pershing nominees limited     23071742 6 17
td waterhouse nominees europe     18222779 487
hsdl nominees limited     17 039435 456
the bank of new york nominees     14285814 382
ferlim nominees limited     11893000 3 18
r c greig nominees limited     11826554 3 16
share issues
no shares were issued during the year
creditor payment policy
the group’s current policy concerning the payment of suppliers is to
w  settle the terms of payment with those suppliers when agreeing the terms of each transaction
w  ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and
w  pay in accordance with its contractual and other legal obligations
the payment policy applies to all payments to creditors for revenue and capital supplies of goods and services without exception 
the company has no trade creditors
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations 
company law requires the directors to prepare financial statements for each financial year  under that law the directors have elected to prepare 
the group financial statements in accordance with international financial reporting standards ifrs as adopted by the european union 
and the parent company financial statements in accordance with united kingdom accounting standards united kingdom generally accepted 
accounting practice the financial statements are required by law to give a true and fair view of the state of affairs of the group and parent 
company and of the profit or loss of the group for that period in preparing these financial statements the directors are required to
w  select suitable accounting policies and then apply them consistently
w  make judgements and estimates that are reasonable and prudent
w  state whether applicable ifrs as adopted by the european union have been followed subject to any material departures disclosed 
and explained in the group financial statements 
w  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue 
in business and
w  state whether applicable uk accounting standards have been followed subject to any material departures disclosed and explained 
in the parent company financial statements
the directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial 
position of the company and enable them to ensure that the financial statements comply with the companies act 2006 they are also 
responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud 
and other irregularities 28 surgical innovations group plc
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annual report and accounts 2009
statement of directors’ responsibilities continued
in so far as each of the directors are aware
w  there is no relevant audit information of which the company’s auditor is unaware and
w  the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish 
that the auditor is aware of that information
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s 
website legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from legislation 
in other jurisdictions
summary of key performance indicators kpis
the directors have monitored the overall progress of the group and the individual strategic elements by reference to certain financial 
and non‑financial kpis
financial performance
kpis are in place to measure sales profitability rate of divisional growth cash generation and returns on capital employed 
customer satisfaction
kpis are established to measure and improve customer relationships quality of service and our order delivery times
employee satisfaction
kpis are agreed to measure staff morale training needs and personal development
leadership
kpis are set to measure the performance of directors and management in conjunction with overall group strategy and planning
innovation
kpis are positioned to measure the creativity and inventiveness of employees to improve the number of patents filed design rights applied 
for and internal products developed
principal risks and uncertainties
the management of the business and the nature of the group’s strategy are subject to a number of risks
the directors have set out below the principal risks facing the business
the directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks 
identified below where possible processes are in place to monitor and mitigate such risks
patents and proprietary rights
the group’s success is dependent upon its ability to establish file and protect intellectual property relating to the development of its 
proprietary products for eventual sale or licence whilst the group seeks patent protection where appropriate for its developments there 
can be no assurance that patent applications will mature into granted patents or that existing patents will provide the group with sufficient 
protection in the case of infringement by third parties or be successfully challenged or revoked by competitors
regulatory approval
as an international business a significant proportion of the group’s products require registration from national or federal regulatory bodies 
prior to being offered for sale with our major product lines now having fda approval in the us we are subject to their audit and inspection 
of our manufacturing facilities there is no guarantee that any product developed by the group will obtain and maintain national registration 
or that the group will always pass regulatory audit of its manufacturing processes failure to do so could have severe consequences upon 
the group’s ability to sell products in the relevant country
product obsolescence
due to the nature of the market in which the group operates products are subject to technological advances and as a result obsolescence 
the directors are committed to the research and development strategy in place and are confident that the group is able to react effectively 
to the developments within the market
report of the directors continued surgical innovations group plc
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review of the year governance accounts
principal risks and uncertainties continued
dependence upon reimbursement
the commercial success of the group’s products is partly dependent upon reimbursement levels for laparoscopic procedures set by governments 
health authorities private insurers and other organisations there is no guarantee that changes in reimbursement policy in the group’s main 
markets will not have an impact on the ability to sell products into those markets
financial risk 
the directors are confident that the banking facilities currently in place are more than adequate for the group’s working capital requirements
some of the group’s sales and purchases are made in currencies other than sterling and consideration is given to the use of forward currency 
contracts to reduce the exposure
the directors are satisfied that credit risk is adequately managed and the level of bad debts is consistent with the nature of the industry 
further details with regard to this are given in note 13
auditor
grant thornton uk llp has indicated its willingness to continue in office a resolution for its re‑appointment as independent auditor 
will be proposed at the agm
by order of the board
n g bowland
chief executive officer
31 march 2010 30 surgical innovations group plc
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directors’ remuneration
the board recognises that directors’ remuneration is of legitimate concern to the shareholders the group operates within an innovative 
and competitive arena that places constant demands on the technical abilities of the group its performance depends on the individual 
contributions of the directors and employees and it believes in rewarding all those who have made a positive contribution in the development 
of the group
the board has in accordance with best practice decided to present this report on remuneration for shareholders’ approval so that shareholders 
can approve the policy detailed in this report
remuneration committee
the remuneration committee which meets as required is made up of the following directors
d b liversidge cbe chairman 
c glass 
r simkins
remuneration policy
the principal objective is to develop policies and recommend proposals appropriate to facilitating the recruitment retention and motivation 
of executive directors and in so doing to avoid the group bearing more than a reasonable and necessary cost where practical and appropriate 
the remuneration of the executive director and other senior management is aligned with the interests of shareholders
the remuneration committee considers that a successful remuneration policy needs to be sufficiently flexible to take account of future 
changes in the group’s business environment and in remuneration practice any changes to policy for years after 2009 will be described 
in future reports on remuneration which will continue to be subject to shareholder approval
the remuneration of the executive director comprises four main elements
w  basic salary to remain competitive in the marketplace reflecting the experience level of competence of the individual and comparative 
base salaries elsewhere within the group
w  annual bonus payment to provide additional short‑term remuneration which directly reflects group and individual performance
w  share options through the regular grant of options to reward achievements of target and outstanding business performance over 
the longer term and
w  pension arrangements to enable directors to make appropriate provision for retirement
it is group policy that a significant proportion of the remuneration of the executive director should be performance related with an annual bonus 
of up to 25 of basic salary
contracts of service
no director has a service contract with a notice period in excess of one year
report on remuneration surgical innovations group plc
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review of the year governance accounts
directors’ emoluments – information subject to audit
details of directors’ emoluments for the year are as follows
    total total 
  salary  emoluments emoluments 
  and  excluding excluding pension pension 
   fees benefits  pensions  pensions contributions contributions 
  2009 2009 2009 2008 2009 2008 
   £’000 £’000 £’000 £’000 £’000 £’000
executive
n g bowland 93 10 103 95 4 4
s s moran resigned 10 july 2008 — — — 48 — 2
non‑executive
d b liversidge cbe
5
 25 — 25 19 — —
c glass
6
 13 — 13 13 — —
r simkins
7
 13 — 13 13 — —
m j mcmahon 13 — 13 13 — —
total 157 10 167 201 4 6
1  no payments were made to any director in respect of compensation for loss of office in 2009 or 2008
2  benefits received consist of the provision of motor cars and private health
3  at 31 december 2009 and march 2010 a loan of £5000 made available to s s moran in 2008 was still repayable
4  at 31 december 2009 and march 2010 a loan of £20000 made available to n g bowland in 2009 was still repayable
5  d b liversidge’s fees are paid to quest investments limited a company of which he is a director
6  c glass’ fees are paid to winburn glass norfolk a firm of which he is a partner
7   r simkins’ fees are paid to getz bros  co a company of which he is an employee
8  pension contributions represent payments made to defined contribution schemes non‑executive directors are not entitled to retirement benefits
9  remuneration of the non‑executive directors is determined by the board 32 surgical innovations group plc
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directors’ share options
details of the share options held by directors are as follows
   at at  
   1 january 31 december  option 
   2009 2009  price date granted
d b liversidge cbe  1000000 1000000 170p november 2000
   1000000 1000000 170p april 2001
   1500000 1500000 170p november 2007
   — 1000000 150p january 2009
   — 400000 170p november 2009
n g bowland  1000000 1000000 300p november 2000
   1000000 1000000 200p july 2001
   2545454 2545454 350p november 2007
   1454546 1454546 170p november 2007
   — 2000000 150p january 2009
   — 2200000 170p november 2009
c glass  1000000 1000000 170p  november 2000
   1000000 1000000 170p april 2001
   1500000 1500000 170p  november 2007
   — 1000000 150p january 2009
   — 400000 170p november 2009
r simkins  2000000 2000000 170p may 2001
   1500000 1500000 170p november 2007
   — 1000000 150p january 2009
   — 400000 170p november 2009
m j mcmahon  1000000 1000000 170p november 2000
   1000000 1000000 170p april 2001
   1500000 1500000 170p november 2007
   — 1000000 150p january 2009
   — 400000 170p november 2009
1 share options are exercisable between nil and ten years from the date of the grant
2 share options are exercisable between three and ten years from the date of the grant
the market price of the company’s shares at the end of the financial year was 163p and the range of market prices during the year was between 
088p and 188p
on behalf of the board
d b liversidge cbe
non‑executive chairman
31 march 2010
1
1
1
1
1
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
report on remuneration continued surgical innovations group plc
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review of the year governance accounts
corporate governance
principles of good governance
the board continues to support the principles of good governance the board has adopted such procedures as it considers practical 
and appropriate for a group of its size so as to affect good governance
application of principles
directors 
the company supports the concept of an effective board leading and controlling the group the board is responsible for approving group 
policy and strategy it meets regularly and has a schedule of matters specifically reserved to it for decision management supplies the board 
with appropriate and timely information and the directors are free to seek any further information they consider necessary all directors 
have access to advice from the company secretary and independent professionals at the group’s expense training is available for new 
directors and other directors as necessary
the board members are
d b liversidge cbe –  non‑executive chairman 
n g bowland – chief executive officer 
c glass – non‑executive director 
r simkins  – non‑executive director 
m j mcmahon  – non‑executive director
all directors are subject to re‑election every three years and at the first agm after appointment
this year m j mcmahon and c glass retire by rotation and being eligible offer themselves for re‑election 
accountability and audit
the board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investments and the company’s assets
the audit committee comprises c glass chairman d b liversidge cbe and r simkins who are all non‑executive directors
the committee considers the appointment and terms of engagement of the external auditor and assesses the independence of the external 
auditor and reviews the auditor’s policy for the rotation of audit partners
the terms of reference of the committee include reviewing the scope and results of the external audit and its effectiveness
communication with shareholders
the board is committed to effective communication between the group and its shareholders
it regards the agm as a means of communicating directly with private investors and encourages their participation all directors normally 
attend the agm and private investors have the opportunity to meet the directors and discuss any issues on an informal basis separate 
resolutions are passed on each issue so that they can be given proper consideration and there is a resolution to approve the annual report 
and accounts
the shareholders can gain access to information on the group as well as to the annual report and accounts through the website wwwsurginnocom 34 surgical innovations group plc
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annual report and accounts 2009
corporate governance continued
internal controls
the board of directors is ultimately responsible for the group’s management and internal control systems during the financial period and 
to the date of approval of the financial statements it has reviewed the operation and effectiveness of the group’s systems of internal control 
which can provide only a reasonable but not absolute assurance against material misstatement or loss 
the board discharges its responsibility for internal financial control through the following key procedures
w  the establishment of an organisational structure appropriate to the size of the business with clearly defined levels of authority and division 
of responsibilities for approval of external payments and receipt and dispatch of goods
w  a comprehensive budgeting and financial reporting system which compares actual performance with budget on a monthly basis and
w  the formulation by the board of policies and of approval procedures in a number of key areas such as credit control expenditure 
authorisation stock ordering and quality assurance
going concern
on the basis of the budget for 2010 and forecasts prepared by the directors the board has a reasonable expectation that the company 
and the group have adequate resources to continue in operational existence for the foreseeable future for this reason they continue 
to adopt the going concern basis in preparing the financial statements
on behalf of the board
d b liversidge cbe
non‑executive chairman
31 march 2010 surgical innovations group plc
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annual report and accounts 2009 35
review of the year governance accounts
report of the independent auditor – group
to the members of surgical innovations group plc
independent auditor’s report to the members of surgical innovations group plc
we have audited the group financial statements of surgical innovations group plc for the year ended 31 december 2009 which 
comprise the consolidated statement of comprehensive income the consolidated balance sheet the consolidated cash flow statement 
the consolidated statement of changes in equity and the related notes the financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting standards ifrs as adopted by the european union
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the statement of directors’ responsibilities set out on pages 27 and 28 the directors are responsible for the 
preparation of the group financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the 
group financial statements in accordance with applicable law and international standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeuknp 
opinion on financial statements
in our opinion the group financial statements
w  give a true and fair view of the state of the group’s affairs as at 31 december 2009 and of its profit for the year then ended 
w  have been properly prepared in accordance with ifrs as adopted by the european union and
w  have been prepared in accordance with the requirements of the companies act 2006
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the report of the directors for the financial year for which the group financial statements are prepared 
is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion
w  certain disclosures of directors’ remuneration specified by law are not made or
w  we have not received all the information and explanations we require for our audit
other matter
we have reported separately on the parent company financial statements of surgical innovations group plc for the year ended 31 december 2009 
tim lincoln
senior statutory auditor
for and on behalf of grant thornton uk llp
statutory auditor chartered accountant
leeds
31 march 2010 36 surgical innovations group plc
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annual report and accounts 2009
consolidated statement of comprehensive income
for the year ended 31 december 2009
 2009  2008
    nonrecurring   non‑recurring  
   headline costs total headline costs total 
  notes £’000 £’000 £’000 £’000 £’000 £’000
revenue 2 4541 — 4541 4312 — 4312
cost of sales  2447 200 2647 2032 — 2032
gross profit  2094 200 1894 2280 — 2280
other operating expenses  1528 — 1528 1485 — 1485
share‑based payments  75 — 75 15 — 15
operating profit 4 491 200 291 780 — 780
finance costs 6 40 — 40 78 — 78
finance income  13 — 13 118 — 118
profit before taxation  464 200 264 820 — 820
taxation 7 261 — 261 190 — 190
profit and total comprehensive income for the period  
attributable to the owners of the parent  725 200 525 630 — 630
earnings per share total and continuing       
basic 8   0 14p   0 17p
diluted 8   0 14p   0 17p
the consolidated statement of comprehensive income above relates to continuing operations surgical innovations group plc
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review of the year governance accounts
consolidated balance sheet
as at 31 december 2009
      2009 2008 
     notes £’000 £’000
assets
non‑current assets
property plant and equipment    9 2056 1343
intangible assets    10 2 139 1 174
deferred tax asset    7 193 134
      4388 2651
current assets
inventories    11 2047 1716
trade receivables    12 2 135 3 164
other current assets    12 460 344
cash and cash equivalents     2508 3232
      7  150 8456
total assets     11538 11 107
equity and liabilities
equity attributable to equity holders of the parent company
share capital    14 3738 3738
share premium account     18809 18809
capital reserve     329 329
retained earnings     14236 14836
total equity     8640 8040
non‑current liabilities
obligations under finance leases     511 224
      511 224
current liabilities
bank overdraft and loans     1 123 1537
trade and other payables     818 787
obligations under finance leases     252 177
current tax liabilities     — 164
accruals     194 178
      2387 2843
total liabilities     2898 3067
total equity and liabilities     11538 11 107
the financial statements on pages 36 to 55 were approved by the board of directors on 31 march 2010 and were signed on its behalf by
d b liversidge cbe
director
31 march 2010
company registered number 2298163 38 surgical innovations group plc
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annual report and accounts 2009
consolidated cash flow statement
for the year ended 31 december 2009
      year ended  year ended 
      31 december 31 december  
      2009 2008 
      £’000 £’000
cash flows from operating activities
operating profit     291 780
adjustments for
depreciation of property plant and equipment     345 187
amortisation of intangible assets     101 60
share‑based payment     75 —
operating cash flows before movement in working capital     812 1027
increasedecrease in inventories     331 100
decreaseincrease in receivables     913 862
increasedecrease in payables     47 142
cash generated from operations     1441 123
interest paid     40 78
tax receivedpaid     38 38
net cash generated from operating activities     1439 7
cash flows from investing activities
interest received     13 118
acquisition of non‑current assets     1517 961
net cash used in investment activities     1504 843
cash flows from financing activities
repayment of bank loans     6 25
repayment of obligations under finance leases     245 178
net cash used in financing activities     251 203
net decrease in cash and cash equivalents     316 1039
cash and equivalents at beginning of period     1701 2740
cash and cash equivalents at end of period     1385 1701
cash at bank and in hand     2508 3232
bank overdraft     1 123 1531
cash and cash equivalents at end of period       1385 1701 surgical innovations group plc
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annual report and accounts 2009 39
review of the year governance accounts
consolidated statement of changes in equity
for the year ended 31 december 2009
   share share capital retained 
   capital premium reserve earnings total 
   £’000 £’000 £’000 £’000 £’000
balance as at 1 january 2008  3738 18809 329 15466 7 410
profit and total comprehensive income for the period  — — — 630 630
balance as at 31 december 2008  3738 18809 329 14836 8040
employee share‑based payment options  — — — 75 75
transactions with owners  — — — 75 75
profit and total comprehensive income for the period  — — — 525 525
balance as at 31 december 2009  3738 18809 329 14236 8640 40 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements
1 group accounting policies under ifrs
a basis of preparation
these financial statements have been prepared on the basis of the ifrs accounting policies set out below 
the financial statements have been prepared in accordance with ifrs as adopted for use by the european union including ifric 
interpretations and in line with those provisions of the companies act 2006 applicable to companies reporting under ifrs
the preparation of financial statements in conformity with ifrs requires the use of certain critical accounting estimates it also requires 
management to exercise its judgement in the process of applying the group’s accounting policies
the directors have considered the available cash resources of the group and its current forecasts and are satisfied that the group has 
adequate resources to continue in operational existence for the foreseeable future and so the going concern basis has been adopted 
in the preparation of these financial statements
the financial statements have been prepared under the historical cost convention
the consolidated financial statements are presented in sterling rounded to the nearest thousand
these accounts reflect the first time adoption of ias 1 presentation of financial statements revised 2007 and ifrs 8 operating segments 
the effect of the adoption of these standards has been presentational only given this the opening comparative balance sheet has not been 
presented as the information is unchanged from that presented previously
b consolidation
subsidiaries
the group financial statements consolidate those of the parent company and of its subsidiary undertakings the results of subsidiaries 
accounted for under the acquisition accounting method are included in the consolidated statement of comprehensive income from the date 
of their acquisition the results of subsidiaries accounted for under the merger accounting method are included in the consolidated statement 
of comprehensive income as if they had always been part of the group intra‑group sales and results are eliminated on consolidation and all 
sales and results relate to external transactions only
c foreign currency translation
transactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions 
foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates 
of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income
d property plant and equipment
these are stated at the cost of acquisition less any provision for depreciation cost includes expenditure that is directly attributable 
to the acquisition of the items 
the assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date
depreciation is charged so as to write off the cost of property plant and equipment less estimated residual value over their estimated useful 
economic lives at the following rates
office and computer equipment – 10–20 per annum 
plant and machinery  – 10 per annum 
tooling  – 20 per annum 
placed equipment – 333 per annum 
leasehold improvements – over the remaining term of the lease
tooling developed for the group’s own products is only depreciated when brought into use
placed equipment relates to equipment placed in clinical settings to generate a stream of disposables revenue surgical innovations group plc
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review of the year governance accounts
1 group accounting policies under ifrs continued
e intangible assets
research and development
expenditure on research activities is recognised as an expense in the period in which it is incurred
development expenditure arising from the group’s development activities is capitalised and amortised over the life of the product only 
if the group can demonstrate the following
w  the technical feasibility of completing the intangible asset so it will be available for use or sale
w  the intention to complete the intangible asset and use or sell it
w  the ability to use or sell the intangible asset
w  that it is probable that the asset created will generate future economic benefits
w  there is the availability of adequate technical financial and other resources to complete the development and to use or sell 
the intangible asset and
w  the development cost of the asset can be measured reliably
where no intangible asset can be recognised development expenditure is recognised as an expense in the period in which it is incurred 
capitalised development costs are amortised over the life of the product within cost of sales which is usually no more than ten years
f impairment of non‑financial assets
impairment reviews are carried out when there is a specific indicator of impairment an asset’s carrying amount is written down immediately 
to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount the recoverable amount is the 
higher of an asset’s fair value less costs to sell and its value in use
g inventories
inventories are stated at the lower of cost using weighted average and net realisable value
cost is the purchase cost including transport for raw materials together with a proportion of manufacturing overheads based on normal 
levels of activity for work in progress and finished goods
net realisable value is based on estimated normal selling price less further costs expected to be incurred to completion and sale provision 
is made for obsolete slow moving or defective items where appropriate
h trade receivables
trade receivables are recognised initially at fair value thereafter at amortised costs less provision for impairment a provision for impairment 
of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the 
original terms of the receivables the amount of the provision is the difference between the asset’s carrying amount and the present 
value of estimated future cash flows the amount of the loss is recognised in the consolidated statement of comprehensive income 
as are subsequent recoveries of amounts previously written off
i cash and cash equivalents
cash and cash equivalents include cash in hand deposits held on call at banks and bank overdrafts bank overdrafts are shown within 
borrowings in current liabilities on the balance sheet
j trade payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate
k share capital
ordinary shares are classified as equity
incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction net of tax from proceeds  42 surgical innovations group plc
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notes to the consolidated financial statements continued
1 group accounting policies under ifrs continued
l income tax
the charge for current tax is based on the results for the period as adjusted for items which are non‑assessable or disallowed and any 
adjustment to tax payable in respect of previous years it is calculated using rates that have been enacted or substantively enacted 
by the balance sheet date
deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between 
the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable 
profit in principle deferred tax liabilities are recognised for all taxable and temporary differences and deferred tax assets are recognised to 
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised such assets 
and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or negative goodwill or from the 
initial recognition other than in business combination of other assets and liabilities in a transaction which affects neither the taxable profit 
nor the accounting profit 
where the group is able to control the distribution of reserves from subsidiaries and there is no intention to distribute the reserves deferred 
tax is not recognised for these temporary differences 
deferred tax is calculated at the rates that are enacted or substantively enacted at the balance sheet date deferred tax is charged or credited 
in the consolidated statement of comprehensive income except when it relates to items credited or charged directly to equity in which case 
the deferred tax is also dealt with in equity
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the group intends 
to settle its current tax assets and liabilities on a net basis
information as to the calculation of the income tax expense is included in note 7 
m employee benefits
pension obligations
the group provides pension benefits to its employees through contributions to defined contribution group personal pension policies the amounts 
charged to the consolidated statement of comprehensive income are the contributions payable in the period
share‑based compensation
all share‑based payment arrangements granted after 7 november 2002 that had not vested by 1 january 2006 are recognised in the 
financial statements the group issues share options to certain employees which are measured at fair value and recognised as an expense 
in the consolidated statement of comprehensive income with a corresponding increase in profit and loss reserve the fair value of the employee 
services received in exchange for the grant of the options is recognised as an expense the total amount to be expensed over the vesting period 
is determined by reference to the fair value of the options granted
the fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become 
unconditionally entitled to the awards at each balance sheet date the group revises its estimate of the number of options that are expected 
to vest it recognises the impact of the revision to original estimates if any in the consolidated statement of comprehensive income 
with a corresponding adjustment to retained earnings
n income recognition
revenue
revenue is the total amount receivable by the group for the supply of goods and services excluding vat and trade discounts it is recognised 
when title of goods passes and the group fulfils its contractual obligations 
royalty income
royalty income is derived from agreements with other parties for them to manufacture and distribute products such royalty income is recognised 
in the same period as the licensee makes the related sale  surgical innovations group plc
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annual report and accounts 2009 43
review of the year governance accounts
1 group accounting policies under ifrs continued
n income recognition continued
design contracts
as soon as the outcome of a design contract can be estimated reliably  contract revenue and expenses are recognised in the consolidated statement 
of comprehensive income in proportion to the stage of completion of the contract the stage of completion is assessed by reference to work 
performed an expected loss on the contract is recognised immediately in the consolidated statement of comprehensive income
interest income
interest income is recognised using the effective interest rate method
government grants
government grants are recognised in the consolidated statement of comprehensive income so as to match them with the expenditure 
towards which they are intended to contribute to the extent that the grants received are intended as a specific reduction against certain 
assets they are recognised in the consolidated statement of comprehensive income over the expected useful life of the related assets
o leases
where the group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset the lease is treated 
as a finance lease the lease is recorded in the balance sheet as property plant and equipment and is depreciated over its estimated useful 
life or the term of the lease whichever is the shorter future instalments under such leases net of finance charges are included in creditors 
rentals under operating leases are charged on a straight‑line basis over the lease term
p significant areas of judgement
in applying the aforementioned accounting policies management has made appropriate estimates in key areas and the actual outcome may 
differ from those calculated the key sources of estimation and judgement uncertainty at the balance sheet date that have a significant risk 
of causing material adjustment to the carrying amount of assets and liabilities in the next financial year are
forecasts and discount rates
the carrying value of a number of items on the balance sheet is dependant on the estimates of future cash flows arising from the group’s operations
w  the impairment test for capitalised development costs is dependant upon forecasts of the cash flows resulting from expected sales 
and cost of sales over the projected life of the relevant product allowance is also made for any future costs of associated product 
development no impairments resulted from the annual impairment testing conducted in 2009 and
w  the realisation of deferred tax assets recognised is dependant on the generation of sufficient future taxable profits the group recognises 
deferred tax assets where it is likely that the benefit will be realised and recognises no more than five years of future profitability given 
uncertainty after this timeframe
trade receivables
the group provides in certain agreed situations products on extended credit terms in order to establish a presence in an export market 
the directors constantly review the likelihood of realisation of these receivables and make provision when the full value of the receivable 
will not be recoverable
q provisions
the group measures provisions at the directors’ best estimates of the expenditure required to settle the obligation at the balance sheet date 
these estimates are made taking account of information available and different possible outcomes  44 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
1 group accounting policies under ifrs continued
r equity
equity is broken down into the elements listed below
w  “share capital” represents the nominal value of equity shares
w  “share premium” represents the excess over nominal value of the fair value of consideration received for equity shares net of expenses 
of the share issue
w  “capital reserve” represents the excess over nominal value of the fair value consideration attributed to equity shares issued in part 
settlement for subsidiary company shares acquired
w  “share option reserve” represents equity‑settled share‑based employee remuneration until such share options are exercised and
w  “profit and loss reserve” represents retained earnings
as at 31 december 2009 the following standards and interpretations are in issue but not yet effective
w  improvements to ifrs issued 16 april 2009
w  ifrs 2 amendment group cash‑settled share‑based payment transactions effective 1 january 2010
w  ifrs 1 amendment additional exemptions for first‑time adopters effective 1 january 2010 and
w  ias 24 revised 2009 related party disclosures effective 1 january 2011
the effect of the adoption of these new standards is expected to be presentational only
2 revenue
analysis by class of business
      2009  2008 
      £’000  £’000
sale of goods
– minimally invasive surgery      4023 3726
– branded products      183 208
– autologous blood transfusion      33 30
royalties
– royalties and licence fees      302 296
sale of services
– design fees      — 52
      4541 4312 surgical innovations group plc
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annual report and accounts 2009 45
review of the year governance accounts
3 segmental reporting
management currently identifies its two principal sales streams as operating segments these operating segments are monitored 
and strategic decisions are made on the basis of adjusted segment operating results
     mis abt total 
31 december 2009    £’000 £’000 £’000
segment revenues    4023 216 4239
cost of sales    2338 309 2647
administrative expenses    1331 26 1357
segment operating results    354 119 235
segment net assets    2608 179 2787
capital expenditure    1076 — 1076
depreciation    347 3 350
amortisation of intangible assets    101 — 101
     mis abt total 
31 december 2008    £’000 £’000 £’000
segment revenues    3726 238 3964
cost of sales    1912 120 2032
administrative expenses    1307 33 1340
segment operating results    507 85 592
segment net assets    1825 298 2 123
capital expenditure    719 — 719
depreciation    179 3 182
amortisation of intangible assets    60 — 60
the totals presented for surgical innovations group plc’s operating segments reconcile to the entity’s key financial figures as presented in its 
financial statements as follows
      2009 2008 
      £’000 £’000
segment revenues  
total segment revenues     4239 3964
royalties and licence fees     302 296
design fees     — 52
entity’s revenues     4541 4312
segment results  
total segment results reported     235 592
royalties and licence fees     302 296
design fees     — 52
unallocated operating income and expenses     191 160
entity’s operating result     346 780
finance costs     40 78
finance income     13 118
entity’s result for the period before tax     319 820
segment assets  
total segment assets     2787 2 123
other unallocated assets and liabilities     2378 3082
consolidation     3455 2835
entity’s assets     8620 8040
in the periods under review unallocated operating income and expenses mainly consist of the listed company costs 46 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
3 segmental reporting continued
the group’s revenues from external customers are divided into the following geographical areas all royalty and licence fees are derived from 
a licensee in the us
      2009 2008 
      £’000 £’000
united kingdom      1404 975
europe      1827 1636
us       372 917
rest of world      636 488
      4239 4016
all non‑current assets are held within the uk
during 2009 £606000 15 of the group’s revenue depended on a single customer in the mis segment 2008 £614000 16
4 operating profit
the profit for the year is stated after charging
      2009 2008 
      £’000 £’000
depreciation of owned assets      273 119
depreciation of assets held under finance lease      72 68
amortisation of capitalised development costs     101 60
auditor’s remuneration
– fees payable to the company’s auditor for the audit of the company’s annual financial statements   25 25
– tax compliance fees      15 11
operating lease rentals
– land and buildings      150 150
5 employees
the average monthly number of employees including executive directors employed by the group during the year was as follows
      2009  2008 
      number number
directors     1 2
production     39 26
development     12 9
administration      11 8
      63 45
the costs incurred in respect of these employees were
      2009 2008 
      £’000 £’000
wages and salaries      1262 1096
social security costs      119 106
pension costs      37 29
      1418 1231
a detailed analysis of directors’ emoluments is shown in the table on page 31 surgical innovations group plc
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annual report and accounts 2009 47
review of the year governance accounts
5 employees continued
directors senior staff and non‑executives
      2009 2008 
      £’000 £’000
salaries     371 354
social security costs     38 36
pension costs     14 11
share‑based payments     75 15
total     498 416
6 finance costs
      2009 2008 
      £’000 £’000
on finance leases     14 10
on bank overdrafts     26 68
      40 78
7  taxation
tax on profit
      2009 2008 
      £’000 £’000
current tax charge      —  164
overunder provision from previous years      202 26
deferred tax credit recognised in year      59 —
tax creditcharge on profit     261  190
factors affecting the tax charge for the year
the taxation assessed for the year is lower than the standard rate of corporation tax in the uk at 28 2008 28 the differences are 
explained as follows
      2009 2008 
      £’000 £’000
profit on ordinary activities before taxation      264 820
corporation tax at standard rate of 28 2008 28     74 230
effects of
research and development enhanced expenditure      250 11
expenses not tax deductible      22 6
capital allowances for the year in excess of depreciation      411 48
other short‑term timing differences     506 8
overunder provision from previous years      202 26
losses utilised      —  21
tax creditcharge for the year     261 190 48 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
7  taxation continued
deferred taxation
the movement in the deferred taxation account during the year was
      2009 2008 
      £’000 £’000
balance brought forward      134 134
consolidated statement of comprehensive income movement arising during the year    59 —
balance carried forward      193 134
the deferred taxation recognised in the financial statements at 28 is set out below
      2009 2008 
      £’000 £’000
trade losses      193 134
the recoverability of the deferred tax asset is dependent on future taxable profits in excess of those arising from the reversal of deferred tax liabilities 
the recognition of the deferred tax assets is based upon profit forecasts for the five years ended 31 december 2014
deferred tax assets at 28 of £4 100000 2008 £3761800 in respect of trading losses carried forward £68000 2008 £29000 in respect 
of short‑term timing differences and £nil 2008 £12000 in respect of accelerated capital allowances have not been recognised on the grounds 
that there is insufficient evidence that these assets will be recoverable in the foreseeable future
8 earnings per ordinary share
basic earnings per ordinary share
the calculation of basic earnings per ordinary share for the year ended 31 december 2009 was based upon the profit attributable to ordinary 
shareholders of £525000 2008 £630000 and a weighted average number of ordinary shares outstanding for the year ended 31 december 2009 
of 373841902 2008 373841902
diluted earnings per ordinary share
the calculation of diluted earnings per ordinary share for the year ended 31 december 2009 was based upon the profit attributable to ordinary 
shareholders of £525000 2008 £630000 and a weighted average number of ordinary shares outstanding for the year ended 31 december 2009 
of 373841902 2008 373841902 all share options at the financial year end were anti‑dilutive
      2009 2008 
earnings     £’000  £’000
earnings for the purpose of basic and diluted earnings per ordinary share     525 630
9 property plant and equipment
    office and  improvements 
   plant and computer placed to leasehold 
  tooling machinery equipment equipment property total 
  £’000 £’000 £’000 £’000 £’000 £’000
gross carrying amount 1260 643 576 55 — 2534
accumulated depreciation and impairment 976 326 414 14 — 1730
carrying amount 1 january 2008 284 317 162 41 — 804
gross carrying amount 1382 938 612 129 199 3260
accumulated depreciation and impairment 1040 376 461 38 2 1917
carrying amount 31 december 2008 342 562 151 91 197 1343
gross carrying amount 1521 1638 719 183 257 4318
accumulated depreciation and impairment 1 129 482 556 71 24 2262
carrying amount 31 december 2009 392 1 156 163 112 233 2056 surgical innovations group plc
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annual report and accounts 2009 49
review of the year governance accounts
9 property plant and equipment continued
    office and  improvements 
   plant and computer placed to leasehold 
  tooling machinery equipment equipment property total 
  £’000 £’000 £’000 £’000 £’000 £’000
carrying amount 1 january 2008 284 317 162 41 — 804
additions – separately acquired 122 295 36 74 199 726
depreciation 64 50 47 24 2 187
carrying amount 31 december 2008 342 562 151 91 197 1343
additions – separately acquired 139 700 107 54 58 1058
depreciation 89 106 95 33 22 345
carrying amount 31 december 2009 392 1 156 163 112 233 2056
leased plant and equipment
the group leases tooling plant and machinery and fixtures and fittings under a number of finance lease arrangements the carrying amount 
and depreciation charge for such assets are disclosed below 
      2009 2008 
      £’000 £’000
tooling
net book value     115 129
depreciation charge for the year     23 23
plant and machinery
net book value     982 574
depreciation charge for the year     76 37
office and computer equipment
net book value     27 20
depreciation charge for the year     12 8
security
at 31 december 2009 the property plant and equipment of the group are subject to a fixed and floating charge to secure both the bank loan 
and overdraft facility
10 intangible assets
      capitalised capitalised 
      development development 
      costs costs 
      2009 2008 
      £’000 £’000
cost
at 1 january 2009     1244 597
additions     1066 647
at 31 december 2009     2310 1244
accumulated amortisation
at 1 january 2009     70 10
charge for the year     101 60
at 31 december 2009     171 70
carrying amount
at 31 december 2009     2 139 1 174
at 31 december 2008     1 174 587
the £2 139000 of capitalised development costs net of £73000 of government grant represents expenditure that fulfils the requirements 
of ias 38 these costs will be amortised over the future commercial life of the product commencing on the sale of the first commercial item 50 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
11 inventories
      2009 2008 
      £’000 £’000
raw materials      990 1038
finished goods      1057 678
      2047 1716
included in the analysis above are provisions against inventory amounting to £200000 2008 £190000
in 2009 a total of £2210000 of inventories was included in profit and loss as an expense 2008 £1923000 this included an amount 
of £323000 resulting from write down of inventories 2008 £60000
inventories are pledged as securities for bank overdrafts
the group’s inventories are comprised of products which are not generally subject to rapid obsolescence on account of technological deterioration 
in condition or market trends consequently management considers that there is little risk of significant adjustments to the group’s inventory 
assets within the next financial year
12 trade and other receivables
      2009 2008 
      £’000 £’000
trade receivables     2 135 3 164
prepayments and accrued income     299 79
other debtors     161 265
      2595 3508
all amounts are short term the carrying value of trade receivables is considered a reasonable approximation to fair value
of the trade receivables £1 104000 relates to five customers 2008 £1894000
all of the group’s trade and other receivables have been reviewed for indicators of impairment certain trade receivables were found to be impaired 
and a provision of £33000 2008 £118000 was recorded accordingly
in addition some of the unimpaired trade receivables are past due at the reporting date the age of financial assets past due but not impaired 
is shown below
      2009 2008 
      £’000 £’000
not more than three months     101 129
more than three months but not more than six months     60 97
more than six months but not more than one year     156 269
more than one year     96 238
 
13 financial instruments
the group is exposed to market risk through its use of financial instruments the group’s risk management is co‑ordinated by the directors 
who focus actively on securing the group’s short to medium‑term cash flows through regular review of all the operating activities of the business 
long‑term financial investments are managed to generate lasting returns
the group does not actively engage in the trading of financial assets for speculative purposes nor does it write options the most significant 
financial risks to which the group is exposed are described on the opposite page surgical innovations group plc
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annual report and accounts 2009 51
review of the year governance accounts
13 financial instruments continued
foreign currency sensitivity
exposures to currency exchange rates arise from the group’s overseas sales and purchases most of which are denominated in euros and dollars
to mitigate the group’s exposure to foreign currency risk cash flows in euros and dollars are monitored on an ongoing basis
foreign currency denominated financial assets and liabilities are set out below
    2009  2008 2009 2008 
    €’000  €’000 ’000  ’000
financial assets   310 291 907 2 192
financial liabilities   123 152 4 92
short‑term exposure   187 139 903 2 100
the group has no long‑term foreign exchange exposure
the group has significant short‑term exposure to the dollar at 31 december 2009 an analysis of the effect of a reasonable possible movement 
of the currency rate against the dollar during 2010 of 3 shows potential foreign currency gains of £14000 on 31 december 2009 dollar 
trade receivables
credit risk analysis
the group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date and which 
are set out below
      2009 2008 
      £’000 £’000
cash and cash equivalents     2508 3232
trade and other receivables     2296 3429
      4804 6661
the group continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls
management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good 
credit quality including those that are past due
in respect of trade and other receivables that are not impaired the group is not exposed to any significant credit risk exposure to any single 
counterparty or any group of counterparties having similar characteristics the credit risk for liquid funds is considered negligible since 
the counterparty is a reputable bank with a high quality external credit rating
liquidity risk analysis
the group manages its liquidity needs by carefully monitoring all scheduled cash outflows liquidity needs are monitored in various time 
bands on a day‑to‑day and week‑to‑week basis as well as on the basis of a rolling four ‑week projection longer‑term needs are monitored 
as part of the group’s regular rolling monthly re‑forecasting process
the group maintains cash to meet its liquidity requirements for up to 30‑day periods funding for long‑term liquidity is additionally secured 
by an adequate amount of committed credit facilities 52 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
13 financial instruments continued
liquidity risk analysis continued
the group’s liabilities have contractual maturities which are summarised below
  current  noncurrent
     within within over 
     6 months 6– 12 months 12 months 
31 december 2009    £’000 £’000 £’000
finance lease obligations    153 139 593
trade and other payables    818 — —
bank overdraft    1 123 — —
     2094 139 593
  current  non‑current
     within within over 
     6 months 6–12 months 12 months 
31 december 2008    £’000 £’000 £’000
long‑term bank loan    6 — —
finance lease obligations    140 63 257
trade and other payables    787 — —
bank overdraft    1531 — —
     2464 63 257
maturity profile of borrowings
      2009 2008 
      £’000 £’000
gross lease payments not later than one year     292 203
later than one year but not more than five years     593 257
future finance charges     122 59
summary of financial assets and liabilities by category
      2009 2008 
      £’000 £’000
loans and other receivables
trade and other receivables     2296 3429
cash      2508 3232
      4804 6661
      2009 2008 
      £’000 £’000
current liabilities
trade payables financial liabilities measured at amortised cost     818 787
other short‑term financial liabilities     1375 1878
      2 193 2665
non‑current liabilities      511 224
        2704  2889
net financial assets and liabilities     2 100 3772
the carrying value of the above assets and liabilities is equal to their fair value surgical innovations group plc
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annual report and accounts 2009 53
review of the year governance accounts
13 financial instruments continued
summary of financial assets and liabilities by category continued
the group’s capital management objectives are
w  to ensure its ability to continue as a going concern and
w  to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk
the group monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presented on the face of the balance sheet
14 share capital
      2009  2008 
      £’000  £’000
authorised 600000000
2008 600000000 ordinary shares of 1p each     6000 6000
allotted called up and fully paid 373841902
2008 373841902 ordinary shares of 1p each      3738 3738
at 31 december 2009 the following share options were outstanding
  number of shares  exercise dates
  at  at option   
  1 january issued in 31 december price per date from which date on which 
scheme and date of grant 2009 year 2009 1p share option may be exercised option expires
executive
november 2000 1000000 — 1000000 30p november 2003 november 2010
non‑executive unapproved
november 2000 3000000 — 3000000 17p november 2003 november 2010
april 2001 5000000 — 5000000 17p april 2004 april 2011
november 2007 6000000 — 6000000 17p november 2009 november 2017
january 2009 — 4000000 4000000 15p november 2009 january 2019
november 2009 — 1600000 1600000 17p november 2009 november 2019
enterprise management 
july 2001 2200000 — 2200000 20p july 2004 july 2011
november 2007 5545454 — 5545454 35p november 2010 november 2017
january 2009 — 2000000 2000000 35p january 2012 january 2019
unapproved 
april 2001 1000000 — 1000000 15p april 2004 april 2011
november 2007 1454546 — 1454546 17p november 2009 november 2017
january 2009 — 2000000 2000000 15p november 2009 january 2019
november 2009 — 2200000 2200000 17p november 2009 november 2019
  these share options do not fall within the recognition and measurement of ifrs 2 and as such no charge for share‑based payments is recognised 
in the consolidated statement of comprehensive income in respect of them 54 surgical innovations group plc
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annual report and accounts 2009
notes to the consolidated financial statements continued
14 share capital continued
share‑based payments
the total share‑based payment charge for the year was £75000
no share options were exercised or forfeited during the current or previous year
the fair values of options granted during the year were determined using the black‑scholes pricing model all the options issued in the year 
vested immediately the following principal assumptions were used in the valuation
volatility – 20 
option life – 1 year 
risk free investment rate – 25
certain share options issued prior to 7 november 2002 and so were outside the scope of the recognition and measurement requirements 
of ifrs 2 had their option price reduced during the year under ifrs 2 where an award granted before 7 november 2002 is modified after 
ifrs 2’s effective date the incremental fair value measured as the difference in the fair value of the award calculated immediately before 
and immediately after modification should be expensed over the remaining vesting period 
the following principal assumptions were used in the valuation
volatility – 20 
option life – 1 year 
risk free investment rate – 25
in total £75000 of employee remuneration expense all of which related to equity‑settled share‑based payment transactions has been included 
in the profit for 2009 2008 £15000 and credited to retained earnings
15 contingent liabilities and financial commitments
these are as follows
a contingent liabilities
there were no contingent liabilities at 31 december 2009 2008 £nil
b operating leases
at 31 december 2009 the group had annual commitments under non‑cancellable operating leases as follows 
      2009  2008 
      land and  land and 
      buildings  buildings 
      £’000  £’000
within one year     147 137
one to five years      590 717
over five years     365 725
c capital commitments
at 31 december 2009 the group had no capital commitments 2008 £nil surgical innovations group plc
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annual report and accounts 2009 55
review of the year governance accounts
16 transactions with related parties
a summary of transactions during the year and outstanding amounts at the balance sheet date is as follows
      amounts amounts  
      invoiced  payable at  
      to the 31 december 
      company 2009 
      £’000  £’000
quest investments limited
1
      25 5
winburn glass norfolk
2
      13 3
getz bros  co
3
      13 13
n g bowland
4
     20 20
acp
5
     56 75
as disclosed in the report on remuneration
1 director’s fees for d b liversidge cbe are paid to quest investments limited a company of which he is a director
2 director’s fees and advisory fees for c glass are paid to winburn glass norfolk a firm of which he is a partner
3 director’s fees and advisory fees for r simkins are paid to getz bros  co a company of which he is an employee
4  at 31 december 2009 and march 2010 a loan of £20000 made available to n g bowland in 2009 was still repayable
5  acp acts as the master distributor for surgical innovations in the far east during the year surgical innovations invoiced acp £56000 for products 
and at 31 december 2009 there was an amount owing to surgical innovations of £75000 r simkins is the ultimate beneficial owner of acp 
17  pensions
the company currently operates a defined contribution group personal pension plan for the benefit of employees 56 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
report of the independent auditor – company
to the members of surgical innovations group plc
independent auditor’s report to the members of surgical innovations group plc
we have audited the parent company financial statements of surgical innovations group plc for the year ended 31 december 2009 
which comprise the company balance sheet and the related notes the financial reporting framework that has been applied in their 
preparation is applicable law and united kingdom accounting standards united kingdom generally accepted accounting practice
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the statement of directors ’ responsibilities set out on pages 27 and 28 the directors are responsible for the preparation 
of the parent company financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the 
parent company financial statements in accordance with applicable law and international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeuknp 
opinion on financial statements
in our opinion the parent company financial statements
w  give a true and fair view of the state of the company’s affairs as at 31 december 2009 
w  have been properly prepared in accordance with united kingdom generally accepted accounting practice and
w  have been prepared in accordance with the requirements of the companies act 2006
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the report of the directors for the financial year for which the financial statements are prepared 
is consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion
w  adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received 
from branches not visited by us
w  the parent company financial statements are not in agreement with the accounting records and returns
w  certain disclosures of directors’ remuneration specified by law are not made or
w  we have not received all the information and explanations we require for our audit
other matter
we have reported separately on the group financial statements of surgical innovations group plc for the year ended 31 december 2009
tim lincoln
senior statutory auditor
for and on behalf of grant thornton uk llp
statutory auditor chartered accountant
leeds
31 march 2010 surgical innovations group plc
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annual report and accounts 2009 57
review of the year governance accounts
company balance sheet
as at 31 december 2009
  2009  2008
   notes £’000  £’000  £’000  £’000
fixed assets
investments   2  1018  1018
current assets
debtors   3 3508  2922 
cash at bank    2345  3 102 
    5853  6024 
creditors amounts falling due within one year  4 94  107 
net current assets     5759  5917
net assets    6777  6935
capital and reserves
called up share capital   5  3738  3738
share premium account   6 18809  18809 
accumulated losses   6 15770  15612 
     3039  3 197
shareholders’ funds     6777  6935
the financial statements on pages 57 to 59 were approved by the board of directors on 31 march 2010 and were signed on its behalf by
d b liversidge cbe
director
31 march 2010 58 surgical innovations group plc
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annual report and accounts 2009
notes to the company financial statements
1 accounting policies
a basis of preparation
the financial statements have been prepared under the historical cost basis and uk gaap 
b investment in subsidiary undertakings
the company’s investment in subsidiary undertakings is stated at cost less any provision for impairment 
c share‑based compensation
all share‑based payment arrangements granted after 7 november 2002 that had not vested by 1 january 2006 are recognised in the 
financial statements the group issues share options to certain employees which are measured at fair value and recognised as an expense 
in the profit and loss account with a corresponding increase in profit and loss reserve the fair value of the employee services received 
in exchange for the grant of the options is recognised as an expense the total amount to be expensed over the vesting period is determined 
by reference to the fair value of the options granted
the fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become 
unconditionally entitled to the awards at each balance sheet date the group revises its estimate of the number of options that are expected 
to vest it recognises the impact of the revision to original estimates if any in the profit and loss account with a corresponding adjustment 
to retained earnings
2 investments
company       £’000
cost
at 31 december 2009 and 1 january 2009      1551
accruals for diminution in value
at 31 december 2009 and 1 january 2009       533
net book value at 31 december 2009 and 1 january 2009      1018
the principal trading subsidiaries of the group comprise
    country of  
    incorporation proportion 
company description of shares held nature of business and operation held
surgical innovations limited ordinary £1 shares design and manufacture  great britain 100 
   of surgical instruments 
haemocell limited ordinary £1 shares design and manufacture  great britain 100 
   of autologous blood products 
3 debtors
      2009  2008 
      £’000  £’000
prepayments and accrued income      9 50
other debtors      44 37
amounts due from subsidiary undertakings     3455 2835
      3508 2922
4 creditors amounts falling due within one year
      2009  2008 
      £’000  £’000
accruals and deferred income      75 64
other creditors      19 43
      94 107
  surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 59
review of the year governance accounts
5 share capital
      2009  2008 
      £’000  £’000
authorised 600000000  
2008 600000000 ordinary shares of 1p each     6000 6000
allotted called up and fully paid 373841902  
2008 373841902 ordinary shares of 1p each      3738 3738
details of the share options are contained in note 14 of the consolidated financial statements
6 reserves
      share  accumulated 
      premium losses 
      £’000  £’000
at 1 january 2009     18809 15612
loss for the year      — 233
employee share‑based payments     — 75
at 31 december 2009      18809 15770
7  reconciliation of movements in shareholders’ funds
      2009  2008 
      £’000  £’000
loss for the financial year      233  42
employee share‑based payments      75 —
net decrease in shareholders’ funds      158 42
opening shareholders’ funds      6935 6977
closing shareholders’ funds      6777 6935
8 loss for the financial year of surgical innovations group plc
the loss for the financial year dealt with in the financial statements of the holding company surgical innovations group plc was £232700 
2008 £42424
as permitted by section 408 of the companies act 2006 the profit and loss account has not been included in these financial statements
9 transactions with related parties
a summary of transactions during the year and outstanding amounts at the balance sheet date is as follows
       amounts  
      amounts  payable at  
      invoiced to 31 december 
      the group 2009 
      £’000  £’000
quest investments limited
1
      25 5
winburn glass norfolk
2
      13 3
getz bros  co
3
      13 13
as disclosed in the report on remuneration
1 director’s fees for d b liversidge cbe are paid to quest investments limited a company of which he is a director
2 director’s fees and advisory fees for c glass are paid to winburn glass norfolk a firm of which he is a partner
3 director’s fees and advisory fees for r simkins are paid to getz bros  co a company of which he is an employee 60 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
fiveyear summary
 ifrs  uk gaap
   2009  2008 2007 2006 2005 
   £’000  £’000  £’000  £’000  £’000
revenue   4541 4312 4770 4460 4018 
cost of sales   2447  2032 2377 2593 2295 
gross profit   2094 2280 2393 1867 1723 
other operating expenses   1528  1500 1708 1 132 1322 
operating profit  566 780 685 735 401 
losses from discontinued operations  200 — — — —
share‑based payments   75 — — — —
finance income  13 118 96 — — 
finance costs  40  78 50 39 49 
profit before taxation  264 820 731 696 352 
taxation  261  190 34 — 50 
retained profit for the year   525 630 765 696 402 
earnings per ordinary share basic  0 14p 0 17p 024p 027p 0 16p
earnings per ordinary share diluted  0 14p 0 17p 023p 027p 0 16p  
review of the year
 1 highlights
 2 our group at a glance
 2 our strategy
 4 chairman’s statement
 8 strengthening our manufacturing
 10 investing in development
 12 intensifying our sales and marketing
 14 business review
governance
 20 directors
 22 senior management and advisers
 24 clinical advisory board
 25 surgical innovations’ trade marks
 26 report of the directors
 30 report on remuneration
 33 corporate governance
accounts
 35  report of the independent 
auditor – group
 36  consolidated statement 
of comprehensive income
 37 consolidated balance sheet
 38 consolidated cash flow statement
 39  consolidated statement of changes 
in equity
 40  notes to the consolidated 
financial statements
 56  report of the independent 
auditor – company
 57 company balance sheet
 58  notes to the company financial 
statements
 60 fiveyear summary
 ibc  

 
 truly 
over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence 
concerning investment matters these are typically from overseas based “brokers” who target uk shareholders offering to sell them what 
often turn out to be worthless or high risk shares in us or uk investments these operations are commonly known as “boiler rooms”  these 
“brokers” can be very persistent and extremely persuasive and a 2006 survey by the financial services authority fsa has reported that 
the average amount lost by investors is around £20000
it is not just the novice investor that has been duped in this way many of the victims had been successfully investing for several years 
shareholders are advised to be very wary of any unsolicited advice offers to buy shares at a discount or offers of free company reports 
if you receive any unsolicited investment advice
w   make sure you get the correct name of the person and organisation
w   check that they are properly authorised by the fsa before getting involved by visiting wwwfsagovukregister
w   report the matter to the fsa either by calling 0845 606 1234 or visiting  wwwmoneymadeclearfsagovuk and
w   if the calls persist hang up
if you deal with an unauthorised firm you will not be eligible to receive payment under the financial services compensation scheme 
the fsa can be contacted by completing an online form at wwwfsagovukpagesdoingregulatedlawalertsoverseasshtml
details of any share dealing facilities that the company endorses will be included in company mailings
more detailed information on this or similar activity can be found on the fsa website wwwmoneymadeclearfsagovuk
warning to shareholders – boiler room scams annual report and accounts 2009
share our technology 
share our passion
think surgery 
think surgical innovations
wwwsurginnocom
surgical innovations group plc
clayton wood house
6 clayton wood bank
leeds ls16 6qz
t 44 0 113 230 7597 
f  44 0 113 230 7598
w wwwsurginnocom
for investor relations enquiries please email 
irsurginnocouk
for sales enquiries please email 
salessurginnocouk
for general enquiries please email 
sisurginnocouk
surgical innovations group plc annual report and accounts 2009 surgical innovations group plc
clayton wood house 
6 clayton wood bank
leeds ls16 6qz 
t 44 0113 230 7597 
f  44 0113 230 7598
wwwsurginnocom autologous blood transfusion abt
collection and reinfusion of a patient’s 
own blood during or after surgery
food and drug administration fda
regulatory body governing the marketing 
of food pharmaceuticals and medical 
devices in the usa 
group purchasing organisations gpo
gpos help hospitals reduce costs by 
aggregating volume to negotiate favourable 
purchasing terms with vendors
laparoscopic
refers to minimally invasive surgery 
carried out in the abdominal cavity
minimally invasive surgery mis
surgery carried out through small incisions 
keyholes thereby minimising wound trauma
original equipment manufacture oem
manufacture of products supplied to other 
companies for sale by those companies 
under their own brand
port access system
devices used for gaining access 
to the abdominal cavity through 
small incisions
resposable
®
a device or range comprising reusable 
main elements and disposable accessories
single port access spa surgery
single rather than traditional multi port 
access systems
glossary of terms


Summary:
 4 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
chairman’s statement
introduction
i am pleased to report another year of 
significant progress during which the group 
has substantially scaled up its operations 
to take full advantage of the opportunities 
in the global laparoscopic surgery market 
some revenue growth was achieved in 2009 
with sales of £4541000 2008 £4312000 
resulting in retained profits of £525000 2008 
£630000 at first glance the results may seem 
disappointing but shareholders should be 
encouraged by the comments and explanations 
on both current performance and the outlook 
given later in the statement i believe that the 
current year will show a significant advance 
in all areas of the business as the investment 
made starts to produce impressive returns
the business has undergone a transformation 
since the move into the new building in 
april 2008 and particularly in the last 
twelve months during this time the group 
has invested £13 million in machinery 
and infrastructure £10 million in product 
development and more than doubled the 
total number of employees to approximately 
90 people this demonstrates belief in the 
group’s strategy of focusing on the core 
business of minimally invasive surgery mis 
and flex technology  the group has seen notable 
commercial gains in the last month of 2009 
and first quarter of 2010 testament to the 
investment made since moving into our 
new facility 
minimally invasive surgery mis
the group is confident that its mis business 
will develop in accordance with its threeyear 
plan our laparoscopic instrumentation 
is becoming increasingly accepted as we 
expand our costeffective product offerings 
to complement the laparoscopic business 
and buoyed by previous successes in 
technology transfer  we are actively moving 
into new areas of keyhole surgery we are 
currently working with surgeons in the fields 
of arthroscopy  cardiovascular and veterinary 
as we look to apply our instrumentation 
intellectual property and expertise into 
these new markets
us success
during 2009 the group reviewed its 
us operations to maximise the opportunities 
open to it i am pleased to announce that 
we have successfully established a route 
to market and actively raised the awareness 
of the surgical innovations brand and our 
product portfolio across america
the group’s strategy was to separate our 
yelloportplus
®
 laparoscopic port access 
system from our us master dealer si usa 
enabling us to sell these products directly 
to distributors and laparoscopic instrument 
management companies also known as tray 
companies this has been achieved and as a 
result we have now appointed a network of 
independent distribution partners covering the 
east coast west coast and central states
this has enabled our us master dealer to 
focus their efforts solely on the logi
®
range 
of resposable instruments a move which 
resulted in the signing of two threeyear 
contracts with premier purchasing partners lp  
the group purchasing unit of premier inc 
“premier” one of the largest group purchasing 
organisations gpos in the us gpos help 
hospitals reduce costs by aggregating volume 
to negotiate favourable purchasing terms 
doug liversidge cbe
nonexecutive chairman
summary of chairman’s statement
w  we are now focused on our core mis 
business and developing this outside 
of the laparoscopic field
w  the current year will show a significant 
advance in all areas of the business
w  substantial growth in scale through 
our oem partnerships 
view the chairman’s statement online at 
ar09surginnoir comchairman surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 5
review of the year governance accounts
with vendors and this agreement provides 
an opportunity for si to gain access to their 
2200 member hospitals this represents a 
considerable proportion of all us hospitals 
and provides the group with significant access 
to the us laparoscopic instrumentation market 
estimated to be worth 150 million per annum 
one contract for our resposable instruments 
has already commenced and another for our 
reusable instruments is due to commence 
in april 2010 the group is delighted with the 
current level of instrument business it is now 
achieving in the us justifying the approach 
we have taken 
the group continues to develop relationships 
with some of the largest tray companies in 
the us such as surgical service inc ssi 
which will see yelloportplus
®
 placed in their 
tray systems in hospitals throughout the 
country si’s resposable
®
 concept offers a 
“win win” situation for tray companies as it 
combines both disposal and reusable elements 
offering both functionality and cost 
effectiveness 
international launch of logi
®
flex
during 2009 we successfully launched 
logi
®
flex an articulating instrument 
designed to assist laparoscopic surgeons 
with the accurate placement of gastric 
bands the device was unveiled at the world 
congress of the international federation 
for the surgery of obesity and metabolic 
disorders ifso and was well received 
at the event being described by surgeons 
as an ‘innovative costeffective solution’ 
it was clear from the outset that the key 
market for this instrument is the us due 
to the fact that obesity affects more than 
60 million us citizens and is the second 
largest cause of preventable death it is 
also estimated that there are 250000 
annual bariatric procedures in the us 
where the logi
®
flex device can be used 
as a consequence we have submitted a 
510k for fda approval for logi
®
flex and 
anticipate that this will be received in the 
second quarter of 2010
our master dealer is currently preparing 
a product launch involving both attendance 
at bariatric exhibitions and obtaining inclusion 
within the current premier contracts as soon 
as fda approval is received the group looks 
forward to reporting further on this later in 
the year
original equipment manufacture oem
the group plans for si to achieve substantial 
growth in scale over the next twelve months 
and beyond through our oem partnerships 
with major medical device companies it is 
notable how the development resources of 
these companies have become stretched as 
a result of consolidation and the number of 
products they have to support si can offer 
an effective solution providing expertise in 
the design and development of an instrument 
combined with the manufacturing capability 
to produce a final device ready for ultimate sale
the solution proved to be extremely effective in 
2009 culminating in negotiations with one of 
our oem partners which we expect to result in 
a major contract in the second quarter of 2010
single port access spa
to complement the increasing number 
of single rather than traditional multi port 
access systems we took the strategic decision 
to concentrate our development focus on the 
flexible instrumentation required for successful 
spa surgery we have a worldwide reputation 
for flex technology and this is proving beneficial 
as we continue to receive interest from a number 
of leading companies wishing to gain access 
to this technology 
the group has substantially scaled up its 
operations to take full advantage of the 
opportunities in the global laparoscopic 
surgery market 6 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009
chairman’s statement continued
minimally invasive surgery mis continued
licensing
following our decision to improve our 
licensed diamondflex
®
 product we created 
new intellectual property with a new innovative 
flex device we are in negotiations with our 
licensee regarding the new technology 
and the group looks forward to providing 
a further update in due course 
whilst licensing our own ip  we are also 
in discussions with various companies 
to license technology into si this will result 
in exclusive manufacturing and sales rights 
to si and royalty payments or joint venture 
arrangements sharing both risk and reward 
there has been increased activity in this 
area as a consequence of si’s enhanced 
reputation within the medical device sector 
and is testament to our strategy of inhouse 
manufacturing and design 
industrial solutions
we are excited about the growth of the group’s 
business providing industrial solutions for major 
international companies the solutions are 
based on our core technology developed over 
the years in our surgical instruments business
during the year our design team was involved 
extensively in the development of an industrial 
solution for one of our key industrial partners 
as a result of our efforts we received an order 
for £616000 of which £480000 was due to 
be invoiced in december 2009 due to third 
party technical difficulties which were outside 
of our control we were unable to deliver our 
contractually completed part of the order prior 
to the year end this had a significant impact 
on the results for the year
i am however pleased to report that the 
technical issues have now been resolved 
and we are scheduled to deliver the completed 
order in april 2010 encouragingly we have 
received a further order for a new prototype 
based on the success of the first project 
this should result in a substantial device 
order for delivery in the second half of 2010 
we believe that there is scope to develop and 
expand the business using our core technology  
to maximise this potential and to provide clear 
differentiated focus we may relocate this 
business to a more appropriate geographical 
setting with close customer proximity
autologous blood transfusion abt
i indicated in my previous chairman’s statement 
that difficult issues had to be addressed in 2009 
including a decision on our abt business 
after a strategic review of the opportunities 
for abt the board concluded that the 
investment required both in cash and 
management time will be too great to 
support within the company especially 
given the evergrowing opportunities 
in the core business
therefore the board has made the decision 
to look for a purchaser for the abt business 
operated under the haemocell brand or 
alternatively for a joint venture partner 
in addition to the knowhow there are 
attractive tax losses potentially available 
to a new owner of the business
whilst a suitable exit is being sought 
the board has made the decision to 
writeoff all assets relating to the abt 
business resulting in a £200000 reduction 
in the group’s operating profits 
employees and infrastructure 
over the last twelve months the group 
has invested £13 million in both machinery 
and infrastructure £10 million in product 
development and more than doubled the 
total number of employees to approximately 
90 people at a time when other companies 
have been forced to make redundancies 
we have made staff appointments in all 
areas of the business production design 
quality hr and business development 
as part of this investment we commissioned 
a “stateoftheart” class 100000 cleanroom 
with an employee base of 90 and investment 
in all areas of the organisation we are able 
to meet the challenges of rapid growth within 
the business experienced in the later months 
of 2009 and start of 2010 surgical innovations group plc
ar09surginnoircom
annual report and accounts 2009 7
review of the year governance accounts
to improve the efficiency and quality of our 
manufacturing processes the enhanced 
cleanroom resources will give us sufficient 
capacity to assemble increasing volumes 
of our own and oem single use devices 
additionally it provides a platform to move 
into the next phase of our manufacturing 
strategy bringing plastic injection moulding 
back inhouse during 2010 
in 2009 we invested in the creation of our 
laparoscopic training centre which was 
officially opened by business minister 
lord davies in february 2010 the training 
centre is ideal for product evaluation as it 
allows members of the si design team to 
view at first hand surgeons using si prototypes 
within a simulated clinical environment
outlook
the group has resolved the difficult issues 
and financially they are accounted for within 
the 2009 results we are now focused on our 
core mis business and developing this outside 
of the laparoscopic field with an employee 
base of 90 and investment in all areas of the 
organisation we are able to meet the challenges 
of rapid growth within the business experienced 
in the later months of 2009 and start of 2010
with 2010 yeartodate revenue at an all time 
high and a £2 million shortterm order book 
coupled with new oem contracts in prospect 
i am extremely confident about the future 
for the group 
to reflect this confidence the board has 
decided to apply to the court to offset the 
holding company’s accumulated losses 
against the share premium account if as 
we expect this proposal is ultimately approved 
by shareholders in general meeting the board 
will be in a position to implement a dividend 
strategy we are conscious that si has over 
4500 shareholders and whilst the primary 
objective is capital gain we feel that when 
appropriate payment of a dividend will be 
made to reflect the loyalty of our many 
private investors
in conclusion i am extremely proud of 
the progress being made and in particular  
of graham bowland our managing director 
who has worked tirelessly and with great 
commitment to develop the company  i am 
also grateful for the support of my fellow 
directors and to our loyal and able workforce 
for their contribution to the company
i look forward to reporting on a very exciting 
period in the development of the company
doug liversidge
chairman
31 march 2010
we are excited about the 
growth of the group’s business 
providing industrial solutions for 
major international companies
£13m
invested in machinery and infrastructure
£10m
invested in product development