optos plc annual report and accounts 2013
optos plc
annual report and accounts 2013 technology by technology 
optos is revolutionising patient care
we are dedicated to providing the only clinically validated retinal imaging 
technologies which enable eyecare professionals to see more diagnose 
more and treat more diseases earlier thus saving sight and saving lives
our vision is to be recognised as the retina company
in the strategic report
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report
ar13optoscom
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what is our current business focus 
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how did we perform during 2013  overview strategic report governance financial statements
optos plc annual report and accounts 2013 01
full contents
overview
02  highlights of our year
03 chairman’s statement
strategic report
 our opportunity
 why optos
 our technology
 our business model
 focus on products
 focus on segments
 focus on geographies
 focus on adding value
 looking ahead
23  chief executive  
officer’s review
26 corporate social responsibility
29  principal risks and 
uncertainties
31 financial review and kpis
governance
36 directors’ report
40 board of directors 
42 operating board 
44 corporate governance
46 report of the audit committee
48  report of the nomination 
committee
50 directors’ responsibilities
51  statement from the chairman 
of the remuneration 
committee
52 remuneration report
63 directors’ remuneration policy
financial statements
71 independent auditor’s report
73  c o n s o li dat e d in c o m e 
statement
73  consolidated statement of 
comprehensive income
74  group and company 
balance sheets
75  group and company statements 
of changes in equity
76  group and company 
cash flow statements
77  notes to the consolidated 
financial statements
115 five year summary
116 corporate information
our patented 200degree 
ultrawidefield technology 
images 82 of the retina 
— 7x more than the average 
eye exam and 50 more 
than any other digital 
imaging product
certain statements made in this report are forward looking statements these forward looking statements are not historical facts but rather are based on the 
company’s current expectations estimates and projections about its industry its beliefs and assumptions words such as “anticipates” “expects” “intends” 
“plans” “believes” “seeks” “estimates” and similar expressions are intended to identify forward looking statements these statements are not guarantees of 
future performance and are subject to known and unknown risks uncertainties and other factors some of which are beyond the company’s control are difficult 
to predict and could cause actual results to differ materially from those expressed or forecasted in the forward looking statements the company cautions 
shareholders and prospective shareholders not to place undue reliance on these forward looking statements which reflect the view of the company only 
as of the date of this report the forward looking statements made in this report relate only to events as of the date on which the statements are made 
the company will not undertake any obligation to release publicly any revisions or updates to these forward looking statements to reflect events 
circumstances or unanticipated events occurring after the date of this report except as required by law or by any appropriate regulatory authority optos plc annual report and accounts 2013 02
highlights 
of our year
 positive underlying financial performance
   revenue and other operating income
1
 
was 1595m fy12 1964m 
  4 growth in underlying revenue
2
 
   profit before tax and exceptional items 
of 92m fy12 263m
   operating costs excluding exceptional 
items reduced by 2 to 839m 
following successful completion 
of the restructuring plan
  gross margin maintained at 57
3
   good cash performance with cash flow 
before acquisition and financing activities 
generating 105m fy12 31m outflow
   net debt reduced by 18 to 39 4m 
fy12 479m
the key metrics for financial performance have been mixed with a strong 
increase in customers and cash generation but reduced revenue and profit 
 highest ever level of installations 
of 1271 with the installed customer 
base growing 25 to 5945
   strong demand for daytona with 
1145 devices installed this year
   over 470 200t x devices installed globally 
including into key ophthalmology centres 
in the usa japan germany and the 
middle east
   two important new corporate contracts 
signed – opsm in australia a further 
250 devices and visionworks in the 
us 100 devices
  continued progress from investment 
in pipeline and product range
   our combined ultrawidefield retinal 
imaging technology with integrated 
optical coherence tomography oct 
is progressing well
   further advancements made 
on our 200tx replacement
 continued positive clinical results generated 
through the publication of three key papers
   a harvard university study demonstrated 
the extent of diabetic retinopathy dr 
in the peripheral retina and the impact 
on severity of disease
   a comparison of imageassisted 
versus traditional fundus examination 
demonstrated the ability of 
optomapassisted examinations to 
outperform traditional retinal examinations
   a study into ultrawidefield retinal imaging 
in the management of noninfectious 
retinal vasculitis provided evidence that 
more effective detection of active vasculitis 
leads to earlier treatment and improved 
patient outcomes
key metrics for future 
are encouraging
strong operational progress in customer base pipeline 
and clinical evidence
notes
1  other operating income represents income from the extension 
of previously recognised finance leases 
2  underlying revenue growth is calculated by treating all payments 
receivable in the period from rental contracts as operating leases 
rather than finance leases
3 includes other operating income overview strategic report governance financial statements
optos plc annual report and accounts 2013 03
chairman’s 
statement
this has been a challenging year for the company but one in which there have been 
many successes
this has been a challenging year for the company but one in which there 
have been many successes i am pleased to report a record increase 
in the number of customers up 25 in the year to 5945 the company 
delivered strong sales of daytona our next generation ultrawidefield 
uwf retinal imaging device in its first full year over 1100 practitioners 
installed the device this year taking the total number of daytona 
customers to nearly 1500 in just 18 months demonstrating that daytona 
is a winning product this is further borne out by opsm signing up for 
an additional 250 devices in australia which will take their total to 410 
as well as by the visionworks order of 100 daytona devices however 
revenues in the first half were lower than expected due to slower 
economic conditions and in common with most new product launches 
some early software upgrades and enhancements required for daytona 
which have now been completed
daytona remains core to our international expansion margin enhancement 
and future product development 
whilst we continue to make progress in the ophthalmology sector 
the demand for optos’ highperformance 200tx device for the 
ophthalmology and vitreoretinal markets was not as strong this year 
however it remains an important product and opportunity in key export 
markets such as japan and the middle east the ophthalmology sector 
continues to be a strategic focus including the development of products 
to meet the clinical needs of our customers and provide them with the 
best service and support possible 
strong customer growth in an otherwise challenging year
our expansion into new markets continues with a growing global customer 
base we now have 5945 uwf devices installed in optometry and 
ophthalmology practices worldwide with international placements increasing 
by 58 and placements in the americas by 18 over 40 million patients 
have received optomap examinations through our rental customers 
demonstrating the continuing utility and value of the technology 
in the course of this year we have seen acceleration in the delivery 
of positive clinical study results of particular note an important study from 
harvard university demonstrated the sheer extent of diabetic eye disease 
in the retina the study found that diabetic retinopathy extends beyond 
the ability of standard technology and only our uwf optomap enables the 
extent to be measured fully a link has been established with the severity 
of disease that we believe will lead to our technology changing the 
standard of care it is through our strategy to build clinical evidence with 
supplementary studies that we aim to demonstrate the potential positive 
impact of uwf to clinical care
we successfully grew the customer base substantially during the 
year however due to the rental profile there were far fewer renewal 
opportunities compared to the previous year therefore combined 
revenue and other operating income fell to 1595m for the year ended 
30 september 2013 compared to 1964m last year on an underlying 
basis treating all payments receivable in the period from rental contracts 
as operating leases we grew 4 
dr peter fellner chairman
number of customers  
up 25 to
5945 optos plc annual report and accounts 2013 04
5945
1595
92
86
4775
1
1964
263
239
135
18
chairman’s 
statement
continued
as a result of the reduced revenue profit before tax and exceptional 
items was 92m fy12 263m with basic earnings per share before 
tax and exceptional items reducing to 128c fy12 368c
cash flow before acquisition and financing activities improved 
significantly in the year generating 105m compared to a 31m outflow 
last year due to revenue mix a higher proportion of capital sales and the 
timing of finance lease receipts as a result we were able to reduce net 
debt to 394m from 479m at the end of the previous financial year 
during the year we increased our revolving credit facility to 50m 
providing additional flexibility to fund the business
i look forward with confidence to next year with daytona remaining a key 
driver of revenue growth underpinned by strong clinical data that will help 
to increase penetration in the ophthalmology segment we also expect 
to see a continued reduction in the cost of the daytona device
finally i would like to thank louisa burdett for her contributions 
as chief financial officer and to welcome robert kennedy to the 
board as her successor i would also like to thank barry rose for his 
valuable contribution to the board over the last eight years both as 
audit committee chairman and senior independent director as always 
i would also like to thank our investors for their continued support during 
the past year and our employees for their outstanding efforts which 
have underpinned the advances achieved within the business
dr peter fellner
chairman
20 november 2013
headline financial results include
installed base up 25
revenue and other operating income down 19
m
profit before tax and exceptional items down 65
m
eps diluted down 64
cents
13
13
13
13
12
12
12
12
turn to page 31 to read 
our full financial review
cash before tax financing and acquisition up 153m 
m
13
12
1 the opening position has been slightly amended from 4689 to reflect a consistent presentation of distributor sales  our vision is to be 
the leading provider of 
imaging technology to 
eyecare professionals for 
improved patient care
we believe  
optomap represents an 
opportunity to improve 
pathology detection and the 
patient experience and helps 
a clinician efficiently target the 
area of the retina in need of 
further investigation our 
opportunity
optos’ ultra‑widefield retinal imaging technology combined with the specific data that can be derived from oct images 
has the potential to offer ophthalmologists and optometrists the most powerful tools for disease diagnosis and management
worldwide it is estimated that seven million 
people lose their vision every year and that 
285 million people are visually impaired
1
 
these rates are expected to double by 2020 
unless prevention efforts intensify as an 
ageing population contributes to more cases 
of cataracts glaucoma and age‑ related 
macular degeneration amd the leading 
causes of blindness
2

a growing need
ocular pathology as well as many non‑ eye 
diseases such as diabetes hypertension 
and certain cancers often first exhibit in the 
periphery of the retina regular screening 
plays a vital role in preventing loss of sight 
and detecting the onset of systematic 
diseases optomap images taken at routine 
eye examinations provide digital records 
that can be compared over time to monitor 
disease progression and manage treatment
benefits of screening
eye disorders and vision loss are among the 
costliest conditions to the us economy and based 
on ever‑ increasing healthcare costs and an ageing 
population this cost is set to continue to grow
prevent blindness america
money spent worldwide each 
year on adult vision problems 
in our largest market the us 
the cost of the major vision 
problems is 651bn
1

refractive 
error  
161
cataracts 
107
general 
vision problems 
104
physical 
disorders 
89
retinal 
disorders  
87
glaucoma 
58
other 
45

202bn
1 prevent blindness america
2  world health organisation fact sheet no 282 june 2012 eyecare trends
increased incidence of disease ageing population
patients taking control of personal healthcare wellness
greater emphasis on prevention public health shift
earlier detection of disease technology advancement
new treatments evolving therapies
a study by the american optometric association found a large number 
of patients are unaware of the health problems an eye exam can detect 
for this reason eyecare providers are emphasising prevention and 
differentiating the quality of care and personal service they offer by 
incorporating optomap
of blindness can be prevented or 
treated if caught early enough
3
80
the estimated global cost of vision 
loss per annum
4

3trn
since our beginnings in 1992 we have 
worked to create ultra‑ widefield retinal 
imaging technology and devices that are 
patient friendly and allow practitioners to 
detect many potential sources of vision loss 
before they become a problem we are now 
often positioned as an integral part of a 
standard examination across the continuum 
of patient eyecare 
where we are
our range of imaging devices supports 
different customer segments and patient 
levels and now includes ultrawidefield 
imaging oct visual acuity perimetry 
and treatment laser products
3  bulletin of the world health organisation 201290728–738
4  study commissioned by amd alliance international in 2010
watch a video about 
the history of optos
wwwyoutubecom
optosplc why optos
with 347 million people worldwide diagnosed 
with diabetes we have accumulated clinical 
evidence that demonstrates the extent of 
diabetic retinopathy dr in the peripheral retina 
and the impact of the severity of the disease
for example
   a harvard university study demonstrates 
that onethird more lesions were found 
in the peripheral area outside of early 
treatment diabetic retinopathy study’s 
etdrs seven standard fields
    additionally in many of these study patients 
this led to a more severe grading of 
diabetic retinopathy
   our ongoing research into diabetic eye 
disease will lead to more effective detection 
of disease at a stage when treatment can 
prevent vision loss
optos is raising the 
standard of care for 
diabetic retinopathy
our ever‑ expanding clinical evidence supported 
by product development and market positioning is 
driving a company‑ wide focus to evolve our products 
to take advantage of the latest trends to set standards 
that will allow eyecare professionals to see more and 
treat patients more effectively this focus will ensure 
optos remains the leader in uwf imaging
we are raising the standards that will  
enable more effective retinal care
of cases experienced dr severity 
agreement between ultra‑widefield 
100˚ imaging and etdrs within 1 
91
read more about diabetic 
retinopathy and its stages
wwwoptoscomen
patientseyeconditions
p200 200dx and daytona with 
autocapture are well positioned 
as screening devices for 
diabetic retinopathy along with 
optosadvance for tele‑ health 
and sharing optomap images with 
specialists in the future daytona 
and daytona with oct will have 
new measurement capabilities 
longitudinal and multi‑ modal 
tracking dr detection and 
diagnostic software tools  more disease was identified on uwf 
compared to traditional field of view 
23
published studies demonstrate that 
optomap‑assisted exams outperform traditional 
retinal exams and find more pathology
findings include
   the sensitivity of an optomap‑ assisted 
exam was greater by 30 significantly 
outperforming the traditional dilated exam
   a literature review from the past three years 
concluded that there was a prevalence of 
66 of pathology visible outside of the area 
viewed by traditional imaging methods
see more  
discover more™
greater sensitivity in a targeted 
ophthalmoscopy than in traditional 
ophthalmoscopy
30
the current ultra‑ widefield devices 
which include auto‑fluorescence 
imaging allow doctors to see 
pathology not visible with manual 
ophthalmoscopes current 
comprehensive image capture 
options red green colouraffa 
will be enhanced in the future with 
eye steering and auto‑ montage 
digital eye exam functionality
larger total retinal surface area on 
average compared to the heidelberg 
spectralis®
1
 widefield lens attachment
2
 
50
optomap retinal imaging and the ability to 
image more retina is now being reported 
to significantly alter disease management 
leading to better patient outcomes
for example
   results from a study conducted at john hopkins 
university demonstrated that patient care 
was altered in 51 of the study patients 
than would have been delivered based 
on traditional techniques
    in several study patients peripheral findings 
suggested disease activity in the absence 
of clinical evidence of disease in the narrow 
central pole 
see more treat 
more effectively
software and feature improvements 
for our 200tx device specifically 
designed for vitreo‑ retinal 
specialists include multi‑ modality 
tracking of each image type to be 
registered together to get more 
comprehensive information leading 
to enhanced treatment planning 
and assessment analysis tools and 
vascular feature measurements
1 spectralis is a registered trademark of heidelberg engineering inc
2  kiss et al comparison of ultra‑ widefield fluorescein angiography with 
the heidelberg spectralis® non‑ contact ultra‑ widefield module vs the 
optos optomap® clin ophthalmol 2013 389 94  our technology
we are revolutionising eyecare with our core ultra‑ widefield 
technology the optomap provides a 200‑ degree view of the retina 
in a single image something no other device is capable of doing
we use a scanning laser ophthalmoscope to 
create a virtual point inside the eye enabling 
a 200‑ degree field of view two low‑ powered 
red and green lasers scan the retina 
simultaneously allowing a view of the sensory 
retina to the retinal pigment epithelium rpe 
and the deeper structures from the rpe to the 
choroid virtual point technology and a unique 
ellipsoidal mirror capture 200 degrees or 82 
of the retina in a single patient friendly capture 
how it works
visit our online report 
for a demo of the 
optomap’s unique 
ultrawidefield vision
ar13optoscom
optomap images allow us to 
preview such a wide view of the 
retina before we perform our 
traditional exam…
optomap images offer unprecedented 
visualisation of retinal pathology in a single 
digital image that can be readily annotated 
and shared a clinical study concluded that 
optomap imaging can enhance a traditional 
dilated fundus exam
1
in a standard eye exams conventional equipment 
is limited to a 45‑ degree field of view of the retina 
showing very small portions at a time clinical 
literature demonstrates that traditional dilated 
retinal exams discover between 32 and 82 
of the pathologies present
1
what we see
200
degrees
45
degrees
standard exam the optomap
1 comparison of image‑ assisted versus traditional fundus examination eye and brain february 2013
  kristen brown jeanette m sewell clement trempe tunde peto thomas g travison
 

  key
1 optic disc  2 macula  3 amppe  4 choroidal melanoma  5 drusen  6 vasculitis  7 branch retimal vein occlusion  
8 microaneurysms 9 coats’ disease  10 seafan  11 neovascularisation  12 uveitis  13 nonperfusion 82 of the retina in a single patient 
friendly capture no dilation no discomfort 
ready to view and share in seconds
the benefits of our technology
to the patient
—  improved eye health 
and information through 
early detection
—  fast convenient and 
non‑invasive
— reassurance
to the professional
—  improved diagnostic 
capabilities
—  permanent record 
to monitor disease 
progression
— easy to use
to the practice
—  choice of ownership models 
rental or outright purchase
—  cloud‑based image archiving 
retrieval and referral
—  additional revenue stream
what can an optomap detect
  o p tomap is the only clinically validated 
ultra‑widefield technology that supports clinicians 
in improving patient outcomes by revealing 
disease in the widest view of the retina
  age‑ related macular degeneration
  d ia b et e s 
  a l z he i m er ’ s d i s e a se
  retinal holes and detachments
  c ar d i o v a sc ul ar d i se a se
  h y p er t en s i o n
  b r ain tu m o u r s
  c er t a i n c anc er s
vision loss is a growing 
global problem yet 
with proper treatment 
it is preventable  key
1 optic disc  2 cotton wool spots  3 artery  4 vein  5 exudates  6 circinate ring  7 cholesterol embolus  8 macula  9 choroidal naevus  10 retinal detachment   
11 new vessels elsewhere 12 bear tracks  13 drusen  14 choroidal melanoma  15 vitreous haemorrhage  16 asteroid hyalosis  17 retinoschisis  18 sclerosedghost vessels   
19 snail tracks  20 fibrosed peripheral changes 21 retinal haemorrhages  22 haemangioma  23 retinal hole  24 congenital hypertrophy of the retinal pigment epithelium   
25 white without pressure  26 horseshoe tear  27 bone spicules  28 chorioretinal atrophy  29 floaters our business 
model
rapidly positioning 
optos at the leading 
edge of the retinal 
diagnostics market
through investment 
development 
and acquisition
we leverage our core ultra‑ widefield diagnostic 
imaging technology to build increased penetration 
across the spectrum of patient care including optometry 
ophthalmology and vitreo‑ retinal speciality
 
 
 
evidence
eciency
excellence
geography products
segments
north america
emea
asia paciﬁc
south america
build sales channels
leverage technology
broaden range
expand portfolio
optometry
ophthalmology
specialists
optos’ business model
we offer a range of purchase options for our products enabling 
customers to select the best solution for their practice
fixed rental variable rental outright purchase
a set payment each 
month with the benefit 
of rental terms such as 
service included
a lower fixed rental and 
reduced price per optomap 
as patient numbers rise and 
other attractive rental terms
device ownership with  
charges for ongoing 
support and new 
software upgrades driving growth
adding value
1
products
building a strong product portfolio 
of ultra‑ widefield retinal imaging and 
other products through acquisition 
and organic development
2
segments
providing products specifically 
for adjacent customer segments 
thus meeting the needs of 
ophthalmologists and optometrists
3
geography
using direct sales and distribution 
channels to deliver our solutions 
to a global market in need of 
improved retinal care we now 
sell into 34 countries 
4
efficiency
our goal is to build world‑ class 
operations globally in every aspect 
of our business our lean initiative 
is delivering improvements in 
productivity quality and cost 
we are also focused on reducing 
the daytona product cost
5
excellence
our company tenet is e
3 
– excellence 
every day in everything we do we 
aim to support eyecare professionals 
in improving the standard of retinal 
care for their patients 
6
evidence
we are committed to increasing 
the flow of strong clinical data to 
demonstrate the importance of 
ultra‑ widefield fundus imaging 
in the discovery management 
and treatment of disease
our strategy filling the cube
 
 
 
evidence
eciency
excellence
geography products
segments
north america
emea
asia paciﬁc
south america
build sales channels
leverage technology
broaden range
expand portfolio
optometry
ophthalmology
specialists
optos is expanding the business through new 
products targeted at specific customer segments 
around the globe
our goal 2020 vision
2020 vision is our measure of financial success we are building 
towards 20 customer growth leading over time to 20 revenue 
growth per annum and 20 margin 
in the year we delivered 25 customer growth and a margin before 
interest costs of 7 we still expect through continued customer 
growth and product cost improvements to achieve this vision
…read on 
for a detailed discussion of each 
component of our business model focus on 
products
daytona pictured
our newest desktop ultra‑ widefield 
imaging system
200dx
enhanced image quality for eyecare 
professionals with a strong interest 
in clinical imaging and analysis
200tx
offering multiple‑ wavelength imaging 
including auto‑ fluorescence to help 
clinicians discover and treat more
optos oct slo with 
microperimetry
the only imaging platform available that delivers 
data about retinal structure and function together 
automated perimeter
quantitatively measures sensitivity to light to 
correlate evidence of disease with functional 
changes in vision
optoschart
used to determine 
how well the eye 
is focusing light on 
the retina and the 
sensitivity of the 
visual signal to 
the brain
t ools that are fundamental to a comprehensive eye examination optos offers devices spanning the full spectrum of care 
from screening to discovery and diagnosis to management 
and treatment by providing a wide product offering we are 
able to meet more of the needs of the practice thus assisting 
our vision to be the retina company of choice for eyecare 
professionals worldwide
developing the range
our current emphasis
   expanding the product range to drive revenue objectives
   completing scale‑ up and global roll‑out of daytona
   continuing progress to combine our ultra‑ widefield retinal imaging 
technology with ocular coherence tomography oct
the daytona devices offer a much wider image than 
has previously been available through fundus cameras 
and is a key pillar in helping our doctors look deeper 
into their patients’ eyes to detect eye disease
luxottica ceo of asia pacific
1
chris beer
diagnostic instruments image management
v2 vantage
the software platform used for analysis 
of retinal images special features include 
comparison overlay magnifier and patient 
education tools such as 3d wrap
optosadvance pictured
a web‑ based image management solution 
that augments v2 vantage by providing easy
  multi‑ modality review
  cloud‑based archiving
   platform independent review
  referral management
proview
addresses the bias that is always present 
in flat representations of a sphere and sets 
the stage for
   i m p r o v e d i m a g e 
registration
   enhanced 3d wrap 
representation
  montage images
   m e a s ur em en t 
capabilities
t ools that improve eyecare providers’ ability to analyse annotate 
and share retinal images
treatment devices
advant yag laser pictured
used to treat common forms of glaucoma by 
surgically facilitating fluid flow between the front 
and back of the eye also commonly used to 
treat secondary cataracts
ultrasound
a device that uses high‑ frequency sound waves 
to get measurements and produce detailed 
images of the eye and eye orbit
t ools that deliver procedures to manage ocular pathologies
download product 
brochures and case 
studies at
wwwoptoscom focus on 
segments
2
our aim to be the retina company is supported by 
supplying integrated devices and software packages 
to eyecare professionals in all major markets allowing 
them to screen diagnose and treat patients anywhere 
along their individual continuum of care
extending our reach
our current emphasis
  focusing on further growth in the ophthalmology market
   developing future products to meet the specific needs 
of each market segment
   improving cloud‑based image management and 
disease‑specific diagnostics
comprehensive retinal care
our focus is on understanding and providing the right products 
and services to support the full continuum of patient retinal care
our expanded range of 
products is specifically 
designed to meet the 
needs of optometrists 
ophthalmologists 
and retinal specialists 
optometrists are the primary providers 
of eyecare and digital retinal screening 
has become an accepted part of their 
comprehensive eye exam we continue 
to add new products that are used by 
optometrists such as the visual acuity 
devices and automated perimeters
the ocular coherence tomography 
oct products are also used in 
wellness screening
optometrists
ophthalmologists require additional 
functionality for imaging devices to properly 
assess and treat their patients as do 
vitreo‑ retinal specialists who focus on retinal 
diseases such as diabetic retinopathy
the 200tx is designed for this customer 
group the products attained through 
our acquisitions such as lasers oct 
and ultrasound scanners deliver a fuller 
offering to this segment
ophthalmologists
price
complexity
screening
optometrist
general ophthalmologist
retinal specialist the successful execution of our strategy to expand into new 
segments is demonstrated by a larger portion of our sales going 
into ophthalmology year‑on‑year
  product sales to 
ophthalmologist 
md customers
  product sales to 
optometrist od 
customers
09 10 11 12 13
evolving our sales mix 
south island optometry centres canada
dr cameron mccrodan
we have found that patients are usually 
very interested in seeing the optomap 
photos in the exam room and in that sense 
it is also a great teaching tool the optomap 
has been a wonderful practice builder focus on 
geographies
3
we have positioned strong sales and 
support staff in each region which is key to 
increased revenue and further expansion 
our sales team of more than 100 is expanding beyond north 
america into geographies including europe the middle east 
south america and asia we are gaining traction in japan 
south korea hong kong and taiwan 
president americas
quinn lyzun
direct markets
   opened new direct markets in 
australia singapore benelux 
and austria
   via commission agents in france 
denmark finland and poland
   continued focus on asset 
utilisation
indirect markets
   drove sales in key distributor 
markets
   optomised the distributor 
channels with enhanced product 
training and marketing support
expanding our footprint
sales by region
americas
70
international
30
sales by channel
direct
90
distributor
10
we are ensuring our sales force understands 
the clinical needs of our customers and provides 
them with the best training service and support 
possible by adding additional products 
and business models
strengthening 
our presence
people in our global sales teams
100
 north america
continued strong sales with 
high demand for daytona 
and the new business model
south america
a new burgeoning market 
for retinal imaging diagnostics 
and treatment devices
europe
increased product awareness 
drove the expansion of the 
customer base in these 
highly diverse markets
asia
sales continued to grow as the 
launch of daytona allowed us 
to expand from retinal specialists 
into the general ophthalmology 
market in this region
australianew zealand
the opsm order for 410 
daytona devices in australia 
and new zealand represents 
the cornerstone of our 
business in this region
34
number of countries into 
which optos sells
  direct sales
   core distributor
  other distributor
  no sales presence focus on 
adding value
we support our core growth drivers 
by adding value across our business
a key driver of optos’ success is 
our focus on creating a world‑ class 
organisation built on a strong culture 
with great people and products 
at its core we engage in activities to 
demonstrate that integrity and respect 
are cornerstones of our business
operational efficiency
we aim to build world‑ class operations globally by a relentless 
focus on operational improvement our objective is the shingo 
prize – an internationally recognised award for companies 
delivering outstanding operational performance
customer service
new procedures and further training are delivering 
outstanding customer service in every aspect of 
the business
productivity
our lean initiative identifies and delivers manufacturing 
improvements to our product design manufacturing 
efficiency quality and cost
cost
operational excellence is delivering cost benefits 
through improved manufacturing yield working capital 
and supply chain savings
quality
we have a continuous improvement philosophy with respect 
to all aspects of operational quality our employees 
constantly seek ways to improve the quality of our products 
and services to maximise customer satisfaction at all times
time to manufacture a scanhead has been 
reduced by 24 hours 
56 a culture of excellence
supporting evidence
optos is committed to clinical research that demonstrates our technology’s 
excellence in support of diagnosis management and treatment of eye disease 
that first presents in the retinal periphery
browse
our press room for the 
results of the latest 
clinical studies
wwwoptoscom
investors
clinical studies
more than 250 completed and ongoing clinical 
studies support our commitment to the belief that 
an ultra‑ widefield view of the retina helps 
eyecare professionals provide the best care 
for their patients
peer reviewed papers
in 2013 we had 40 clinical peer reviewed 
papers and ten review articles highlighting 
the importance of the periphery 
equivalence of optomap to the gold standard 
and changing patient care because of seeing 
more with an optomap
clinical studies undertaken to demonstrate 
the benefits of ultra‑ widefield retinal exams
250
future plans
further extend the application of our uwf technology across 
the continuum of patient care optometrist‑ led screening of 
healthy and referable eyes through to ophthalmology‑ led 
“see more and treat more” approaches that use directed 
interventions with pharmaceuticals or lasers
scientific symposiums
144 podium presentations at leading clinical education 
programmes were delivered globally in 2013
optos tenets
  focus on customers
  treat everyone with respect
  act with integrity
  be a team player
  take initiative and be accountable
  develop yourself personally and professionally
 compete to win
  drive innovation
  respond with a sense of urgency
  protect the environment
our ongoing objective is to create a work environment where each of our 
employees is given the opportunity time and training to improve their skills 
processes and ultimately the support to our customers  looking  
ahead
our strong increase 
in installed base 
performance provides 
an excellent platform 
for future growth
continuing to grow 
the customer base
during 2013 optos made good progress 
we delivered a record year of product installations 
with over 1270 new customers equivalent to 25 
growth in the installed base as the distribution 
of our ultrawidefield technology becomes more 
widespread we expect to continue growing 
the global customer base overview strategic report governance financial statements
optos plc annual report and accounts 2013 23
the new daytona has been designed to be accommodated within smaller 
office spaces and to increase patient comfort whilst still providing high 
resolution imaging and adding new autofluorescence capabilities 
the device has performed strongly in its first full year with over 1100 
devices being sold or rented clearly demonstrating that daytona is 
a gamechanging device for the company
we now have nearly 1500 daytona customers during the year we were 
delighted to enter into an additional agreement for a further 250 units with 
opsm the leading optometry chain in australia and new zealand which 
when installed will take their total to 410 we also agreed terms to supply 
100 daytona devices to hvhc inc for installation in its visionworks 
optometry stores in the usa 
our nearterm focus is to drive the sales of daytona in all our key markets 
and continue to improve manufacturing efficiency
as a result of delayed customer decision making increased competition 
and economic conditions in certain territories our tx device sales were not 
as strong as we had anticipated other product sales were largely in line 
with expectations
chief executive 
officer’s review
a successful year of customer growth 
roy davis chief executive officer
2
during the year we continued to develop the ophthalmologist and retinal 
specialist segments developing diseasespecific offerings such as 
diabetic retinopathy where we see significant opportunities 
although sales of the tx device were subdued we have made good 
progress in the segment including some notable successes with daytona 
within general ophthalmology as well as increasing our presence in the field 
of diabetic retinopathy to accelerate the development of this important 
market in north america we have embedded the ophthalmology 
specialists within the regional teams elsewhere we continue to grow our 
ophthalmology presence in the key markets of japan and the middle east 
looking forward we believe that corporate accounts driven primarily 
by daytona represent a significant opportunity for optos in fy13 we have 
made good progress achieving substantial sales and orders from vision 
source and visionworks in the us as well as the continued success at opsm 
1
we have seen a year of strong new customer growth in particular with our new flagship 
product daytona which is gaining good traction the difficult start to the year has meant 
that headline revenue and profits were lower than we had anticipated however we saw 
positive underlying performance with 4 growth and a healthy generation of cash 
helping to reduce our net debt by 18 
products segments
our strategy is 
based on leveraging 
our existing sales 
channel and growing 
both geographically 
and across different 
market segments optos plc annual report and accounts 2013 24
chief executive officer’s 
review continued
choice of business models
our customers continue to respond well to the alternative business models 
we offer the trend away from the traditional payperpatient model and 
towards outright purchases of the devices continues based on customer 
choice in the year we have seen an increase of 24 in capital sales we have 
supported this through partnerships with finance companies to simplify the 
process for those customers wishing to own the equipment 
the success of the daytona device further expanding the portfolio of 
products and software allows the sales team to attract new customers and 
retain existing relationships we have also seen a further reduction in the 
number of devices deinstalled in the year to just 101 fy12 203 which 
represents less than 2 of the installed base fy12 4 
the success of the different business models along with strong cost 
control has resulted in a significantly improved cash performance 
compared to the previous year cash flow before tax acquisition 
and financing activities was a 135m inflow fy12 18m outflow 
3
we continue our expansion into new geographies with territories 
outside of north america contributing 30 of total revenue in fy13 
up from 25 last year we also grew the international installed 
base by 58 during the year
americas
north america continues to be our main market and although revenue was 
down in the year due to the reduced number of renewal opportunities the 
installed base increased by 18 we have also started to develop business 
in south america which represents an excellent opportunity particularly 
in brazil
international
in europe the picture has been mixed due to the challenging economic 
conditions we have seen reasonable customer growth in northern europe 
although not as strong as we would have liked and in southern europe 
it has been difficult the middle east represents a significant opportunity 
for us in particular around diabetes we have therefore established 
a presence in dubai to support this important future market
the key international growth markets were australia through the 
opsm contract and asia where we continued to expand our presence 
in south korea hong kong and taiwan as well as maintaining strong 
sales in japan both for the tx and daytona devices 
geographies customer 
choice
software 
upgrades
ongoing 
service 
revenues
variable 
rental
fixed
rental
rental
renewal
overages
cash
conversion
rental
product
upgrade
capital 
sale
rental
year 1 year 2 onwards end of rentalfuture
current 
revenue
cash source
future 
revenue
cash source
during the year we 
saw an increase of 
24 in capital sales 
as customers continue 
to respond well to the 
various business 
how we generate revenue and cash
strategic progress continued
devices  
deinstalled

2
of installed 
base overview strategic report governance financial statements
optos plc annual report and accounts 2013 25
demonstrated that onethird more lesions were found in the peripheral 
area outside of etdrs seven standard fields additionally in many of 
these patients this led to a more severe grading of diabetic retinopathy 
thus a great body of pathology is in the peripheral retina that would 
have been missed by standard technology we believe that our ongoing 
research in diabetic eye disease and beyond will lead to more effective 
detection of disease at a stage at which treatment can prevent visual loss 
in addition we published a first study that demonstrates the ability of 
optomapassisted examinations to outperform traditional retinal examinations 
and the first study to provide evidence that more effective detection of active 
vasculitis leads to earlier treatment and better patient outcomes 
we are committed to focusing our clinical research to strengthening the pillars 
of detection and prevention of blindness due to diabetic retinopathy as well 
as other diseases and in changing the standards of care 
summary and outlook
following a difficult start to the year we delivered underlying revenue growth 
and improved cash generation whilst making good progress with the rollout 
of daytona the 25 increase in our installed customer base – our largest 
annual increase yet – includes the placement of 1145 daytona devices and 
demonstrates the increasing value of our proprietary technology to eye 
healthcare professionals globally 
looking forward we have a strong rd pipeline and a growing body of 
clinical evidence demonstrating the critical importance of diagnostics in the 
retinal periphery and for the treatment and management of diseases such 
as diabetic retinopathy during the next financial year we expect to
 ΅ promote additional growth in the installed base with an increasing 
penetration within ophthalmology
 ΅ deliver further reductions in the manufacturing cost of daytona
 ΅ continue to build the clinical evidence supporting uwf with a focus 
on specific disease areas and
 ΅ continue improved cash generation
with strong sales of daytona our new products progressing well the building 
body of clinical evidence and a broadened geographical reach the board 
is confident that optos is well placed to drive customer growth in fy14 
roy davis
chief executive officer
20 november 2013
research and development 
we have made good progress on the combination of ultrawidefield 
retinal imaging technology with oct into a single device which has 
the potential to offer eyecare professionals the most powerful tools 
for disease diagnosis and management
following earlier demonstration of indocyanine green angiography icg 
capability on our devices which is important for imaging the deeper 
choroidal vessels in the eye and an important screen for agedrelated 
macular degeneration used extensively in asian markets we have 
completed three highly successful clinical evaluations providing confidence 
to proceed with commercialisation of icg on future products this will be 
incorporated into “california” the designated replacement for the 200tx 
device which will be based on the daytona platform and is a key product 
in our development pipeline
optomap images are at the very core of our offering and improving these 
images is an ongoing primary aim during the last twelve months we have 
developed and demonstrated patent pending technology to deliver image 
quality improvements for current and future product platforms this is 
complemented by a suite of test software that provides quantitative 
assessment of image quality to ensure optimal results
providing clinicians with targeted software tools in many cases disease 
specific to support better decisions and improved patient outcomes will allow 
us to continue to differentiate our product offering proview our patented 
method for displaying optomap images addresses the inherent bias in any 
curved surface when displayed on a flat plane and will be the building block 
which will underpin a suite of imaging tools it introduces capabilities such 
as accurate measurement of retinal features registration of images across 
imaging modalities and platforms a software method for automated montage 
and blending of central and eye steered images thereby providing a complete 
view of the patient’s retina work is also progressing on diabetic retinopathy 
grading software
the significance of the peripheral retina in diabetic 
retinopathy and beyond
we are committed to further strengthening our clinical evidence and 
expanding our disease indications whilst demonstrating the importance 
of imaging the entire retina historical medical literature has suggested 
that some of the earliest clinical changes in diabetic retinopathy may 
occur in the peripheral retina this year with uwf optomap we have 
been able to provide evidence for the first time to prove this premise 
we published results from a clinical study comparing our ultrawidefield 
imaging to early treatment diabetic retinopathy study etdrs protocol 
fundus photography this study completed by harvard university  optos plc annual report and accounts 2013 26
corporate social
responsibility
code of ethics and business conduct
the company has a code of ethics and business conduct which provides 
a general statement of the expectations of the company regarding the 
ethical standards to which each employee including officers should 
adhere while acting on behalf of the company each employee is 
expected to read and become familiar with the ethical standards 
described in the code
there have been no issues raised under this code in the year
health and safety
there were no health and safety enforcement actions at any of the 
company’s locations during the year ended 30 september 2013 
the company’s policy regards the health safety and welfare of all employees 
as a matter of prime importance and serves as the basis for the company 
owing a duty of care under law and as a matter of best practice to protect its 
employees and others from harm arising from work activities the company 
has a written policy on health and safety which is comprised of the following 
elements statement of the company’s commitment to health and safety and 
detailing how safety will be managed details of where responsibilities are 
allocated and how employees fit into the overall safety management system 
and details of how specific activities and functions are managed the last 
element includes risk assessments fire safety first aid incident and 
accident reporting electrical safety work equipment hazardous 
substances and manual handling information instruction and training 
on health and safety are provided across the company
the company’s global webbased system procured for quality 
management system applications has over the last year been 
expanded to also accommodate the company’s health and safety 
policies and procedures this system allows instant access to the 
company’s internal policies and procedures by any employee of 
the company it is the company’s intention to continue to expand 
the use of this global webbased system in other areas of health 
and safety applications
the company is compliant with medical device directive 200747ec with 
respect to iso 13485 and ce marking of its products this is with particular 
reference to the requirement relating to risks associated with substances 
leaking from medical devices the company has declared that none of 
its devices contain di2ethylhexylphthalate at levels equal to or greater 
than 01 by mass and that no raw materials containing or derived from 
bisphenol a are in contact with the patient
the board has acknowledged and accepted its responsibility for health and 
safety across the group the ceo has overall responsibility for ensuring that 
line management is responsible for the day to day management of health 
and safety the board receives regular updates on health and safety which 
enables the directors to assess and review the effectiveness of the health 
and safety policy throughout the financial year
the company regards 
the health safety 
and welfare of all 
employees as a matter 
of prime importance overview strategic report governance financial statements
optos plc annual report and accounts 2013 27
equal opportunities policy
the company is an equal opportunities employer 
this means that it is company policy that no individual 
or group of individuals experiences discrimination 
harassment or victimisation on any grounds the 
company is committed to a policy of providing equal 
opportunities to all persons this underpins and guides 
all aspects of employment including recruitment and 
promotion and provides encouragement to employees 
at all levels to act fairly and to prevent discrimination on 
any ground including but not limited to age gender race 
marital status sexual orientation religion or disability 
company policies for recruitment training career 
development and promotion of employees are open fair and 
inclusive in their approach the company recognises the need to 
develop and regularly review employment policies and procedures 
to ensure that recruitment training and development promotion and 
compensation decisions are made on the basis of competency 
performance ability and potential the company seeks to facilitate a 
culture that enables employees to successfully balance professional 
and personal requirements and commitments we believe that this 
helps recruit and retain skilled and motivated employees
we expect all of our employees to be treated and to treat others 
with respect we strive to provide a working environment free from 
harassment intimidation or discrimination in any form which may 
affect the dignity of the individual 
we recognise that an effective equal opportunities policy will help 
all staff to develop to their full potential which is clearly in the best 
interests of both our staff and our business we work to ensure that 
we not only observe the relevant regulations but to the best of our 
ability provide genuine equality of opportunity 
it is a requirement of the company’s code of ethics that the company 
and its employees are committed to conducting its activities in full 
compliance with all applicable environmental laws
there was no environmental enforcement action at any of the company’s 
locations during the financial year ended 30 september 2013
the company makes available to its customers medical retinal imaging 
devices that are designed to ensure at a very minimum that they comply 
with applicable laws regulations and industry standards in each of the 
country markets in which it operates these devices by design have 
a minimal impact on the environment 
the company engages in the continual development of a 
range of packing materials that are suitable for multitrip use 
the company is further rationalising and minimising the number 
of material movements both internally and externally by developing 
the us distribution service centre as a manufacturing hub in addition 
to its repair capabilities this is part of a six sigma lean strategy which is 
expected to deliver several benefits including a positive environmental 
impact this strategy will necessarily involve the supply chain 
additionally the company’s newest desktop retinal imaging device uses 
less packaging less power and has simpler installation requirements 
which together results in a greener environmental outcome
the company undertakes to recycle its paper plastics metal and 
personal computers and mobile telephones medical devices will have 
to comply with the rohs directive as from 2014 the redesign of certain 
electronics to be “lead free” is well underway with suppliers validating 
these new processes the directors’ report contains disclosures 
relating to the company’s carbon emissions
under an approved producer compliance scheme the company is 
meeting the waste electrical electronic equipment weee regulations 
environment employees optos plc annual report and accounts 2013 28
corporate social
responsibility continued
the company continues to maintain an informal giving programme that 
provides modest financial support to encourage the community spirit 
of its employees it is about looking for opportunities to empower and 
collaborate with employees and the community through charitable work 
notforprofits professional organisations schools and others it is also 
about being proactive to promote and address issues that matter to 
stakeholders the company does not make donations to political 
parties or bodies
human rights
optos recognises that it has a corporate responsibility to respect 
human rights and that we must act to avoid infringing the rights 
of others the board believes that the company’s employment 
practices its manufacturing and other working environments and the 
code of business conduct which governs relations with suppliers 
avoids any adverse impact on the human rights of our employees 
or suppliers furthermore we do not have any employees or manufacturing 
operations in countries that may be considered to have human rights issues
robert kennedy
chief financial officer and company secretary
20 november 2013
equal opportunities policy continued
we further recognise the benefits of employing individuals from a range 
of backgrounds as this creates a workforce with creativity and diversity 
we value the wealth of experience within the communities in which 
we operate and aspire to have a workforce that reflects this
harassment and discrimination policy
consistent with the optos belief that each employee should be treated with 
respect and dignity optos is committed to providing a work environment 
that is free of discrimination in keeping with this commitment we maintain 
a strict policy prohibiting unlawful harassment regarding any characteristics 
protected by the antidiscrimination laws including but not limited to age 
citizenship status colour disability marital status national origin race 
religion gender and sexual preference this policy applies to all company 
agents and employees furthermore it prohibits harassment or sexual 
harassment in any form including verbal physical and visual harassment 
our harassment and discrimination policy is communicated to all employees
corporate giving
the company believes that building and maintaining vibrant healthy 
communities is a shared responsibility and is committed to doing its part 
employees are encouraged to engage with and make a difference in the 
communities where they live and work and the company supported 
employees and partnered with customers and organisations in a number 
of worthy causes and initiatives to give back and make that important 
difference many employees contributed independently of the company 
to support their colleagues in their charitable endeavours 
men
75
women
25
for the majority 
of the year
men
86
women
14
men
71
women
29
board of directors
operating board
rest of organisation
our workforce 
by gender
employees continued overview strategic report governance financial statements
optos plc annual report and accounts 2013 29
principal risks 
and uncertainties
business risks
principal risk mitigating factors status
market 
success of 
new products
success and uptake of daytona and future derivatives of 
it in our key markets is critical to the longterm growth of 
the company 
the daytona device has been developed to deliver practitioner 
and patient benefit including the same ultrawidefield view of the retina 
autofluorescent imaging new software robust and smaller size allowing 
use regardless of practice size or physicalclimatic environment
although we had some software issues in the first half 
of the year these have been resolved in the year the 
demand for daytona has been strong and we expect this 
to continue the product pipeline is well developed 
and progressing to plan
product  
portfolio risk
the company derives the majority of its revenue from its 
p200 and p200c medical devices there is a risk that 
success of daytona could result in significantly reduced 
demand for these products
the company derives an increasing share of revenue from other 
products in particular daytona pricing programmes have been 
established in the marketplace to extend the life of these products 
in the medium term it is expected that daytona will be the most 
significant product
we have seen reduced sales of p200dx devices 
however we continue to sell them and most daytonas 
have gone to new customers rather than to existing ones 
the impact of the risk is reducing as daytona becomes 
more established
market 
concentration
the company currently generates most of its revenue 
in the optometry sector within north america
the company is investing in direct sales and distributor 
relationships outside north america as well as building sales 
capability for ophthalmology and other specialist markets
the growth in the international customer base has 
continued and international now accounts for 30 
of revenue we have made good progress in the 
ophthalmology sector but optometry remains the 
dominant market
operational risks
principal risk mitigating factors status
device 
complexity
the company’s devices are complex and growth 
is dependent on it being able to manufacture and service 
its devices in a costeffective and repeatable way 
reliability issues would clearly have an impact on 
reputation and cost software is becoming increasingly 
important in product performance
the daytona design is modular relies on readily available 
components and technologies and is therefore easier 
to manufacture and maintain than existing products 
where a product is singlesourced the company seeks to 
hold sufficient inventories to manage expected demand 
we have an internal software team and a separate software 
validation team to fully test before release 
we are continuing to strengthen both our quality and customer 
support processes
we did see reliability issues in the first half of fy13 
relating to daytona software corrective actions were 
put in place to fix the issues but also to review the 
validation and verification processes to prevent 
future issues
daytona cost 
reduction
the inability to deliver the target daytona cost reduction has a 
material impact on the operational margin as well as the 
potential to limit future volume sales
the rd and operations teams are now under a single manager and working 
closely together to deliver this saving a clearly defined roadmap has been 
established to deliver a reduced daytona product cost
new we did not deliver the target cost in fy13 but a clear plan 
is in place which will deliver reduced costs in fy14
technology 
 competition
if a third party produces a more advanced device 
with improved functionality or a similar device with 
significantly lower build costs this could have a material 
adverse effect on the company’s business
the company continually develops the quality and functionality of its 
products as well as investing approximately 5 of revenue per annum 
in rd to bring new products to market the company has also invested 
in demonstrating the clinical efficacy and superiority of its devices
in the year a competitor launched a lens which increased 
the field of view on their device however it is limited in 
application and the field of view remains substantially less 
than optos’ products
during the year we undertook a full review 
of our risk management processes and 
introduced a more systematic process 
this involved risk assessment interviews being conducted with functional vps building on local information and 
processes risks were then assigned a level of risk and to categories including competition external environment 
financial operations regulatorycompliance and strategic we used this as basis to define the principal current risks 
which are described below these are the most significant risks that may adversely affect our business strategy 
financial position or future performance it is not possible to identify every risk that could affect our business and the 
actions taken to mitigate the risks described below cannot provide absolute assurance that a risk will not materialise
reducing
increasing
stable optos plc annual report and accounts 2013 30
principal risks and 
uncertainties continued
regulatory risks
principal risk mitigating factors status
increasing 
regulation
the company’s medical devices are subject to strict us 
federal food and drug administration fda regulations and 
the requirements of similar foreign regulatory bodies failing 
to satisfy regulatory requirements or regulation changes 
could result in the imposition of sanctions or cause the 
company to be unable to sell its product in certain markets 
or face adverse publicity 
this risk increases as we enter into more countries which 
can have different regulatory requirements
the company operates to relevant iso guidelines and monitors 
and anticipates developments in regulatory thinking
the company has a dedicated regulatory team who works 
closely with both external bodies and internally particularly with 
the sales teams to ensure we are able to meet current and 
new regulations
the regulatory framework is becoming ever more complex 
such as with the introduction of the usa sunshine act and 
hippa and rosh compliance within the eu 
we continue to monitor and react as required to the meet 
the changing requirements 
litigation  
risk
technologybased companies are frequently subject to litigation 
with respect to patent and other intellectual property rights 
any litigation to determine the validity of thirdparty infringement 
claims or defend the company’s intellectual property could  
at a minimum be costly 
the company’s business exposes it to the risk of certain 
litigation for example a patient suffering harm during the image 
process or the company’s retinal image system not identifying 
an underlying medical problem
the company believes the core patent protection around 
its product is strong and is not aware of any significant actual 
or pending suits the company does not offer diagnostic or 
treatment services and its customers are all qualified eyecare 
clinicians who are fully trained in the use and interpretation 
of the optomap product the company maintains product 
liability insurance although there can be no certainty the 
insurance coverage would be sufficient to meet the cost 
of any claims
there have been no substantive challenges to our 
ip position
financial risks
principal risk mitigating factors status
consumer 
pressures
in common with other consumer businesses the company 
is subject to pricing pressures and relies in part on 
reimbursement agreements with insurers and government 
health authorities the company is subject to evolving 
healthcarerelated taxes imposed by government agencies
the nearterm success of the company’s business depends 
on consumers understanding the benefit of regular optomap 
examinations at the price offered by the company and 
healthcare professionals the company seeks to drive adoption 
and awareness of its product through strong educational 
programmes and compelling evidence from clinical studies
the continued growth in new customers demonstrates 
that customers and consumers increasingly understand 
the benefit of the optomap examinations
a medical device tax has been introduced in the us which 
we have dealt with during the course of fy13
economic 
environment
the company’s operating results and financing capacity 
could be adversely affected by the current world economic 
outlook this combined with a relatively new product can 
make it difficult to forecast and therefore plan accordingly 
this risk is heightened as in recent years a high proportion 
of the profits have been delivered in the last quarter
this can lead to volatility and put pressure on the company’s 
financing arrangements including meeting bank covenants
the company offers customers alternative ways to access 
its technology including payperpatient rental fixed rental 
renttoown and outright purchase 
the company benefits from good visibility of secured forward 
revenues and cash through service and rental contracts 
the latter typically having a term of around three years 
we have in place forecasting and reporting processes 
to mitigate the planning risk 
the company has financing in place and it closely monitors 
its covenant compliance
although we have seen difficult economic conditions 
in europe we have continued to grow the installed base
we have entered into partnerships with thirdparty 
financing companies to facilitate customers’ outright 
purchase we have seen reduced deinstalls in the year 
we have updated the commission plan with the aim of 
flattening revenue where demand allows 
during the year the company has raised both debt finance 
and vendor finance demonstrating the ability to raise 
finance and strong relationships with our finance providers
exchange 
rate risk
the company operates in several countries and currencies 
and its results are impacted by changes in currency 
exchange rates
the company reports its results in us the currency 
in which the majority of its revenues and costs arise 
the company monitors its nonus foreign currency exposure 
wherever possible the majority of cash balances are maintained 
in us to mitigate the impact of currency fluctuations
due in particular to the growth in the australian business 
we have increasing exposure largely relating to intercompany 
balances on the balance sheet as we have seen in fy13 
currency movements can create material and adverse 
translation costs overview strategic report governance financial statements
optos plc annual report and accounts 2013 31
financial review  
and kpis our customer base for core optos uwf scanning devices increased from 
4775
1
 to 5945 during the year growth of 25
profit and loss account
revenues
the sum of revenues 1582m and other operating income 13m 
in total 1595m was 19 lower than last year 1964m largely reflecting 
the reduced number of renewal opportunities due to the timing of 
expiring contracts the outright sales of devices increased by 24 
to 796m fy12 642m finance leases were substantially lower at 
338m fy12 641m due to the reduced number of renewals revenues 
from operating leases fell to 186m from 525m last year reflecting the 
shift of rental classification into finance leases this was partially offset 
by increased recurring revenues from service and warranty at 275m 
fy12 156m 
although new rental and capital customers were much higher this year 
the number of renewals both rental extensions and capital conversions 
were a quarter of that in fy12 443 versus 1982 and therefore the number 
of contracts in the year was 35 lower 1714 versus 2634 hence 
revenue is lower even though new customers increased substantially 
the reduced renewal opportunities are largely a result of timing as 
to when the existing rental contracts expire at the end of the year 
we had 3329 rentals of which around 900 have a renttoown option 
adjusting revenues in both the current and prior financial year to treat all 
receipts under rental contracts as if they were operating leases resulted 
in underlying growth in revenues of 4
our americas markets generated revenues of 1106m fy12 1478m 
a reduction of 25 due to lower renewal rates with our international 
market excluding intersegment sales flat at 489m fy12 486m 
following continued challenging economic conditions there was 
continued growth in asia and australia mainly through sales to opsm 
the leading optometry chain in australia and new zealand revenues 
in direct markets were lower due to the lower number of renewal 
opportunities although all areas delivered strong installed base growth
we have 144m due under noncancellable rental contracts of which 
862m is recognised in the balance sheet the balance is committed 
service revenue that will be matched to the period in which the service 
is delivered and a small element of remaining operating leases 59m 
robert kennedy chief financial officer and company secretary
 renewals and conversions
 new rental
 new capital
1982
12
375 277
443
13
403 868 1714
2634
total
 operating lease and variable rental
 service and warranty
 finance lease
 capital sales
total
12
525 642 156
186
13
275 338 796 1595
1964
m
641 optos plc annual report and accounts 2013 32
financial review  
and kpis continued
finance interest revenue of 50m fy12 28m represents the implied 
discount within finance lease rental contracts and therefore is effectively 
a release of revenue
interest charges and other finance costs were flat at 24m
profit on ordinary activities before tax
profit on ordinary activities before tax was 92m and there was a profit 
of 95m after exceptional items compared to 263m and 234m after 
exceptional items in the prior year 
exceptional items
exceptional credits of 03m arose in the period charge of 13m after 
tax relating to four areas
m
opko royalty reduction 48
restructuring costs 08
exchange rate on translation 23
intangible development impairment 14
exceptional credit 03
when optos acquired the assets and trade of opko in september 2011 
85m of contingent consideration was recognised to reflect royalties 
payable on future sales of opko oct products or products using 
that technology this liability was reduced to 63m in the year to 
30 september 2012 an agreement has been reached with opko to 
pay 15m royalties in three payments the final payment by june 2014 
as final settlement of this royalty this results in a noncash exceptional 
credit of 48m with the 15m balance being reclassified from 
provisions to creditors 
a restructuring plan was announced on 1 may 2013 to deliver savings and 
to position the business for faster growth and closer customer service 
this included the closure of two sites costs totalling 08m have been 
incurred relating to this restructuring 
customer base
our customer base for core optos uwf scanning devices increased 
from 4775
1
 to 5945 during the year growth of 25
44 of our devices are owned outright 2616 we sold 1037 devices 
in fy13 compared to 663 in fy12 of which 868 went to new customers 
we also added 403 new rental customers fy12 375 in total 56 of our 
total installed base 3329 devices remains on rental contract with the 
majority 2960 classified as finance leases this is an increase of 
136 rental customers 
in the year there were 443 operating lease renewals of which 169 chose 
to buy the device and the remainder extended their rental contract 
this compared to 1982 in fy12 of which 387 were capital conversions 
and 1595 were rental renewals
1  the opening position has been slightly amended from 4689 to reflect a consistent 
presentation of distributor sales
gross and operating profits and net finance costs
gross profits reduced by 195m to 892m with a flat gross margin 
of 57 fy12 57 the first half included some costs associated with 
daytona upgrades which had an impact on this margin as did delays 
in reducing the daytona manufacturing cost gross margin restated 
to include the release of finance lease interest was 58 fy12 58
overheads before exceptional items were reduced from 860m to 
839m reflecting reduced sales costs and partial benefits from the 
restructuring in the second half of the year but offset by a much reduced 
research costs capitalisation 
operating margins before exceptional costs decreased from 13 to 4 
due to reduced revenue and adverse operational leverage delivering 
preexceptional operating profits of 66m fy12 259m 
average numbers of employees increased from 426 to 435 the restructuring 
in the second half of the year has been implemented but some staff did not 
leave until the beginning of the next financial year staff costs for the year 
were 499m compared to 552m in the previous year the higher average 
staff numbers were offset by reduced incentive payments  overview strategic report governance financial statements
optos plc annual report and accounts 2013 33
as a consequence of adverse exchange rate movements in particular the 
us to au rate there was a material adverse charge of 23m relating to 
the translation of intercompany balances given the nature and size of this 
it was deemed material to the overall result 
lastly during the second half of the year the decision was taken to focus 
development effort on the combined uwfoct device and to stop further 
development of the standalone oct device as a result the intangible 
development asset associated with the standalone oct device was 
written off at cost of 14m
tax
the total charge of 31m for the year can be analysed as below
preexceptional
m
exceptional
m
total
m
profit before tax 92 03 95
tax see breakdown below 15 16 31
effective rate 16 533 33
tax analysis
current – current year 02 01 01
current – prior year 08 — 08
deferred tax year 05 17 22
in the preexceptional tax charge for the year we have recognised the tax 
losses in australia based on current and expected future profitability this 
has resulted in a deferred tax asset of 15m being recognised on the 
balance sheet in addition the tax charge includes a prior year adjustment 
relating primarily to us state taxes 06m which have historically been 
accrued on a blended rate but following a detailed review have now 
been trued up note there is no cash impact as the appropriate amount 
of taxes had been paid adjusting for these items the effective tax rate 
in the year was 26
the postexceptional charge is high as it includes a deferred tax liability 
relating to the difference between the amount included as part of the 
initial opko purchase price allocation for the estimated royalty payment 
and the actual amount to be paid partly offset by the fact that the royalty 
release in the period is not taxable
the resultant posttax profit after exceptional items was 64m representing 
basic earnings per share of 89c compared with 246c in the previous year
cash flow
cash flow from operating activities before tax was an outflow of 162m 
compared to an inflow of 49m in fy12 however a large proportion 
of cash received relates to finance leases rental and imputed interest 
which although shown within investing activities are a core part of 
operating activities 
fy13
m
fy12
m mvt
cash flow from operating activities 162 49
cash receipts from finance 
lease receivables 296 71
finance lease interest receivable 50 28
adjusted operating cash flow 184 148 36
purchases of property plant 
and equipment 38 99
expenditure on intangible assets 11 67
cash flow before tax acquisition 
and financing 135 18 153
tax paid 30 13
cash flow before acquisition 
and financing 105 31 136
acquisition — 175
financing activities 68 170
net increasedecrease in cash 173 36 optos plc annual report and accounts 2013 34
financial review  
and kpis continued
balance sheet
shareholders’ equity increased to 1255m in the year from 1186m 
principally reflecting the increase in retained profits finance lease 
receivables increased to 862m fy12 822m 
noncurrent assets fell to 1104m fy12 1277m due to two principal 
movements there has been a reduction in property plant and machinery 
due to reduced operating leases in addition the value of intangible 
assets has fallen due to amortisation reduced capitalisation of development 
costs and a write off of the oct development asset in the year 
current assets increased to 1167m from 904m with increases 
in finance lease receivables and inventories of 59m and 55m 
respectively cash balances also increased by 173m in the year 
trade receivables fell by 45m reflecting lower sales towards the 
year end compared with the previous year
total liabilities increased slightly to 1016m from 995m but with a large 
shift between current and noncurrent as the bank facility is now deemed 
to be a current liability as it expires in september 2014 total finance 
liabilities increased by 21m primarily due to 88m bank 80m vendor 
financing 08m offset by a reduction in provisions of 62m primarily 
the release of royalty with the balance reclassed as a creditor 
by order of the board
robert kennedy
chief financial officer and company secretary
20 november 2013
shareholders’ equity 
increased to
1255m
net debt  
reduced to
394m
cash flow continued
cash flow before tax acquisitions and financing activities was an inflow 
of 135m compared with an outflow of 18m in the previous year and 
therefore a positive 153m movement this was due to revenue mix 
a higher proportion of capital sales and the timing of finance lease 
receipts this improvement was offset by the reduced profit and 
increased inventory relating to the buildup of daytona compared 
to the end of fy12 
excluding finance income and finance lease receipts investing activities 
used 49m fy12 341m expenditure on intangible assets of 11m 
related primarily to internal research and development this was 56m 
lower than last year due to the costs for the daytona project in fy12 
cash investment in fixed assets fell from 99m to 38m reflecting 
a reduced number of devices under operating leases treated as plant 
and equipment 
cash flow before acquisition and financing activities was 105m which 
compares positively to a 31m cash outflow in fy12 net cash flows from 
financing activities resulted in a net cash inflow of 68m fy12 170m 
this includes the 50m revolving credit facility with lloyds bank of which 
38m was drawn at the year end fy12 30m cash balances increased 
by 173m in the year to 239m whilst finance lease obligations increased 
by 08m from 245m to 253m resulting in net debt at the year end of 
394m compared to 479m at the start of the year overview strategic report governance financial statements
35
future contracted  
revenues 
down to 144m
increase net in 
installed base 
up to 1170
total number of 
customer sites 
up to 5945
number of rental 
customer sites 
up to 3329
144 1170 5945 3329
160 535 4775 3215
132 328 4240 3429
13 13 13 13
12 12 12 12
11 11 11 11
revenue  
growth 
down 19
underlying  
revenue growth 
up 4
operating margin including 
finance lease interest 
before exceptional items  
up 73
cash generated before tax 
financing and acquisitions 
up to 135m
19 4 73 135
37 15 146 18
35 26 181 106
13 13 13 13
12 12 12 12
11 11 11 11
financial measures
operational measures
we look at our performance in terms of revenues customer growth 
operating margins and cash generation as follows
financial measures
revenue is defined as the sum of revenue plus other 
operating income
revenue growth versus prior year is the total 
revenue for the year divided by the total revenue 
for the prior year 
underlying revenue growth is calculated by treating 
all payments receivable in the period from rental 
contracts as operating leases
operating margin before exceptional items is the 
gross profit less selling distribution and administrative 
expenses plus finance lease interest but excluding 
exceptional costs divided by revenues 
   m
m
optos plc annual report and accounts 2013 optos plc annual report and accounts 2013 36
voting
subject to the company’s articles of association articles and the rights 
and restrictions thereof and of the 2006 act every shareholder present 
in person at a general meeting of the company shall on a show of hands 
have one vote and on a poll every shareholder present in person at a 
general meeting or by proxy shall have one vote for every share of which 
they are the holder no shareholder shall be entitled to vote in relation 
to shares held by them unless all monies presently payable by them 
in respect of those shares have been fully paid 
transfer of shares
there is no restriction on the transfer of shares in the company other 
than as contained in the company’s articles of association the board 
may in its absolute discretion and without giving any reason refuse 
to register the transfer of a certificated share which is a not a fully paid 
share provided that the refusal does not prevent dealings in shares 
of that class in the company from taking place on an open and proper 
basis b in respect of more than one class of shares or c not lodged duly 
stamped if stamp‑able with the company and except where the shares 
are registered in the name of a recognised person as defined in the articles 
and no certificate shall have been issued thereof accompanied by the 
relevant share certificate and such other evidence of the right to transfer 
as the board may require in the case of a transfer of a certificated share 
by a recognised person the lodging of a share certificate will only be 
necessary if and to the extent that a certificate has been issued in respect 
of the share in question the board may in its absolute discretion and 
without giving any reason refuse to register any allotment or transfer of 
shares which is in favour of a child bankrupt or person of unsound mind 
or more than four joint allotters or transferees
directors’ report
the directors present their report and the audited financial statements for 
the year ended 30 september 2013 the directors consider this report 
and accounts taken as a whole is fair balanced and understandable 
and provides the information necessary for shareholders to assess the 
company’s performance business model and strategy
business review
the directors’ report should be read in conjunction with the chairman’s 
statement on page 3 and the strategic report which are incorporated 
into this report by reference and which contain details of the principal 
activities of the company a review of the business during the year and 
an indication of expected progress and future developments disclosure 
of the key performance indicators for the company disclosure of the 
principal risks and uncertainties affecting the business and disclosure 
of the company’s financial risk management policy in addition to this 
note 26 of the financial statements also contains disclosure relating to 
the company’s principal financial instruments
financial results 
the profit after taxation for the year ended 30 september 2013 was 64m 
compared to 176m for the financial year ended 30 september 2012 
basic earnings per share was 89c compared to 246c per share for the 
financial year ended 30 september 2012 
dividend
no dividend is payable
share capital and structure
the company has an authorised share capital of £1800000 comprising 
90000000 ordinary shares as at this date each ordinary share has 
a nominal value of £002 and each carries one vote 
no share in the capital of the company may be allotted at a discount and 
save as permitted by the companies acts no share may be allotted except 
as paid up at least as to one‑quarter of its nominal value and the whole of 
any premium on it 
as at 1 october 2012 the company had 71589046 ordinary shares 
in issue an additional 622887 ordinary shares were issued during the 
year ended 30 september 2013 to employees and former employees 
the company therefore had 72211933 ordinary shares in issue as 
at 30 september 2013 representing 72211933 total voting rights overview strategic report governance financial statements
optos plc annual report and accounts 2013 37
directors
details of the directors are set out on pages 40 to 41 details of 
appointments to and resignations from the board during the financial 
year can be found on page 40
directors’ interests
details of the directors’ interests are set out on page 59
directors’ powers 
subject to the provisions of the companies acts the company’s articles 
and to any powers given by special resolution of the company the 
business of the company shall be managed by the board which may 
exercise all the powers of the company whether relating to the 
management of the business or not the company’s articles detail 
the specific authorities of the directors copies of the articles may 
be obtained from the company secretary
allotment and issue of shares
the directors are by shareholder resolution passed at the annual 
general meeting of the company on 21 february 2013 generally 
and unconditionally authorised to exercise all the powers of the company 
to allot relevant securities up to a maximum nominal amount of £478967 
being equal to approximately 333 of the company’s issued share 
capital as at 14 january 2013
the directors are also generally empowered to allot equity 
securities within the meaning of the act of the company for cash 
on a non pre‑emptive basis this power is limited to a any allotment 
where equity securities have been offered to holders of equity securities 
in proportion as nearly as may be to their then holdings of such 
securities and b any other allotment of equity securities up to an 
aggregate nominal value of £71845 being equal to approximately 
5 of the company’s issued share capital as at 14 january 2013 
such authorities and powers expire on 20 may 2014 unless previously 
revoked varied or renewed 
it is proposed that these authorities and powers be renewed by shareholder 
resolution at the company’s forthcoming annual general meeting pursuant 
to and within the meaning of the 2006 act but without prejudice to the 
exercise of any such authority prior to the date of the resolution 
notified interest of shareholding
as at 30 september 2013 the company had been notified in accordance 
with the financial services authority disclosure and transparency rules 
of the following interests in 3 or more of the company’s ordinary 
share capital 
shareholder
number 
of ordinary 
shares
 issued  
share  
capital
aberforth partners llp 13875162 1921
threadneedle asset management ltd 6630733 918
patrick paul 4657867 645
amadeus capital partners limited 4254753 589
aviva investors
1
3948756 547
atp investment management 3583563 490
nfu mutual 2424809 336
royal london asset management 2308531 320
lsp 2240877 310
1  the company disclosed on 15 november 2013 that it had received notification from aviva 
investors that it had increased its shareholding to 4447235 616 of the company’s issued 
share capital
voting rights
deadlines for exercising voting rights and appointing a proxy or proxies 
to vote on resolutions to be passed at the agm on 20 february 2014 will 
be specified in the notice of agm the voting rights of shareholders are 
restricted where a notice pursuant to section 793 of the 2006 act has 
been given in respect of shares held by such shareholder and the 
information required by such notice has not been given to the company
there are currently no limitations on the voting rights of shareholders 
of a given percentage or number of votes and the company is not aware 
of any arrangement by which with the company’s co‑operation financial 
rights carried by ordinary shares are held by a person other than the 
holder of such ordinary shares the company is not aware of any 
agreement between holders of securities which may result in restrictions 
on the transfer of securities or on voting rights optos plc annual report and accounts 2013 38
directors’ report continued
activities an appropriate induction is provided for new directors and 
ongoing training is provided as and when may be required all directors 
having notified the chairman in the first instance are able to take 
independent professional advice at the company’s expense in 
furtherance of their duties during 2013 no director felt the need to take 
such advice they also have access to the advice and services of the 
company secretary who is responsible for advising the board through 
the chairman on all governance matters
retirement by rotation
at the first general meeting after the date of adoption of the articles and 
at each subsequent annual general meeting of the company as near as 
possible to but not exceeding one‑third of the directors but at least one 
in any case must retire from office by rotation the directors to retire will 
firstly be those who wish to retire and not offer themselves for re‑election 
and secondly those who have been longest in office since their last 
appointment or reappointment 
disabled employees 
equal opportunity guides all aspects of employment including recruitment 
and promotion and provides encouragement to employees at all levels to 
act fairly and to prevent discrimination on any ground including disability 
it is optos’ policy that applications for employment by disabled persons are 
always fully considered in the event of an existing employee becoming 
disabled all reasonable effort is made to ensure that their employment 
within the group can continue it is our policy that the training career 
development and promotion of disabled persons are as far as possible 
the same as that of all other employees in the group additional information 
on the company’s employment policy can be found on page 27 
employee involvement
the company operates a framework for employee information 
and consultation and during the year provided employees with 
information including information relating to the economic and financial 
factors affecting the company including through presentations from the 
chief executive officer a company‑wide newsletter in which employees 
are encouraged to present suggestions and views and through regular 
inter‑departmental and management meetings all of which are designed 
to allow for and encourage a free and cross‑functional flow of information 
and ideas employees participate directly in the success of the company 
through an individual and performance‑related bonus scheme 
and through a share award and option scheme 
redeemable shares and purchase of own shares
subject to the companies act 2006 and without prejudice to any rights 
attaching to any existing shares or class of shares in such manner as 
is provided in the articles shares may be issued that are to be redeemed 
or which at the option of the company or the holder are liable to be 
redeemed subject to the relevant legislation and without prejudice to any 
relevant special rights attached to any class of shares the company may 
purchase any of its own shares of any class in any way and at any price 
whether at par or above or below par
the company is by shareholder resolution passed at the company’s annual 
general meeting on 20 february 2013 generally and unconditionally 
authorised to make market purchases of any of its ordinary shares on such 
terms and in such manner as the directors of the company may from time 
to time determine provided that i the maximum number of ordinary shares 
authorised to be purchased is up to but not exceeding 10 of the company’s 
issued share capital ii the minimum price which may be paid for any such 
ordinary share is £002 exclusive of the expenses of purchase if any 
payable by the company and iii the maximum price exclusive of the 
expenses of purchase if any payable by the company which may be paid 
for any such ordinary share is an amount equal to 105 of the average of 
the mid market closing quotations for an ordinary share as derived from the 
daily official list of the london stock exchange for the five business days 
immediately preceding the day of purchase 
it is proposed that this authority and power be renewed by shareholder 
resolution at the company’s forthcoming annual general meeting being 
held on 20 february 2014 pursuant to and within the meaning of the 
2006 act but without prejudice to the exercise of any such authority 
prior to the date of the resolution to the exercise of any such authority 
prior to the date of the resolution
appointment of directors
directors may be appointed by the company by an ordinary resolution 
of shareholders the board may appoint a director either to fill a vacancy 
or as an additional director and in either case whether or not for a fixed 
term any director so appointed will hold office only until the next 
following general meeting and will not be taken into account in 
determining the directors who are to retire by rotation at such meeting 
and shall then be eligible for re‑appointment if not re‑appointed by 
shareholders at that general meeting the director shall retain office until 
the meeting appoints someone in his or her place or if the meeting does 
not do so the director will vacate office at the close of the meeting 
a director is not required to hold shares in the capital of the company 
directors are provided with documentation on the company and its  overview strategic report governance financial statements
optos plc annual report and accounts 2013 39
material contracts
none of the directors had any material interest in any material contract 
with the company or its subsidiary companies
political donations
the company made no political donations
financial instruments
the company’s financial risk management objectives and policies 
are discussed in note 26 on pages 111 to 114
annual general meeting
the annual general meeting will be held on 20 february 2014 for which 
a notice will be sent to shareholders together with a form of proxy 
separately containing the resolutions being proposed and an 
accompanying explanatory description of each resolution
auditor
a resolution to re‑appoint ernst  young llp as auditor will be submitted 
to shareholders at the annual general meeting on 20 february 2014
directors’ statement as to disclosure of information 
to auditor
the directors who were members of the board at the time of approving the 
directors’ report are listed on pages 40 and 41 and having made enquiries 
of fellow directors and of the company’s auditor each of these directors 
confirms that to the best of their knowledge and belief there is no information 
that is information needed by the company’s auditor in connection with 
preparing their report of which the company’s auditor is unaware and 
each director has taken all the steps a director might reasonably be 
expected to have taken to be aware of relevant audit information and 
to establish that the company’s auditor is aware of that information
by order of the board
robert kennedy
chief financial officer and company secretary
20 november 2013
greenhouse gas emissions
having collected the necessary raw data based on our operations this 
was then converted into carbon dioxide equivalent co
2
e emissions using 
conversion factors as specified by defradecc
the total carbon footprint for the year was calculated to be 1776 tonnes 
of co
2
e which equals 11 tonnes co
2
em of revenue
the breakdown of emissions between scope 1 direct emissions 
including consumption of fuel fugitive emissions from air conditioning and 
refrigeration etc and vehicles and scope 2 consumption of purchased 
electricity steam heating and cooling is detailed below
optos carbon footprint tco
2
e 201213
significant agreements 
there are no agreements which the company considers significant and 
to which the company is a party that take effect alter or terminate upon 
a change of control of the company following a takeover bid
indemnification
the articles of the company allow the directors to be indemnified against 
all liabilities incurred in the proper conduct of the company’s business
research and development
the company continues to invest in research and development 
details of which are set out in the strategic report
scope 1 vehicles
737
scope 1 gas
35
scope 1 ac
39
scope 1 refrigeration
0
scope 2 electricity
965 optos plc annual report and accounts 2013 40
board of directors 
dr peter fellner r•n
non‑executive chairman
dr peter fellner joined optos as chairman on 
1 january 2010 from 1990 to 2003 he served 
as ceo of celltech group plc and oversaw 
its growth into the uk’s largest biotechnology 
company dr fellner then served as celltech’s 
chairman until its acquisition in 2004 before 
this he served as ceo of roche uk from 1986 
to 1990 having previously been director of 
the uk roche research centre dr fellner 
currently serves as chairman of the medical 
technology company consort medical plc and 
the biotechnology companies vernalis plc 
biotie therapies corp and ablynx nv he was 
vice‑chairman of astex pharmaceuticals inc 
until its acquisition by otsuka in october 2013 
he is also a director of the global 
biopharmaceutical company ucb sa and is 
a member of the novo as advisory group 
dr fellner previously served as chairman 
of the biotechnology company acambis plc 
and premier research group plc a cro 
until they were each acquired during 2008 
and was also a director of evotec ag until 2011
chairman’s overview
during the accounting period the board 
comprised as executive directors roy davis 
chief executive officer ceo and louisa burdett 
chief financial officer cfo until 17 july 2013 
the non‑executive directors comprised 
dr peter fellner barry rose until 31 may 2013 
john goddard dr peter kehoe david wilson 
and rosalyn wilton 
robert kennedy was appointed as an 
executive director and chief financial officer 
on 16 october 2013
the company’s non‑executive directors provide 
input to the business by contributing to the 
oversight function of the board and to the 
development of the company’s strategy
the non‑executive directors met as a group on 
two occasions during the financial year ended 
30 september 2013 without the presence of 
executive directors
the board met twelve times during the year 
including once over a two‑day period with 
senior management to focus on strategy 
and business planning
the board delegates to the company’s operating 
board which is chaired by the ceo and comprises 
the company’s senior management and 
meets regularly certain decisions including 
implementing the strategy operational plans 
and policies of the company and the company’s 
subsidiary companies as determined by the 
board delivering the operating and financial 
results against budgets and managing and 
controlling the allocation of capital human 
and technical resources
dr peter fellner
chairman
20 november 2013
roy davis
chief executive officer
roy davis joined optos as chief executive 
officer on 17 november 2008 he was ceo 
of gyrus group plc a leading medical device 
company from 2007 before it was acquired 
by the olympus corporation of japan in 
2008 before this mr davis served as 
chief operating officer of gyrus from 2003 
he joined gyrus as a non‑executive director 
on its flotation in 1997 prior to this mr davis 
was ceo of ntera a nanotechnology 
company and spent almost ten years 
with arthur d little the global management 
consulting company where he was 
vice president and global head of its 
operations management business he has 
also held senior positions for tricom reuters 
and molex mr davis holds a mechanical 
engineering degree and a mba from 
the london business school
robert kennedy
chief financial officer 
company secretary
robert kennedy joined the company in 
august 2011 and holds the positions of 
chief financial officer and company secretary
mr kennedy joined from the university 
of dundee where he had been the 
director of finance since 2007 prior to this 
mr kennedy held a number of senior finance 
roles including six years with gamma holding 
nv the last three as group finance director 
of the filtration division he also spent three 
years working at pricewaterhousecoopers 
as a management consultant
mr kennedy has an honours degree in 
economics from the university of sheffield 
and a mba from the university of manchester 
he is a member of the chartered institute 
of management accountants and the 
association of corporate treasurers overview strategic report governance financial statements
optos plc annual report and accounts 2013 41
john goddard fca a•n
non‑executive director
john goddard joined optos as non‑executive 
director in june 2011 and serves as chairman of 
the audit committee he has had a distinguished 
career in the global pharmaceuticals industry the 
majority of which was with astrazeneca where 
he was ultimately head of group strategic 
planning mr goddard has extensive experience 
of mergers and acquisitions and had significant 
involvement in the merger of astra and zeneca 
prior to his retirement from astrazeneca in 2010 
he was responsible for building a 100‑strong 
global team focused on ma and licensing 
which completed 75 transactions in four years 
including several acquisitions in‑licensing and 
out‑licensing of compounds and disposals 
latterly mr goddard became chairman of the 
astrazeneca subsidiary aptium oncology 
and of the substantial medical device business 
astratech he is a member of the board 
of directors of intas pharmaceuticals ltd 
mr goddard is a fellow of the institute of 
chartered accountants and a member of 
the association of corporate treasurers
dr peter kehoe a•r•n
non‑executive director
dr peter kehoe joined optos as 
non‑executive director in october 2010 
he has been a principal of kehoe eye care 
us since 1984 and a consultant to transitions 
optical and diopsys inc since 2010 and 
2012 respectively dr kehoe served on 
the board of trustees of the american 
optometric association from 1999 to 
2010 and was instrumental in the launch 
of infantsee® a programme offering 
comprehensive free eye examinations for 
any child in america in their first year of life 
he served as president in 2008 to 2009 and 
currently serves as treasurer of the world 
council of optometry he holds an od 
degree and a doctor of science from the 
illinois college of optometry is a fellow 
in the american academy of optometry 
and a diplomate of the american board 
of optometry
david wilson a•r•n
non‑executive director
david wilson joined the company as a 
non‑executive director in june 2011 and 
serves as the senior independent director 
to the board david is chairman and founding 
partner of wg partners he has 26 years’ 
experience in the city most recently as 
deputy chief executive of matrix corporate 
capital previously david was ceo of piper 
jaffray ltd where he also served as 
global chairman of healthcare and on the 
group leadership team david has held 
senior positions at ing barings as head 
of uk investment group deutsche bank as 
head of small companies corporate finance 
and ubs as head of small companies 
corporate broking david is senior board 
adviser to sapia partners llp and on the 
board of governors of harris academy bromley 
rosalyn wilton r•n
non‑executive director
rosalyn wilton joined optos as non‑executive 
director in august 2007 and serves as 
chairman of the remuneration committee 
until 2009 she was chairman of ipreo 
holdings llc the us‑based financial data and 
solutions group formed following the merger 
of i‑deal llc and hemscott group ltd before 
the merger rosalyn was chief executive 
officer of hemscott plc she has previously 
served as managing director of reuters 
information services and reuters transactions 
products and was a member of the reuters 
executive committee rosalyn has held 
non‑executive directorship positions with 
scottish widows and the london international 
financial futures exchange she has previously 
served as a senior adviser to 3i investments 
and providence equity partners she currently 
serves as non‑executive director of axa uk 
axa insurance and axa wealth management 
and as non‑executive director and chairman 
of secure health ltd rosalyn holds a bsc 
hons from the university of london
a audit committee
r remuneration committee
n nomination committee optos plc annual report and accounts 2013 42
operating board 
richard coose
vice president global human 
resources and training
richard coose joined the company in 2009 
he has over 25 years of human resources 
experience within diverse industries 
including global medical devices software 
development and high‑tech he joined optos 
from olympus where he was executive director 
human resources overseeing gyrusacmi’s 
human resource function and subsequent 
integration with olympus mr coose holds 
a bs in management with a concentration 
in human resources and an mba from 
the university of massachusetts
leslie amodei
vice president  
global product marketing
leslie amodei joined optos in 2010 with 
over 25 years of global medical device 
sales and marketing experience during the 
course of her career she has been involved 
in the initial commercialisation of unique 
technologies such as the first excimer laser 
for refractive surgery and the only plasma 
energy based aesthetic device
ms amodei holds a bs in psychobiology 
from the university of new hampshire 
and is a member of the cmo council
anne marie cairns
vice president  
medical affairs and quality
anne marie cairns joined the company in 
2007 she joined optos from roche with over 
20 years of global research and development 
experience in the healthcare industry as part 
of one of the world’s largest pharmaceutical 
companies for ten years she worked on three 
rochegenentech biologic therapies – avastin 
herceptin and mabthera a global studies 
leader she provided international leadership 
of cross‑functional medicine development 
teams and enabled the successful delivery 
of blockbuster drugs to market ms cairns 
holds a bsc hons in chemistry and is a 
member of the institute of clinical research 
wouter donders
president international
wouter donders joined the company in 
october 2010 as vice president emea and 
currently holds the position of president 
international after becoming a key individual 
in the growth of international business 
through high impact strategic marketing 
focusing on geographical expansion and 
new business development
previously working as vice president sales 
and marketing emea with gyrus plc and 
general manager for olympus europa gmbh 
having overseen the transition of emea gyrus 
in olympus wouter has a proven record of 
successful integration after acquisitions 
advancing sales execution and driving 
surgical and ent businesses
mr donders brings over 13 years of 
international medical device and healthcare 
experience with him having studied both 
business administration and physiotherapy 
in the netherlands  overview strategic report governance financial statements
optos plc annual report and accounts 2013 43
bryan farrell 
senior vice president  
global corporate accounts
bryan farrell joined the company in 2010 
mr farrell has an in‑depth knowledge of 
eyecare sales and marketing gained through 
almost a decade of experience within the 
industry he joined optos from ophthalmic 
imaging systems ois where he worked 
on several major imaging and informatics 
product launches mr farrell holds 
a ba in economics from the university 
of california davis
quinn lyzun
president americas
quinn lyzun has been in the eye industry 
for 15 years 11 of those with optos starting 
as a salesman with optos he put over 100 
placements into the pacific northwest before 
moving to california where he continued to 
excel from there he moved to edinburgh and 
became the uk business manager putting 
more placements in the field in 18 months 
than the business had to that point
mr lyzun started the scandinavian business 
placing the two largest chains in norway 
before moving back to california
moving from regional sales director to head 
of north america sales and now to president of 
the north america business he has realigned 
all aspects of the customer facing business 
and is looking forward to optos’ best year yet 
he obtained a mba in toronto and an executive 
education at columbia in new york
jim milkay
chief information officer
jim milkay joined the company in may 2007 
he has over 20 years of experience in 
healthcare it most recently with idx 
systems corporation before it was acquired 
by general electric mr milkay holds a 
bs in business administration and a 
masters degree in computer information 
systems from bentley college massachusetts
alex warnock
chief operating officer
alex warnock joined the company in 2008 
he has extensive experience in international 
markets and broad npi experience with 
complex electronic products he has held the 
positions of director global cas technology 
and development for depuy iorthopaedics 
a division of johnson  johnson divisional 
vp and senior gmvp engineering at pace 
micro technology and european operations 
manager at motorola mr warnock holds a 
bsc in electrical and electronic engineering 
an msc in digital systems engineering 
and is a chartered engineer ceng
dan wood
senior vice president 
re‑engineering
dan wood joined the company in 2011 
he has 20 years of international management 
experience including start‑ups and global 
medical device manufacturers he joined 
optos from olympus where he was vp 
of supply chain and integration overseeing 
gyrus’ integration of acmi and then 
gyrusacmi’s subsequent integration 
in to olympus mr wood holds an msc 
in engineering and economics from 
lincoln college oxford optos plc annual report and accounts 2013 44
corporate governance
as at 30 september 2013 all of the non‑executive directors were 
independent as provided for by the code
role of non‑executive directors
the company’s non‑executive directors provide input to the business by 
contributing to the oversight function of the board and to the development 
of the company’s strategy non‑executive directors are required to be 
satisfied that the financial information is accurate and that the internal 
controls and policies and procedures governing risk management are 
effective and appropriate the company’s non‑executive directors are 
available to shareholders the non‑executive directors met as a group 
on two occasions during the financial year ended 30 september 2013 
without the presence of executive directors 
board process and information
the board met twelve times during the year including once over 
a two‑day period with senior management to focus on strategy 
and business planning dialogue occurs regularly between directors 
outside of scheduled meetings meeting agendas include review 
and approval of minutes recorded of the previous meeting matters 
arising items for discussion special items items for note and any other 
business board materials are distributed by the company secretary 
normally not less than seven days in advance of meeting dates to allow 
directors to adequately prepare for meetings the board receives 
operational and financial information to assist in monitoring and assessing 
the ongoing performance of the business on a monthly basis this 
includes reports from the ceo cfo and company secretary the board 
also schedules and reviews special items covering business critical areas 
during the year the executive with responsibility for the special item 
submits a written report covering the item which is included in the board 
materials and attends the board meeting by invitation for that part of the 
agenda to discuss the report in detail 
no one other than directors and the company secretary is entitled to be 
present at board meetings unless specifically invited to attend in those 
instances when a director has been unable to attend board or committee 
meetings his or her comments on the papers for that meeting are 
communicated to the chairman in advance so that they can be 
duly considered
combined code
the board of directors board remains committed to ensuring 
high standards of corporate governance are maintained and continues 
to manage the company’s affairs in accordance with the principles 
and provisions of the uk corporate governance code the code 
september 2012 
statement of compliance
the board considers that the company has complied with the 
principles and provisions set out in the code throughout the year 
ended 30 september 2013
board of directors
the principal duty of the board is to represent and protect the interests 
of the company’s shareholders by ensuring that the company is 
well managed and operated in a way which is in the interests of its 
shareholders the board is responsible for oversight of the formulation 
and implementation of the strategy of the company the board is also 
responsible for oversight of the company’s operations and has an 
obligation to keep informed of the company’s activities and appropriate 
policies and procedures in order to assist management in formulating 
developing and implementing plans and serves as a body to review 
and provide advice to management on the operations of the company 
the board is committed to reviewing its membership on a regular basis 
the chairman ensures that board discussions are conducted taking all 
views into account so that no one individual director or small group of 
directors dominate the proceedings
chairman and chief executive officer
there is a distinct and defined division of responsibilities between 
the chairman and the chief executive officer ceo the chairman 
is primarily responsible for the effective working of the board and the 
ceo is responsible for the operational management of the business 
and for the implementation of strategy as agreed by the board 
the division of responsibilities is reviewed annually by the board
board balance and independence
during the accounting period the board comprised as executive 
directors roy davis chief executive officer ceo and louisa burdett 
chief financial officer cfo until 17 july 2013 the non‑executive directors 
comprised dr peter fellner barry rose until 31 may 2013 john goddard 
dr peter kehoe david wilson and rosalyn wilton  overview strategic report governance financial statements
optos plc annual report and accounts 2013 45
the directors acknowledge that they have overall responsibility for the 
company’s system of internal control and for reviewing its effectiveness 
the board continued to apply c2 of the code by establishing a continuous 
process for identifying evaluating and managing the risks that are 
considered significant its system is designed to manage the risk and 
can only be a reasonable and not absolute assurance against material 
misstatement or loss 
a group risk and control framework has been established 
and includes a range of controls including financial operational 
and compliance it is based principally on reviewing reports from 
management and considering whether significant risks are identified 
evaluated classified and controlled and ensuring that any significant 
weaknesses are promptly and properly remedied this includes manuals of 
policies and procedures applicable to all material aspects of the business 
a budgetary control system which includes monitoring actual performance 
against pre‑determined plans and the appointment of suitably qualified 
and experienced staff to execute on their agreed responsibilities 
external audit risk assessment and planning is in place the audit 
committee considers and determines relevant action in respect 
of any control issues raised by either the executive directors 
or the external auditor 
there is currently no dedicated internal audit function the directors 
review and determine the requirement for a dedicated internal audit 
function on an annual basis the directors have determined based on the 
size and complexity of the group that a dedicated internal audit function 
is not currently required if any specific internal control weakness is either 
perceived or identified the directors will engage an independent third 
party to carry out additional tests
performance evaluation
the board undertakes an evaluation of its own performance and that 
of its committees and individual directors including an assessment 
of the effectiveness of the chairman executive and non‑executive 
directors and company secretary during this evaluation consideration 
is given to the balance of skills experience independence and knowledge 
of the company board diversity including gender how the board 
works together as a unit and other factors relevant to its effectiveness
a meeting in the financial year ended 30 september 2013 of the 
company’s non‑executive directors under the leadership of the 
sid without the presence of the chairman and executive directors 
to conduct a performance evaluation of the chairman took place 
the sid discussed the feedback with the chairman
functions of the board
the board acknowledges and accepts its statutory duties and in doing 
so encourages the long‑term success of the company by exercising 
independent judgement with respect to material strategic and operational 
issues safeguarding corporate assets by reviewing the financial policies and 
affairs of the company and overseeing the company’s financial reporting 
process and internal controls reviewing of the adequacy of the company’s 
systems for compliance with all applicable laws and regulations overseeing 
the company’s risk management process and ensuring that the company 
has appropriate procedures in place to manage risks and evaluating the 
effectiveness of the board and its committees at least annually the board 
delegates to the company’s operating board which is chaired by the 
ceo and comprised of the company’s senior management and meets 
regularly certain decisions including implementing the strategy 
operational plans and policies of the company and the company’s 
subsidiary companies as determined by the board delivering the 
operating and financial results against budgets and managing and 
controlling the allocation of capital human and technical resources
senior independent director
the code recommends that the board should appoint one of its 
independent non‑executive directors to serve as the company’s senior 
independent director sid david wilson is the sid for the company 
and is available to shareholders employees can contact the sid under 
the provisions set out in the group’s whistle‑blowing policy if they 
have concerns that have not been resolved through normal channels 
or for which contact through the normal channels is inappropriate 
accountability and audit 
all directors have accepted a duty of care and accountability to act in 
the interests of the company the audit committee has a particular role 
acting independently from management to ensure that the interests 
of shareholders are properly protected relative to financial reporting 
and internal control 
risk management and internal control
the board confirms that there is an ongoing process for identifying 
monitoring evaluating and managing the company’s significant risks that 
such a process has been in place for the year ended 30 september 2013 
and up to the date of approval of the annual report and accounts that 
it is regularly reviewed by the board and that it accords with the internal 
control guidance for directors relative to the code optos plc annual report and accounts 2013 46
the primary objectives of the audit committee are the provision of 
effective governance of the appropriateness of the financial reporting 
and the performance of the external auditor its main responsibilities are
 • planning and reviewing the company’s interim and preliminary reports 
and accounts
 • reporting to the board on the appropriateness and consistency 
of accounting policies
 • reviewing key judgement areas 
 • advising the board on whether the committee believes the 
annual report and accounts taken as a whole is fair balanced 
and understandable and
 • overseeing the relationship with the external auditor
the ultimate responsibility for reviewing and approving the company’s 
interim and preliminary reports and accounts remains with the board 
on the recommendation from the committee
the committee has been selected with the aim of providing appropriate 
experience and expertise to fulfil the committee’s duties it is chaired by 
john goddard and its other members included barry rose until 31 may 2013 
dr peter fellner until 1 june 2013 peter kehoe from 1 june 2013 and 
david wilson from 15 may 2013 the company secretary serves 
as secretary to the audit committee
board and committee meeting attendance
the board and its committees meet on a regular basis to discuss 
and agree matters which are specifically reserved to them for review 
and decision contact between board and committee meeting dates 
is carried out by the directors as and when required to discuss and 
agree matters arising relative to addressing and advancing the business 
of the company
number of meetings
board
12
audit
5
remuneration
5
nomination
4
dr peter fellner 1212 24
1
55 44
roy davis 1212 — — —
louisa burdett 1010
2
— — —
barry rose 68
3
34
3
— 23
3
john goddard 1212 55 — 44
dr peter kehoe 1212 11
4
55 44
david wilson 1112 22
5
55 44
rosalyn wilton 1012 — 55 44
1 dr fellner resigned from the audit committee on 1 june 2013
2 louisa burdett resigned from the board on 17 july 2013
3 barry rose resigned from the board on 31 may 2013
4 dr peter kehoe joined the audit committee on 1 june 2013
5 david wilson joined the audit committee on 15 may 2013
appointments and resignations 
barry rose resigned from the board on 31 may 2013 louisa burdett resigned 
from the board as chief financial officer on 17 july 2013 robert kennedy 
was appointed to the board as chief financial officer on 16 october 2013
board committees
the board appoints the members of the audit remuneration and 
nomination committees each of which has the responsibility to assist 
the board in its oversight capacity the committees meet at regularly 
scheduled times throughout the year and at any other time that may 
be necessary to assist the board in executing its responsibilities
certain other individuals are invited to attend the committee meetings when 
required and relevant to the proceedings the written terms of reference 
setting out the duties and responsibilities of the board and its committees 
are reviewed and revised as may be necessary on an annual basis 
committee terms of reference are available from the company secretary 
or on the company’s website at wwwoptoscom
corporate governance continued
report of the audit committee
john goddard 
chairman
the committee assists the board in 
carrying out its responsibilities in relation 
to the financial reporting requirements 
risk management and the assessment 
of internal controls it also manages the 
relationship with the external auditor overview strategic report governance
optos plc annual report and accounts 2013 47
financial statements
the p200 and p200dx the committee agreed based on a 
recommendation from management that given the current sales plan 
it was appropriate to extend the life of the p200 and p200 dx to 
30 september 2015 effective from 1 october 2013 the proposed asset 
life was also reviewed by ey as part of the audit planning process 
 • impairment of goodwill and intangible assets the judgements relate 
largely to the assumptions used for the calculation of the value in 
use of the business the values used were consistent with previously 
reviewed budgets and plans and therefore the committee was 
comfortable with the assumptions it was agreed that it was appropriate to 
write off the standalone oct project given the decision not to pursue 
this development the committee was content with the goodwill value 
and value attributed to the remaining intangible assets in addition this is 
a prime area of focus for ey who reported their findings to the committee
 • going concern the company’s current bank facility expires in 
september 2014 and therefore does not cover the full twelve months 
required the committee was content that based on the projected cash 
flows and the financing options available to the company that it is 
appropriate to produce the accounts on a going concern basis 
ey agreed with this conclusion
ii risk management and internal control
the committee reviewed the results from a revised risk assessment 
process and the associated risk register which is prepared and monitored 
by the company’s senior management and sets out the likelihood and 
potential impact of the significant risks faced by the company it also 
reviewed internal controls including reviewing and agreeing the need 
for an internal audit function in addition it confirmed the adequacy 
of the company’s whistle‑blowing policy
iii t ax
the committee reviewed updates on the company’s tax position along 
with a presentation from pwc the company’s tax advisers
iv  external audit
we receive from ey a detailed audit plan identifying their assessment of key 
risks for the 201213 financial year the primary risks were accounting for 
leasescustomer contract terms revenue recognition impairment of goodwill 
and intangible assets and risk of misstatement due to fraud and error
 
mr goddard dr kehoe and mr wilson are independent within the meaning 
of the code the board considered all members of the audit committee 
throughout the year ended 30 september 2013 to be independent in 
character and judgement and in possession of the relevant business 
experience and requisite financial expertise
the committee meets at least four times during the year meetings are 
attended by non‑executives and by invitation the chief executive and 
chief financial officer other relevant people from the business are also 
invited to attend certain meetings where required our external auditor 
is also invited to each meeting
the committee assists the board in carrying out its responsibilities in 
relation to the financial reporting requirements risk management and 
the assessment of internal controls it also manages the relationship with 
the external auditor at the meetings during the year the committee 
focused on
i financial reporting
the primary role of the committee is to review the appropriateness 
of the half‑year and annual financial statements in particular
 • the company’s accounting policies
 • material areas in which significant judgement has been applied 
or there has been discussion with the external auditor and
 • whether the accounts are fair balanced and understandable
the full terms of reference of the committee can be found on the 
company’s website
the primary areas of judgement considered by the committee and 
discussed with the external auditor in relation to the 2013 accounts 
were as follows
 • revenue recognition including lease accounting and contract terms 
the committee reviewed the revenue recognition criteria in particular the 
point at which revenue is recognised and where appropriate the lease 
classification this is also a key area of focus for ernst  young llp ey 
testing the committee based on feedback from management and ey 
confirmed the appropriate revenue recognition policies were applied
 • asset life the asset life is a key determinant of whether an rental 
is considered to be a finance lease this is significant in particular 
for the new daytona device the committee reviewed the basis 
of the management judgement and were satisfied that four years 
is an appropriate asset life for all devices with the exception of  optos plc annual report and accounts 2013 48
report of the audit committee continued
the nomination committee has responsibility to assist the board with 
succession planning and with the selection process for the appointment 
of a new director or chairman the nomination committee is chaired by the 
chairman of the board and is composed of all non‑executive directors 
the chairman of the board serves as secretary to the committee 
all members of the committee are independent within the meaning of the 
code the code states that the test of independence is inappropriate 
to the chairman of the board dr fellner fulfilled the independence 
criteria at the time of his appointment 
the principal responsibilities of the nomination committee are to 
evaluate the board in terms of balance of skills experience independence 
and knowledge of the company its diversity including gender how the 
board works together as a unit and other factors relevant to its effectiveness 
following this evaluation prepare a description of the role and requisite 
capabilities required for a particular appointment assess the time 
commitment expected on the part of the chairman of the company and to 
require non‑executive directors to undertake that they will have sufficient 
time to meet their commitments to the company oversee the search 
process for suitably qualified non‑executive directors as and when 
required using outside advisers as the nomination committee may 
determine as appropriate and arrange for all members of the nomination 
committee to meet the preferred candidate prior to making a formal 
recommendation to the board
report of the audit committee continued
iv external audit continued
we assess the effectiveness of the external audit process in relation to 
the audit plan and reporting received from ey based on this plan and 
the primary identified risks we also receive feedback from management 
regarding the audit process for fy13 both the committee and 
management were satisfied that there had been the appropriate level 
of review and challenge throughout the audit process and therefore 
assessed the process to be good 
ey regularly update the committee on the audit plan and progress 
as well as technical updates when appropriate the committee holds 
a private meeting at least once a year to provide an additional opportunity 
for feedback without the executive directors being present
the committee considers the reappointment of the external auditor 
including rotation of the audit partner each year and also tests their 
independence on an ongoing basis the auditor is required to rotate 
the lead audit partner to the company every five years and 2013 saw 
the commencement of annie graham’s role as senior statutory auditor 
replacing mark harvey who had held the position since 2008 the auditor 
themselves operates procedures to safeguard against the possibility that 
their objectivity and independence could be compromised this includes 
the use of quality review partners a technical review board where appropriate 
and annual independence review procedures the auditor also confirms 
their independence to the committee at each meeting that they attend
ey has been the company’s external auditor since 1999 the committee 
has considered the reappointment of the auditor of the company and 
recommended to the board that ey be proposed for reappointment the 
committee has considered the audit tendering provisions outlined in the 
code although given the size of the company it is not obliged to tender 
the committee will review this position annually
in accordance with the code the company maintains a policy on the 
engagement of the external auditor with respect to the performance of 
non‑audit related work the policy also provides that any non‑audit work 
involving a single expenditure of more than 02m must be assigned to 
tender the amount paid for non‑audit work during the year is set out in 
note 5 to the financial statements on page 92
during 2013 for historical reasons ey carried out tax compliance work for 
the australian subsidiary company the amounts involved were immaterial 
report of the nomination committee
dr peter fellner 
chairman
the main activities of the nomination 
committee during the financial year ended 
30 september 2013 included leading 
the selection process for and making 
recommendations to the board regarding 
the role of chief financial officer and 
considering the contribution and commitment 
of the directors standing for re‑election overview strategic report governance financial statements
optos plc annual report and accounts 2013 49
all directors can be reached by contacting the company secretary at
optos plc
queensferry house
carnegie campus
enterprise way
dunfermline scotland
ky11 8gr
company information is available from wwwoptoscom
going concern
the directors having reviewed the group’s budget for the next financial 
year and other longer‑term plans are satisfied that the group has adequate 
resources to continue in operational existence for the foreseeable future 
as part of this review the directors considered the current levels of 
available debt facilities and although the current revolving credit facility 
expires in september 2014 there are several credit approved financing 
options available to the company therefore it is appropriate to continue 
to adopt the going concern basis in preparing the accounts 
by order of the board
robert kennedy
chief financial officer and company secretary
20 november 2013
the company has a code of ethics which covers all appointments within the group with 
the interest of promoting a workplace that is free from discrimination or harassment 
based on race colour religion gender or other factors that are unrelated to the 
company’s business interests 
the board believes in the importance of diversity including gender diversity and 
the benefits that it can bring to the operation of an effective board and the company 
as a whole the gender representation on the board constituted 25 women and 
75 men for the majority of the year
the main activities of the nomination committee during the financial year 
ended 30 september 2013 included leading the selection process for and making 
recommendations to the board regarding the role of chief financial officer and 
considering the contribution and commitment of the directors standing for re‑election
during the year spencer stuart was consulted regarding the search for a cfo 
spencer stuart has no other connection with the company
the number of meetings held during the financial year ended 30 september 2013 
and the attendance record at these meetings is set out on page 46 
communication with shareholders
the company believes in having an open and regular dialogue with shareholders 
to ensure that the goals objectives and overall business strategy of the company are 
communicated and understood the board supports the use of the company’s annual 
general meeting as a means for communicating with shareholders and encourages 
their participation
the ceo and cfo make twice‑yearly presentations following the company’s interim 
and preliminary results announcements hosting site visits and investor information 
days provides the investment community and shareholders with the opportunity to 
improve their understanding of the company and its strategy 
during the year the company issued interim management statements and pre‑close 
trading statements relating to performance for a specified period of time and disclosed 
relevant business news through the regulatory news service in accordance with 
the dtrs the company notifies the market of its total voting rights and issued share 
capital at the beginning of every month covering the previous month where 
an increase or decrease has occurred  optos plc annual report and accounts 2013 50
directors’ responsibilities
responsibility statement
the directors together confirm that to the best of their knowledge the 
financial statements prepared in accordance with ifrss as adopted 
by the european union give a true and fair view of the assets liabilities 
financial position and profit of the company and the undertakings 
included in the consolidation taken as a whole and that the strategic 
report includes a fair review of the development and performance of the 
business and the position of the company and the undertakings included 
in the consolidation taken as a whole together with a description of the 
principal risks and uncertainties that they face 
robert kennedy
chief financial officer and company secretary
20 november 2013
the information presented in this annual report and accounts ara has 
been prepared in accordance with the companies act 2006 2006 act 
the united kingdom listing authority ukla listing rules the disclosure 
and transparency rules dtrs and the financial reporting council’s frc 
uk corporate governance code the code september 2012 
the directors are responsible for preparing the ara and the group and 
company together the group financial statements in accordance with 
applicable uk law and those international financial reporting standards 
as adopted by the european union under company law the directors 
must not approve the group financial statements unless they are satisfied 
that they present fairly the financial position of the group and the financial 
performance and cash flows of the group for that period 
in preparing those financial statements the directors are required to select 
suitable accounting policies in accordance with ias 8 “accounting policies 
change in accounting estimates and errors” and then apply them consistently 
present information including accounting policies in a manner that 
provides relevant reliable comparable and understandable information 
provide additional disclosures when compliance with the specific 
requirements in international financial reporting standards ifrss 
is insufficient to enable users to understand the impact of particular 
transactions other events and conditions on the group’s financial position 
and financial performance state that the group has complied with ifrss 
subject to any material departures disclosed and explained in the financial 
statements and make judgements and accounting estimates that are 
reasonable and prudent
the directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the group’s transactions and disclose 
with reasonable accuracy at any time the financial position of the group 
enabling them to ensure that the financial statements comply with the 
2006 act and article 4 of the ias regulation 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 overview strategic report governance financial statements
optos plc annual report and accounts 2013 51
statement from the chairman of the remuneration committee
as part of the annual bonus earned and deferred for the period to 
30 september 2012 she is entitled to exercise this deferred share 
award within six months of leaving employment however the associated 
matching share award will lapse following a comprehensive search 
process robert kennedy was appointed cfo on 16 october 2013
in light of overall group performance no bonuses were earned 
by executive directors for the year ending 30 september 2013 and 
no long term incentive awards vested in respect of the year ending 
30 september 2013
throughout the year the committee continued to apply the remuneration 
policy prudently with a strong alignment to the interests of shareholders 
details are given on the following pages the committee will continue 
to engage actively with and seek to incorporate the views of shareholders 
in any major changes to the executive director remuneration policy
rosalyn wilton
chairman of the remuneration committee
20 november 2013
i am pleased to present the directors’ remuneration report the report 
for the financial year ended 30 september 2013 this report sets out 
how we have employed our compensation philosophy for the year ended 
30 september 2013 and provides further context on the remuneration 
committee’s the committee rationale when determining the remuneration 
policy and specific remuneration for the executive directors 
key remuneration activity during the reporting year included 
the following
the committee has continued to monitor our executive remuneration 
policy having regard to evolving market practice whilst also seeking 
to ensure that there is continuity to the structure of executive pay 
accordingly the existing remuneration policy and fundamental structure 
of the executive remuneration package remains largely unchanged and 
the overall quantum of the annual and long term incentive opportunity 
has no increased 
the committee has also considered the base pay of the executive directors 
and decided that it is appropriate to reward roy davis with a modest increase 
in base pay of 25 with effect from 1 october 2013 this is in line with the 
range of increases in base pay awarded to employees across the group
louisa burdett stepped down from the board of directors on 17 july 2013 and 
will leave the company on 24 november 2013 ms burdett will receive her 
basic salary and benefits and the company will continue to make pension 
contributions until her date of leaving no ex‑gratia payments are being 
made for loss of office ms burdett’s entitlements under the company’s 
share plans will lapse on her leaving employment other than the deferred 
bonus plan basic award granted on 11 december 2012 over 5946 shares 
dear shareholder
throughout the year the committee continued to apply the 
remuneration policy prudently with a strong alignment to the interests 
of shareholders details are given on the following pages 
rosalyn wilton 
chairman optos plc annual report and accounts 2013 52
remuneration report
this report has been prepared on behalf of the board and has been approved by the board the report complies with the large and medium‑sized 
companies and groups accounts and reports regulations 2008 the 2012 uk corporate governance code the code and the financial conduct 
authority listing rules 
to reflect the requirements of the revised remuneration reporting regulations this report is presented in two sections the annual remuneration report and 
a directors’ remuneration policy the annual remuneration report provides details on the amounts earned in respect of the year ended 30 september 2013 
and how the policy will be operated for the year commencing 1 october 2013 this is subject to an advisory vote at the annual general meeting the directors’ 
remuneration policy sets out the forward‑looking remuneration policy it will be subject to a binding vote at the annual general meeting in 2014 and will be 
effective from the close of that meeting
annual remuneration report
introduction
the group’s compensation philosophy serves as a high‑level tool to help the board and management align compensation related decisions back 
to strategy and is determined with due regard to the interests of shareholders and the company the key objectives of the group’s compensation 
philosophy are summarised below
key objectives compensation philosophy
paying competitively in setting executive salaries and performance related pay the group considers a number of factors 
including market conditions salaries in comparable companies in similar industries and affordability 
in order to recruit motivate and retain executives of the calibre required
pay for performance executive directors’ remuneration should be structured such that an appropriate proportion of the 
package links pay to performance to drive a results orientated culture whilst maintaining an 
appropriate balance between risk and reward
alignment with interest of shareholders a substantial proportion of the variable remuneration opportunity is delivered in shares in the 
company to encourage share ownership and to support the group’s commitment to generating 
long‑term value for shareholders
share financial success with the wider group the group operates all‑employee incentive compensation programmes so that financial success may 
be shared with all employees overview strategic report governance financial statements
optos plc annual report and accounts 2013 53
consideration by the directors of matters relating to directors’ remuneration
the committee has responsibility for the group’s overall compensation philosophy policies and procedures which are determined with due regard 
to the interests of shareholders and the company the principal responsibilities of the committee are as follows determine the remuneration policy 
for the group determine the policy and specific remuneration for the executive directors including where applicable their service contracts 
determine whether the executive directors company secretary and the company’s executive management should be eligible to receive annual 
bonuses and any benefits under the company’s share plans determine the performance conditions to be attached to annual bonus payments and any 
benefits awarded under the dbp psp and sop determine pensionable remuneration and determine and recommend to the board the remuneration 
of the chairman
fees paid to non‑executive directors are determined and approved by the board as a whole
the chart below provides a summary of the different elements of pay which form the basic remuneration package for our executive directors 
base salary  benefits  pension contributions of up to 15 of salary
short‑term performance long‑term performance
fixed elements
performance related elements
maximum 100 of salary maximum 11 matching award 
on deferred bonus up to 50 
of gross bonus
maximum 100 of salary
annual bonus payable in cash and 
deferred shares under the company’s 
deferred bonus plan dbp based on the 
group achieving stretching targets which 
support the group strategy and align to 
key performance indicators
matching shares awards under 
the dbp which vest based 
on the company’s relative 
total shareholder return 
performance compared to 
the ftse small cap index 
excluding investment trusts 
share awards under the 
performance share plan psp 
which vest based on the group 
achieving stretching financial 
and non‑financial targets
participation in all employee share plans
other long term sharebased benefits
  as described on page 65 the company also has in place a share option plan sop the committee may at its discretion grant approved performance share 
plan apsp awards comprising both an hmrc approved option granted under the sop and a psp award with the vesting of the psp award scaled back to 
take account of any gain made on exercise of the sop option other than to enable the grant of apsp awards the company does not intend to grant awards 
to executive directors under both the psp and sop in the same financial year  optos plc annual report and accounts 2013 54
remuneration report continued
consideration by the directors of matters relating to directors’ remuneration continued
membership
the committee is chaired by rosalyn wilton and its other members during the financial year ended 30 september 2013 were dr peter fellner 
peter kehoe and david wilson the company secretary serves as secretary to the committee all members of the committee are considered 
independent within the meaning of the code the code states that the test of independence is inappropriate to the chairman of the board dr fellner 
was independent within the meaning of the code on his appointment the board considers that the chairman of the board should be a member of 
the committee as it is essential that the chairman be involved in the decision‑making process relative to the remuneration of the executive directors
the members of the committee have no personal financial interest other than as shareholders in the matters to be decided no actual or potential 
conflicts of interest arising from other directorships and no day‑to‑day operational responsibility within the company
advisers to the remuneration committee
deloitte llp deloitte is retained to provide independent advice to the committee as required deloitte is a member of the remuneration consultants 
group and as such voluntarily operates under the code of conduct in relation to executive remuneration consulting in the uk deloitte’s fees for 
providing remuneration advice to the committee amounted to £7800 for the year ended 30 september 2013 year to 30 september 2012 £2975 
deloitte was appointed by the committee which assesses from time to time whether this appointment remains appropriate or should be put out to 
tender and took into account the remuneration consultants group code of conduct when reviewing the ongoing appointment of deloitte deloitte 
has also advised the company during the year on the operation of its share plans and on compliance with new legislation on directors’ remuneration 
the chief executive officer roy davis also attends committee meetings to provide advice and respond to specific questions but is not in attendance 
when his own remuneration is discussed 
shareholder voting
the company remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes the following table sets out actual 
voting in respect of the resolution to approve the directors’ remuneration report for the financial year ended 30 september 2012
number of votes for against discretionary withheld
directors’ remuneration report for the financial year ended 30 september 2012 2013 agm 47481167 664961 5300 1594
9861 138 001 overview strategic report governance financial statements
optos plc annual report and accounts 2013 55
information subject to audit
single figure of remuneration
the aggregate remuneration provided to directors who have served as directors in the year ended 30 september 2013 for the financial year ended 
30 september 2013 is set out below along with the aggregate remuneration provided to such directors for the financial year ended 30 september 2012
single figure 000s
all directors are paid in gbp the average exchange rate used during the year ended 30 september 2013 was 156 to £100 2012 158 to £100 
director
salaryfees
a
benefits
b
bonus
c
long term
incentives
d
pension
e
total
remuneration
year ended 30 september 2013
executive
roy davis 518 2 — — 78 598
louisa burdett
1
403 70
2
— — 58 531
non‑executive
dr peter fellner 156 — — — — 156
john goddard 61 — — — — 61
dr peter kehoe 57 — — — — 57
barry rose
3
52 — — — — 52
david wilson 60 — — — — 60
rosalyn wilton 69 — — — — 69
year ended 30 september 2012
executive
roy davis 506 2 167 337 51 1063
louisa burdett
4
103 144
5
34 — 10 291
non‑executive
dr peter fellner 158 — — — — 158
john goddard 55 — — — — 55
dr peter kehoe 55 — — — — 55
barry rose 75 — — — — 75
david wilson 55 — — — — 55
rosalyn wilton 67 — — — — 67
1  louisa burdett stepped down from the board on 17 july 2013 and will leave the company on 24 november 2013
2  includes a payment of 68438 made to louisa burdett on 28 july 2013 to compensate her for the value of shares in her previous employment that she forfeited on joining the company 
3 barry rose resigned from the board on 31 may 2013
4  louisa burdett was appointed on 26 june 2012 the figures in the table above for the year ended 30 september 2012 are the figures for the period from 26 june 2012
5  represents a payment made to louisa burdett on 28 july 2012 to compensate her for the value of shares in her previous employment that she forfeited on joining the company optos plc annual report and accounts 2013 56
remuneration report continued
single figure 000s continued
the figures in the single figure table are derived from the following
a salaryfees the amount of salaryfees received in the year
b benefits this is the taxable value of benefits received in the year the benefits principally comprise private medical insurance and 
life insurance in addition to these principal benefits
•  a payment of 144000 was made to louisa burdett on 28 july 2012 to compensate her for the value of shares in her 
previous employment that she forfeited on joining the company and
•  a payment of 68438 was made to louisa burdett on 28 july 2013 to compensate her for the value of shares in her 
previous employment that she forfeited on joining the company
c bonus bonus is the value of the bonus earned in respect of the year including shares subject to deferred awards under the dbp 
but not matching awards under the dbp a description of performance against the objectives which applied for the financial 
year is provided on page 57 in light of overall group performance no bonuses were earned by executive directors for 
the year ending 30 september 2013
d long term incentives long term incentives is the value of performance related incentives vesting in respect of the financial year and the value 
of sharesave options granted based on the fair value of the options at grant
for the year ended 30 september 2012 comparative figures the value of roy davis’ psp award that vested for the 
three‑ year performance period to 30 september 2012 is the number of shares that vested 125000 x a market value 
of £16875 per share on the date of vesting 15 december 2012 less the exercise price of £002 per share payable 
converted into us at the exchange rate of 158 to £100
for psp awards granted on 24 november 2010 that would have vested by reference to the three‑ year performance period 
ending 30 september 2013 the performance condition was based on cumulative operating cash flow as discussed on 
page 57 the awards lapsed
e pension the value of the employer contribution to the defined contribution pension
individual elements of remuneration
a base salary and fees
base salaries for executive directors are reviewed annually by the remuneration committee and are set with reference to individual performance 
experience and responsibilities within the group as well as with reference to similar roles in comparable companies as reported in the company’s 
previous directors’ remuneration report with effect from 1 october 2012 roy davis’ basic salary was increased to £331460 the increase of 35 was 
to reflect the scope and responsibilities associated with the role and was within the range of base salary increases for employees in the wider group 
louisa burdett joined the company on 26 june 2012 and her salary on appointment of £245000 was not increased
the remuneration policy for non‑executive directors other than the chairman is determined by the board and is reviewed periodically the 
non‑executive directors do not participate in any of the group’s share incentive plans nor do they receive any benefits or pension contributions 
the fees for the non‑executive directors which were unchanged since 1 october 2010 were reviewed during 2013 with effect from 1 january 2013 
the basic fee for the non‑executive directors was increased from £35000 per annum to £37000 per annum the chairman’s fee and supplements 
were not increased following barry rose’s stepping down from the board with effect from 31 may 2013 the aggregate non‑executive directors’ fees 
have decreased by £49500 per annum  overview strategic report governance financial statements
optos plc annual report and accounts 2013 57
annual bonus
for the year ended 30 september 2013 annual bonus opportunity was based on the group achieving the financial targets set out below one‑third 
relating to revenue one‑third operating profit and one‑third cash flow for each measure bonuses are earned on a linear basis as follows
threshold performance 30 of maximum
target performance 60 of maximum
maximum bonus opportunity full vesting
for the executive directors the maximum bonus opportunity is 100 of basic annual salary in light of overall group performance no bonuses were 
earned by executive directors for the year ending 30 september 2013
because no bonuses were earned by the executive directors for the year ending 30 september 2013 no deferred shares were awarded 
b long term incentives – performance based
as noted on page 53 the company’s performance‑based incentive arrangements are
 • matching awards under the dbp which are granted on up to a one for one basis based on the amount of any annual bonus deferred into shares and
 • awards under the psp 
performancebased long term incentives – vesting in respect of the year
no psp awards or dbp matching awards vested in respect of the financial year ended 30 september 2013 the psp award granted to roy davis 
in november 2010 was subject to a performance condition based on cumulative operating cash flow over the three financial years ending 
on 30 september 2013 for any of the award to have vested cumulative operating cash flow would have had to be at least 74m cumulative 
operating cash flow was 44m over the performance period and therefore the award lapsed in full the first dbp matching awards were granted 
in december 2011 and subject to performance will vest in december 2014 
performancebased long term incentives – granted in the year
the following long term incentive awards were granted in the year ended 30 september 2013 
on 22 november 2012 roy davis and louisa burdett were granted awards under the psp and sop if the sop awards are exercised at a gain then 
psp awards will be forfeited to the same value to ensure that the total pre‑tax value delivered to participants remains unchanged on 11 december 2012 
roy davis and louisa burdett were granted awards under the dbp 
executive director
type of  
award
maximum
opportunity
number  
of shares
face value 
at date 
of grant
4
 of the face value  
vesting at threshold
performance  
period
roy davis psp award
1
100 of base salary 191595 £331459 straight line vesting 
between 1 and 100
01 october 2012 to 
30 september 2015
 sop award
2
905 of base salary 17341 £30000 straight line vesting 
between 1 and 100
01 october 2012 to 
30 september 2015
 dbp matching award
3
100 of the amount of 
bonus earned which is 
deferred under the dbp
14948 £26159 30 01 october 2012 to 
30 september 2015 optos plc annual report and accounts 2013 58
remuneration report continued
annual bonus continued
performancebased long term incentives – granted in the year continued
executive director
type of  
award
maximum
opportunity
number  
of shares
face value 
at date 
of grant
4
 of the face value  
vesting at threshold
performance  
period
louisa burdett
5
psp award
1
100 of base salary 141618 £244999 straight line vesting 
between 1 and 100
01 october 2012 to 
30 september 2015
 sop award
2
1224 of base salary 17341 £30000 straight line vesting 
between 1 and 100
01 october 2012 to 
30 september 2015
dbp matching award
3
100 of the amount of
 bonus earned which is
 deferred under the dbp
5946 £10406 30 01 october 2012 to  
30 september 2015
1  psp awards have an exercise price of 2 pence per share which is the nominal value of the shares which must be paid up in order for shares to be capable of issue directly to participants 
on exercise of the options once vested the options are exercisable until the tenth anniversary of the date of grant the awards are subject to the following performance measures 
50 of each award is subject to the following performance measure based on 
cumulative earnings per share
cumulative eps cumulative eps cumulative eps
cumulative earnings per share fy13  fy14  fy15 less than 177 221 265 or greater
 of eps award which vests 0 50 100
cumulative operating cash flow
operating cash flow operating cash flow operating cash flow
cumulative operating cash flow fy13  fy14  fy15 less than 96m 120m 144m or greater
 of cash flow award which vests 0 50 100
2  sop awards were granted in the form of market value options under the hmrc approved part of the sop subject to the same performance measures as apply to the psp awards sop awards have 
an exercise price of £173 per share being the market value of a share on the date of grant if the sop awards are exercised at a gain then psp awards will be forfeited to the same value to ensure 
that the total pre‑tax value delivered to participants remains unchanged once vested the options are exercisable until the tenth anniversary of the date of grant
3  dbp matching awards were granted in the form of nil cost options once vested the options are exercisable until the tenth anniversary of the grant date the awards will vest based on the 
company’s total shareholder return tsr compared to the tsr of the companies in the ftse small cap index excluding investment trusts over a three‑ year performance period ending 
on 30 september 2015 as set out below for these purposes tsr is calculated on the basis of a three month average at the beginning and end of the performance period 
company’s tsr ranking vesting percentage
below median 0
median 30
upper quartile 100
a claw‑back malus provision applies to any dbp matching award granted in respect of a mandatory deferral such that the award may be forfeited should 
it subsequently be confirmed that the original results on which the bonus was calculated contained a material misstatement of the group’s financial results
4  the market price of the company’s shares at the date of grant has been used to calculate face value of the awards the market price of the company’s shares at 22 november 2012 was 
£173 the market price of the company’s shares at 11 december 2012 was £175
5  ms burdett’s entitlements under the company’s share plans will lapse on her leaving employment other than the deferred bonus plan basic award granted on 11 december 2012 over 5946 
shares as part of the annual bonus earned and deferred for the period to 30 september 2012 she is entitled to exercise this deferred share award within six months of leaving employment overview strategic report governance financial statements
optos plc annual report and accounts 2013 59
directors’ interests in shares at 30 september 2013
although not a contractual obligation there is a general intent for executive directors to build a holding in the company’s shares over a three to four‑year 
period equivalent to one times salary this may be achieved through retention of awards under the company’s incentive plans and includes both exercised 
options and the after tax value of vested but unexercised options roy davis has an interest of 010 of the issued share capital as at 30 september 2013 
and 085 in vested options and is considered to have met the guideline
the beneficial and non‑beneficial interests in the ordinary shares of the company of each person who has served as a director during the financial 
year ended 30 september 2013 are shown below
director type
interests in
 shares
vested
 interests
under share
schemes
unvested interests
under share schemes
total as at
30 september
2013
subject to
 performance
 conditions
not subject to
 performance
 conditions
executive
roy davis shares 69017
1
na na na 69017
nominal value option na 615000 638291 na 1253291
market value options na — 17341 na 17341
sharesave options na — na 8737 8737
louisa burdett shares 5946
2
na na na 5946
nominal value option na — 206092 na 206092
market value options na — 17341 na 17341
sharesave options na — na — —
non‑executive
dr peter fellner shares — —
john goddard shares — —
dr peter kehoe shares 5000 5000
barry rose shares 35000 35000
3
david wilson shares — —
rosalyn wilton shares 12500 12500
1  includes 44017 shares purchased using mr davis’ bonus deferral and held in the employee share ownership trust in respect of his dbp basic awards
2  represents shares purchased using ms burdett’s bonus deferral and held in the employee share ownership trust in respect of her dbp basic award
3 holding as at 31 may the date on which mr rose stepped down from the board optos plc annual report and accounts 2013 60
remuneration report continued
information not subject to audit
performance graph and table
the graph to the right shows the company’s performance measured by total 
shareholder return compared with the performance of the ftse smallcap 
and ftse all small healthcare and equipment services indices which the 
committee considers to be the most relevant indices to use for purposes 
of comparison because of the comparable nature of the businesses within 
the ftse all small healthcare and equipment services index and the 
broad‑based nature of the ftse smallcap index
the table below details the total remuneration and annual bonus and psp paid out for roy davis over the last five financial years 
total 
remuneration
000
annual bonus 
as a  of 
maximum 
opportunity
psp as a  
of maximum 
opportunity
year ended 30 september 2013 598 0 0
year ended 30 september 2012 1063 33 50
year ended 30 september 2011 2449 775 100
year ended 30 september 2010 708 55 na
year ended 30 september 2009 408 0 na
change in chief executive officer’s remuneration compared to all employees
the table below sets out in relation to salary taxable benefits and annual bonus the increase between the pay for the year ended 30 september 2012 and 
the pay for the year ended 30 september 2013 for roy davis compared to the average increase between the same periods for all other employees 
element of remuneration ceo  change
all other
employees
 change
basic salary 35 3
the average value of taxable benefits for the wider workforce is affected by changes in the employee population across various locations and 
changes in exchange rates and the percentage change is not a meaningful comparison 
roy davis and other employees earned bonuses in the year to 30 september 2012 but no bonuses were earned in the year to 30 september 2013 
by mr davis or other employees therefore the percentage change in bonus compared to the prior year is not a meaningful comparison
80
60
40
20
0
20
40
60
80
sep 08 mar 09 sep 09 mar 10 sep 10 mar 11 sep 11 mar 12 sep 12 mar 13 sep 13
optos ftse smallcap ftse all small healthcare and equipment services overview strategic report governance financial statements
optos plc annual report and accounts 2013 61
spend on pay
the table below sets out the group’s dividends and total group‑ wide expenditure on pay for all employees as reported in the audited financial 
statements for the years ended 30 september 2012 and 30 september 2013
year ended 
30 september
2012
m
year ended 
30 september
2013
m  change
dividends nil nil 0
overall expenditure on pay 552 499 95
implementation of directors’ remuneration policy for the financial year commencing 1 october 2013
information on how the company intends to implement the directors’ remuneration policy for the financial year commencing 1 october 2013 is set 
out below
the committee has continued to monitor the executive remuneration policy having regard to evolving market practice whilst also seeking to ensure 
that there is continuity to the structure of executive pay accordingly the existing remuneration policy and fundamental structure of the executive 
remuneration package remains largely unchanged and the overall quantum of the annual and long term incentive opportunity has not increased 
however to reflect the group’s key strategic priorities new performance targets for the annual bonus and performance share plan have been 
introduced for the financial year beginning 1 october 2013 as described on page 62
basic salary and fees
for 20132014 the committee decided that it is appropriate to reward roy davis with a modest increase in base pay of 25 with effect from 1 october 2013 
this is line with the increase in base pay awarded to employees across the group roy davis’ base salaries for 20122013 and 20132014 are as set 
out below
year ended 30 september 2013 2014
roy davis £331460 £340000
on appointment to the role of chief financial officer on 16 october 2013 robert kennedy’s salary was £215000 to be reviewed annually with the first 
review being 1 october 2014
as set out on page 56 the fees for the non‑executive directors were reviewed during 2013 it is intended that the fees for the non‑executive directors 
will be unchanged for 201314
non‑executive director fees 
year ended 30 september 2013 2014
chairman £100000 unchanged
non‑executive director – basic fee
£35000 per annum for the 
period to 1 january 2013 unchanged
£37000 per annum for the 
period from 1 january 2013
senior independent director fee supplement £5000 unchanged
fee supplement for chairmanship of audit committee  
or remuneration committee £7500 unchanged optos plc annual report and accounts 2013 62
remuneration report continued
annual bonus 
an element of the annual bonus will in future be measured against 
strategic measures linked to measurable and quantitative targets which 
support the delivery of the group’s strategy and which complement 
the existing financial measures payment under this element will 
be subject to the achievement of a threshold level of performance 
for the financial year ending 30 september 2014 the maximum bonus 
opportunity will continue to be 100 of base salary for the executive 
directors the following table sets out the proposed performance metrics and weightings
the directors consider that the actual revenue profit cash and strategic targets are matters which are commercially sensitive and should therefore 
remain confidential to the company they provide our competitors with insight into our business plans expectations and our strategic actions 
however the committee will disclose on a retrospective basis how the company’s performance relates to any annual bonus payments made
deferred bonus plan
executive directors are required to defer 25 of any annual bonus 
earned into shares in the company for a period of three years under the 
dbp and may to elect to defer up to a further 25 of any bonus earned 
however the overall deferral cannot exceed 50 of the bonus earned 
matching share awards are granted on a one‑for‑one basis by reference 
to the gross bonus deferred which vest at the end of the three‑ year deferral period based on the company’s total shareholder return tsr compared 
to the tsr of the companies in the ftse small cap index excluding investment trusts as follows for these purposes tsr is calculated on the basis of a 
three‑month average at the beginning and end of the performance period 
performance share plan
the committee has reviewed the performance metrics and targets for the psp award to be granted in november 2013 to ensure that they remain 
appropriately stretching in the current environment and continue to be aligned with the business strategy and creation of shareholder value details 
of the proposed psp awards to be granted to the executive directors are set out below
executive director
maximum opportunity 
at date of grant performance measures weightings targets set vesting schedule
roy davis 100 of base salary installed base 25 threshold 8400
stretch 11900
for each element
25 vests at  
threshold performance
increasing in a straight line  
to full vesting for stretch 
performance
profitability 50 threshold eps 101
stretch eps 142
cash generation 25 threshold 595m
stretch 820m
robert kennedy 100 of base salary installed base 25 threshold 8400
stretch 11900
for each element
 25 vests at  
threshold performance
increasing in a straight line  
to full vesting for stretch 
performance
profitability 50 threshold eps 101
stretch eps 142
cash generation 25 threshold 595m
stretch 820m
company’s tsr ranking matching share award ratio
below median 0 ie 0 vesting
median 031 ie 30 vesting
upper quartile 11 ie 100 vesting
performance measure weighting vesting schedule 
revenue 20 for each element
profitability 40 30 vests for threshold performance
cash generation 40 60 vests for on target performance
 full vesting for stretch performance overview strategic report governance financial statements
optos plc annual report and accounts 2013 63
the following directors’ remuneration policy determined by the committee will be subject to a binding vote at the annual general meeting in 2014 
and will be effective from the close of that meeting 
policy table
the following table describes each of the components of the remuneration package for the executive directors 
purpose and link 
to strategy operation opportunity performance metrics
base  
salary
core element of fixed 
remuneration with the aim 
to recruit motivate 
and retain executives 
of the calibre required
base salaries are usually reviewed annually but may be reviewed more 
frequently if required and are influenced by a range of factors including 
but not limited to
•  role experience and individual performance
•  economic environment and group financial performance
•  the range of salary increases awarded across the group and
•  typical pay levels for comparable roles in companies of a simil ar 
size and complexity in the relevant market
current salaries are disclosed on page 61
salary increases are reviewed in the context of the wider workforce salary 
increases and the committee considers very carefully any increase out of 
line with the range of increases across the workforce
higher increases may be awarded where there is a reason to do so 
taking into account relevant factors these circumstances may include 
but are not limited to
•  increase in scope or responsibility
•  a director being moved to mark et positioning over a period of time
•  a salary falling significantly below competitive positioning an d
•  other circumstances in which there is a commercial need
not applicable 
although the individual’s 
contribution and overall 
performance is one of 
the considerations in 
determining the level 
of any salary increase
benefits
fixed element of 
remuneration with the aim 
to recruit motivate and 
retain executives of the 
calibre required
participation in the 
company’s sharesave 
plan and employee stock 
purchase plan create staff 
alignment with the group 
and promote a sense of 
ownership
executive directors receive benefits in line with market practice 
which include private medical insurance and life assurance
the sharesave plan is a hm revenue  customs approved monthly 
savings plan for employees in the uk facilitating the purchase of shares 
at a discount
the employee stock purchase plan is a monthly savings plan facilitating 
the purchase of shares at a discount 
other benefits may be provided based on individual circumstances 
such benefits may include but are not limited to car or 
relocation allowances
set at a level which the committee considers appropriate and provides 
sufficient level of benefit based on individual circumstances
the sharesave plan has a contribution limit of £250 per month or such 
higher amount as is permitted in accordance with the relevant legislation
the employee stock purchase plan has a contribution limit of 400 per 
month or such higher amount as is permitted in accordance with the 
relevant legislation
not applicable
pension
helps recruit and 
retain executives
executive directors are eligible to participate in the defined contribution 
pension plan in appropriate circumstances such as where contributions 
exceed the annual or lifetime allowance executive directors may be 
permitted to take a cash supplement instead of contributions to the plan
15 of base salary not applicable
directors’ remuneration policy 64
purpose and link 
to strategy operation opportunity performance metrics
annual 
bonus 
scheme
incentivise corporate 
and individual 
performance on an 
annual basis to drive 
a results‑orientated 
culture 
intended to place 
total cash earnings 
of executive directors 
within a market 
competitive range 
upon the achievement 
of stretching 
performance 
objectives 
the annual bonus scheme is reviewed prior to the start of each year to ensure the bonus opportunity 
performance measures and weightings of those measures are appropriate and support the company’s 
strategy t argets are set and assessed by the committee the committee has discretion to vary the bonus 
payout should any formulaic output not reflect the committee’s assessment of overall business performance
25 of any bonus earned will be mandatorily deferred into an award over company shares under the dbp  
executive directors may also be offered the opportunity to elect to defer additional amounts under the dbp  
the operation of the dbp is described below 
a claw‑back malus provision applies to any amounts mandatorily deferred as described below 
the maximum annual 
bonus opportunity is 
100 of base salary
performance is measured against challenging financial 
targets in key operational areas with the relevant areas 
and the respective weighting varying each year based 
upon company strategic priorities part of any bonus 
opportunity not exceeding 50 of the overall opportunity 
may be determined by reference to performance against 
non‑financial strategic measures
financial metrics
for achievement of a “threshold” wperformance level 
the minimum level of performance that results in any 
payment under the annual bonus scheme up to 30 
of the maximum opportunity for each element of the 
bonus pays out
for achievement of a “target” performance level up 
to 60 of the maximum opportunity for each element 
of the bonus pays out
for achievement of a “maximum” performance level 
which is the highest level of performance that results 
in any additional payment 100 of the maximum pays out
straight line vesting will usually apply between threshold 
and target performance levels and between the target 
performance level and full vesting 
nonfinancial metrics
where a non‑financial strategic metric has not been met 
there will be no payment in respect of that metric if such 
a metric is achieved the maximum payment in respect of 
that proportion of the award will vest 
deferred 
bonus 
plan dbp
provides a retention 
element through share 
ownership and further 
supports the delivery of 
the group’s business 
strategy 
and commitment to 
generating long‑term 
value for shareholders
25 of any bonus earned by an executive director will be mandatorily deferred into an award of shares under the 
dbp  executive directors may be invited to elect to defer a further amount of any bonus earned provided that the 
overall deferral cannot exceed 50 of the bonus earned deferred shares will typically take the form of a nil‑cost 
option to acquire shares but may be structured as an alternative form of share award
the vesting of the deferred shares is not subject to the satisfaction of any performance condition however any 
bonus deferred on a mandatory basis will be subject to a claw‑back provision such that at the discretion of the 
committee the deferred shares and associated matching shares may be forfeited should it subsequently be 
confirmed that the original results on which the bonus was calculated contained a material misstatement of the 
group’s financial results
deferred shares are subject to a three‑ year deferral period mandatorily deferred amounts cannot ordinarily be 
removed from the dbp before the end of the deferral period voluntarily deferred amounts can be removed from 
the dbp before the end of the deferral period although this will usually result in the lapse of the associated 
matching award described below 
as described on page 69 deferred awards may be released early and matching awards may vest early on a change 
of control or other relevant event or in “good leaver” circumstances deferred awards may also be released early in 
other leaver circumstances other than where employment is terminated due to gross misconduct 
participants may be granted an opportunity to earn a matching award of shares matching awards will ordinarily 
vest at the end of the three‑ year deferral period subject to the achievement of a performance target ordinarily 
measured over a three‑ year period
the committee may increase the number of shares subject to a deferred share award or matching share award 
under the dbp to reflect dividends that would have been paid over the deferral period on shares that vest 
or make a cash payment equal to the value of those additional shares dividend equivalents 
executive directors may 
defer up to 50 of their 
gross annual bonus into 
shares in the company 
and receive a matching 
award on an up to  
one‑for‑one basis
dividend equivalents 
may also be awarded 
matching awards will vest subject to the satisfaction 
of a performance target based on the company’s 
t otal shareholder return when compared to the 
t otal shareholder return of a group of comparator 
companies or an index in either case selected by 
the committee from time to time 
for achievement of a “threshold” performance level 
the minimum level of performance that results in any 
payment for matching awards under the dbp  30 
of the maximum award pays out 
straight line vesting will usually apply between threshold 
performance and full vesting
directors’ remuneration policy continued
optos plc annual report and accounts 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 65
purpose and link to 
strategy operation opportunity performance metrics
performance 
share plan 
psp and 
share option 
plan sop
incentivise executive 
performance over the 
long term
provides a retention 
element and further 
supports the delivery 
of the group’s business 
strategy and 
commitment to 
generating long‑term 
value for shareholders
psp
the company’s principal long‑term incentive arrangement is the 
performance share plan psp under the psp  the committee may grant 
awards as conditional shares a nil‑cost option or as forfeitable shares 
vesting is dependent on the achievement of performance conditions 
normally over a three‑ year measurement period
the committee may increase the number of shares delivered on 
the vesting of a psp award to reflect dividends that would have been 
paid on shares that vest or make a cash payment equal to the value 
of those additional shares dividend equivalents 
as described on page 69 psp awards may vest early on a change 
of control or other relevant event or in “good leaver”circumstances 
sop
the company also has in place a share option plan sop awards 
under the sop take the form of options to acquire shares with a per 
share exercise price equal to the market value of a share at the date 
of grant of the option 
the committee may at its discretion structure awards as approved 
performance share plan apsp awards comprising both an hmrc 
approved option granted under the sop and a psp award with the 
vesting of the psp award scaled back to take account of any gain made 
on exercise of the sop option other than to enable the grant of apsp 
awards the company will not grant awards to executive directors under 
both the psp and sop in the same grant period unless there is 
a commercial reason to do so 
psp
maximum award of 
100 of base salary 
in any financial year
dividend equivalents 
may also be awarded
sop
maximum award of 
50 of base salary 
in any financial year
other than to enable 
the grant of apsp 
awards the company 
will not grant awards 
to executive directors 
under both the psp 
and sop in the same 
grant period unless 
there is a commercial 
reason to do so
the vesting of psp awards will be subject to the satisfaction of performance targets 
set by the committee the performance measures are reviewed annually to ensure 
they remain relevant 
part of any psp award not exceeding 25 of the total award may be determined by 
reference to performance against non‑financial strategic measures the remainder of 
the award will be subject to performance targets based on key financial measures 
such as earnings per share or cash flow applying either one measure or a combination 
of measures 
financial metrics
for awards under the psp below a “threshold” performance level the minimum target 
level of performance 0 of the award for each element of the award pays out 
for achievement of a “threshold” performance level 25 of the maximum opportunity 
for each element of the award pays out
for achievement of a “maximum” performance level which is the highest level of 
performance that results in any additional payment 100 of the maximum pays out
straight line vesting will usually apply between threshold and maximum performance 
levels ie between the target performance level and the maximum
where an option under the sop is granted as part of an apsp award the same 
performance condition applies to the sop option as applies to the psp award 
nonfinancial metrics
where a non‑financial strategic metric has not been met there will be no payment in 
respect of that metric if such a metric is achieved the maximum payment in respect 
of that proportion of the award will vest 
an overview of the non‑ executive directors’ remuneration is set out below
non‑executive 
director fees
sole element of 
non‑executive director 
remuneration set at a 
level that reflects market 
conditions and is 
sufficient to attract 
individuals with 
appropriate knowledge 
and experience
fees are reviewed periodically
the committee determines and recommends to the board the 
remuneration of the chairman
fees paid to non‑executive directors are determined and approved by 
the board as a whole
fees may be paid wholly or partly in cash or company shares
a basic fee and an 
additional fee for 
chairmanship of a 
committee and for 
holding the position of 
senior independent 
director
fees are based on the 
levels paid to 
non‑executive directors 
serving on boards of 
similar‑sized uk‑listed 
companies and the time 
commitment and 
contribution expected 
for the role 
the non‑executive directors do not receive any pension or other benefits nor do they 
participate in any annual bonus or long term incentive arrangements
non‑executive directors’ fees are not subject to any performance measures 
 
the committee may make minor changes to the policy described above which do not have a material advantage to directors to aid in its operation or implementation without seeking shareholder approval but 
taking into account the interests of shareholders  optos plc annual report and accounts 2013 66
directors’ remuneration policy continued
explanation of performance metrics chosen
performance metrics for awards under the psp and sop for matching awards under the dbp and for annual bonus arrangements are set to drive 
business performance and link to the group strategy whilst not encouraging excessive risk taking 
the committee sets measures that provide an appropriate link to the company’s strategy which is to create a sustained improvement in underlying 
performance and maximise returns to shareholders
the committee considers carefully the target ranges to be attached to bonus sop psp and dbp matching awards taking into account a number 
of factors which could include future growth expectations and the requirement to set stretching but achievable targets additionally where relative 
tsr is used there will be no payout for performance below median compared to the comparator group 
the committee retains the discretion to adjust the performance targets and measures where it considers it appropriate to do so for example 
to reflect changes in the structure of the business and to assess performance on a fair and consistent basis from year to year 
legacy matters
the committee retains discretion to make any remuneration payments and payments for loss of office notwithstanding that they are not in line 
with the policy described above where the terms of the payment were agreed
 • before the policy came into effect or
 • at a time when the relevant individual was not a director of the company and in the opinion of the committee the payment was not in consideration 
of the individual becoming a director of the company or
 • to satisfy contractual commitments under legacy remuneration arrangements
for these purposes “payments” includes the committee satisfying awards of variable remuneration and in relation to an award over shares the terms 
of the payment are “agreed” at the time the award is granted
illustrations of application of remuneration policy
the charts at right show the relative split of remuneration between fixed pay base salary benefits and pension and variable pay annual bonus 
dbp and psp for the executive directors on the basis of minimum remuneration remuneration receivable for performance in line with the company’s 
expectations and maximum remuneration the committee believes an appropriate portion of the chief executive’s remuneration links rewards 
to corporate and individual performance and is aligned to the group’s strategic priorities
the charts are based on the current package in developing the scenarios the following assumptions have been made 
 • base salary is the latest known salary as at 1 october 2013
 • in the case of roy davis benefits are as disclosed in the single figure table on page 55 for the year ended 30 september 2013 and in the case 
of robert kennedy the same benefits value is assumed and
 • pension is measured by applying the contribution rate against latest known salary
matching awards under the dbp  psp awards and amounts included in the bonus deferred into shares are set out at face value with no share price growth included
annual bonus  
including deferred amounts dbp matching award psp
minimum performance
no bonus earned na no award vests
performance in line 
with expectations
60 of salary matching award over 15 of salary granted ie assuming a mandatory 
deferral of 25 of the bonus earned of which 30 ie 45 of salary vests
25 of psp award 
ie 25 of salary vests 
maximum performance
100 of salary matching award over 50 of salary granted ie assuming a mandatory 
deferral of 25 of the bonus earned and a voluntary deferral of a further 
25 of the bonus earned which vests in full 
100 of psp award 
vests
 base salary benefits and pension
 annual bonus
 dbp and psp
roy davis
robert kennedy
minimum performance
£3923
100
minimum performance
£2485
100
performance in line with expectations
£6966
30 56 14
performance in line with expectations
£441
30 56 14
maximum performance
£12423
41 27 32
maximum performance
£786
41 27 32
total remuneration £000
total remuneration £000 overview strategic report governance financial statements
optos plc annual report and accounts 2013 67
differences in policy from the wider employee population
the company values its wider workforce and aims to provide a remuneration package that is market competitive within the employees’ jurisdiction of 
employment where remuneration is not determined by statutory regulation the key principles of the compensation philosophy are applied consistently 
across the wider employee population
 • we remunerate people in a manner that allows for stability of the business and the opportunity for sustainable long term growth
 • we seek to remunerate fairly and consistently for each role with due regard to the market place internal consistency and the company’s ability to pay 
and  the group operates all‑employee incentive compensation programmes so that financial success may be shared with all employees
optos has operations in a number of different countries and with employees at different levels of seniority and although based on the overarching 
principle above reward policies vary depending upon location and seniority
the company also operates a hmrc approved sharesave scheme and invites all employees to participate at the discretion of the committee 
therefore encouraging wider workforce share ownership furthermore any group employee is eligible to participate in the psp and sop 
upon invitation and at the discretion of the committee 
approach to recruitment remuneration
when agreeing the components of a remuneration package for the appointment of directors the committee will apply the following principles
 • the packages will be sufficient to facilitate the recruitment of individuals of sufficient calibre to lead the business and effectively execute the strategy 
for shareholders
 • the committee will look to align the remuneration package offered with the group’s broader compensation philosophy and
 • the committee will seek to ensure that no more is paid than is necessary
the committee retains discretion to make payments or awards decisions outside of the terms of the policy elements set out in the table on page 65 where 
it considers it necessary to do so in determining appropriate remuneration arrangements the committee will consider without limitation the quantum of 
the package on offer compared to similar positions in the market the structure of the remuneration and the experience of the candidate to ensure that 
arrangements are in the best interests of both optos and its shareholders without paying more than necessary to recruit a director of the required calibre
the committee may make awards on hiring an external candidate to compensate the candidate for the forfeiture of any award entered into with a 
previous employer in determining any such ‘buy out’ the committee will consider all the relevant factors including the likelihood of the awards vesting 
should the external candidate have remained in their previous employment the form in which they were granted and the time over which they would 
have vested generally buy‑out awards will be made on a comparable basis to those forfeited 
the committee would seek to implement buy out and recruitment awards to be in line with the company’s remuneration framework so far as is practical 
the committee may consider other components which may include cash or shares awards restricted stock awards and share options where there 
is a commercial rationale for doing so 
where considered appropriate recruitment awards will be liable to forfeiture or ‘claw‑back’ on early departure 
in exceptional circumstances an initial annual or long term incentive award may be made which may be higher than the maximum opportunity under 
the approved policy set out on page 65 in any event the maximum variable pay of any remuneration package offered to a newly appointed director 
excluding any ‘buy out’ award will not exceed 250 of basic salary optos plc annual report and accounts 2013 68
service contracts 
existing service contracts for executive directors
the company has entered into a service contract with each of the executive directors which may be terminated by the company by giving not less 
than six months’ notice in the event of a change of control this is extended to twelve months’ notice 
each service contract gives the company a right at its absolute discretion to make a payment in lieu of the notice period pilon
roy davis’ service contract provides that any pilon will include any bonus payments that might otherwise have been due to him during the period taking into account 
performance for which the pilon is made any payment in respect of benefits which he would have been entitled to receive during the period for which the pilon is 
made and any payment in respect of holiday entitlement which would have accrued during the period for which the pilon is made robert kennedy’s service contract 
excludes from any pilon any bonus payments that might otherwise have been due during the period for which the pilon is made any payment in respect of benefits 
he would have been entitled to receive during that period and any payment in respect of holiday entitlement which would have accrued during that period 
nonexecutive directors
the company has entered into a letter of appointment with each of its non‑executive directors each letter of appointment is for a fixed three ‑ year renewable term 
and includes a provision that either party may terminate the appointment at any time during the term of the appointment by giving three months’ notice of termination
the dates of the letters of appointment and their respective expiration dates for the non‑ executive directors are as follows
non‑ executive director date of letter of appointment expiry date
dr peter fellner 01 january 2013 31 december 2015
john goddard 01 june 2011 31 may 2014
dr peter kehoe 01 october 2013 30 september 2016
david wilson 01 june 2011 31 may 2014
rosalyn wilton 01 august 2013 31 july 2016
policy in relation to the setting of notice periods in service contracts
the committee’s policy is for service contracts to be capable of termination by the company by giving not less than six months’ notice in the event 
of a change of control this is extended to not less than twelve months’ notice non‑executive directors’ letters of appointment are for fixed three ‑ year 
renewable terms and may be terminated on three months’ notice 
any new director’s service contract would adopt the approach that there is excluded from any pilon any bonus payments that might otherwise have 
been due during the period for which the pilon is made any payment in respect of benefits which the director would have been entitled to receive 
during that period and any payment in respect of holiday entitlement which would have accrued during that period
directors’ remuneration policy continued overview strategic report governance financial statements
optos plc annual report and accounts 2013 69
payments for loss of office
the company’s policy on the principles on which the determination of payments for loss of office will be approached are summarised below
provision policy
termination payment
payment of basic salary for the contractual notice period the committee will consider the circumstances of any termination and the performance of the 
executive and reserves the right to pay all or part of an annual bonus for the year of termination in exercising its discretion the committee will take into 
account relevant factors including the circumstances of the termination contribution to the business during the bonus period and performance if a 
payment in lieu of notice is made the provisions of the relevant service contract will apply to determine the amount of any payment due the committee 
may also pay legal and outplacement fees 
share plan leaver provisions
on termination of office the leaver provisions in the share plans as approved by shareholders will apply
in “good leaver” circumstances as determined in accordance with the rules of the psp dbp or sop as appropriate which provide for good 
leavers to include participants who cease employment due to death illness injury disability redundancy retirement in the case of the sop  
or any other reason determined by the committee the share plans provide as follows
psp  the committee shall determine whether the award vests at the date of cessation in which case the extent of vesting shall be 
determined by determining the extent to which the performance condition has been satisfied at the leaving date or on the ordinary 
vesting date in which case the extent of vesting shall be determined by determining the extent to which the performance condition  
is satisfied at the end of the performance period the number of shares in respect of which the award would vest based on that 
determination will be reduced to reflect the proportion of the performance period that has elapsed unless the committee determines 
that it would be inappropriate to make this reduction 
dbp  the committee shall determine whether the matching award vests at the date of cessation in which case the extent of vesting shall be 
determined by determining the extent to which the performance condition has been satisfied at the leaving date or would be satisfied  
at the end of the performance period or on the ordinary vesting date in which case the extent of vesting shall be determined by 
determining the extent to which the performance condition is satisfied at the end of the performance period the number of shares in 
respect of which the award would vest based on that determination will be reduced to reflect the proportion of the performance period 
that has elapsed unless the committee determines that no such reduction should apply
the committee may permit the early release of deferred awards under the dbp
sop the committee has discretion to permit the exercise of unvested sop options following termination of office to such extent as the 
committee determines 
in other “leaver” circumstances other than where employment is terminated due to gross misconduct the committee may also permit the early 
release of deferred awards under the dbp
change of control provisions in the company’s share plans
in the event of a change of control of the company or other relevant corporate event the provisions of the share plans will apply to determine 
the extent to which any unvested awards vest
psp  the committee shall determine whether and to what extent any performance condition shall be deemed to be satisfied having regard to 
the progress towards meeting that performance condition the number of shares in respect of which the award would vest based on that 
determination will be reduced to reflect the proportion of the performance period that has elapsed unless the committee determines that 
it would be inappropriate to make this reduction 
dbp  the committee shall determine the extent to which it considers any performance condition applying to a matching award has been satisfied 
or would be satisfied at the end of the performance period the number of shares in respect of which the award would vest based on that 
determination will be reduced to reflect the proportion of the performance period that has elapsed unless the committee determines that 
no such reduction should apply 
sop  the committee has discretion to permit the exercise of unvested sop options following a change of control to such extent as the committee determines  optos plc annual report and accounts 2013 70
directors’ remuneration policy continued
statement of consideration of employment conditions elsewhere in the company
salary benefits and performance related reward provided to employees is taken into account when setting policy for directors’ remuneration 
although employees are not formally consulted in relation to the setting of the policy this includes consideration of 
 • salary increases for the general employee population 
 • overall spend on annual bonus 
 • participation levels in the annual bonus and any long term incentive plans 
 • company‑wide benefit including pension offerings 
 • any other relevant factors as determined by the committee and
 • the committee takes into account ad‑hoc information provided by the hr function
statement of consideration of shareholder views
there were no shareholder concerns expressed during the year which resulted in the need for the company to take remedial action
by order of the board
robert kennedy
chief financial officer and company secretary
20 november 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 71
we have audited the financial statements of optos plc 
for the year ended 30 september 2013 which comprise 
consolidated income statement consolidated statement 
of comprehensive income the group and company balance 
sheets the group and company statements of changes in 
equity the group and company cash flow statements and 
the related notes 1 to 26 the financial reporting framework 
that has been applied in their preparation is applicable law 
and international financial reporting standards ifrss 
as adopted by the european union and as regards the 
parent company financial statements as applied in 
accordance with the provisions of the companies act 2006
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 directors’ responsibilities 
statement set out on page 50 the directors are responsible 
for the preparation of the financial statements and for being 
satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the financial statements 
in accordance with applicable law and international 
standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s 
ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement whether caused 
by fraud or error this includes an assessment of whether 
the accounting policies are appropriate to the group’s 
circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read 
all the financial and nonfinancial information in the annual 
report and accounts to identify material inconsistencies 
with the audited financial statements and to identify any 
information that is apparently materially incorrect based on 
or materially inconsistent with the knowledge acquired by 
us in the course of performing the audit if we become aware 
of any apparent material misstatements or inconsistencies 
we consider the implications for our report
opinion on financial statements
in our opinion
 ΅ the financial statements give a true and fair view of the 
state of the group’s and of the parent company’s affairs 
as at 30 september 2013 and of the group’s profit for the 
year then ended
 ΅ the group financial statements have been properly 
prepared in accordance with ifrss as adopted by the 
european union 
 ΅ the parent company’s financial statements have been 
properly prepared in accordance with ifrss as adopted 
by the european union and as applied in accordance 
with the requirements of the companies act 2006 and
 ΅ the financial statements have been prepared in accordance 
with the requirements of the companies act 2006 and 
as regards the group financial statements article 4 of the 
ias regulation
our assessment of risks of material 
misstatement
we identified the following risks of material misstatement that 
had the greatest effect on the audit strategy the allocation 
of resources in the audit and directing the efforts of the 
engagement team
 ΅ lease accounting and customer contract terms including 
the risk of inappropriate lease classification and 
associated revenue recognition
 ΅ revenue recognition including the risk that sales are 
recorded in the wrong accounting period and the risk that 
sales containing multiple service or product elements are 
not accounted for correctly
 ΅ impairment of goodwill and intangible assets including 
the risk that critical assumptions applied in the group’s 
impairment tests are inappropriate
 ΅ going concern basis of preparation and
 ΅ the risk of misstatement due to fraud or error arising from 
management override
our application of materiality
we determined materiality for the group to be 450k 2012 
1150k which is 5 of forecast pretax profit this provided 
a basis for determining the nature timing and extent of risk 
assessment procedures identifying and assessing the risk of 
material misstatement and determining the nature timing and 
extent of further audit procedures
on the basis of our risk assessments together with our 
assessment of the group’s overall control environment 
our judgement was that overall performance materiality 
ie our tolerance for misstatement in an individual account or 
balance for the group should be 50 2012 50 
of planning materiality namely 225k 2012 575k our 
objective in adopting the approach was to ensure that total 
uncorrected and undetected audit differences in all accounts 
did not exceed our planning materiality level 
we agreed with the audit committee that we would report 
to the committee all audit differences in excess of 50k 
2012 57k as well as differences below that threshold that 
in our view warranted reporting on qualitative grounds
an overview of the scope of our audit
following our assessment of the risk of material 
misstatement to the group financial statements we selected 
five 2012 five components that represent the principal 
business units within the group’s two reportable segments 
and account for 100 2012 100 of the group’s revenue 
and 100 2012 100 of the group’s profit before tax two 
2012 two of these were subject to a full scope audit whilst 
the remaining three 2012 three were subject to a specific 
scope audit where the extent of audit work was based on our 
assessment of the risks of material misstatement and of the 
materiality of the group’s business operations at those 
locations they were also selected to provide an appropriate 
basis for undertaking audit work to address the risks of 
material misstatement identified above 
independent auditor’s report
to the members of optos plc optos plc annual report and accounts 2013 72
independent auditor’s report continued
to the members of optos plc
an overview of the scope of our audit 
continued
the audit work at the five locations was executed at levels of 
materiality applicable to each individual entity which were 
much lower than group materiality the senior statutory 
auditor visited both of the full scope audit locations
our response to the risks identified above included the 
following procedures
 ΅ lease accounting and customer contract terms for a 
sample of lease contracts we challenged managements 
classification as either an operating lease or a finance 
lease and that based on this classification we confirmed 
that the accounting for each lease was appropriate and 
that the inclusion of any lease incentives or other terms 
and conditions had been appropriately accounted for
 ΅ revenue recognition we performed cutoff testing in the 
months of september 2013 and october 2013 to ensure 
revenue had been appropriately recognised in the correct 
period we focused our testing to determine that revenue 
was appropriately recognised where a sale contained 
multiple elements or service elements to be delivered 
in future periods
 ΅ impairment testing of goodwill and intangible assets 
we challenged managements assumptions used in the 
impairment testing of goodwill and intangible assets 
described in note 2 to the financial statements including 
the reasonableness of cash flow projections inputs 
discount rates perpetuity rates and the sensitivities used
 ΅ going concern basis of preparation we challenged the 
directors’ assessment of going concern and agreed cash flow 
projections and assumptions to supporting documentation 
our work included a review of the evidence available of 
current refinancing discussions and assessment of the 
sensitivity of managements forecasts and projections
 ΅ the risk of misstatement due to fraud or error we performed 
journal entry testing analytical review procedures and enquiry 
of management in order to identify material fraud and error 
due to management override
opinion on other matters prescribed 
by the companies act 2006
in our opinion
 ΅ the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance 
with the companies act 2006 
 ΅ the information given in the strategic report and 
directors’ report for the financial year for which the 
group and company financial statements are prepared 
is consistent with the group and company financial 
statements and
 ΅ the information given in the corporate governance 
statement set out on pages 44 to 50 with respect to 
internal control and risk management systems in relation 
to financial reporting processes and about share capital 
structures is consistent with the financial statements
matters on which we are required to report 
by exception
we have nothing to report in respect of the following
under the isas uk and ireland we are required to report 
to you if in our opinion information in the annual report is
 ΅ materially inconsistent with the information in the audited 
financial statements or
 ΅ apparently materially incorrect based on or materially 
inconsistent with our knowledge of the group acquired 
in the course of performing our audit or
 ΅ is otherwise misleading
in particular we are required to consider whether we have 
identified any inconsistencies between our knowledge 
acquired during the audit and the directors’ statement 
that they consider the annual report is fair balanced and 
understandable and whether the annual report 
appropriately discloses those matters that we communicated 
to the audit committee which we consider should have been 
disclosed
under the companies act 2006 we are required to report 
to you if in our opinion
 ΅ adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have 
not been received from branches not visited by us or
 ΅ the parent company financial statements and the part of 
the directors’ remuneration report to be audited are not 
in agreement with the accounting records and returns or
 ΅ certain disclosures of directors’ remuneration specified 
by law are not made or
 ΅ we have not received all the information and explanations 
we require for our audit or
 ΅ a corporate governance statement has not been 
prepared by the company
under the listing rules we are required to review
 ΅ the directors’ statement set out on page 49 in relation 
to going concern 
 ΅ the part of the corporate governance statement relating 
to the company’s compliance with the nine provisions of 
the uk corporate governance code specified for our 
review and
 ΅ certain elements of the report to shareholders by the 
board on directors’ remuneration
annie graham 
senior statutory auditor
for and on behalf of ernst  young llp
statutory auditor
glasgow
20 november 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 73
 notes 
2013
before
exceptional
items
m 
2013
exceptional
items
note 4
m 
2013
m
2012
before
exceptional
items
m 
2012
exceptional
items
note 4
m 
2012
m 
revenue 5 1582 — 1582 1932 — 1932
cost of sales 690 — 690 845 — 845
gross profit 892 — 892 1087 — 1087
selling and distribution costs 324 — 324 348 — 348
administrative and other expenses 515 03 512 512 29 541
other operating income 5 13 — 13 32 — 32
operating profit 66 03 69 259 29 230
finance revenue 6 50 — 50 28 — 28
finance costs 6 24 — 24 24 — 24
profit from continuing operations before taxation 92 03 95 263 29 234
tax chargecredit 8 15 16 31 75 17 58
net profit for the year attributable to equity holders of the 
parent 77 13 64 188 12 176
profit before taxation per ordinary share 
basic 9 128c — 132c 368c — 327c
diluted 9  124c — 128c 357c — 317c
profit after taxation per ordinary share 
basic 9 107c — 89c 263c — 246c
diluted 9  104c — 86c 256c — 239c
2013 
m 
2012
m 
profit for the year 64 176
other comprehensive income to be reclassified to profit and loss in subsequent periods 
exchange differences on foreign operations 03 —
other comprehensive income not being reclassified to profit or loss in subsequent periods
deferred tax associated with sharebased payment transactions  — 01
other comprehensive income for the year after tax  03 01
total comprehensive income for the year  67 177
consolidated statement of comprehensive income
for the year ended 30 september 2013
consolidated income statement
for the year ended 30 september 2013 optos plc annual report and accounts 2013 74
group company
notes
2013 
m 
2012
m
2013
m
2012
m
assets 
noncurrent assets 
property plant and equipment 10 90 179 42 57
intangible assets 11 423 471 151 189
investments in subsidiaries 12 — — 157 157
finance lease receivables 13 553 572 53 38
deferred tax asset 8 38 55 20 38
total noncurrent assets 1104 1277 423 479
current assets 
inventories 14 346 291 140 124
tax receivable 8 23 02 — —
finance lease receivables 13 309 250 23 14
trade and other receivables 15 250 295 1347 1306
cash and cash equivalents 16 239 66 159 —
total current assets 1167 904 1669 1444
total assets 2271 2181 2092 1923
equity and liabilities 
equity 
issued capital 26 25 26 25
share premium 1203 1200 1203 1200
retained profitdeficit 27 35 86 28
foreign exchange reserve 01 04 — —
total equity 1255 1186 1315 1253
noncurrent liabilities 
financial liabilities 17 138 427 — 300
provisions 18 — 64 — 02
government grants 19 — — — —
deferred tax liability 8 10 — — —
total noncurrent liabilities 148 491 — 302
current liabilities 
trade and other payables 20 368 383 394 364
provisions 18 05 03 03 03
financial liabilities 17 495 118 380 01
government grants 19 — — — —
total current liabilities 868 504 777 368
total liabilities 1016 995 777 670
total equity and liabilities 2271 2181 2092 1923
approved by the board of directors on 20 november 2013 and signed on its behalf by 
robert kennedy 
chief financial officer and company secretary
group and company balance sheets
as at 30 september 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 75
group notes 
share 
capital 
m 
share 
premium 
m 
retained 
deficitprofit
m 
foreign 
exchange 
m 
total
m 
at 1 october 2011 25 1197 213 04 1005
other comprehensive income  — — 01 — 01
profit for the year — — 176 — 176
total comprehensive income for year — — 177 — 177
issue of ordinary share capital 23 — 03 — — 03
sharebased payments 24 — — 01 — 01
at 30 september 2012 25 1200 35 04 1186
other comprehensive income — — — 03 03
profit for the year — — 64 — 64
total comprehensive income for year — — 64 03 67
issue of ordinary share capital 23 01 03 — — 04
deferred tax associated with sharebased payment transactions — — 05 — 05
sharebased payments 24 — — 03 — 03
at 30 september 2013 26 1203 27 01 1255
company notes 
share 
capital 
m 
share 
premium 
m 
retained
deficitprofit
m 
foreign 
exchange 
m 
total
m 
at 1 october 2011 25 1197 87 — 1135
other comprehensive income — — 01 — 01
profit for the year — — 113 — 113
total comprehensive income for year — — 114 — 114
issue of ordinary share capital 23 — 03 — — 03
sharebased payments 24 — — 01 — 01
at 30 september 2012 25 1200 28 — 1253
other comprehensive income — — — — —
profit for the year — — 60 — 60
total comprehensive income for year — — 60 — 60
issue of ordinary share capital 23 01 03 — — 04
deferred tax associated with sharebased payment transactions — — 05 — 05
sharebased payments 24 — — 03 — 03
at 30 september 2013 26 1203 86 — 1315
share premium 
share premium comprises the cumulative difference between the net proceeds and nominal value of the company’s issued equity share capital 
foreign exchange reserve 
this reserve includes all cumulative differences on the translation of the group’s net investment in foreign operations optos elected to deem 
the cumulative differences on the retranslation into us dollars of the group’s net investment in foreign operations to be nil as at 1 october 2004 
as a result in the event of any future disposal of a foreign operation any gain or loss on disposal will include cumulative translation differences arising 
only on or after 1 october 2004
group and company statements of changes in equity
for the year ended 30 september 2013 optos plc annual report and accounts 2013 76
group company
2013 2012 2013 2012
notes m m m m
operating activities 
profit for the year 64 176 60 113
adjustments to reconcile profit for the year to net cash inflow from operating activities 
income tax charge 31 58 16 31
net finance revenuecosts 26 04 05 03
depreciation amortisation and impairment of noncurrent assets 133 267 69 87
contingent consideration — 08 — 08
property plant and equipment scrapped 03 05 — —
intangibles held in software disposed of 01 — — —
medical devices held in ppe disposed of 34 141 05 18
sharebased payments 03 01 01 01
revenue recognised from device sales under finance leases 338 641 44 39
decreaseincrease in trade and other receivables  45 30 41 509
amortisation of government grants — 03 — 03
decrease in inventories 40 07 15 24
decreaseincrease in trade and other payables  10 115 36 148
decreaseincrease in provisions 62 21 02 01
cash flow from operating activities 162 49 90 181
tax paid 30 13 — —
net cash flow from operating activities 192 36 90 181
cash flow from investing activities 
finance lease interest receivable 50 28 04 02
purchases of property plant and equipment 38 99 16 37
business acquisitions net of cash acquired — 175 — —
expenditure on intangible assets 11 67 09 131
cash receipts from finance lease receivables 296 71 20 08
net cash flow from investing activities 297 242 01 158
cash flow from financing activities 
proceeds from vendor finance 151 123 — —
repayment of vendor finance 143 232 — —
proceeds from new borrowings 80 300 80 300
proceeds from share issues 04 03 04 03
interest paid 24 24 09 05
net cash flow from financing activities 68 170 75 298
net increasedecrease in cash and cash equivalents 173 36 164 41
effect of foreign exchange on cash and cash equivalents — — — —
cash and cash equivalents at beginning of year 66 102 05 36
cash and cash equivalents at end of year 16 239 66 159 05
group and company cash flow statements
for the year ended 30 september 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 77
1 authorisation of financial statements 
and statements of compliance
the consolidated and company financial statements of optos plc for the 
year ended 30 september 2013 were approved and authorised for issue 
by the directors on 20 november 2013 optos plc is a public limited 
company incorporated and domiciled in scotland and is listed on 
the london stock exchange
the consolidated financial statements of optos plc have been prepared 
in accordance with ifrs as adopted by the european union and applied 
in accordance with the provisions of the companies act 2006
2 accounting policies
the principal accounting policies adopted in the preparation of these 
financial statements are set out below these policies have been 
consistently applied to the years presented unless otherwise stated
i basis of preparation and accounting policies
a basis of preparation 
the financial statements have been prepared in accordance with the 
accounting policies based on ifrs and ifric interpretations endorsed 
by the european union and with those parts of the companies act 2006 
applicable to companies reporting under ifrs
the consolidated financial statements are presented in us dollars 
as this is the group and company’s functional currency and all 
values are rounded to the nearest one hundred thousand except 
when otherwise indicated
having considered uncertainties under the current economic environment 
and after making enquiries the directors have a reasonable expectation 
that the company and the group have adequate resources to continue 
in operational existence for the foreseeable future accordingly 
they continue to adopt the going concern basis in preparing the 
annual report and accounts
this conclusion has been reached having considered the effect 
of liquidity risk on the group’s ability to operate effectively currently 
liquidity risk is not considered a significant business risk to the group 
given its level of cash available debt facilities and cash flow projections 
the key liquidity risks faced by the group are considered to be the failure 
of banks where funds are deposited and the inability to secure additional 
debt finance in order to facilitate the expansion of the group’s business 
or to introduce new or improved products
as part of this review the directors considered the current levels 
of available debt facilities the structure of the debt finance being multiple 
assetbacked arrangements and the availability of other sources of debt 
capital including the 50m revolving credit facility although the current 
revolving credit facility expires in september 2014 there are several credit 
approved financing options available to the company the directors also 
considered the levels of future cash flows guaranteed under its rental 
customer agreements and the pattern of future debt repayments 
associated with current finance obligations
no company profit and loss account is presented for optos plc 
as permitted by section 408 of the companies act 2006
b basis of consolidation
business combinations are accounted for using the acquisition method 
the cost of an acquisition is measured as the aggregate of the 
consideration transferred measured at acquisitiondate fair value and 
the amount of any noncontrolling interest in the acquiree the choice 
of measurement of noncontrolling interest either at fair value or 
at the proportionate share of the acquiree’s identifiable net assets 
is determined on a transaction by transaction basis acquisition costs 
incurred are expensed and included in administrative expenses
when the group acquires a business it assesses the financial assets 
and liabilities assumed for appropriate classification and designation 
in accordance with the contractual terms economic circumstances 
and pertinent conditions as at the acquisition date this includes the 
separation of embedded derivatives in host contracts by the acquiree
any contingent consideration to be transferred by the acquirer will be 
recognised at fair value at the acquisition date subsequent changes 
to the fair value of the contingent consideration which is deemed to be an 
asset or liability will be recognised in accordance with ias 39 either in profit 
or loss or in other comprehensive income if the contingent consideration 
is classified as equity it should not be remeasured until it is finally settled 
within equity
goodwill is initially measured at cost being the excess of the aggregate 
of the acquisitiondate fair value of the consideration transferred and 
the amount recognised for the noncontrolling interest and where the 
business combination is achieved in stages the acquisitiondate fair value 
of the acquirer’s previously held equity interest in the acquiree over the 
net identifiable amounts of the assets acquired and the liabilities assumed 
in exchange for the business combination
notes to the consolidated financial statements
for the year ended 30 september 2013 optos plc annual report and accounts 2013 78
notes to the consolidated financial statements continued
for the year ended 30 september 2013
2 accounting policies continued
i basis of preparation and accounting policies 
continued
b basis of consolidation continued
assets acquired and liabilities assumed in transactions separate to the 
business combinations such as the settlement of preexisting relationships 
or postacquisition remuneration arrangements are accounted for separately 
from the business combination in accordance with their nature and 
applicable ifrss identifiable intangible assets meeting either the 
contractuallegal or separability criterion are recognised separately 
from goodwill contingent liabilities representing a present obligation 
are recognised if the acquisitiondate fair value can be measured reliably
if the aggregate of the acquisitiondate fair value of the consideration 
transferred and the amount recognised for the noncontrolling interest 
and where the business combination is achieved in stages the acquisition 
date fair value of the acquirer’s previously held equity interest in the 
acquiree is lower than the fair value of the assets liabilities and contingent 
liabilities and the fair value of any preexisting interest held in the 
business acquired the difference is recognised in profit and loss
after initial recognition goodwill is measured at cost less any 
accumulated impairment losses for the purposes of impairment testing 
goodwill acquired in a business combination is from the acquisitiondate 
allocated to each of the group’s cashgenerating units or groups 
of cashgenerating units that are expected to benefit from the 
combination irrespective of whether other assets or liabilities of the 
acquiree are assigned to those units each unit or group of units to which 
goodwill is allocated shall represent the lowest level within the entity at 
which the goodwill is monitored for internal management purposes and 
not be larger than an operating segment before aggregation
where goodwill forms part of a cashgenerating unit and part of the 
operation within that unit is disposed of the goodwill associated with the 
operation disposed of is included in the carrying amount of the operation 
when determining the gain or loss on disposal of the operation goodwill 
disposed of in this circumstance is measured based on the relative values 
of the operation disposed of and the portion of the cashgenerating 
unit retained
subsidiary undertakings are entities controlled by the group 
control exists when the group has the power directly or indirectly 
to govern the financial and operating policies of an entity so as to obtain 
benefits from its activities in assessing control potential voting rights 
that presently are exercisable or convertible are taken into account 
the financial statements of subsidiary undertakings are included in the 
consolidated financial statements from the date that control commences 
until the date that control ceases the financial statements of the 
subsidiary undertakings are prepared for the same reporting year as the 
parent company using consistent accounting policies all intercompany 
balances and transactions including unrealised profits arising from 
intragroup transactions have been eliminated in full
c ifrs 8 “operating segments”
the group has two reportable segments being americas and 
international markets in assessing performance and making resource 
allocation decisions the operating board which is the group’s chief 
operating decisionmaking body and the board review revenues 
and gross profits by segment 
the business is managed on an integrated basis with functions managed 
globally and decisions reached through crossfunctional committees 
in particular research and development is actively targeted at new 
products and at enhancing the existing products for all markets 
manufacturing marketing sales regulatory and support functions 
are managed and operated on a global basis and are not specific 
to individual markets or products
transfer prices between segments are set in accordance with the group’s 
transfer pricing policy segment revenue segment expense and segment 
result include transfers between geographical segments those transfers 
are eliminated on consolidation
d investments
investments in subsidiaries are held at historical cost less any applicable 
provision for impairment
e exceptional items
material items of income and expense which because of the nature 
and infrequency of the events giving rise to them merit separate 
presentation to allow a better understanding of the elements of the 
group’s financial performance  overview strategic report governance financial statements
optos plc annual report and accounts 2013 79
2 accounting policies continued
f foreign currency translation
the consolidated financial statements are presented in us dollars which 
is the group’s presentational currency each entity in the group determines 
its own functional currency and items included in the financial statements 
of each entity are measured using that functional currency transactions 
in foreign currencies are initially recorded in the functional currency 
rate ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date all exchange 
differences are taken to profit or loss with the exception of differences 
on foreign currency borrowings that provide a hedge against a net 
investment in a foreign entity these are taken directly to equity until 
the disposal of the net investment at which time they are recognised 
in profit or loss
tax charges and credits attributable to exchange differences on those 
borrowings are also dealt with in equity nonmonetary items that are 
measured in terms of historical cost in a foreign currency are translated 
using the exchange rates as at the dates of the initial transactions 
nonmonetary items measured at fair value in a foreign currency are 
translated using the exchange rates at the date when the fair value 
was determined
the functional currency of the foreign operations optos canada inc 
optos gmbh and optos australia is the canadian dollar euro and 
australian dollar respectively as at the reporting date the assets 
and liabilities of these subsidiaries are translated into the presentation 
currency of optos plc the us dollar at the rate of exchange ruling at the 
balance sheet date and their income statements are translated at the 
weighted average exchange rates for the year the exchange differences 
arising on the translation are taken directly to a separate component of 
equity on disposal of a foreign entity the deferred cumulative amount 
recognised in equity relating to that particular foreign operation is 
recognised in the income statement the company’s share capital and share 
premium account are denominated in sterling and are translated at the 
historical rates of exchange
optos has elected to deem the cumulative differences on the 
retranslation into us dollars of the group’s net investment in foreign 
operations to be nil as at 1 october 2004 as a result in the event 
of a future disposal of a foreign operation any gain or loss on disposal 
will only include cumulative translation differences arising on or after 
1 october 2004
g property plant and equipment
property plant and equipment is stated at cost of acquisition 
or manufacture less accumulated depreciation and accumulated 
impairment in value in the case of medical devices certain of the costs 
of manufacture relate to the capitalisation of directly attributable internal 
labour costs the employee costs and appropriate overheads associated 
with upgrading and installing the devices at the relevant customer site 
under operating leases are also capitalised 
depreciation is provided on all property plant and equipment at rates 
calculated to write off the cost less estimated residual values based 
on prices prevailing at the balance sheet date of each asset evenly 
over its expected useful life as follows
medical devices  up to four years
leasehold improvements   lesser of ten years or period  
of the lease
other plant and equipment  three to ten years
medical devices refer to retinal examination equipment being used 
or expected to be used under operating lease rental agreements 
medical devices are depreciated from the point of activation at the 
relevant customer site in the case of a device that is removed from 
one customer site upgraded and relocated to a new customer site 
depreciation is recalculated to write off the remaining net book value 
of that device together with the additional capitalised costs relating to 
the upgrade and installation over the remaining useful life of the asset
medical devices expected to be sold outright or by way of finance lease 
are held as inventory
the carrying values of plant and equipment are reviewed for impairment 
when events or changes in circumstances indicate that the carrying value 
may not be recoverable when an item of property plant and equipment 
is sold after the end of its rental term sale proceeds are recorded as 
revenue with the remaining net book value of the device or inventory 
carrying value recorded as cost of goods
the assets’ residual values useful lives and depreciation methods 
are reviewed and adjusted if appropriate at each financial year end
the company launched its new daytona device in the first half of 2012 
and determined that to the extent it is used in the business and held 
as property plant and equipment it will be depreciated over its 
expected useful life which the directors have assessed at four years optos plc annual report and accounts 2013 80
2 accounting policies continued
h leases
group as a lessor
arrangements between optos and its customers are assessed on a case 
by case basis taking into account the terms of the contract the fair value 
and the estimated residual life of the underlying device 
finance leases
arrangements between optos and the customer where substantially all 
of the risks and rewards incidental to ownership of the asset have been 
transferred to the customer are classified as finance leases the group 
makes this assessment at the inception of the lease or at the date of 
contract extension on the basis of one or more of the following factors
 ΅ the lease transfers ownership of the equipment to the customer 
by the end of the lease term 
 ΅ the customer has a right to buy the equipment either during the term 
of the lease or at the end of the lease at an advantageous price and 
it is reasonably certain at the inception of the lease that this option 
will be exercised
 ΅ the lease term covers the major part of the estimated useful life 
of the asset or
 ΅ the present value of the minimum lease payments amounts 
to substantially all of the fair value of the asset 
an amount equal to the fair value of the asset or if lower the present 
value of the minimum lease payments is recognised as revenue in the 
income statement and as an asset in the statement of financial position 
the fair value of service and maintenance is released to the income 
statement on a straight line basis over the lease term finance income 
is recognised on the basis of a constant monthly rate of return on the net 
investment in the finance lease which is equivalent to the incremental 
borrowing rate charged to the group the transaction is treated as a 
disposal and the carrying value of the device either in property plant 
and equipment or inventories recorded as a cost in the income statement 
in accordance with the policy for outright sales
income derived from extension of existing finance lease contracts 
is recognised as other operating income
operating leases
arrangements between optos and the customer where substantially all 
of the risks and rewards incidental to ownership of the asset have not 
been transferred to the customer are classified as operating leases 
the group makes this assessment based on the following factors
 ΅ ownership of the asset does not transfer to the customer at the end 
of the lease term and there is no advantageous acquisition option 
for the customer at the end of the lease
 ΅ the estimated useful life of the asset is considered to be significantly 
in excess of the lease term andor
 ΅ at the inception of the lease the present value of the minimum lease 
payments is significantly less than the fair value of the asset
the majority of the group’s rental contracts commit the customer 
to pay a fixed monthly sum the mmp plus a variable monthly sum should 
the usage of the device exceed the minimum agreed level variable 
rental these fixed rental payments from operating leases are recognised 
monthly in the income statement on a straight line basis over the lease 
term variable rentals are recognised monthly in line with actual usage 
of the device
group as a lessee
finance leases
assets held by the group under finance leases which transfer to the 
group substantially all the risks and benefits incidental to ownership 
of the leased item are capitalised at the inception of the lease at the fair 
value of the item or if lower at the present value of the minimum future 
lease payments upon placement of medical devices at a customer site and 
where the customer enters into a fixed term contract to pay the group 
fixed and variable amounts of revenue the group selectively enters into a 
financing agreement with thirdparty providers of debt finance the debt 
finance provider advances the group funds in return for taking the right 
to receive the fixed revenue streams and legal title to the device over 
the term of the finance arrangement
in such cases there is a transfer of legal title of the relevant device to the 
debt provider with legal title being transferred back to the group at the 
end of the term of the debt as the significant risks and rewards of 
ownership are retained by the group the finance received from the 
debt providers is recorded as fixedrate obligations which are repayable 
by instalments and are secured over the related medical device 
notes to the consolidated financial statements continued
for the year ended 30 september 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 81
2 accounting policies continued
h leases continued
group as a lessee continued
finance leases continued
in such cases the medical devices are recorded as property 
plant and equipment and the debt finance as finance leases payable 
lease payments payable under the medical device finance arrangements 
are apportioned between the finance charges and reduction of the lease 
liability so as to achieve a constant rate of interest on the remaining balance 
of the liability with the finance charges being charged directly against 
income over the lease term
leased assets are depreciated over the estimated useful life of the asset 
or where there is no reasonable certainty that the group will obtain 
ownership by the end of the lease term over the lease term if shorter
operating leases
leases where the lessor retains a significant portion of the risks and 
benefits of ownership of the asset are classified as operating leases 
and rentals payable are recognised in the income statement on a straight 
line basis over the lease term
i intangible assets
intangible assets are carried at cost less accumulated amortisation 
and accumulated impairment losses with the exception of certain 
development costs internally generated intangible assets are not 
capitalised and expenditure is charged against profits in the year in 
which the expenditure is incurred purchased intangible assets are 
capitalised at cost and amortised over the expected useful life of the 
asset intangible assets acquired as a result of a business combination 
are initially recognised at their fair value in accordance with ifrs 3 
“business combinations” if an intangible asset is considered to 
have suffered impairment in value it is written down to its estimated 
recoverable amount in accordance with the group’s policy on impairment
research and development costs
research costs are expensed as incurred development expenditure 
incurred on an individual project is capitalised when the group can 
demonstrate the technical feasibility of completing the project so that it 
will be available for use or sale its intention to complete and its ability to use 
or sell the asset how the asset will generate future economic benefits 
the availability of resources to complete the asset and the ability to 
measure reliably the expenditure following development 
following the initial recognition of the development expenditure the 
cost model is applied requiring the asset to be carried at cost less any 
accumulated amortisation and accumulated impairment losses any 
expenditure carried forward is amortised over the benefits which are 
anticipated to accrue from the estimated commercial life of the asset 
from the point of full commercial launch
the carrying value of intangible assets is reviewed for impairment 
annually when the relevant asset is not yet in use or more frequently 
when an indication of impairment arises during the reporting year
computer software
computer software that is not integral to an item of property plant 
and equipment is recognised separately as an intangible asset whether 
acquired or developed internally amortisation is provided on a straight line 
basis so as to charge the cost of the software to the income statement 
over its expected useful life which is in the range of three to five years
j impairment of assets
the group assesses at each reporting date whether there is an indication 
that the value of an asset may be impaired if any such indication of 
impairment exists or when annual impairment testing for an asset 
is required the group makes an estimate of the asset’s recoverable 
amount the recoverable amount of an asset or cashgenerating unit 
is the higher of its fair value less costs to sell and its value in use and is 
determined for an individual asset unless the asset does not generate 
cash inflows that are largely independent of those from other assets or 
groups of assets or cashgenerating units where the carrying amount 
of an asset exceeds its recoverable amount the asset is considered 
impaired and is written down to its recoverable amount in assessing 
value in use the estimated future cash flows are discounted to their 
present value using a pretax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the asset 
impairment losses of continuing operations are recognised in the income 
statement in those expense categories consistent with the function of the 
impaired asset
an assessment is made at each reporting date as to whether there is any 
indication that previously recognised impairment losses may no longer 
exist or may have diminished if such indication exists the recoverable 
amount is estimated a previously recognised impairment loss is 
reversed only if there has been a change in the estimates used to 
determine the asset’s recoverable amount since the last impairment 
loss was recognised if that is the case the carrying amount of the asset optos plc annual report and accounts 2013 82
notes to the consolidated financial statements continued
for the year ended 30 september 2013
2 accounting policies continued
j impairment of assets continued
is increased to its recoverable amount that increased amount cannot 
exceed the carrying amount that would have been determined net of 
depreciation had no impairment loss been recognised for the asset in 
prior years such reversal is recognised in the income statement after 
such a reversal the depreciation charge is adjusted in future periods 
to allocate the asset’s revised carrying amount less any residual value 
on a systematic basis over its remaining useful life
k finance lease receivables
provision is made against the receivable when there is objective evidence 
that the group will not be able to collect the debts balances are written off 
when the probability of recovery is assessed as being remote
l inventories
inventories primarily comprise finished goods workinprogress and spares 
and components all related to medical devices inventories are valued 
at the lower of cost and net realisable value using the firstin firstout 
or weighted average cost basis cost of raw materials consumables 
and workinprogress includes the cost of direct materials and where 
applicable direct labour and those overheads that have been incurred 
in bringing the inventories to their present location and condition 
inventory is written down on a case by case basis if the anticipated net 
realisable value declines below the carrying amount of the inventories 
net realisable value is the estimated selling price less estimated cost 
to completion and selling expenses when the reasons for a write down 
of the inventory have ceased to exist the write down is reversed
m trade and other receivables
trade receivables which generally have payment terms of 30–90 days 
are recognised and carried at the original invoice amount less an 
allowance for any uncollectible amounts provision is made against the 
receivable when there is objective evidence that the group will not be 
able to collect the debts balances are written off when the probability 
of recovery is assessed as being remote
n cash and cash equivalents
cash and shortterm deposits in the balance sheet comprise cash 
at banks and in hand and shortterm deposits with an original maturity 
of three months or less
o interest bearing loans and borrowings
all loans and borrowings are initially recognised at the fair value 
of the consideration received less directly attributable transaction costs 
after initial recognition interest bearing loans and borrowings are 
subsequently measured at amortised cost using the effective interest 
method the group selectively enters into a financing agreement with 
thirdparty providers of debt finance the debt finance provider advances 
the group funds in return for taking the right to receive the fixed revenue 
streams and legal title to the device over the term of the finance 
arrangement in such cases there is a transfer of legal title of the relevant 
device to the debt provider with legal title being transferred back to the 
group at the end of the term of the debt as the significant risks and 
rewards of ownership are retained by the group the finance received 
from the debt providers is recorded as fixedrate obligations which are 
repayable by instalments and are secured over the related medical device
p provisions
a provision is recognised in the balance sheet when the group has 
a present legal or constructive obligation as a result of a past event that 
can be reliably measured and it is probable that an outflow of economic 
benefits will be required to settle the obligation provisions are determined 
by discounting the expected future cash flows at a pretax rate that 
reflects risks specific to the liability
q taxation
income tax
current tax assets and liabilities for the current and prior periods are 
measured at the amount expected to be recovered from or paid to the 
taxation authorities
the tax rates and tax laws used to compute the amount are those that 
are enacted or substantively enacted at the balance sheet date overview strategic report governance financial statements
optos plc annual report and accounts 2013 83
2 accounting policies continued
q taxation continued
income tax continued
deferred income tax is recognised for all temporary differences arising 
between the tax bases of assets and liabilities and their carrying amounts 
in the financial statements with the following exceptions
 ΅ where the deferred tax liability arises from the initial recognition 
of goodwill or of an asset or liability in a transaction that is not a 
business combination and at the time of the transaction affects 
neither the accounting profit nor taxable profit or loss and
 ΅ in respect of taxable temporary differences associated with 
investments in subsidiaries where the timing of the reversal 
of the temporary differences can be controlled and it is probable that 
the temporary differences will not reverse in the foreseeable future
deferred income tax assets are recognised for all deductible temporary 
differences carryforward of unused tax credits and unused tax losses 
only to the extent that it is probable that taxable profit will be available 
against which the deductible temporary differences and the carryforward 
of unused tax credits and unused tax losses can be utilised
the carrying amount of deferred income tax assets is reviewed at each 
balance sheet date and reduced to the extent that it is no longer probable that 
sufficient taxable profit will be available to allow all or part of the deferred 
income tax asset to be utilised unrecognised deferred income tax assets 
are reassessed at each balance sheet date and are recognised to the 
extent that it has become probable that future taxable profit will allow 
the deferred tax asset to be recovered
deferred income tax assets and liabilities are measured on an undiscounted 
basis at the tax rates that are expected to apply to the year when the asset 
is realised or the liability is settled based on tax rates and tax laws that have 
been enacted or substantively enacted at the balance sheet date
income tax relating to items recognised directly in equity is recognised 
in equity and not in the income statement otherwise income tax 
is recognised in the income statement
deferred tax assets and deferred tax liabilities are offset if a legally 
enforceable right exists to set off current tax assets against current tax 
liabilities and the deferred taxes are related to the same taxable entity 
and the same taxation authority
sales tax
revenues expenses and assets are recognised net of the amount 
of sales tax or equivalent except
 ΅ where the sales tax incurred on a purchase of assets or services is not 
recoverable from the taxation authority in which case the sales tax is 
recognised as part of the cost of acquisition of the asset or as part of 
the expense item as applicable and
 ΅ in the balance sheet where receivables and payables are stated with 
the amount of sales tax included
the net amount of sales tax recoverable from or payable to the 
taxation authorities is included as part of receivables or payables 
in the balance sheet
r sharebased payment transactions
certain employees including senior executives of the group receive 
remuneration in the form of sharebased payment transactions whereby 
employees render services as consideration for equity instruments 
equitysettled transactions
the cost of equitysettled transactions with employees is measured 
by reference to the fair value at the date at which they are granted and 
is recognised as an expense over the vesting period which ends on the 
date on which the relevant employees become fully entitled to the award 
in valuing equitysettled transactions no account is taken of any 
performance conditions other than conditions linked to the price 
of the shares of the company market conditions if applicable
no expense is recognised for awards that do not ultimately vest except for 
awards where vesting is conditional upon a market condition which are 
treated as vesting irrespective of whether or not the market condition is 
satisfied provided that all other performance conditions are satisfied optos plc annual report and accounts 2013 84
notes to the consolidated financial statements continued
for the year ended 30 september 2013
2 accounting policies continued
r sharebased payment transactions continued
the cost of equitysettled transactions is recognised together 
with a corresponding movement in equity over the period in which the 
performance andor service conditions are fulfilled ending on the date 
on which the relevant employees become fully entitled to the award the 
vesting date the cumulative expense recognised for equitysettled 
transactions at each reporting date until the vesting date reflects the 
extent to which the vesting period has expired and the group’s best 
estimate of the number of equity instruments that will ultimately vest 
the income statement charge or credit for a period represents 
the movement in cumulative expense recognised as at the beginning 
and end of that period
where the terms of an equitysettled award are modified or a new award 
is designated as replacing a cancelled or settled award the cost based 
on the original award terms continues to be recognised over the original 
vesting period in addition an expense is recognised over the remainder 
of the new vesting period for the incremental fair value of any modification 
based on the difference between the fair value of the original award and 
the fair value of the modified award both as measured on the date of 
modification no reduction is recognised if this difference is negative
where an equitysettled award is cancelled it is treated as if it had vested 
on the date of cancellation and any cost not yet recognised in the income 
statement for the award is expensed immediately any compensation paid 
up to the fair value of the award at the cancellation or settlement date 
is deducted from equity with any excess over fair value being treated 
as an expense in the income statement
the group took advantage of the transitional provisions of ifrs 2 
in respect of equitysettled awards and applied ifrs 2 only to 
equitysettled awards granted after 7 november 2002 that had 
not vested on 1 january 2005 where share options lapse as a result 
of the company terminating the employment of an individual it is 
accounted for as a forfeiture of the option
s revenue and lease income recognition
revenue is recognised to the extent that it is probable that the economic 
benefits will flow to the group and the revenue can be reliably measured 
revenue is measured at the fair value of the consideration received 
excluding discounts rebates vat and other sales tax or duties with the 
exception of medical device excise tax revenue streams attracting medical 
device excise tax are accounted gross of this tax with the cost of tax 
recognised in cost of goods sold
the following specific recognition criteria must also be met before 
revenue is recognised
rental income under operating leases
revenue from the provision of retinal examinations using the group’s 
medical devices is recognised according to the classification of the rental 
agreement as an operating lease such examinations are undertaken by 
customers who generally enter into agreements under which they pay a 
fixed monthly rental plus a variable monthly sum should the usage of the 
device exceed the minimum agreed level
these fixed monthly rental payments from agreements which have been 
classified as operating leases are recognised monthly on a straight line 
basis to the income statement over the lease term the variable rentals 
are recognised monthly in line with actual usage of the device
device sales under finance leases
revenue from the sale of devices which have been classified as finance 
leases is recognised as an amount equal to the fair value of the asset 
or if lower the present value of the minimum lease payments variable 
rentals are recognised to revenue each month to the extent that they 
can be reliably estimated
device sales – outright
revenue from the sale of devices is recognised in the income statement 
when the significant risks and rewards of ownership of the goods have 
passed to the buyer usually on dispatch or installation at the customer’s 
site or where relevant at the end of any validation period
service warranty and maintenance contracts
revenue from the sale of service and maintenance contracts is 
recognised on a straight line basis over the term of the contract overview strategic report governance financial statements
optos plc annual report and accounts 2013 85
2 accounting policies continued
s revenue and lease income recognition continued
other operating income
income derived from extension of existing finance lease contracts 
is recognised as other operating income
finance income
finance income is recognised on the basis of a constant monthly 
rate of return on the net investment in the relevant finance lease
interest income
revenue is recognised as interest accrues on cash deposits 
or loan arrangements 
t borrowing costs
borrowing costs are recognised as an expense when incurred
cost of raising debt finance are capitalised and amortised over 
the life of the underlying debt instrument
u government grants
government grants are recognised where there is reasonable assurance 
that the grant will be received and all attaching conditions will be 
complied with
when the grant relates to an expense item it is recognised as income over 
the period necessary to match the grant on a systematic basis to the 
costs that it is intended to compensate where the grant relates to an 
asset the fair value is credited to a deferred income account and is 
released to the income statement over the expected useful life of the 
relevant assets
v postemployment benefits
postemployment benefits comprise pension benefits provided 
to employees throughout the world
the group operates a number of defined contribution pension schemes 
the assets of the schemes are invested and managed independently 
of the finances of the relevant company the contributions are recognised 
in the income statement in the period in which they become payable
w derecognition of financial liabilities
a financial liability is derecognised when the obligation under the liability 
is discharged or cancelled or expires
x significant judgements made
in the process of applying the group’s accounting policies the board 
and management have made the following judgements apart from 
those involving estimations which have the most significant effect 
on the amounts recognised in the financial statements
group as a lessor and rental income
revenue is recognised according to the classification of the rental 
agreement as either an operating or finance lease the group considers 
the arrangements between optos and its customers on a case by 
case basis taking into account the terms of the contract the fair value 
and the estimated residual life of the underlying device set out in note 2h
revenue from rental agreements which have been classified as finance 
leases is recognised as an amount equal to the fair value of the asset or 
if  lower the present value of the minimum leased payments variable 
rentals are recognised to revenue each month to the extent that they 
have not been previously reliably estimated and recognised
these rental payments from agreements which have been classified 
as operating leases are recognised monthly in the income statement 
on a straight line basis to the income statement over the lease term
development costs
the group amortises its capitalised development costs over the 
anticipated benefits expected to accrue in the operations of the device 
or technology management assesses the appropriateness of the 
period taking into account latest market expectations further details 
are included in note 11
impairment of assets
the group assesses at each reporting date whether there is an indication 
that the value of an asset may be impaired if any such indication 
of impairment exists or when annual impairment testing for an asset 
is required the group makes an estimate of the asset’s recoverable 
amount the recoverable amount of an asset or cashgenerating unit optos plc annual report and accounts 2013 86
notes to the consolidated financial statements continued
for the year ended 30 september 2013
2 accounting policies continued
x significant judgements made continued
impairment of assets continued
is the higher of its fair value less costs to sell and its value in use and 
is determined for an individual asset unless the asset does not generate 
cash inflows that are largely independent of those from other assets 
or groups of assets or cashgenerating units
where the carrying amount of an asset exceeds its recoverable amount 
the asset is considered impaired and is written down to its recoverable 
amount in assessing value in use the estimated future cash flows are 
discounted to their present value using a pretax discount rate that reflects 
current market assessments of the time value of money and the risks 
specific to the asset impairment losses of continuing operations are 
recognised in the income statement in those expense categories 
consistent with the function of the impaired asset
an assessment is made at each reporting date as to whether there is any 
indication that previously recognised impairment losses may no longer 
exist or may have diminished if such indication exists the recoverable 
amount is estimated a previously recognised impairment loss is reversed 
only if there has been a change in the estimates used to determine 
the asset’s recoverable amount since the last impairment loss was 
recognised if that is the case the carrying amount of the asset 
is increased to its recoverable amount that increased amount cannot 
exceed the carrying amount that would have been determined net of 
depreciation had no impairment loss been recognised for the asset 
in prior years such reversal is recognised in the income statement after 
such a reversal the depreciation charge is adjusted in future periods 
to allocate the asset’s revised carrying amount less any residual value 
on a systematic basis over its remaining useful life
y key sources of estimation uncertainty
the key assumptions concerning the future and other key sources 
of estimation uncertainty at the balance sheet date that have a significant 
risk of causing a material adjustment to the carrying amounts of assets 
and liabilities within the next financial year are discussed opposite
useful lives of medical devices
the group depreciates medical devices over their estimated useful lives 
the board and management annually assess the appropriateness of the 
current estimate of useful life in september 2013 and in light of the 
developments outlined in the business review the directors revised 
their estimate of the expected useful economic lives of the p200 and 
200dx medical devices to end no later than 30 september 2015
the impact of this change is estimated to be 07m reduction in the 
fy 2014 depreciation charge and a depreciation charge in fy 2015 
for these medical devices
deferred tax
the group has gross unused tax losses these losses are recognised 
under ias 12 as deferred tax assets the group makes judgements 
as to the likelihood of these losses being recoverable and changes 
in these assumptions could have a material impact on the group’s 
reported tax charge further details are included in note 8
contingent consideration 
contingent consideration is recognised at fair value as of the date 
of acquisition the fair value is determined as the net present value 
of the cash flows expected to be paid discounted at an appropriate 
rate if the determined probabilities of future events change after the 
acquisition date the fair value of contingent consideration liability may 
change with a corresponding chargecredit to the income statement
z new standards and interpretations
new standards and interpretations adopted in these accounts are listed 
below and did not have any material effect on the financial position 
or performance of the group
international accounting  
standards ifrsias
effective date for
periods commencing
ias 12 amendment recovery of underlying assets 1 january 2012
ias 1 amendment presentation of other items of comprehensive income 1 july 2012
improvements to ifrss issued may 2012 various overview strategic report governance financial statements
optos plc annual report and accounts 2013 87
2 accounting policies continued
z new standards and interpretations continued
the amendments to ias 1 introduce a grouping of items presented in other comprehensive income oci items that could be reclassified or recycled 
to profit or loss at a future point in time now have to be presented separately from items that will never be reclassified the amendment affected 
presentation only and had no impact on the group’s financial position or performance 
the iasb and ifric have issued the following standards and interpretations with an effective date for periods after the date of these financial statements
international accounting standards ifrsias
effective date for
periods commencing
ifrs 9 financial instruments classification and measurement 1 january 2015
ifrs 10  consolidated financial statements 1 january 2014
ifrs 11  joint arrangements 1 january 2014
ifrs 12 disclosures of interests in other entities 1 january 2014
ifrs 13 fair value measurement 1 january 2013
ias 27 separate financial statements 1 january 2014
ias 28 investments in associates and joint ventures 1 january 2014
ifrs 7 amendment financial instruments disclosures 1 january 2013
ias 19 amendment employee benefits 1 january 2013
ias 32 amendment financial instruments offsetting financial assets against financial liabilities 1 january 2014
ifrs 1 amendment firsttime adoption on government loans 1 january 2013
ifrs 10 11 and 12 amendments transition guidance 1 january 2014
ias 36 amendment impairment of assets recoverable amount disclosures for nonfinancial assets 1 january 2014
ias 39 amendment financial instruments novation of derivatives and continuation of hedge accounting 1 january 2014
ifric 21 levies 1 january 2014
improvements to ifrss issued may 2012 various
 not yet adopted for use in the european union
the above standards and interpretations should be adopted in accordance with their effective dates the directors do not anticipate that the adoption 
of these standards and interpretations will have a material impact on the group’s financial statements in the period of initial application
3 segmental analysis
following the restructuring announced in may 2013 the group has two reportable segments being americas and international markets americas 
reportable segment covers operations in north and south america the rest of the world is reported under international no restatement in reportable 
results of the segments is required following this change 
in assessing performance and making resource allocation decisions the operating board which is the group’s chief operating decisionmaking body 
and the board review revenues and gross profits by segment 
optos sells a range of diagnostic and treatment devices to healthcare professionals globally either directly or through arrangements with distributors 
cash flow is generated through the rental or sale of devices and related software and support services 
the business is managed on an integrated basis with functions managed globally and decisions reached through crossfunctional committees in particular 
research and development is actively targeted at new products and at enhancing the existing product for all markets manufacturing marketing sales 
regulatory and support functions are managed and operate on a global basis and are not specific to individual markets or products
transfer prices between segments are set in accordance with the group’s transfer pricing policy segment revenue segment expense and segment 
result include transfers between geographical segments those transfers are eliminated on consolidation optos plc annual report and accounts 2013 88
notes to the consolidated financial statements continued
for the year ended 30 september 2013
3 segmental analysis continued
an analysis by operating segment is given below for the year ended 30 september 2013
americas 
2013 
m
international 
2013 
m
eliminations
2013 
m
total
2013
m
revenue  
operating lease and variable revenue from rental of devices 153 33 — 186
device sales under finance leases 179 159 — 338
device sales – outright 547 249 — 796
service and warranty contracts 227 48 — 275
intersegment sales — 267 267 —
segment revenue
1
1106 756 267 1595
operating lease and servicing costs 136 56 — 192
cost of goods of device sales under finance leases 70 81 — 151
cost of goods of outright device sales 215 132 — 347
intersegment costs 267 — 267 —
segment gross profit
1
418 487 — 905
selling and distribution costs 324
administrative and other expenses 512
operating profit 69
net finance costs 26
profit from continuing operations before taxation 95
taxation 31
net profit for the year 64
assets and liabilities
segment assets 1260 2044 1561 1743
unallocated assets 528
total assets 2271
segment liabilities 1224 710 1561 373
unallocated liabilities 643
total liabilities 1016
other segment information
capital expenditure 
property plant and equipment 17 21 — 38
intangible fixed asset 02 09 — 11
depreciation 39 36 — 75
amortisation 12 32 — 44
loss on disposal of noncurrent assets 04 — — 04
exceptional items includes intangible asset impairment 40 37 — 03
1  segment revenue and gross profit includes other operating income of 13m which relates to income derived from extension of existing finance lease contracts this presented as other 
income on the face of the income statement
unallocated assets primarily comprise goodwill cash and shortterm deposits and deferred tax assets
unallocated net liabilities comprise financial liabilities and taxation
revenue includes 279m attributable to the uk noncurrent assets excluding deferred tax assets and investments include 246m attributable to the uk overview strategic report governance financial statements
optos plc annual report and accounts 2013 89
3 segmental analysis continued
an analysis by operating segment is given below for the year ended 30 september 2012
americas 
2012 
m
international 
2012
m
eliminations 
2012 
m
total
2012
m
revenue 
operating lease and variable revenue from rental of devices 451 74 — 525
device sales under finance leases 484 157 — 641
device sales – outright 407 235 — 642
service and warranty contracts 136 20 — 156
intersegment sales — 299 299 —
segment revenue
1
1478 785 299 1964
operating lease and servicing costs 205 88 — 293
cost of goods of device sales under finance leases 161 79 — 240
cost of goods of outright device sales 163 149 — 312
intersegment costs 299 — 299 —
segment gross profit
1
650 469 — 1119
selling and distribution costs 348
administrative and other expenses 541
operating profit 230
net finance costs 04
profit from continuing operations before taxation 234
taxation 58
net profit for the year 176
assets and liabilities
segment assets 1301 2019 1522 1798
unallocated assets 383
total assets 2181
segment liabilities 1312 661 1522 451
unallocated liabilities 544
total liabilities 995
other segment information
capital expenditure
property plant and equipment 49 51 — 100
intangible fixed assets 78 211 — 289
depreciation 118 50 — 168
amortisation 15 59 — 74
loss on disposal of noncurrent assets 02 — — 02
exceptional items includes intangible asset impairment 20 24 — 04
1  segment revenue and gross profit includes other operating income of 32m which relates to income derived from extension of existing finance lease contracts this presented as other 
income on the face of the income statement
unallocated assets primarily comprise goodwill cash and shortterm deposits and deferred tax assets
unallocated net liabilities comprise financial liabilities and taxation 
revenue includes 251m attributable to the uk noncurrent assets excluding deferred tax assets and investments include 245m attributable to the uk  optos plc annual report and accounts 2013 90
notes to the consolidated financial statements continued
for the year ended 30 september 2013
4 exceptional items
2013 
m 
2012
m
royalty release 48 22
restructuring costs 08 —
foreign exchange loss 23 —
development cost impairment 14 —
employee overtime claims — 16
acquisition costs — 10
contingent consideration — 08
intangible asset and related trading balances impairment — 33
total exceptional charges recognised in the year 03 29
royalty release and intangible asset impairment
the group reviews acquisitions at the end of each financial year
as part of the opko instrumentation acquisition in september 2011 contingent royalties amounting to 85m were payable on future product sales 
at 30 september 2012 the fair value of this contingent royalty payment was revised downwards from 85m to 63m to reflect the revenue and 
product mix projections see note 18 as at 30 september 2013 an agreement has been reached with opko to settle the future royalty payments 
associated with the acquisition for 15m resulting in 48m release of the provision in the year 
as part of the acquisition of opto global holdings pty ltd intangible assets were recognised relating to a number of key supplier relationships 
due to difficult trading circumstances at one of these suppliers the carrying value of the intangible asset attributed to this supplier was impaired 
at 30 september 2012 trading balances also existed between group companies and this supplier to reflect the uncertainty as to when these 
amounts might be recoverable a position was taken to charge the full amount of 33m in the year ended 30 september 2012 as an exceptional 
item this charge was made up of a noncash item of 25m relating to the supplier intangible asset and 08m relating to the trading amount
restructuring costs
on 1 may 2013 the group announced a restructuring of the business into two regional businesses americas and international as part of this 
restructuring the rd facility in canterbury and the oct manufacturing site in miami were closed moving production to the existing uwf site 
in boston the cost of restructuring amounted to 08m and comprised redundancy costs of 07m and other of 01m
foreign exchange loss
as a consequence of adverse exchange rate movements in particular the usd to aud rate the group incurred a material adverse charge of 23m 
relating to the translation of inter company balances the adverse exchange movement has been treated as exceptional this year due to the material 
level of the exchange loss recognised and its overall impact on the accounts in comparison to the profit for the year the material level of exchange 
difference is considered to be one off in nature 
development costs 
the group has taken the decision to stop development of the existing stand alone oct device and therefore has written off the associated 
development costs of 14m with progress being made on the combined uwfoct device it was determined to utilise existing group resources 
to focus on the development of this overview strategic report governance financial statements
optos plc annual report and accounts 2013 91
4 exceptional items continued
employee overtime claims
in the year to 30 september 2011 a number of current and former us based employees of optos inc filed a claim against the company that their 
employed status should be nonexempt thus entitling them to be paid on an hourly basis rather than on a salaried basis and to be paid additional 
sums for overtime the claim amounted to 16m and was settled during the first half of the financial year ended 30 september 2013
acquisition costs
during the year ended 30 september 2012 the group incurred a further 10m of acquisition costs in respect of the opko health transaction of which 
05m was incurred in the period to 31 march 2012
contingent consideration
the group acquired 100 of the share capital of opto global holdings pty ltd on 13 december 2010 for 143m the purchase consideration included an 
estimated 25m relating to the fair value of the contingent consideration the expectation at 30 september 2011 was that the conditions relating 
to the contingent consideration would no longer be met and 17m was released at that time during 2012 the fair value of the contingent consideration was 
further reassessed at zero resulting in a credit of 08m to the income statement and no payment was made this was due to lower than expected sales 
primarily the result of delays in the integration of the productsdistributors as well as the time taken to obtain regulatory approval 
5 revenue and expenses
2013 
m 
2012
m
revenue
operating lease and variable revenue from rental of devices 186 525
device sales under finance leases 326 619
device sales – outright 795 632
service and warranty contracts 275 156
revenue 1582 1932
other operating income 13 32
finance revenue 50 28
total revenue 1645 1992
cost of sales 690 845
gross margin 955 1147
no revenue was derived from exchanges of goods or services
operating lease and variable revenue from rental of devices includes 186m 2012 525m from rental contracts with customers where substantially 
all the risks and rewards of ownership remain with optos being 122m 2012 431m from fixed monthly minimum payments to which customers have 
contracted plus 64m 2012 94m from the variable per optomap revenue for tests performed over the monthly minimum levels
revenue from the sales of devices classified as finance leases is the lower of an amount equal to the fair value of the asset or the present value of the 
minimum leased payments from rental contracts where the rental agreement has been assessed as a finance lease
service and warranty contracts relate to revenues from contracts to maintain and service the company’s devices
other operating income of 13m 2012 32m relates to additional income from contracts that had been previously recognised as finance leases  optos plc annual report and accounts 2013 92
notes to the consolidated financial statements continued
for the year ended 30 september 2013
5 revenue and expenses continued
certain of the contractual arrangements with the customers fall as being operating leases future minimum rentals receivable under  
noncancellable operating leases with customers are as follows
2013 
m 
2012
m
not later than one year 43 150
after one year but not more than five years 16 100
after five years — —
59 250
 notes
2013 
m 
2012
m
profit from continuing operations before taxation is stated after charging
depreciation charge for the period 10 75 168
rd expenditure
1
94 85
amortisation of software
2
11 05 05
amortisation of other intangibles and development costs 11 39 69
operating lease rentals 19 15
sharebased payments 03 02
foreign exchange differences 23 12
1  includes 30m 2012 57m in respect of the amortisation of intangible assets which is recognised in administrative and other expenses through the income statement in addition 09m 
2012 64m of rd expenditure was incurred which has not been charged in arriving at the pretax profit for the period as it has been capitalised as an intangible asset further information 
is included in note 11 to the group financial statements
2  amortisation of software and acquired intangibles is recognised in administrative and other expenses through the income statement
services provided by the group’s auditor and network firms
during the year the group including its overseas subsidiaries obtained the following services from the group’s auditor at costs as detailed below
2013 
m 
2012
m
fees payable to the company’s auditor for the audit of the company’s annual accounts including estimated expenses 03 02
all other services 01 —
04 02
other services relate primarily to half year review procedures and tax compliance services in australia
profit attributable to the company
the profit for the year ended 30 september 2013 attributable to optos plc is 60m 2012 113m  overview strategic report governance financial statements
optos plc annual report and accounts 2013 93
6 financing
2013 
m 
2012
m
finance costs
finance lease interest payable 15 19
bank interest payable 09 05
24 24
finance revenue
finance lease interest receivable 50 28
bank interest receivable — —
50 28
7 directors and employees
2013 
m 
2012
m
staff costs for the group during the year
wages and salaries 449 500
social security costs 38 44
defined contribution pension costs 11 06
sharebased payments 01 02
499 552
the average monthly number of persons employed during the year was as follows
2013 
number 
2012
number
executive directors 2 2
field sales and support 183 187
manufacturing and refurbishment 128 110
product development 53 50
central 58 65
marketing 11 12
435 426
the above tabulation excludes the nonexecutive directors
the directors’ remuneration during the year was as follows
2013 
m 
2012
m
directors’ remuneration 15 14
aggregate gains made by directors on the exercise of options — —
pension contributions 01 01
number of directors accruing benefits under
defined contributions pension scheme 2 2 optos plc annual report and accounts 2013 94
notes to the consolidated financial statements continued
for the year ended 30 september 2013
8 taxation
analysis of tax chargecredit in the year
2013
m 
2012
m
tax on profit on ordinary activities
corporation tax at 235 2012 25
current year tax charge — —
adjustment in respect of prior periods 01 —
overseas taxes – prior year 07 03
overseas taxes – current year 01 09
current year tax charge 09 12
deferred tax 
origination and reversal of timing differences 11 51
adjustment in respect of prior periods 09 09
impact of tax rate change 02 04
total deferred tax charge 22 46
total income tax charge 31 58
the tax charge to the income statement includes a charge of 16m in relation to exceptional items 2012 credit 17m
2013
m 
2012
m
corporation tax reconciliation
group profit on ordinary activities before taxation 95 234
group profit on ordinary activities multiplied by the standard rate  
of corporation tax in the uk of 235 2012 25 22 59
effects of
permanent adjustments 03 07
effect of overseas tax rates 06 13
prior period unrecognised deferred tax asset 17 —
enhanced relief for rd expenditure 04 05
adjustment in respect of prior periods 17 06
effect of tax rate and law changes 02 04
expiry of tax losses 01 —
sharebased payments 01 —
total tax charge for the year 31 58 overview strategic report governance financial statements
optos plc annual report and accounts 2013 95
8 taxation continued
deferred income tax at 30 september 2013 and 30 september 2012 recognised in the balance sheet related to the following
group company
2013
m
2012
m
2013
m
2012
m
deferred tax assets
accelerated capital allowances 27 12 06 06
development costs 14 — 14 —
deferred revenue 08 08 — —
sharebased payments 05 12 05 08
other temporary differences 12 19 — —
tax losses 68 28 23 24
net deferred income tax asset 28 55 20 38
presented in the balance sheet as follows 
group company
2013
m
2012
m
2013
m
2012
m
deferred tax assets 38 55 20 38
deferred tax liabilities 10 — — —
net deferred income tax asset 28 55 20 38
group
the deferred tax movement results from the annual review of deferred tax asset recognition the conclusion of which is that it is appropriate based 
on projected future profitability in each of the relevant territories to recognise all deferred tax assets these assets will be recovered when future 
tax charges are sufficient to absorb these tax benefits
company
all deferred tax assets at 30 september 2013 have been recognised based on projected future profitability these assets will be recovered when 
future tax charges are sufficient to absorb these tax benefits
deferred income tax at 30 september 2013 and 30 september 2012 recognised in the income statement related to the following
group company
2013
m
2012
m
2013
m
2012
m
deferred tax chargescredits
accelerated capital allowances 15 15 01 01
development costs 14 08 14 08
deferred revenue — 06 — —
sharebased payments 02 01 01 01
other temporary differences 31 02 — 01
tax losses 40 66 01 40
net deferred income tax credit 22 46 15 31 optos plc annual report and accounts 2013 96
notes to the consolidated financial statements continued
for the year ended 30 september 2013
8 taxation continued
tax losses
deferred tax assets have been recognised in 2013 in respect of historic tax losses incurred in the uk us and germany as there is sufficient evidence 
in the form of projected future profitability to conclude that these losses will be recoverable in the foreseeable future a deferred tax asset of 15m 
relating to unused tax losses in australia has now been recognised as there is sufficient certainty in relation to the recoverability of the asset in 2012 
the deferred tax asset of 10m was not recognised in relation to unused australian tax losses
impact of future tax rate changes
the main rate of corporation tax was reduced from 24 to 23 from 1 april 2013 and legislation to reduce the main rate of corporation tax from 23 
to 21 from 1 april 2014 and from 21 to 20 from 1 april 2015 was included in the finance act 2013 which was substantively enacted on 2 july 2013
9 profit per ordinary share
basic earnings per share amounts are calculated by dividing the profit before taxation and the profit after taxation for the financial year by the 
weighted average number of ordinary shares outstanding during the year
diluted earnings per share amounts are calculated by dividing the profit before taxation and the profit after taxation for the financial year by 
the weighted average number of ordinary shares outstanding during the year adjusted for the effects of dilutive options in the case of a loss 
no impact for further dilution is reflected as this would not have the effect of increasing the loss per share and is therefore not dilutive
the profit per ordinary share is calculated as follows 
2013 2012
weighted average number of ordinary shares in issue 71991614 71463266
effect of dilution share options 2233625 2189043
adjusted weighted average number of ordinary shares for diluted earnings per share 74225239 73652309
profit before exceptional items and taxation m 92 263
basic profit before exceptional items and taxation per share cents 128c 368c
diluted profit before exceptional items and taxation per share cents 124c 357c
profit before exceptional items after taxation m 77 188
basic profit before exceptional items after taxation per share cents 107c 263c
diluted profit before exceptional items after taxation per share cents 104c 256c
profit before taxation m 95 234
basic profit before taxation per share cents 132c 327c
diluted profit before taxation per share cents 128c 317c
profit after taxation m 64 176
basic profit after taxation per share cents 89c 246c
diluted profit after taxation per share cents 86c 239c overview strategic report governance financial statements
optos plc annual report and accounts 2013 97
10 property plant and equipment
group
leasehold 
improvements 
m 
medical 
devices
m 
plant and
equipment
m 
total
m
cost
at 1 october 2012 33 473 110 616
additions — 17 21 38
transfer to inventory — 15 — 15
reclassification of asset 02 22 24 —
disposals — 388 13 401
exchange adjustment — 01 — 01
at 30 september 2013 31 64 142 237
depreciation
at 1 october 2012 17 341 79 437
charge for year 03 53 19 75
reclassification of asset — 06 06 —
disposals — 354 10 364
exchange adjustment — 01 — 01
at 30 september 2013 20 33 94 147
net book value at 30 september 2013 11 31 48 90
cost
at 1 october 2011 21 1334 116 1471
additions 12 74 14 100
transfer to inventory — 06 — 06
reclassified as intangible asset — — 15 15
disposals — 921 05 926
exchange adjustment — 08 — 08
at 30 september 2012 33 473 110 616
depreciation
at 1 october 2011 12 968 78 1058
charge for year 05 155 08 168
reclassified as intangible asset — — 05 05
disposals — 777 02 779
exchange adjustment — 05 — 05
at 30 september 2012 17 341 79 437
net book value at 30 september 2012 16 132 31 179 optos plc annual report and accounts 2013 98
notes to the consolidated financial statements continued
for the year ended 30 september 2013
10 property plant and equipment continued
company
leasehold 
improvements 
m 
medical 
devices
m 
plant and
equipment
m 
total
m
cost
at 1 october 2012 13 80 80 173
additions — 08 08 16
reclassification of asset — 21 21 —
transfer to inventory — 03 — 03
disposals — 39 — 39
at 30 september 2013 13 25 109 147
depreciation
at 1 october 2012 10 47 59 116
charge for year 01 10 12 23
reclassification of asset — 06 06 —
disposals — 34 — 34
at 30 september 2013 11 17 77 105
net book value at 30 september 2013 02 08 32 42
cost
at 1 october 2011 12 119 70 201
additions 01 19 17 37
reclassified as intangible asset — — 07 07
transfer of inventory — — — —
disposals — 58 — 58
at 30 september 2012 13 80 80 173
depreciation
at 1 october 2011 09 66 53 128
charge for year 01 21 06 28
transfer of inventory — — — —
disposals — 40 — 40
at 30 september 2012 10 47 59 116
net book value at 30 september 2012 03 33 21 57
medical devices refer to retinal examination equipment being used or expected to be used under operating lease agreements medical devices are 
depreciated from the point of activation at the relevant customer site in the case of a device that is removed from one customer site upgraded and 
relocated to a new customer site depreciation is recalculated to write off the remaining net book value of that device together with the additional 
capitalised costs relating to the upgrade and installation over the remaining useful economic life of the asset disposals primarily relates to devices 
where the remaining net book value is recognised as cost of goods sold as a result of the existing customer purchasing the device outright or 
renewing a rental contract as a finance lease the reclassification is in relation to retinal examination equipment now being used in clinical trials 
demonstration and marketing devices as opposed to operating leases 
the group has reviewed the economic useful lives of all assets and has determined that certain elements of medical devices for example installation 
costs computer and other peripherals have a useful economic life of between two and five years depending on the specific circumstances of the 
assets including the period over which the medical device is expected to be maintained at a particular customer site  overview strategic report governance financial statements
optos plc annual report and accounts 2013 99
10 property plant and equipment continued
these peripheral components do not have a cost that is significant in relation to the total cost of the device and the medical device itself 
is still considered to have a useful economic life of between two and five years
the carrying value of plant and equipment and medical devices held subject to finance lease obligations at 30 september 2013 was 05m 
2012 19m for the group and nil 2012 nil for the company legal title to the leased assets transfers to the debt provider as security for 
the term of the agreement 
11 intangible assets
group
development
costs
m 
software 
costs 
m
licences and
relationship
costs
m
goodwill
costs
m
total
m
cost
at 1 october 2012 341 51 70 251 713
additions – internal development 09 — — — 09
additions – purchased externally — 02 — — 02
disposals — 06 — — 06
at 30 september 2013 350 47 70 251 718
accumulated amortisation
at 1 october 2012 160 39 43 — 242
amortisation in year 30 05 09 — 44
impairment note 4 14 — — — 14
disposals — 05 — — 05
at 30 september 2013 204 39 52 — 295
net carrying amount at 30 september 2013 146 08 18 251 423
cost
at 1 october 2011 211 33 60 105 409
additions – internal development 64 03 — — 67
additions – purchased externally 66 — 10 146 222
additions – reclassified from tangible assets — 15 — — 15
at 30 september 2012 341 51 70 251 713
accumulated amortisation
at 1 october 2011 103 29 06 — 138
amortisation in year 57 05 12 — 74
additions – reclassified from tangible assets — 05 — — 05
impairment note 4 — — 25 — 25
at 30 september 2012 160 39 43 — 242
net carrying amount at 30 september 2012 181 12 27 251 471
the group capitalised 09m 2012 67m of expenditure incurred on intangible assets and acquired intangible assets of nil 2012 222m as part 
of the business combination
the main development asset relates to daytona which is carried at 73m 2012 95m and has a remaining useful economic life of six years optos plc annual report and accounts 2013 100
notes to the consolidated financial statements continued
for the year ended 30 september 2013
11 intangible assets continued
company
development
costs
m 
software
costs 
m
licences
relationship
 and 
intellectual
property costs
m
goodwill
costs
m
total
m
cost
at 1 october 2012 342 38 — — 380
additions – internal development 08 — — — 08
additions – purchased externally — — — — —
additions – reclassified from tangible assets — — — — —
at 30 september 2013 350 38 — — 388
accumulated amortisation
at 1 october 2012 160 31 — — 191
amortisation in year 30 02 — — 32
impairment note 4 14 — — — 14
at 30 september 2013 204 33 — — 237
net carrying amount at 30 september 2013 146 05 — — 151
cost
at 1 october 2011 211 31 — — 242
additions – internal development 65 — — — 65
additions – purchased externally 66 — — — 66
additions – reclassified from tangible assets — 07 — — 07
at 30 september 2012 342 38 — — 380
accumulated amortisation
at 1 october 2011 103 29 — — 132
amortisation in year 57 02 — — 59
at 30 september 2012 160 31 — — 191
net carrying amount at 30 september 2012 182 07 — — 189
on 13 december 2010 the group acquired 100 of the share capital of opto global holdings pty ltd for 143m at that date the fair value of the 
net assets and liabilities in opto global equalled 38m and consequently there is goodwill of 105m the group acquired the trade and assets of 
the instrumentation division of opko health inc on 11 october 2011 the fair value of the purchase consideration was 26m at the date of acquisition 
the fair value of net assets equated to 114m and therefore goodwill of 146m 
the goodwill acquired through business combinations has been allocated to the groups of cashgenerating units that are expected to benefit 
from the synergies of the acquisition optos has defined two cashgenerating units which are equivalent to the two operating segments americas 
and international the goodwill has been allocated 125m to americas and 126m to international based on the expected benefits that will arise 
from the acquisition overview strategic report governance financial statements
optos plc annual report and accounts 2013 101
11 intangible assets continued
for the purpose of impairment testing goodwill is reviewed at the operating segment level
in assessing whether goodwill has been impaired the carrying value of the operating segment including goodwill is compared with the recoverable 
amount of the operating segment the recoverable amount is based on value in use using discounted riskadjusted projections of the group’s pretax 
cash flows based on the future projections in line with the overall strategy the projection is based on forward plans for the next five years with a 
perpetual 1 increase for future years on the basis the business expects to continue to trade these projections are approved by senior management
for each operating segment we use an appropriate discount rate reflecting those risks and tax effects in arriving at the appropriate discount rate for 
each group of cash flows we adjust the group’s posttax weighted average cost of capital of 8 to reflect the impact of relevant risks the time value 
of money and tax effects the weighted average pretax discount rate used was between 11 and 12 
as a further check we compare our market capitalisation to the book value of our net assets and this indicates significant surplus at 30 september 2013
the group has also performed sensitivity analysis calculations on the projections the directors have concluded that given the significant headroom 
that exists and the results of the sensitivity analysis performed there is no significant risk that reasonable changes in any key assumptions would 
cause the carrying value of goodwill to exceed its value in use
12 investments in subsidiaries
company
shares in 
subsidiary
undertakings
m 
longterm
loans
to subsidiary
undertakings
m
total
m
cost
at 1 october 2012 143 14 157
at 30 september 2013 143 14 157
details of the investments in which the group and the company holds and the percentage of ownership of the nominal value of any class of share 
capital are as follows
name of company
country of 
registration proportion
optos inc usa 100
optos canada inc canada 100
optos gmbh germany 100
optos australia formerly opto global holdings pty ltd australia 100
optos kk japan 100
optos bv the netherlands 100 optos plc annual report and accounts 2013 102
notes to the consolidated financial statements continued
for the year ended 30 september 2013
13 finance lease receivables
group company
2013
m
2012
m
2013
m
2012
m
within one year 353 291 27 17
later than one year and not later than five years 589 609 56 40
later than five years 10 10 03 02
allowance for doubtful accounts 04 — 01 —
948 910 85 59
less finance income allocated to future periods 86 88 09 07
present value of minimum lease payments 862 822 76 52
within one year 309 250 23 14
later than one year and not later than five years 543 562 50 36
later than five years 10 10 03 02
862 822 76 52
included within
noncurrent assets 555 572 54 38
current assets 311 250 23 14
allowance for doubtful debts 04 — 01 —
862 822 76 52
group company
2013
m
2012
m
2013
m
2012
m
ageing of impaired but not yet past due finance lease receivables
within one year 02 — — —
later than one year and not later than five years 02 — 01 —
later than five years — — — —
04 — 01 —
during the year the group recognised finance lease agreements with customers totalling 339m variable rentals from finance leases amounted 
to 50m the average effective interest rate in relation to finance leases is 60 company 64
14 inventories
group company
2013
m
2012
m
2013
m
2012
m
raw materials spares and consumables 173 218 81 93
workinprogress 16 12 16 12
medical devices for sale 157 61 43 19
346 291 140 124
inventory valued at 10m 2012 03m has been written off in the normal course of business as it was not deemed to be economical to repair 
or became obsolete overview strategic report governance financial statements
optos plc annual report and accounts 2013 103
15 trade and other receivables
group company
2013
m
2012
m
2013
m
2012
m
trade debtors 227 263 42 55
allowance for doubtful debts 23 13 05 01
204 250 37 54
amounts due from group undertakings — — 1282 1237
valueadded tax recoverable 17 09 17 09
prepayments 23 34 05 06
other receivables 06 02 06 —
250 295 1347 1306
trade receivables generally have payment terms of 30–90 days
group company
2013
m
2012
m
2013
m
2012
m
analysis of trade receivables
neither impaired nor past due 172 203 32 47
past due not impaired 32 47 05 07
impaired 23 13 05 01
227 263 42 55
the group is exposed to credit risk over a large number of customers and there is no significant concentration of risk 
group company
2013
m
2012
m
2013
m
2012
m
ageing of past due but not impaired trade receivables
up to one month 17 34 03 05
between one and two months 05 05 01 01
more than two months 10 08 01 01
32 47 05 07
group company
2013
m
2012
m
2013
m
2012
m
movement in the allowance for doubtful debts
balance at beginning of year 13 08 01 01
impairment losses recognised on receivables 21 15 07 02
amounts written off as uncollectible 01 03 — 01
amounts recovered during the year 10 07 03 01
balance at end of year 23 13 05 01 optos plc annual report and accounts 2013 104
notes to the consolidated financial statements continued
for the year ended 30 september 2013
16 cash and cash equivalents
group company
2013
m
2012
m
2013
m
2012
m
cash at bank and in hand 238 65 159 —
shortterm deposits 01 01 — —
239 66 159 —
cash at bank earns interest at floating rates based on daily bank deposit rates
17 financial liabilities
group company
2013
m
2012
m
2013
m
2012
m
bank loan
current 380 — 380 —
noncurrent — 300 — 300
380 300 380 300
the group has in place a revolving credit facility rcf of up to 50m this facility was used to fund the acquisition of the opko instrumentation division 
and for working capital purposes 380m was drawn down as at 30 september 2013 amounts outstanding under the rcf incur interest between 145 
and 215 above libor the facility expires in september 2014
group company
2013
m
2012
m
2013
m
2012
m
obligations under vendor financing
current 115 118 — 01
noncurrent 138 127 — —
253 245 — 01
group company
2013
m
2012
m
2013
m
2012
m
amounts payable
within one year 125 128 — 01
between one and two years 144 79 — —
between two and five years 03 55 — —
272 262 — 01
less finance charges allocated to future periods 19 17 — —
253 245 — 01
during the year the group raised additional funding through vendor finance of 151m 2012 123m and made repayments to thirdparty providers 
of vendor finance of 143m 2012 232m  overview strategic report governance financial statements
optos plc annual report and accounts 2013 105
17 financial liabilities continued
as at 30 september 2013 33 2012 38 of the finance lease rental agreements were collateralised against debt finance and 3 2012 9 of the 
operating leases rental agreements were collateralised against debt finance
the weighted average outstanding lease term is 215 months 2012 198 months the weighted average effective borrowing rate for 2013 was 52 
2012 59 all leases are on a fixed repayment term and no arrangements have been entered into for contingent rental payments
18 provisions
group company
2013
m
2012
m
2013
m
2012
m
at 1 october
provided in the year
67
02
04
63
05
—
03
02
released in the year 49 — 02 —
reclassified to trade and other payables 15 — — —
at 30 september 05 67 03 05
current 05 03 03 03
noncurrent — 64 — 02
05 67 03 05
provisions include 02m in relation to a voluntary disclosure to us customs under the customs’ reconciliation programme the remaining balances 
relates to social security contributions on share options
the royalty provision has been revised downwards from 63m to 15m resulting in a 48m credit to the income statement as noted in note 4 reflecting 
a negotiated settlement with the vendor the agreed royalty settlement payment is due to be made within one year and has been reclassified to 
current trade and other payables
social security contributions on share options included in provisions
social security contributions on share options are considered to fall within the scope of ifrs 2 and are measured as though a cashsettled option under 
ifrs 2 the provision is calculated based on the options outstanding at the balance sheet date that are expected to be exercised and relate to the expired 
portion of the vesting period and using the fair value of the options at the balance sheet date it is expected that the costs will be incurred during the 
exercise period to june 2023
19 government grants
group company
2013
m
2012
m
2013
m
2012
m
at 1 october — 03 — 03
released to the income statement — 03 — 03
at 30 september — — — —
current — — — —
noncurrent — — — —
— — — — optos plc annual report and accounts 2013 106
notes to the consolidated financial statements continued
for the year ended 30 september 2013
20 trade and other payables
group company
2013
m
2012
m
2013
m
2012
m
bank overdraft — — — 05
trade payables 144 88 104 65
amounts due to group undertakings — — 235 233
other taxes and social security costs 13 16 05 06
other payables 15 01 — —
deferred income 110 144 16 16
accruals 86 133 34 39
368 383 394 364
optos’ policy for the year ended 30 september 2013 for all suppliers was to fix terms of payment when agreeing the terms of the credit account 
to ensure that the supplier was aware of the terms and to abide by the agreed terms of payment trade payables are typically paid twice monthly 
with terms equivalent to an average of 35 days
other payables are noninterest bearing and have an average term of between 30 and 60 days
deferred income represents prepaid service contracts and other items where delivery of the underlying product or service has yet to be delivered
21 operating lease commitments – minimum lease payments
at 30 september 2013 the group had commitments under noncancellable operating leases as follows
group company
2013
m
2012
m
2013
m
2012
m
land and buildings
within one year 13 12 05 04
in the second to the fifth year 38 31 11 11
after the fifth year 03 06 01 04
54 49 17 19
the group entered into eight commercial leases on property commencing august 1999 which had a lease period of 20 years december 2005 which had 
a lease period of 10 years may 2006 which had a lease period of 5 years october 2007 which had a lease period of 10 years june 2010 which had a lease 
period of 3 years october 2011 which had a lease period of 5 years january 2013 which had a lease period of 7 years and february 2013 which had a lease 
period of 2 years there are no renewal options or escalation costs included within the contracts there are no restrictions placed upon the lessee 
by entering into these leases the may 2006 lease has been renewed until may 2014
22 capital commitments
in the normal course of business of agreeing contractual relationships with customers the group is committed to incurring around nil of costs in the year 
to 30 september 2013 2012 01m these costs will enhance the value of the device and will be capitalised into property plant and equipment when incurred  overview strategic report governance financial statements
optos plc annual report and accounts 2013 107
23 called up share capital
equity share capital
2013
number
million
2012
number
million
authorised share capital
ordinary shares of 2p each 90 90
the company has one class of ordinary share which carries no rights to fixed income
2013 2012
at 1 october ordinary shares of 2p each issued and fully paid up 71589046 71263926
exercise of employee share options 622887 325120
at 30 september ordinary shares of 2p each 72211933 71589046
consideration received on issue of shares
share 
capital
2013 
m
share
premium 
2013
m
share 
capital
2012 
m
share
premium
2012
m
issue of ordinary share capital for acquisition — — — —
exercise of employee share options 01 03 — 03
total 01 03 — 03
consideration received 01 03 — 03
24 sharebased payments
the company has operated discretionary share option arrangements both pre and post its admission to the main market of the london stock 
exchange in february 2006 ipo
option movements during year
the charge recognised from equitysettled sharebased payment transactions for employee services received during the year ended 30 september 2013 
is 03m 2012 charge of 01m with a credit of 02m 2012 charge of 01m in respect of national insurance
option terms
preipo discretionary options that remain outstanding vested over the three years commencing on the date on which the option was granted 
one third of the options vested on grant and the remaining twothirds vested over the following 36 months on a monthly basis
a further vesting arrangement was utilised in respect of two separate grants the first grant is subject to timebased vesting with onethird of the 
option vesting on the first second and third anniversaries of the date of grant
all preipo option agreements contain provisions for the full acceleration of the option on a change in the control of the company option holders 
who cease to be employees of the group are entitled to exercise their vested options in full for a period of either one month or six months following 
cessation of employment depending on the reasons for that cessation
new share plans were introduced post ipo as detailed overleaf
all option agreements contain provisions enabling the adjustment of the number of shares subject to option and the exercise price in the event 
of capitalisation issue subdivision or consolidation of ordinary shares all options are to be settled by way of equity with a maximum term of ten years 
from the date of grant optos plc annual report and accounts 2013 108
notes to the consolidated financial statements continued
for the year ended 30 september 2013
24 sharebased payments continued
employee stock purchase plan espp
shareholder approval to implement an espp for usbased employees was 
given at the company’s annual general meeting held on 21 february 2012 
this incentive scheme mirrors the type and efficiencies of the saye 
scheme currently in place in the uk eligible employees will have the 
opportunity to participate in this scheme in the financial year ending 
30 september 2014 the remuneration committee has resolved to 
offer participants the maximum allowable discount
sharesave
the date of grant was 22 december 2011 with a contract saving start 
date of 1 february 2012 it is a threeyear subscription the remuneration 
committee resolved that the option price for this grant was £164 which 
represented the maximum allowable 20 discount under the plan rules 
eligible employees will have the opportunity to participate in this scheme 
in the financial year ending 30 september 2014 the committee once 
again resolved to offer participants the maximum allowable discount
the optos performance share plan 2007
a performance share plan supervised by the remuneration committee 
which grants awards of conditional shares a nil or nominal cost option 
with a short exercise period or as forfeitable shares awards will normally 
vest on the third anniversary of grant other than in exceptional 
circumstances to the extent that applicable performance conditions 
have been met all awards are subject to performance conditions set 
by the committee and measured over a single threeyear period 
all awards normally lapse upon leaving employment however under 
certain circumstances such as death disability illness or the sale 
or transfer of a participant’s employing company then the award will 
normally vest subject to satisfaction of performance conditions and a 
pro rata basis for time between the grant and end of threeyear period 
as determined by the remuneration committee in the event of a takeover 
or scheme of arrangement of winding up of the company all awards will 
vest early to the extent that the performance conditions have or would 
have in the opinion of the remuneration committee been satisfied 
awards will then be subject to pro rata for time between the grant and 
threeyear period as determined by the remuneration committee 
unless it decides it is inappropriate to do so in the circumstances
the optos share option plan 2007
an option plan supervised by the remuneration committee structured 
to comprise elements approved by hm revenue and customs so as 
to provide uk tax qualified options as well as elements not so approved 
the plan also provides us employees with incentive stock options so as 
to achieve tax efficiencies in the us grants awards are made at an exercise 
price which is not less than the market value of the company’s ordinary 
shares on or around the time of grant awards will normally vest of the third 
anniversary of grant other than in exceptional circumstances to the extent 
that applicable performance conditions have been met any award can be 
subject to performance conditions set by the committee and measured 
over a single threeyear period
awards are required to be exercised within ten years of grant all awards 
normally lapse upon leaving employment however under certain 
circumstances such as death disability illness or the sale or transfer 
of a participant’s employing company then the award will normally vest 
subject to satisfaction of performance conditions where appropriate and 
a pro rata basis for time between the grant and end of threeyear period 
as determined by the remuneration committee in the event of a takeover 
or scheme of arrangement of winding up of the company all awards will 
vest early to the extent that the performance conditions where appropriate 
have or would have in the opinion of the remuneration committee been 
satisfied awards will then be subject to pro rata for time between the grant 
and threeyear period as determined by the remuneration committee 
unless it decides it is inappropriate to do so in the circumstances
the following table illustrates the number and weighted average exercise 
prices waep of and movements in share options during the year ended 
30 september 2013
2013
number
2013
waep
2012
number
2012
waep
outstanding at the 
beginning of the year
1
4485283 £062 4229874 £066
granted during the year 1637160 £071 1348691 £016
forfeited during the year 864072 £084 768162 £084
exercised during the year 622887 £278 325120 £255
outstanding at the end  
of the year
1
4635484 £068 4485283 £062
exercisable at the end  
of the year 1200073 £041 1384766 £047
1  included within this balance are options over 1500 2012 1500 2p shares that have not been 
recognised in accordance with ifrs 2 as the options were granted on or before 7 november 2002 
these options have not been subsequently modified and therefore do not need to be accounted 
for in accordance with ifrs 2 the weighted average share price during the year was £169 
2012 £197 overview strategic report governance financial statements
optos plc annual report and accounts 2013 109
24 sharebased payments continued
share options outstanding at the end of the period have the following exercise prices
expiry dates 
price
per share
2013
number
2012
number
options issued preflotation
june 2012 – november 2012 £100 — 1500
january 2013 – december 2013 £100 — 13500
february 2014 – december 2014 £100 13399 50288
january 2015 – december 2015 £100 168200 235375
january 2016 £100 500 2000
june 2016 £207 32500 32500
performance share plan 2007
march 2019 £002 590000 665000
december 2019 £002 175000 704845
may 2020 £002 — 21022
november 2020 £002 523914 659107
november 2021 £002 323947 372417
june 2022 £002 64474 64474
november 2022 £002 835917 —
share option plan 2007
may 2017 £248 26000 29000
january 2018 £124 85724 104086
january 2019 £076 49500 72250
december 2019 £092 59250 249500
may 2020 £129 — 7500
november 2020 £105 250000 287500
november 2021 £205 471500 562500
may 2022 £224 24000 32000
november 2022 £173 423864 —
june 2023 £120 10000 —
sharesave
july 2014 £103 166176 173515
july 2015 £164 100279 109167
july 2016 £130 105791 —
deferred bonus plan matching awards
december 2021 £nil 31897 36237
december 2022 £002 26182 —
espp
december 2022 235 77470 —
outstanding at the end of the year 4635484 4485283
157936 options were issued and forfeited during the year ended 30 september 2013 2012 152840 optos plc annual report and accounts 2013 110
notes to the consolidated financial statements continued
for the year ended 30 september 2013
24 sharebased payments continued
the fair value of equitysettled share options granted is estimated as at the date of grant using the blackscholes formula taking into account the terms 
and conditions upon which the options were granted the following table lists the inputs to the model used for the years ended 30 september 2013 and 
30 september 2012
summary of all awards not yet fully vested at 30 september 2013
june 2013
 share option
 plan
dec 2012
 espp
dec 2012
 sharesave
 plan
nov 2012 
psp
nov 2012
 share option
 plan
june 2012 
psp
may 2012
 share option
 plan
dec 2011
 sharesave 
plan
nov 2011 
psp
nov 2011
 share option
 plan
nov 2010
 sharesave 
plan
nov 2010 
psp
number of 
awards granted 10000 125876 119772 893966 461364 64474 32000 115752 496172 580000 251798 893028
dividend yield nil nil nil nil nil nil nil nil nil nil nil nil
expected volatility 45 44 43 43 43 44 46 48 50 50 54 54
riskfree 
interest rate 079 028 053 044 044 038 042 051 068 068 136 130
expected life  
of option years 3 217 3 3 3 3 3 3 3 3 3 3
share price at 
date of grant £113 284 £175 £180 £180 £190 £204 £219 £205 £205 £129 £124
exercise price £120 235 £139 £002 £173 £002 £224 £164 £002 £205 £103 £002
fair value at 
date of grant £033 £058 £067 £178 £056 £188 £057 £096 £203 £070 £057 £122
the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur the expected 
volatility reflects the assumption that the historical volatility is indicative of future trends which may also not necessarily be the actual outcome 
as the company and group have only a limited history of quoted share price volatility the expected volatility has been based on the historical 
volatility of comparative companies no other features of options granted were incorporated into the measurement of fair value 
25 related party transactions
group
during the year ended 30 september 2013 revenue totalling 1108621 2012 45322 at normal market prices was received by group companies from 
kehoe eyecare pc of which peter kehoe is a director and controlling shareholder there was nil outstanding at 30 september 2013 2012 3646 
no guarantees have been given or received no provisions have been made for doubtful debts in respect of the amounts owed by related parties
compensation of key management personnel
2013
m
2012
m
shortterm employee benefits 32 36
postemployment benefits 03 02
termination payments 03 03
sharebased payments 01 01
39 42
there were ten 2012 eleven key management personnel in 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 111
25 related party transactions continued
company
transactions with subsidiary companies
note
2013
m
2012
m
sales to subsidiary companies 367 238
purchases from subsidiary companies 46 63
amounts due from subsidiary companies 1282 848
amounts due to subsidiary companies 235 167
long term loans to subsidiary companies 12 14 14
no guarantees have been given or received no provisions have been 
made for doubtful debts in respect of the amounts owed by related parties
compensation of key management personnel
2013
m
2012
m
shortterm employee benefits 17 22
postemployment benefits 02 01
termination payments — 03
sharebased payments — 01
19 27
there were five 2012 six key management personnel in 2013
26 financial instruments disclosures
the group’s principal financial instruments comprise cash and 
finance leases
the main purpose of these financial instruments is to manage the group’s 
funding and liquidity requirements the group has other financial 
instruments such as trade receivables and trade payables which arise 
directly from its operations the principal financial risks to which the 
group is exposed are those relating to foreign currency credit liquidity 
and interest rate
foreign currency risk
the group has invested in overseas operations and also buys and sells 
goods and services in currencies other than in the functional currency 
of its relevant operations as a result the group’s nonus dollar revenues 
profits assets liabilities and cash flows can be affected by movements 
in exchange rates
the following table demonstrates the sensitivity to a reasonably possible 
change in the sterling against the us dollar the euro against the us dollar 
and australian dollar against the us dollar exchange rates with all other 
variables held constant of the group’s profit before tax due to fair value 
of monetary assets and liabilities an increase in currency rate is defined as 
a strengthening of sterling euro and australian dollar versus the us dollar
group and company
increase in 
currency rate
effect
on profit
m
decrease in 
currency rate
effect
on profit
m
2013
sterling versus 
us dollar 10 39 10 39
euro versus us dollar 10 06 10 06
australian dollar versus 
us dollar 10 13 10 13
2012
sterling versus 
us dollar 10 44 10 44
euro versus us dollar 10 — 10 —
australian dollar versus 
us dollar 10 09 10 09
the group monitors its nonus dollar foreign currency exposure and 
when deemed necessary by the board seeks to minimise its transaction 
exposure by using forward foreign currency contracts to eliminate 
exposures on any committed significant transactions the board has 
determined that it was not necessary to use forward foreign currency 
contracts in 2013 it is group policy not to engage in any speculative 
forward exchange transactions of any kind the group does not currently 
hedge currency exposure in its net investment on overseas operations  optos plc annual report and accounts 2013 112
notes to the consolidated financial statements continued
for the year ended 30 september 2013
26 financial instruments disclosures continued
credit risk
the credit risk on liquid funds is limited because the funds are deposited 
over a number of counterparties who are banks with a mix of high quality 
balance sheets high credit ratings assigned by international credit rating 
agencies or strong governmental support the group’s credit risk is 
primarily attributable to its trade receivables
the group is exposed to risk over a large number of customers and there 
is no significant concentration of risk the amounts presented in the 
balance sheet are net of allowance for doubtful receivables an allowance 
for impairment is made where there is an identifiable loss event which 
based on previous experience is evidence of a reduction in the 
recoverability of cash flows
trade receivables are denominated in the following currencies
group company
2013
m
2012
m
2013
m
2012
m
us dollar 151 181 22 33
sterling 12 09 12 09
canadian dollar 25 27 — —
euro 17 21 02 02
australian dollar 17 14 — —
other currencies 05 11 06 11
227 263 42 55
fair values of financial assets and financial liabilities
set out below is a comparison by category of carrying amounts and fair 
values of all of the group’s financial instruments
group
carrying 
amount
2013
m 
fair
value
2013
m
carrying 
amount
2012 
m 
fair
value
2012
m
financial assets
cash 239 239 66 66
finance lease 
receivables 862 862 822 822
financial liabilities
obligations under 
vendor financing 253 253 245 245
loan 380 380 300 300
company
carrying 
amount
2013
m 
fair
value
2013
m
carrying 
amount
2012 
m 
fair
value
2012
m
financial assets
cash 159 159 — —
finance lease 
receivables 76 76 52 52
financial liabilities
obligations under 
vendor financing — — 01 01
bank overdraft — — 05 05
loan 380 380 300 300
the fair value of items has been calculated by discounting the expected 
future cash flows at prevailing interest rates the carrying amounts of all 
other financial instruments of the group ie shortterm trade receivables 
and payables that are not included in the above table are a reasonable 
approximation of fair value the carrying amount recorded in the balance 
sheet of each financial asset represents the group’s maximum exposure 
to credit risk
the average length remaining on the finance lease obligations is 
215 months it has therefore been deemed that the carrying value 
is in line with the fair value
the weighted average effective interest rate on cash balances for 2013 
was 01 2012 01
interest rate risk
interest on financial instruments classified as fixed rate is fixed until the 
maturity of the instrument interest on financial instruments classified 
as floating rate is repriced at intervals of less than one year the other 
financial instruments of the group that are not included in the above 
tables are noninterest bearing and are therefore not subject to interest 
rate risk
excess cash is placed on shortterm interest bearing deposit accounts
based on current levels of net debt interest rate risk is not considered 
to be material overview strategic report governance financial statements
optos plc annual report and accounts 2013 113
26 financial instruments disclosures continued
interest rate risk continued
the following table demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant of the group’s 
profit before tax through the impact on floating rate deposits there is no impact on the group’s equity
group
increase
in basis
points
effect on
profit
before tax
m
2013
us dollar 50 01
2012
us dollar 50 01
company
increase
in basis
points
effect on
profit
before tax
m
2013
us dollar 50 01
2012
us dollar 50 01
liquidity risk
the group aims to mitigate its liquidity risk by managing its cash resources and improving its credit rating to facilitate effective fundraising 
the group’s funding objective is to maintain continuity of funding and flexibility through the use of internally generated funds and finance leases 
which it uses to fund the expansion of its business operations during the year ended 30 september 2013 the group continued to have access 
to sufficient funds to meet its business expansion needs excess cash is placed on shortterm interest bearing deposit accounts
the table below summarises the maturity profile of the group’s financial liabilities at 30 september 2013 based on contractual undiscounted payments
group
within 
1 year
 m 
1–2 
years 
m 
2–5 
years
m 
total
m
2013 
fixed rate
obligations under vendor financing 125 144 03 272
floating rate
trade and other payables excluding other taxes and social security costs 355 — — 355
loan 380 — — 380
group
within 
1 year
 m 
1–2 
years 
m 
2–5 
years
m 
total
m
2012
fixed rate
obligations under vendor financing 128 79 55 262
floating rate
trade and other payables excluding other taxes and social security costs 367 — — 367
loan — 300 — 300 optos plc annual report and accounts 2013 114
26 financial instruments disclosures continued
liquidity risk continued
company
within
1 year
m
1–2
years
m
2–5
years
m
total
m
2013  
fixed rate 
obligations under vendor financing — — — —
floating rate
trade and other payables excluding other taxes and social security costs 389 — — 389
bank overdraft — — — —
loan 380 — — 380
company
within
1 year
 m 
1–2
years 
m 
2–5
years
m 
total

2012
fixed rate
obligations under vendor financing 01 — — 01
floating rate 
trade and other payables excluding other taxes and social security costs 358 — — 358
bank overdraft 05 — — 05
loan — 300 — 300
capital management
the primary objective of the group’s capital management is to ensure 
that it maintains access to sufficient capital to continue to grow its business 
the group’s capital comprises equity attributable to equity holders vendor 
financing and bank shortterm deposits the group’s principal business 
model of placing medical devices with customers on a rental basis 
requires it to access capital to fund purchases of new medical devices 
which are included as property plant and equipment on the group’s 
balance sheet the group has however also increased the proportion 
of direct capital sales made to customers
in addition to debt finance the group maintains cash at bank and on 
shortterm deposits where it seeks to optimise the rates of interest 
received cash deposits are managed in parallel with levels of debt 
financing in order to provide sufficient levels of liquidity to settle its 
ongoing requirements for creditor payments the group tracks and 
manages its levels of net debt no changes were made in the objectives 
policies or processes during the years ended 30 september 2012 
and 30 september 2013
2013
m
2012
m
net debt
cash 239 66
debt 380 300
obligations under vendor financing 253 245
net debt 394 479
the group entered into a facility agreement with lloyds bank corporate 
markets in respect of the provision of bilateral multicurrency revolving 
credit facilities of up to 500m this facility is to be used to fund the 
acquisition of opko instrumentation division and for general working 
capital purposes and 380m was drawn and outstanding under the facility 
as at 30 september 2013 amounts outstanding under the rcf incur 
interest between 145 and 215 above libor
notes to the consolidated financial statements continued
for the year ended 30 september 2013 overview strategic report governance financial statements
optos plc annual report and accounts 2013 115
five year summary
2013
m
2012
m
2011
m
2010
m
2009
m 
revenue 1582 1932 1433 1063 972
gross profit 892 1087 914 709 590
operating expenses 839 889 663 534 505
other operating income 13 32 — — —
exceptional items 03 29 07 — 63
operating profit 69 230 244 175 22
profitloss before taxation 95 234 220 127 38
profitloss after taxation 64 176 228 140 43
diluted profitloss before taxation per ordinary share 128c 317c 307c 181c 55c
diluted profitloss after taxation per ordinary share 86c 239c 318c 199c 61c
net cash flow from operating activities 192 36 372 464 374
cash flow before tax financing and acquisitions 135 18 106 279 185
net debt 394 479 252 211 462 optos plc annual report and accounts 2013 116
corporate information
europe
optos plc registered office address
queensferry house 
carnegie business campus 
enterprise way 
dunfermline 
scotland ky11 8gr 
united kingdom
44 0 1383 843 300
optos gmbh
prinzenallee 7 
d40549 düsseldorf
49 0 2115 23910 
49 0 800 18 22 643
switzerland
optos switzerland
zweigniederlassung egg 
gewerbestrasse 9 
8132 egg
41 0 43 277 07 37
americas
optos inc
67 forest street 
marlborough ma 01752 
united states
tollfree 
1 800 854 3039
outside of the us 
1 508 787 1400
australia
optos australia
10 myer court 
beverley 
south australia 5009
61 8 8443 4533 optos plc’s commitment to environmental issues is reflected in this annual report and accounts which 
has been printed on symbol freelife satin fsc® certified and cocoon offset comprising 100 recycled 
fibre which are produced at mills with iso 14001 environmental management systems this report was 
printed by pureprint group using their environmental print technology which minimises the impact of 
printing on the environment vegetable based inks have been used and 99 of dry waste is diverted 
from landfill the printer is a carbonneutral® company optos plc
queensferry house 
carnegie business campus 
enterprise way 
dunfermline 
scotland ky11 8gr 
united kingdom
44 0 1383 843 300
optoscom
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Summary:
 optos plc annual report and accounts 2013 04
5945
1595
92
86
4775
1
1964
263
239
135
18
chairman’s 
statement
continued
as a result of the reduced revenue profit before tax and exceptional 
items was 92m fy12 263m with basic earnings per share before 
tax and exceptional items reducing to 128c fy12 368c
cash flow before acquisition and financing activities improved 
significantly in the year generating 105m compared to a 31m outflow 
last year due to revenue mix a higher proportion of capital sales and the 
timing of finance lease receipts as a result we were able to reduce net 
debt to 394m from 479m at the end of the previous financial year 
during the year we increased our revolving credit facility to 50m 
providing additional flexibility to fund the business
i look forward with confidence to next year with daytona remaining a key 
driver of revenue growth underpinned by strong clinical data that will help 
to increase penetration in the ophthalmology segment we also expect 
to see a continued reduction in the cost of the daytona device
finally i would like to thank louisa burdett for her contributions 
as chief financial officer and to welcome robert kennedy to the 
board as her successor i would also like to thank barry rose for his 
valuable contribution to the board over the last eight years both as 
audit committee chairman and senior independent director as always 
i would also like to thank our investors for their continued support during 
the past year and our employees for their outstanding efforts which 
have underpinned the advances achieved within the business
dr peter fellner
chairman
20 november 2013
headline financial results include
installed base up 25
revenue and other operating income down 19
m
profit before tax and exceptional items down 65
m
eps diluted down 64
cents
13
13
13
13
12
12
12
12
turn to page 31 to read 
our full financial review
cash before tax financing and acquisition up 153m 
m
13
12
1 the opening position has been slightly amended from 4689 to reflect a consistent presentation of distributor sales