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microsaic systems plc
annual report 2013
 
 
 
 
microsaic cover 4pp covermicrosaic cover 4pp cover  07052014  1048  page 2 microsaic systems is the innovative
hightechnology company developing
and marketing a new generation of
compact analysis equipment for
chemists
highlights 1
chairman’s statement 2
strategic report
company overview and business model 3
chief executive’s review 4
risks and uncertainties 8
performance measurement 9
governance
board of directors 10
directors’ report 11
directors’ remuneration report 14
corporate governance report 16
financial statements
independent auditors’ report 18
statement of comprehensive income 20
statement of changes in equity 21
statement of financial position 22
statement of cash flows 23
notes to the financial statements 24
annual general meeting
notice of the annual general meeting 40
notes 42
corporate information and advisors 44
microsaic cover 4pp covermicrosaic cover 4pp cover  07052014  1048  page 3 2013 highlights
• signing of an additional oem agreement for the sale of
the 4000 mid
®
as a standalone instrument
• launch of the microsaic 4000 mid
®
miniature mass
spectrometer at pittcon international trade fair
• launch of the isolera™ dalton by biotage ab the first
oem product containing 4000 mid
®
postperiod update
• launch of the midas™ compact interface module
• signing of precontract oem agreement for the sale of the
4000 mid
®
and midas™ for use in protein separation
applications
• appointment of andrew darby as finance director 
financial summary
• revenue up 92 to £117 million 2012 £061 million
• placing of 9951443 ordinary shares raising £428 million
before costs
• cash at 31 december 2013 £324 million 2012
£179 million
• total statutory loss for the year to 31 december 2013
£229 million 2012 £187 million
microsaic systems plc annual report and financial statements 2013 1
highlights
microsaicpp0107microsaic0107  07052014  1038  page 1 i am pleased to present the company’s
annual report  financial statements for
the year ended 31 december 2013 
2013 was a year where microsaic
achieved a number of key milestones most
notably the launch of the 4000 mid
®

it also saw the launch of the first oem
product to contain the 4000 mid
®
 the
biotage isolera™ dalton the company’s
product development program continued
apace with the more recent release of the
midas™ which will extend the reach of
microsaic’s technology into a wider range
of applications and environments
the 4000 mid
®
and the midas™ together
form the core technologies behind our
successful recent signing of a further
commercial agreement for the detection of
proteins we are excited by the opportunity
to work with a major global healthcare
equipment company the opportunities
provided by our ‘chip’ based technologies
and ‘plug and play’ offering will continue
to grow as we extend the capabilities of
our technology and product range over the
years to come
our relationship with biotage ab has moved forward and
we continue to work closely with them in addition to this
relationship we are excited by the size and quality of
companies that continue to approach us to discuss
commercial opportunities these relate to opportunities for
our single quad technology but also our in development
triple quad where a number of major global companies are
expressing a keen interest this product has undergone
successful prototype demonstrations and continues to make
positive progress towards completion 
over the last few years there has been a tangible
transformation in the nature of our business the evolution
from a university spinout into a quoted commercial
enterprise is evident the company’s strategy structure
culture and infrastructure have all developed significantly
which has led to a growing level of public and industry
recognitions 
in the past 12 months there have been two changes to the
board last summer eric yeatman stood down from the role
of chairman i would like to thank eric for his invaluable
input during his nine year tenure as chairman during this
time the company has achieved a growing reputation in
pioneering mass spectrometry miniaturisation we are
pleased that eric continues to serve as a member of the
board and brings expertise to bear on the advancement
of our unique technology 
more recently we announced the resignation of malcolm
bateman who has stepped down as finance director and
will leave the company at the end of april 2014 to pursue
his other interests malcolm joined microsaic in 2006 as
financial controller and was appointed to the board in
2011 he played a major part in the 2011 ipo and has
been an important member of the management team over
the past eight years we would like to thank him for his
contribution in securing microsaic’s development and wish
him well in the next stage of his career we are pleased to
welcome andrew darby aca as our new finance director
i would again like to thank our shareholders for their
support during the last year over 2014 we shall continue
to build upon the achievements already made and continue
to capitalise on the opportunities that are becoming
increasingly evident 
colin nicholl
chairman
29 april 2014
2 microsaic systems plc annual report and financial statements 2013
chairman’s statement
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 2 microsaic systems plc develops
microengineered analytical instruments that
are based on the scientific technique of
mass spectrometry ms ms is widely
accepted as one of the most reliable
methods for identifying the chemical
makeup of substances and microsaic is
the first and only company to have
commercialised and patented chipbased
ms technology using silicon
microengineering mems
the analysis method of choice
mass spectrometry is an established analytical technique
used in many laboratories which enables the accurate
identification and quantification of trace levels of chemical
or biological compounds by recording their unique
molecular weight today ms is the standard means of
measuring the composition of samples in pharmaceuticals
and biotechnology but is also widely used in a variety of
other industries including healthcare environmental food
and drink security petrochemicals and mining
by miniaturising ms to desktop size microsaic has made
it practical for a much wider range of users and
applications within these fields and opens up new
opportunities for the growing 3 billion ms market
a step change in laboratory capability
the company’s first product the microsaic 3500 mid
®

was launched in january 2011 and became the world’s
smallest ms system users are particularly impressed by the
selfcontained nature of the system – no other mass
spectrometer for liquid analysis has eliminated external
pumps and computers – and this gives the mid
®
a
revolutionary advantage in deployability ease of use and
cost of ownership these advantages have been recognised
within the wider industry too the 3500 mid
®
gained the
new product award from the us society of laboratory
automation and screening in 2011 and a prestigious
rd 100 award in 2012 as one of the most technologically
significant products to enter the marketplace globally
several articles have been published in scientific journals
citing new discoveries made using the mid
®

continuing evolution
the microsaic 4000 mid
®
has an even smaller footprint
than the 3500 mid
®
and fits even more comfortably into
a standard laboratory fume hood its ‘plug  play’
components also enable users to maintain the system
themselves resulting in less downtime and greater flexibility
within the laboratory the 4000 mid
®
was launched in
march at pittcon 2013 the world’s largest annual
conference and exposition on laboratory science and
scientific instrumentation 
we have an ongoing rd programme building on the
achievements already made and focused on increasing the
reach of our core ionchip
®
technology which underpins the
mid
®
 our product pipeline includes more complex ms
systems which will allow us to address more technically
demanding market areas such as food and drink and
environmental safety 
tapping into established sales channels through
valueadded partnerships
the company’s strategy is to generate revenue streams by
introducing compact deployable ms products based on its
patented chip technologies into a series of markets and
applications by selling through partnerships with existing
sales channels typically these sales channels will be
international suppliers of complementary equipment 
in 2012 a partnership was formed with biotage ab a well
established supplier in the areas of analytical and medicinal
chemistry microsaic is providing its 4000 mid
®
as an
original equipment manufacturer oem as part of an
integrated solution for massdirected flash purification that
is enabling a leap forward in chemists’ work flow and
productivity
further similar relationships are planned with other leading
suppliers of scientific equipment which will enable the
company to build up volume sales direct sales to end
users in niche application areas will also continue in
parallel
quality innovation moving forward
microsaic systems was established in 2001 from the highly
regarded optical and semiconductor devices group at
imperial college london it has been based at
headquarters in woking uk since september 2004 and
was admitted to aim a market of the london stock
exchange in april 2011 ticker msys
microsaic systems plc annual report and financial statements 2013 3
strategic report – company overview and business model
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 3 4 microsaic systems plc annual report and financial statements 2013
microsaic has enjoyed a highly productive
year in 2013 making notable progress in
our ongoing evolution into a successful
commercial business we continue to
execute our strategy of developing
commercial partnerships whilst at the
same time growing direct sales to end
users in parallel we have continued to
make significant technological advances
that will in time give us the capability
needed for our next generation of
products this will further broaden the
range of applications that our miniaturised
mass spectrometry ms instruments can
address
microsaic’s chipbased technology has allowed us to
miniaturise the mass spectrometer – the gold standard for
chemical analysis – far beyond any other product on the
market this miniaturisation greatly simplifies deployment
drastically cutting power consumption and other running
costs and makes ms much more accessible to lab scientists
than it has ever been before 
our lead ms instrument the microsaic 4000 mid
®
 was
officially launched in march 2013 at pittcon the major
annual international trade fair focused on scientific and
laboratory equipment which took place in philadelphia
usa the market’s response and subsequent acceptance
of the 4000 mid
®
has been enthusiastic and through
a combination of direct sales and shipments to our oem
partner we achieved a near doubling of our revenue for
the full year 2013 to £117 million £061 million in 2012 
commercial strategy
our main route to market for our product is as an original
equipment manufacturer oem through partnerships with
companies that have established global sales channels
these companies also have complementary products that
when combined with our product can deliver synergistic
benefits for the end users during the year we strengthened
our relationship with our existing oem partner biotage ab
in june biotage ab launched its fully integrated system for
flash chromatography and mass identification which
incorporated our core ms instrument the 4000 mid
®

demand for the integrated product the isolera™ dalton
has been good and shipments of the 4000 mid
®
to biotage
are in line with expectations
we continue to develop relationships with new potential
commercial partners in the pharma biotech and other
related sectors in this regard we were pleased to announce
in april 2013 the signing of an oem agreement for the
global nonexclusive marketing and sale of the 4000 mid
®
as a standalone instrument for use in direct and rapid ms
analysis successful trials have also been completed with
a number of other potential partners and discussions are
advancing with several of these aimed at securing
commercial agreements 
strategic report – chief executive’s review
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 4 microsaic systems plc annual report and financial statements 2013 5
we were pleased to announce on 14 april 2014 the
signing of a precontract commercial agreement to provide
the miniature mass spectrometer – the microsaic 4000
mid
®
– as an original equipment manufacturer oem
the agreement is for the global exclusive marketing and
sale of the 4000 mid
®
 along with the recently released
midas™ interface unit as a standalone instrument for use
in protein separation applications the partner is a major
international healthcare equipment company
the agreement is focused on the use of the 4000 mid
®
in conjunction with protein separation a major application
that is used globally and has increasing market demand
it follows a period of rd collaboration in which microsaic
has successfully adapted and enhanced the 4000 mid
®
to address this new application 
we will work towards completion and signing of a full
commercial contract which is anticipated to include a
commitment to purchase up to 50 units and consumables
of the 4000 mid
®
in the first year increasing to over
200 units and consumables from the fourth year onwards
the initial period of the contract is expected to be
48 months the selling price is in line with the board’s
expectations shipments under the agreement are
anticipated to commence in q1 2015
in addition to oem agreements for our products in the
major ms application areas we achieved a number of
direct sales to customers in new and highvalue application
areas direct contact with users is proving to be valuable as
a means of prioritising future product development and
rd programmes a number of key direct sales have
already been achieved and a pipeline has been established
for the coming year
the 4000 mid
®
is currently manufactured at our facility in
woking but in line with our commercial strategy and as
sales increase in 2014 we will be outsourcing the
production of the units to an accredited thirdparty supplier
new technologies
our marketing plan for 2013 has been directed towards
positioning microsaic as a solution provider for chemical
analysis rather than simply as a mass spectrometer vendor
in line with this plan we have been leveraging our technical
expertise to develop nextgeneration products that we
believe will significantly expand the range of applications
that our innovative ms instruments can address and that
endusers will increasingly demand
in january 2014 we launched the midas™ compact
interface module the midas™ unit has been designed to
extend the use of ms in the laboratory from specialist
analytical chemists to the wider research community
it connects to the 4000 mid
®
and offers automated sample
preparation and injection for direct ms analysis in realtime
at the lab bench or in the fume hood
our strategy is to commercialise midas™ alongside the
4000 mid
®
through partnerships with wellestablished
suppliers in the areas of analytical and medicinal chemistry
and directly to customers in niche application areas
in june 2013 we presented a working prototype of our
chipbased triple quadrupole mass spectrometer for the first
time at the american society of mass spectrometry asms
this new technology can analyse more complex materials
such as medical eg blood or saliva or environmental
samples and is an important achievement that has the
potential to further extend microsaic’s leading position in
miniaturised ms instrumentation we recently exhibited our
latest progress with this system at the major trade fair
pittcon in march 2014 where the reception from delegates
was very encouraging negotiations are ongoing with
a number of possible key ms instrument partners to develop
the triple quadrupole into a fully commercial product with
an expected launch date in 2015 
at the same event we displayed our concept product 4500
mid
®
instrument for the first time this system is an
extension of the 4000 mid
®
and has been designed for the
mass identification of larger molecules in sample mixtures
such as proteins and peptides we intend to launch this
product in the next twelve months and are already engaged
in discussions with potential oem partners to develop this
system further for commercialisation in several areas
microsaicpp0107microsaic0107  07052014  1038  page 5 financial results
revenues increased 92 to £1165235 in 2013 2012
£606281 oem sales volumes of the 4000 mid
®
have
been the principal contributor to this rise with regular
monthly shipments being made sales of consumables are
also rising and will become more significant over time as
the installed base grows 
research and development revenue streams are becoming
a less significant proportion of the total company income
but continue to make a contribution spending on rd
amounted to £927379 and was focused on product
enhancements in order to open up new application
opportunities for the mid
®
and on our triple quadrupole
mass spectrometer
the total comprehensive loss for the year was £2285158
compared to £1867069 in the previous year excluding
the effects of sharebased payments accounting the
operating expenses for 2013 and 2012 were £1462395
and £1228084 – the increase arising from business
development and marketing activities and augmenting the
business infrastructure as commercial operations ramp up
in may the company placed 9951443 ordinary shares
with new and existing shareholders this represented a 23
increase in the company’s issued share capital we wish to
thank our investors for supporting this placing which will
enable the company to execute its organic revenue growth
plans as well as allow investment in the development and
production of instruments and technologies the gross
proceeds raised from the issue amounted to £428 million
cash in hand at 31 december 2013 was £324 million
as with previous years the going concern basis has
continued to be adopted in preparing the financial
statements following the progress made by the company
to date and the progress anticipated in the near term the
directors have a reasonable expectation that the company
will have access to adequate funds to continue operations
for at least twelve months further details are provided in
the notes to the financial statements
enhancing the team
to ensure the company is equipped with the necessary skills
and personnel to drive continuing revenue growth and to
support the transition into a successful commercial business
we have made a number of new hires during the year
we have created a new business development team whose
objective is to grow direct sales and establish new
commercial relationships and routes to market our
customer services team has been enhanced significantly and
the engineering team has been expanded in order to ensure
our oem and direct customers have the technical support
they require i am now confident that we have the
commercial and technical personnel in place to support
senior management as we look to drive the growth of the
business in the years ahead
i am delighted to report the appointment of andrew darby
as finance director andrew darby has over 17 years of
experience in senior finance strategic and operational roles
within quoted companies in the information technology
sector he joins microsaic from active risk group plc
formerly an aimlisted company specialising in enterprise
risk management software solutions 
in october we announced the formation of the company’s
first scientific advisory group members of the group have
impressive credentials across a wide range of areas in
industry and research and will be able to advise us on
future applications for our chipbased technology
6 microsaic systems plc annual report and financial statements 2013
strategic report – chief executive’s review continued
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 6 outlook 
i am very pleased with the progress that microsaic made
across all areas of its business in 2013 we have built
a strong foundation around the 4000 mid
®
though our
oem partnerships and are confident of signing further
agreements with other interested oem partners who have
established global sales distribution channels sales are
building and we are gaining increasing recognition for the
potential of our innovative ms technologies and new
products within the scientific analytical instrumentation
market where we believe we have an opportunity to make
ms accessible across a broader range of applications and
to a much larger number of lab scientists than ever before
we now have the team in place needed to support the
expected growth and development of our business
we are focused on three business strategies that underpin
our ambitions for 2014 and beyond
• developing oem partnerships with synergistic
companies which can provide microsaic with access
to enhanced sales distribution channels alongside our
own direct sales channel
• stepping up marketing communications and the
promotion of the core brand values of microsaic
• outsourcing the manufacture of the main product
ensuring highquality build reliability and high volume
capacity
all our activities are aligned to these three priorities our
‘plug  play’ usability designs remain unique and the
increasing market acceptance of our chipbased technology
will provide the platform for further growth and
differentiation from competitors we remain intent on
broadening the application base and enhancing user
experience of the mid
®
in order to make it the benchtop
analytical tool of choice for chemists it is my belief that
these strengths and focused strategy puts microsaic
systems in a strong position to capitalise in an evolving
market
microsaic systems plc annual report and financial statements 2013 7
microsaicpp0107microsaic0107  07052014  1038  page 7 strategic report – risks and uncertainties
for the year ended 31 december 2013
8 microsaic systems plc annual report and financial statements 2013
in common with other small companies developing new technologies the company is subject to a number of risks and
uncertainties which principally include
risk area key risks
company development — the early stage development of the business and its evolution into a successful
trading company with all the operational requirements that this entails
— current operating losses depleting the company’s capital and cash 
— the availability and terms of capital needed for continued business development and
expansion
— recruitment and retention of personnel and requisite skills to run and build the
business
customer markets — market acceptance of the company’s revolutionary products
— competing products emerging from other companies
— the ability of the company to generate sufficient revenue from the sale of its
products
— the economic environment and recessionary effects that may restrict customer
spending on capital equipment 
— establishing and maintaining a high reputation as a supplier of equipment
technical — the product’s technical performance and specification meeting customer
requirements
— the reproducibility of the company’s products as production volumes increase
— the ability to protect company intellectual property and defend infringement claims
by others
financial — sufficient cash flow liquidity
— credit risk attributable to trade receivables and cash deposits
— exchange rate risk on currency exposures
the main financial risks arising from the company’s activities are liquidity risk and credit risk  the company seeks to
manage liquidity by ensuring sufficient funds are available to meet expected needs and to invest cash assets safely and
profitably in order to minimise risk to the company’s capital funds are invested with financial institutions with strong credit
ratings cash forecasts are updated regularly to ensure that there is sufficient cash available for foreseeable requirements
the company has no external financing facilities therefore its interest rate risk is limited to the level of interest received on
its cash surpluses
there is further explanation of the financial risks in note 23 to the financial statements
this annual report contains certain forward looking statements that have been made by the directors in good faith based
on the information available at the time of the approval of the annual report by their nature such forward looking
statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not
occur in the future actual results may differ from those expressed in such statements
microsaicpp0819microsaicpp0819  07052014  1036  page 8 microsaic systems plc annual report and financial statements 2013 9
strategic report – performance measurement
for the year ended 31 december 2013
the ongoing performance of the company is managed and monitored using a number of key performance indicators
both financial and qualitative
whilst there are many financial and operating measures regularly monitored by the company the primary financial metrics
are
year to year to
31 december 31 december
2013 2012
£ £
revenue 1165235 606281
loss before tax and share based payments 2331671 2097800
cash used in operating and investing activities 2552302 1476565
cash and cash equivalents 3239283 1788579
revenues comprise sales of products and income from development projects product sales now form the majority of the
company’s revenue product launch is a key driver of our product revenue and 2013 saw both the launch of the microsaic
4000 mid
®
chip based mass spectrometer and the first oem product incorporating the 4000 mid
®
 namely the isolera™
dalton from biotage ab a fully integrated system for flash chromatography and mass identification
maintaining tight control over costs is another key objective in managing the developing business this is monitored
through monthly management accounts for each cost type and in the overall trading results which are calculated
excluding share based payments
the company is not yet profitable and utilises cash for its operational activities the forecasting and monitoring of the
company’s cash resources is therefore critical in terms of the efficient allocation of those resources and in predicting
future cash requirements a key feature of the company’s internal management reporting is therefore an emphasis
on operational cash flow forecasts which are monitored at both management and board level on a monthly basis 
in terms of the company’s wider performance the progress of its research and development programmes are reviewed
against key qualitative milestones on a monthly basis by the board the more detailed aspects of these programmes are
also discussed and monitored through separate project reviews research and development programmes which feed into
the company’s product pipeline are planned and executed against identified objectives and timelines the company’s
intellectual property rights provide an indicator of the success of its rd activities and the protection of its technology from
competitors microsaic maintains a large portfolio of patents of which 52 are granted
this strategic report was approved by the board of directors on 29 april 2014 and signed on its behalf
colin jump
chief executive officer
microsaicpp0819microsaicpp0819  07052014  1036  page 9 10 microsaic systems plc annual report and financial statements 2013
colin nicholl nonexecutive chairman
colin nicholl joined the board of the company in 2005
and has served as chairman since july 2013 having
previously been deputy chairman from 2006 until june
2013 he sits on the board’s audit committee colin brings
a wealth of business financial and city experience to the
company as a former partner of cazenove  co and
chief investment officer of cazenove asset management
he is a nonexecutive director of im asset management
and was until its takeover chairman of membrane
extraction technology limited colin has a degree in
mathematics from the university of york and has actuarial
and company secretarial professional qualifications
andrew holmes nonexecutive director
andrew holmes is professor of microelectromechanical
systems at imperial college london and a cofounder of
the company professor holmes was educated at
cambridge university and imperial college london where
he has been a member of staff since 1995 and specialises
in research into microfabrication and micropower
technologies andrew has been company secretary of the
company since 2004 and sits on the board’s audit and
remuneration committees
james ramage nonexecutive director
james ramage was appointed as a director of the company
in april 2010 dr ramage is also chairman of tesla
engineering a manufacturer of high value magnetic
components for mri scanners and other products he is a
veteran of the analytical instrumentation industry and served
as a director and divisional managing director of
vg instruments plc and fisons plc prior to becoming
chairman of tesla dr ramage sits on the board’s audit
committee and chairs the board’s remuneration committee
eric yeatman nonexecutive director
eric yeatman is professor of microengineering at imperial
college london professor yeatman is a cofounder of the
company and was chairman of the board from 2004 to
june 2013 he chairs the board’s audit committee and sits
on the board’s remuneration committee eric was
educated at dalhousie university halifax canada and
imperial college london where he has been a member of
staff since 1989 he specialises in microsystems research
and has acted as an advisor to two venture capital funds
colin jump chief executive officer
colin jump has 30 years’ commercial and operational
experience in the analytical instrumentation market
he joined microsaic systems in november 2012 from
shimadzu a global manufacturer of scientific research
instruments where he spent 11 years as its uk managing
director he was previously european commercial director
at sge europe 19992001 and prior to that spent seven
years in senior management and marketing positions at
mallinckrodt baker in the uk and the netherlands between
1983 and 1991 colin served in sales and marketing
positions at bayer diagnostics boehringer mannheim and
wellcome diagnostics he was appointed to the board on
1 november 2012
andrew darby finance director
andrew darby was appointed as finance director to the
company in april 2014 mr darby is a graduate of
cambridge university and a chartered accountant with
over 17 years of experience in senior finance strategic
and operational roles within quoted companies
he joined microsaic from active risk group plc formerly
an aimlisted company specialising in enterprise risk
management software solutions where he spent seven
years as chief operations officer and chief financial
officer until its successful sale to sword group se prior
to joining active risk andrew held senior positions with
misys plc and generali spa and qualified as a chartered
accountant with coopers  lybrand now
pricewaterhousecoopers
peter edwards technical director
peter edwards joined the company as head of research
and development in 2007 and was elected to the board
of directors from june 2011 mr edwards a chartered
engineer was awarded a bsc degree in engineering at
kingston polytechnic and between 1987 and 2007 served
in senior positions with applied materials inc a fortune
500 company and the global leader in nanomanufacturing
technology solutions and a supplier of semiconductor
manufacturing equipment between 2001 and 2005 he
served as engineering director and was responsible for
development of applied material’s ion implanter products
before finally serving as key product unit director
board of directors
for the year ended 31 december 2013
microsaicpp0819microsaicpp0819  07052014  1036  page 10 microsaic systems plc annual report and financial statements 2013 11
directors’ report
for the year ended 31 december 2013
the directors present their report for the year ended 31 december 2013
principal activity business review and business risks
the principal activity of the company continued to be the research development and commercialisation of scientific
instruments a review of the business and its prospects is contained within the strategic report 
results and dividends
the results for the company are given in the statement of comprehensive income set out on page 20 the directors do not
recommend the payment of a dividend 2012 nil
directors
since 1 january 2013 the following directors have held office
c j nicholl
c r jump
m r bateman resigned 15 april 2014
a h darby appointed 16 april 2014
p i t edwards
a s holmes
j c ramage
e m yeatman
colin jump colin nicholl and james ramage were reappointed at the annual general meeting on 15 may 2013
at the forthcoming annual general meeting peter edwards and eric yeatman will retire by rotation and be proposed for re
appointment following his appointment since the year end andrew darby will also retire at the annual general meeting
and be proposed for reappointment 
directors’ interests
the directors’ interests in the shares of the company at 31 december 2013 were
ordinary shares of 025p each ordinary shares of 025p each 
at 31 december 2013 at 31 december 2012
number  number 
c j nicholl 3030616 577 2565500 603
c r jump 23256 004 ––
m r bateman 36664 007 25000 006
p i t edwards 31977 006 25000 006
a s holmes 2936656 559 2913400 685
j c ramage 261190 050 163480 038
e m yeatman 3252723 619 3159700 743
9573082 1822 8852080 2081
microsaicpp0819microsaicpp0819  07052014  1036  page 11 12 microsaic systems plc annual report and financial statements 2013
directors’ report continued
for the year ended 31 december 2013
significant shareholdings
shareholders excluding directors having a beneficial interest of 3 or more of the company’s shares as at 29 april
2014
ordinary shares of 025p each 
at 29 april 2014
number 
blackrock investment management 5035198 959
fidelity worldwide investment 4684841 892
n w wray 4134032 787
r r a syms 3735200 711
herald investment trust 2745348 523
hargreave hale 2537000 483
octopus investments 2442980 465
amati global investors 2293000 436
a p finlay 1935040 369
employees
the company regards the expertise and contributions of its employees as crucial to the future success of the business
the company engages its employees to understand all aspects of the business and seeks to remunerate its employees fairly
the company gives full and fair consideration to applications for employment received regardless of age gender colour
ethnicity disability nationality religious beliefs or sexual orientation the board takes account of employees’ interests when
making decisions and suggestions from employees aimed at improving the company’s performance are encouraged
company share ownership plans
the company operates two share ownership plans for the benefit of its employees and directors an employee share
option scheme esos and a share incentive plan sip
the esos was formed in 2006 to enable the incentivisation of key employees to be aligned to the performance of
the company under the esos the company grants to employees options to acquire the company’s ordinary shares
subject to
— vesting periods normally 5 years for new grants
— a total exercise period of 10 years from date of grant
— the exercise price normally being the market price of the ordinary shares at the date of grant
— performance conditions as appropriate 
options are granted to the maximum amount allowed under the limits of the enterprise management incentive ‘emi’
scheme – these options are called ‘approved options’ the emi scheme is subject to the provisions of schedule 5 of the
income tax earnings and pensions act 2003 any options granted above emi limits are ‘unapproved options’
the sip enables all employees subject to minimum service criteria the opportunity to take a continuing stake in the
company it was approved by hmrc in november 2012 and operated for the first time in 2013 a plan trust has been
established for the purposes of acquiring the company’s shares in accordance with sip regulation employees can invest up
to £1500 from gross pay in any one year which is used to acquire shares known as ‘partnership shares’ and held within the
plan trust the company may issue ‘matching shares’ in proportion to the partnership shares and also award employees
with ‘free shares’ matching shares and free shares vest on the completion by the participating employee of a further three
years’ service and certain other events and can be withdrawn from the plan taxfree after five years’ service
health and safety and the environment
the company is committed to providing a safe environment for its staff and other parties for whom it has a responsibility
it has set up systems and processes to ensure compliance with health and safety legislation and the board considers health
and safety matters at its regular monthly meetings
the company is also mindful of its corporate responsibilities concerning the impact of its activities on the environment and
seeks to minimise this impact wherever possible
microsaicpp0819microsaicpp0819  07052014  1036  page 12 microsaic systems plc annual report and financial statements 2013 13
directors’ indemnity and insurance
the company has granted an indemnity to its directors under which the company will indemnify them subject to the terms
of the deed of indemnity against all costs charges losses damages and liabilities incurred by them in performance of
their duties
the company also maintains insurance for its directors and officers against the consequences of actions brought against
them in relation to their duties for the company
payment of creditors
the company’s policy for payment of suppliers is to agree payment terms in advance of the supply and to adhere to those
payment terms the trade creditors of the company at the year end as a proportion of amounts invoiced by suppliers
during the year represent 47 days’ purchases 2012 48 days
related party transactions
the interests of the directors are shown above and their remuneration is detailed in the directors’ remuneration report
there were no other related party transactions
directors’ responsibilities
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the company for safeguarding the assets of the company for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for the preparation of a directors’ report which complies
with the requirements of the companies act 2006
the directors are responsible for preparing the annual report and the financial statements in accordance with the
companies act 2006 the directors have chosen to prepare financial statements for the company in accordance with
international financial reporting standards ifrss as adopted for use in the european union
international accounting standard 1 requires that financial statements present fairly for each financial year the company’s
financial position financial performance and cash flows this requires the faithful representation of the effects of
transactions other events and conditions in accordance with the definitions and recognition criteria for assets liabilities
income and expenses set out in the international accounting standards board’s ‘framework for the preparation and
presentation of financial statements’ in virtually all circumstances a fair presentation will be achieved by compliance with
all applicable ifrss a fair presentation also requires the directors to
— consistently select and apply appropriate accounting policies
— present information including accounting policies in a manner that provides relevant reliable comparable and
understandable information and
— provide additional disclosures when compliance with the specific requirements in ifrss is insufficient to enable users
to understand the impact of particular transactions other events and conditions on the entity’s financial position and
financial performance 
statement of disclosure to auditors
so far as each director is aware there is no relevant audit information of which the company’s auditors are unaware
additionally the directors have taken all the steps that they ought to have taken as directors in order to make themselves
aware of any relevant audit information and to establish that the company’s auditors are aware of that information
auditors
saffery champness have expressed their willingness to remain in office as auditors of the company and a resolution for
their reappointment will be proposed at the forthcoming annual general meeting
this directors’ report was approved by the board of directors on 29 april 2014 and signed on its behalf
andrew holmes
company secretary
company number 3568010
microsaicpp0819microsaicpp0819  07052014  1036  page 13 14 microsaic systems plc annual report and financial statements 2013
this report on the directors’ remuneration sets out the company’s policy on the remuneration of executive and
nonexecutive directors together with details of directors’ remuneration packages and service contracts
remuneration committee
the remuneration policy for executive directors determination of their individual remuneration packages and their
performance appraisals have been delegated to the board’s remuneration committee comprising three nonexecutive
directors
in setting the remuneration levels the remuneration committee considers a number of factors including
— the basic salaries and benefits available to executive directors of comparable companies
— the need to attract and retain directors of an appropriate calibre
— the need to ensure executive directors’ commitment to the continued success of the company by means of incentive
schemes and
— the need for the remuneration awarded to reflect performance
remuneration of the nonexecutive directors
the remuneration of the nonexecutive directors is agreed by the board following recommendation by the remuneration
committee having a view to rates paid in comparable organisations and appointments the nonexecutive directors did
not receive any pension bonus or other benefits from the company since becoming a public limited company no share
options have been issued to nonexecutive directors nonexecutive directors may participate in company share
ownership plans on the same terms as other staff
remuneration policy for executive directors
the company’s remuneration policy for executive directors is to
— have regard to the directors’ experience and the nature and complexity of their work in order to pay a competitive
salary that attracts and retains management of the quality required to serve the business
— link individual remuneration packages to the company’s performance through the award of discretionary bonus
schemes and
— provide employmentrelated benefits including life assurance and insurance relating to the directors’ duties
directors’ emoluments
year to year to
31 december 31 december
salaries other pension 2013 2012
and fees payments contributions total total
£££ £ £
c j nicholl 23209 –– 23209 18010
c r jump 159372 15000 – 174372 46562
1
m r bateman 79128 5961 4670 89759 66219
p i t edwards 98821 10013 7395 116229 103764
a s holmes 21750 –– 21750 18800
p r selway –– – – 3900
2
j c ramage 19577 –– 19577 13750
e m yeatman 22772 –– 22772 51500
424629 30974 12065 467668 322505
1 from 1 november 2012
2 to 30 may 2012
directors’ remuneration report
for the year ended 31 december 2013
microsaicpp0819microsaicpp0819  07052014  1036  page 14 share incentive plan sip
m r bateman and j c ramage participated in the company sip in 2013 and were each awarded 1562 matching shares
under the terms of the scheme these interests remained at 31 december 2013 2012 nil
directors’ share options
share options over the company’s ordinary shares held by the directors during the year were
at at
1 january lapsed exercised 31 december
2013 in the year in the year 2013 exercise price
number number number number p exercise period
c j nicholl 116000 116000 – – 4310p 24 may 2006 – 24 may 2013
116000 –– 116000 4310p 24 may 2008 – 24 may 2015
116000 –– 116000 4310p 24 may 2009 – 24 may 2016
c r jump 1276191 –– 1276191 3900p 10 dec 2017 – 9 dec 2022
m r bateman 40600 –– 40600 12931p 1 dec 2010 – 19 feb 2018
19333 –– 19333 2586p 3 dec 2012 – 2 dec 2020
38667 –– 38667 2586p 3 dec 2013 – 2 dec 2020
80000 –– 80000 4200p 2 jul 2015 – 1 jul 2022
p i t edwards 191400 –– 191400 12931p 11 apr 2011 – 19 feb 2018
77333 –– 77333 2586p 3 dec 2012 – 2 dec 2020
154667 –– 154667 2586p 3 dec 2013 – 2 dec 2020
40000 –– 40000 4200p 2 jul 2015 – 1 jul 2022
2266191 116000 – 2150191
the above share options are subject to service andor performance conditions none of the share options held by the
directors were exercised during the year
the share price on 1 january 2013 was 39p and on 31 december 2013 was 435p with a high and low over the year of
48p and 38p respectively
directors’ service contracts
details of each director’s service contract are as follows
contract date term notice period
c j nicholl 24 april 2006 indefinite 3 months
c r jump 23 september 2012 indefinite 6 months
m r bateman 11 july 2011 indefinite 3 months
p i t edwards 30 june 2010 indefinite 3 months
a s holmes 1 april 2006 indefinite 3 months
j c ramage 21 june 2010 indefinite 3 months
e m yeatman 1 april 2006 indefinite 3 months
microsaic systems plc annual report and financial statements 2013 15
microsaicpp0819microsaicpp0819  07052014  1036  page 15 16 microsaic systems plc annual report and financial statements 2013
corporate governance report
for the year ended 31 december 2013
as an aimlisted company microsaic systems plc is not required to comply with the uk corporate governance code
2010 a set of recommended corporate governance principles for uk public companies issued by the financial reporting
council however the directors support high standards of corporate governance and have established a set of corporate
governance principles which they regard as appropriate for the size nature and stage of development of the company
based on the qca guidelines 
the board
in july 2013 colin nicholl became chairman of the board in succession to eric yeatman who continues to serve as
a nonexecutive director
role of the board
the board is responsible inter alia for strategy budget performance approval of major capital expenditure and the
framework of internal controls
board processes
the board has established an audit committee and a remuneration committee with formally delegated responsibilities to
assist with the execution of its responsibilities
the full board holds regular meetings on a monthly basis and additional meetings at any other times as may be necessary
to deal with any urgent matters that arise the agenda for board meetings is prepared in conjunction with the chairman
and submissions are circulated in advance the company management team prepares regular reports which allow the
board to assess the company’s activities and review its performance and the board has clearly specified the levels of
authority delegated to management members of the company’s management team are regularly involved in board
discussions and directors are able to have discussions with other employees where appropriate
the board is ultimately responsible for the company’s system of internal control and for reviewing its effectiveness
this includes financial operational and compliance controls and riskmanagement systems internal control systems are
designed to meet the company’s particular needs and the risks to which it is exposed the internal control systems are
designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only
provide reasonable and not absolute assurance against misstatement and loss
composition of the board
the board currently comprises seven directors 
the role of the chairman is filled by a nonexecutive director
directors appointed by the board are subject to reelection by shareholders at the following annual general meeting and
thereafter directors are subject to reelection at least every three years
conflicts of interest
directors must keep the board advised of any interest that could potentially conflict with those of the company
where a conflict exists the director concerned is not present at the meeting whilst the relevant matter is considered
directors’ attendance record
the following table shows the attendance at the meetings of the board of directors during 2013
meetings
meetings held attended
number number
c j nicholl 12 12
c r jump 12 11
m r bateman 12 11
p i t edwards 12 12
a s holmes 12 12
j c ramage 12 11
e m yeatman 12 11
microsaicpp0819microsaicpp0819  07052014  1036  page 16 microsaic systems plc annual report and financial statements 2013 17
audit committee
the remit of the audit committee is documented in its terms of reference which were adopted by the board of directors
on 31 march 2011
the purpose of the committee is to assist the board in the effective discharge of its responsibilities for corporate
governance financial reporting corporate control and risk management the audit committee normally meets at least
twice a year and amongst other things reviews the annual report and accounts and interim statements with the external
auditors the committee also approves external auditors’ fees and ensures auditors’ independence as well as focusing
on compliance with legal requirements and accounting standards the ultimate responsibility for reviewing and approving
the annual financial statements and interim statements remains with the board
the members of the audit committee for 2013 were e m yeatman from july 2013 committee chairman c j nicholl
committee chairman until june 2013 j c ramage and a s holmes the external auditors the chief executive officer
finance director and other executives may be invited to the audit committee meetings at the discretion of the
committee 
the audit committee met three times in 2013
remuneration committee
the remit of the remuneration committee is documented in its terms of reference which were adopted by the board of
directors on 31 march 2011
the remuneration committee meets as required and at least once a year its responsibilities include reviewing the
performance of the executive directors setting their remuneration levels determining the payment of bonuses and other
benefits and considering the grant of options under the company share option schemes
the members of the remuneration committee for 2013 were j c ramage committee chairman c j nicholl until june
2013 a s holmes and e m yeatman from july 2013 
the remuneration committee met four times in 2013
board nominations
the appointment of replacement or additional directors is the responsibility of the board as a whole 
at this stage it is not considered appropriate for the company to have a formally constituted nominations committee
however this will be kept under review
communications with shareholders
the board aims to keep shareholders informed of all major developments concerning the company information is
communicated through the following channels
— the release of announcements trading updates and interim financial statements through the regulatory news service
of the london stock exchange and on the company’s website
— the annual report and financial statements are sent to all registered shareholders
— notices of all meetings of shareholders are also sent to all registered shareholders
microsaicpp0819microsaicpp0819  07052014  1036  page 17 18 microsaic systems plc annual report and financial statements 2013
we have audited the financial statements of microsaic systems plc for the year ended 31 december 2013 on pages 20
to 39 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 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 auditors’ report and for no other purpose to the fullest extent permitted by
law we do not accept or assume responsibility to anyone other than the company and the company’s members as
a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement set out on page 13 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 company’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 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 affairs of the company as at 31 december 2013 and of its loss for the year
then ended and 
— have been properly prepared in accordance with ifrss as adopted by the european union and as applied in
accordance with the provisions of the companies act 2006 and
— have been prepared in accordance with the requirements of the companies act 2006
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the strategic report and directors’ report for the financial period for which the
financial statements are prepared is consistent with the financial statements
independent auditors’ report to the members of
microsaic systems plc
for the year ended 31 december 2013
microsaicpp0819microsaicpp0819  07052014  1036  page 18 emphasis of matter – going concern
in forming our opinion we have considered the adequacy of the disclosures made in note 3 to the financial statements
concerning the company’s ability to meet its future working capital needs in view of the significance of this uncertainty
we consider that it should be drawn to your attention but our opinion is not modified in this respect 
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you
if in our opinion
— adequate accounting records have not been kept or returns adequate for our audit have not been received from
branches not visited by us or
— the financial statements are not in agreement with the accounting records and returns or
— certain disclosures of directors’ remuneration specified by law are not made or
— we have not received all the information and explanations we require for our audit
lucy brennan
senior statutory auditor
for and on behalf of saffery champness
chartered accountants and statutory auditors
lion house 
red lion street
london wc1r 4gb
29 april 2014
microsaic systems plc annual report and financial statements 2013 19
microsaicpp0819microsaicpp0819  07052014  1036  page 19 20 microsaic systems plc annual report and financial statements 2013
year to year to
31 december 31 december
2013 2012
notes £ £
revenue 5 1165235 606281
cost of sales 2042354 1486490
gross loss 877119 880209
operating expenses 1536398 1179516
loss from operations 6 2413517 2059725
finance income 7 7843 10493
loss before tax 2405674 2049232
tax on loss on ordinary activities 8 120516 182163
total comprehensive loss for the year 2285158 1867069
loss per share attributable to the equity shareholders of the company
basic and diluted loss per ordinary share 9 471p 456p
all operations are continuing operations
statement of comprehensive income
for the year ended 31 december 2013
the notes on pages 24 to 39 form part of these financial statements
microsaicpp2044microsaicpp2044  07052014  1035  page 20 microsaic systems plc annual report and financial statements 2013 21
share
share share option retained total
notes capital premium reserve earnings equity
£££ ££
at 1 january 2012 96681 3214253 647690 1712505 2246119
shares issued 9668 1537231 –– 1546899
share issue costs – 100074 –– 100074
transfer in respect of lapsed share options –– 99552 99552 –
total comprehensive loss for the year ––– 1867069 1867069
share based payments – share options –– 48568 – 48568
at 31 december 2012 106349 4651410 499570 3480022 1777307
shares issued 16 24922 4259698 –– 4284620
share issue costs – 281614 –– 281614
transfer in respect of lapsed share options –– 190761 190761 –
total comprehensive loss for the year ––– 2285158 2285158
share based payments – share options –– 74003 – 74003
at 31 december 2013 131271 8629494 382812 5574419 3569158
statement of changes in equity
for the year ended 31 december 2013
the notes on pages 24 to 39 form part of these financial statements
microsaicpp2044microsaicpp2044  07052014  1035  page 21 22 microsaic systems plc annual report and financial statements 2013
31 december 31 december
2013 2012
notes £ £
assets
noncurrent assets
intangible assets 10 131831 128885
property plant and equipment 11 210546 84265
total noncurrent assets 342377 213150
current assets
inventories 12 204841 190352
trade and other receivables 13 415220 181529
corporation tax receivable 80000 150000
cash and cash equivalents 3239283 1788579
total current assets 3939344 2310460
total assets 4281721 2523610
equity and liabilities
equity
share capital 16 131271 106349
share premium 17 8629494 4651410
share option reserve 17 382812 499570
retained earnings 5574419 3480022
total equity 3569158 1777307
current liabilities
trade and other payables 14 712563 746303
total equity and liabilities 4281721 2523610
the financial statements were approved for issue by the board of directors on 29 april 2014
colin jump
chief executive officer
company number 3568010
statement of financial position
as at 31 december 2013
the notes on pages 24 to 39 form part of these financial statements
microsaicpp2044microsaicpp2044  07052014  1035  page 22 microsaic systems plc annual report and financial statements 2013 23
year to year to
31 december 31 december
2013 2012
notes £ £
loss from operations 2413517 2059725
amortisation of intangible assets 10 56843 67169
depreciation of property plant and equipment 11 93261 58513
share based payments 74003 48568
increase in inventories 14489 41227
increasedecrease in trade and other receivables 233691 129912
decreaseincrease in trade and other payables 33740 298671
cash used in operations 2471330 1595255
taxation received 190516 222163
net cash used in operating activities 2280814 1373092
cash flows from investing activities
purchases of intangible assets 10 59789 58682
purchases of property plant and equipment 11 219542 55284
interest received 7843 10493
net cash used in investing activities 271488 103473
cash flows from financing activities
proceeds from share issues 16 4284620 1546899
share issue costs 281614 100074
net cash from financing activities 4003006 1446825
net increasedecrease in cash and cash equivalents 1450704 29740
cash and cash equivalents at the beginning of the year 1788579 1818319
cash and cash equivalents at the end of the year 3239283 1788579
statement of cash flows
for the year ended 31 december 2013
the notes on pages 24 to 39 form part of these financial statements
microsaicpp2044microsaicpp2044  07052014  1035  page 23 24 microsaic systems plc annual report and financial statements 2013
1 accounting policies
the following principal accounting policies have been used consistently in the preparation of these financial
statements 
basis of preparation
these financial statements have been prepared in accordance with international financial reporting standards ifrs
and the interpretations of the international financial reporting interpretations committee ifric as adopted by the
european union and with those parts of the companies act 2006 applicable to companies reporting under ifrs
these financial statements have been prepared on the historic cost basis except where financial instruments are
required to be carried at fair value under ifrs 
revenue recognition
revenue represents amounts receivable from the sale of goods and services and from development contracts net
of value added tax and trade discounts
revenue from the sale of goods is recognised when the risks and rewards of ownership of the goods passes to the
customer which is normally upon delivery
revenue from rendering services is recognised in the period in which the service is provided 
revenue from development contracts is recognised under the percentageofcompletion method
income receivable in respect of government grants is included within revenue and is recognised in the same period
as the related costs
segmental reporting
the company currently has one business segment being the research development and commercialisation of
scientific instruments this is undertaken wholly within the united kingdom and therefore a segmental analysis of
turnover profitslosses on ordinary activities before tax and net assets has not been presented the company is
managed on the basis of its performance as a whole and not by any segments
intangible assets
trademarks and patents are stated at historic cost of registration less accumulated amortisation and any accumulated
impairment losses amortisation is calculated to write off the cost in equal annual instalments over five years which is
considered to be a prudent estimate of their useful economic lives
property plant and equipment
items of property plant and equipment are stated at cost of acquisition or production costs less accumulated
depreciation and impairment losses 
depreciation is charged to the statement of comprehensive income on a straightline basis to writeoff the carrying
value of each asset to residual value over its estimated useful economic life as follows
plant and equipment – 20 to 333 on a straight line basis
fixtures and fittings – 333 on a straight line basis
pensions
the company operates a defined contribution retirement benefit scheme for its employees contributions are charged
to the statement of comprehensive income in the period they are payable
notes to the financial statements
for the year ended 31 december 2013
microsaicpp2044microsaicpp2044  07052014  1035  page 24 microsaic systems plc annual report and financial statements 2013 25
inventories
inventories are stated at the lower of cost and net realisable value cost is based on the firstin firstout principle and
includes expenditure incurred in acquiring the inventories and bringing them into their present locations and
condition the cost of finished goods and work in progress comprises raw materials direct labour and other direct
costs net realisable value is the estimated selling price in the ordinary course of business less applicable selling
expenses
taxation
current taxes are based on the results of the company and are calculated according to local tax rules using the tax
rates that have been enacted by the balance sheet date 
the company recognises research and development tax credits receivable in cash as a current asset under the
heading corporation tax receivable any difference with amounts actually received are dealt with as adjustments
to prior period tax
deferred tax is provided in full using the balance sheet liability method for all taxable temporary differences arising
between the tax bases of assets and liabilities and their carrying values for financial reporting purposes deferred tax
is measured using currently enacted or substantially enacted tax rates 
deferred tax assets are recognised to the extent the temporary difference will reverse in the foreseeable future and that
it is probable that future taxable profit will be available against which the asset can be utilised
foreign currency translation
monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange
ruling at the balance sheet date transactions in foreign currencies are recorded at the rate ruling at the date of
transaction or forward contract rate if applicable all differences are taken to the statement of comprehensive
income
government grants
grants towards revenue expenditure are released to the statement of comprehensive income as the related
expenditure is incurred
financial instruments
the company has adopted both ias 32 and ias 39
financial assets and financial liabilities are recognised on the company’s statement of financial position when the
company becomes a party to the contractual provisions of the instrument
cash and cash equivalents
the fair value of cash and cash equivalents is considered to be their carrying amount due to their short term maturity
trade receivables
trade receivables do not carry interest and are stated at their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts
financial liability and equity
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into an equity instrument is any contract that evidences a residual interest in the assets of the company after
deducting all of its liabilities
bank borrowings
interestbearing bank loans and overdrafts are recorded as the proceeds received net of direct issue costs finance
charges including premiums payable on settlement or redemption and direct issue costs are accounted for on an
accrual basis to the statement of comprehensive income using the effective interest method and are added to the
carrying amount of the instrument to the extent that they are not settled in the period in which they arise
microsaicpp2044microsaicpp2044  07052014  1035  page 25 26 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
1 accounting policies continued
financial instruments continued
trade payables
trade payables are not interest bearing and are stated at their nominal value
equity instruments
equity instruments issued by the company are recorded at the value of the proceeds received net of direct issue costs
leases
assets obtained under hire purchase contracts and finance leases are capitalised and depreciated over their useful
lives obligations under such agreements are included in liabilities net of the finance charges allocated to future
periods
all other leases are considered operating leases the costs of which are expensed on a straight line basis over the
lease term rent free periods and other incentives are spread on a straight line basis over the lease term
research and development
expenditure on research is recognised as an expense in the period in which it is incurred
development costs incurred on specific projects are capitalised when all the following conditions are satisfied
• completion of the intangible asset is technically feasible so that it will be available for use or sale
• the company intends to complete the intangible asset and use or sell it
• the company has the ability to use or sell the intangible asset
• the intangible asset will generate probable future economic benefits among other things this requires that there
is a market for the output from the intangible asset or for the intangible asset itself or if it is to be used internally
the asset will be used in generating such benefits
• there are adequate technical financial and other resources to complete the development and to use or sell the
intangible asset and
• the expenditure attributable to the intangible asset during its development can be measured reliably
costs incurred which do not meet the above criteria are expensed as incurred no development costs have been
capitalised to date
share based payments
in accordance with ifrs 2 “sharebased payments” the company reflects the economic cost of awarding shares and
share options to directors employees and advisors by recording an expense in the statement of comprehensive
income equal to the fair value of the benefit awarded fair value being determined by reference to option pricing
models the expense is recognised in the statement of comprehensive income over the vesting period of the award
microsaicpp2044microsaicpp2044  07052014  1035  page 26 microsaic systems plc annual report and financial statements 2013 27
2 application of new eu endorsed accounting standards amendments to existing eu endorsed
standards and interpretations
new standards amendments and interpretations effective in 2013 and relevant to the company’s results
ias 1 presentation of financial statements
new requirements to group together items within other comprehensive income that may be reclassified to the
profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall
performance of an entity
annual improvements 2009–2011 cycle amendments clarifying the requirements for comparative information
including minimum and additional comparative information required
new standards amendments and interpretations effective in 2013 not relevant to the company’s results
or that do not have a significant impact on the company’s financial statements other than additional
disclosures
ias 12 income taxes 
this standard has been amended to introduce the rebuttable presumption than an investment property will
be recovered in its entirety through sale
ias 16 property plant and equipment
annual improvements 2009–2011 cycle amendments to the recognition and classification of servicing
equipment
ias 19 employee benefits
amendments to the accounting for current and future obligations resulting from the provision of defined benefit
plans 
ias 32 financial instruments presentation revised
annual improvements 2009–2011 cycle amendments to clarify the tax effect of distribution to holders of equity
instruments
ias 34 interim financial reporting revised
annual improvements 2009–2011 cycle amendments to improve the disclosures for interim financial reporting
and segment information for total assets and liabilities
ifrs 1 first time adoption of international financial reporting standards revised
standard amended to provide guidance for entities emerging from severe hyperinflation and resuming presentation
of ifrs compliant financial statements or presenting ifrs compliant financial statements for the first time
standard amended to remove the fixed date of 1 january 2004 relating to the retrospective application of the
derecognition requirements of ias 39 and relief for firsttime adopters from calculating day 1 gains on
transactions that occurred before the date of adoption
amendments add an exception to the retrospective application of ifrss to require that firsttime adopters apply
the requirements in ifrs 9 financial instruments and ias 20 accounting for government grants and disclosure
of government assistance prospectively to government loans existing at the date of transition to ifrss
annual improvements 2009–2011 cycle amendments clarifying the options available to users when repeated
application of ifrs 1 is required and to add relevant disclosure requirements
annual improvements 2009–2011 cycle amendments to borrowing costs
microsaicpp2044microsaicpp2044  07052014  1035  page 27 28 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
2 application of new eu endorsed accounting standards amendments to existing eu endorsed
standards and interpretations continued
ifrs 7 financial instruments disclosures
amendments require entities to disclose gross amounts subject to rights of setoff amounts set off in accordance
with the accounting standards followed and the related net credit exposure this information will help investors
understand the extent to which an entity has set off in its balance sheet and the effects of rights of setoff on the
entity’s rights and obligations
ifrs 13 fair value measurement
new guidance on fair value measurement and disclosure requirements 
ifric 20 stripping costs in the production phase of a surface mine
clarifies the requirements for accounting for stripping costs associated with waste removal in surface mining
new standards amendments and interpretations not yet effective and relevant to the company’s results
none
new standards amendments and interpretations not yet effective and not relevant to the company’s
results or do not have a significant impact on the company’s financial statements other than additional
disclosures
ias 27 consolidated and separate financial statements – effective for periods beginning on or after 1 january 2014
consequential amendments resulting from the issue of ifrs 10 11 and 12 
requirement to account for interests in ‘investment entities’ at fair value under ifrs 9 financial instruments
or ias 39 financial instruments recognition and measurement in the separate financial statements of a
parent
ias 28 investments in associates – effective for periods beginning on or after 1 january 2014
consequential amendments resulting from the issue of ifrs 10 11 and 12 
ias 32 financial instruments presentation revised – effective for periods beginning on or after 1 january 2014
amendments require entities to disclose gross amounts subject to rights of setoff amounts set off in accordance
with the accounting standards followed and the related net credit exposure this information will help investors
understand the extent to which an entity has set off in its balance sheet and the effects of rights of setoff on the
entity’s rights and obligations
ias 36 impairment of assets – effective for periods beginning on or after 1 january 2014
amendments to the disclosure requirements regarding the measurement of the recoverable amount for impaired
assets
ias 39 financial instruments – effective for periods beginning on or after 1 january 2014
amendments to provide an exception to the requirement for discontinuation of hedge accounting in
circumstances where a hedging instrument is required to be novated to a central counterparty as a result of laws
or regulations
ifrs 10 consolidated financial statements – effective for periods beginning on or after 1 january 2014
new standard that replaces the consolidation requirements in sic12 consolidation—special purpose entities
and ias 27 consolidated and separate financial statements the standard builds on existing principles by
identifying the concept of control as the determining factor in whether an entity should be included within the
consolidated financial statements of the parent company and provides additional guidance to assist in the
determination of control where this is difficult to assess 
amendments to the transition guidance of ifrs 10 consolidated financial statements ifrs 11 joint
arrangements and ifrs 12 disclosure of interests in other entities limiting the requirements to provide adjusted
comparative information
microsaicpp2044microsaicpp2044  07052014  1035  page 28 microsaic systems plc annual report and financial statements 2013 29
ifrs 10 exception to the principle that all subsidiaries must be consolidated entities meeting the definition of
‘investment entities’ must be accounted for at fair value under ifrs 9 financial instruments or ias 39 financial
instruments recognition and measurement
ifrs 11 joint arrangements – effective for periods beginning on or after 1 january 2014
new standard that deals with the accounting for joint arrangements and focuses on the rights and obligations
of the arrangement rather than its legal form the standard requires a single method for accounting for
interests in jointly controlled entities
amendments to the transition guidance of ifrs 10 consolidated financial statements ifrs 11 joint arrangements
and ifrs 12 disclosure of interests in other entities limiting the requirements to provide adjusted comparative
information 
ifrs 12 disclosure of interest in other entities – effective for periods beginning on or after 1 january 2014
new and comprehensive standard on disclosure requirements for all forms of interests in other entities including
joint arrangements associates special purpose vehicles and other off balance sheet vehicles 
amendments to the transition guidance of ifrs 10 consolidated financial statements ifrs 11 joint
arrangements and ifrs 12 disclosure of interests in other entities limiting the requirements to provide adjusted
comparative information
new disclosures required for investment entities as defined in ifrs 10
3 going concern
the financial statements have been prepared on a going concern basis which assumes that sufficient funds will
be available for the company to continue in operational existence for at least 12 months from the date of signing
the company’s business activities together with the factors likely to affect its future development performance and
position are set out in the strategic review sections within the annual report 
the company has been developing its technologies for the market place and as such has been absorbing funds
the company is now in the commercialisation phase of its development and the financing of operations in the future
will be from employment of existing cash reserves and revenue from product sales 
the directors have prepared trading and cash flow projections that extend beyond 12 months from the date of this
report these include increasing revenue levels which the directors believe will be derived from the sale of its products
and are supported by market feedback that has been received there is no certainty that the expected level of sales
will be achieved and if there were a significant shortfall it may be necessary for the company to secure alternative
sources of funding to enable it to remain a going concern whilst the company has been successful securing funding
in the past this is no guarantee that it will be possible in the future however the directors have a reasonable
expectation that the company will have access to sufficient funding to continue operations for at least twelve months
from the signing of this report and therefore they continue to adopt the going concern basis for the preparation of the
financial statements 
microsaicpp2044microsaicpp2044  07052014  1035  page 29 30 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
4 critical accounting estimates and judgements
accounting estimates and judgements are continually evaluated and are based on past experience and other factors
including expectations of future events that are believed to be reasonable under the circumstances
the company makes estimates and assumptions concerning the future the resulting accounting estimates could by
definition differ from the actual outcome 
the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are summarised below
going concern
the financial statements have been prepared on a going concern basis which assumes that sufficient funds will
be available for the company to continue in operational existence for at least 12 months more details are provided
in note 3
revenue recognition 
the revenue recognised from development contracts reflects management’s best estimate about the contract’s
outcome and stage of completion the company’s management assesses the contracts at each balance sheet date
including the costs to completion which are subject to estimation uncertainty 
amortisation of trademarks and patents 
capitalised costs relating to trademarks and patents are amortised over their estimated useful lives as the product
development programme is still ongoing and the lifetime of the company’s intellectual property is difficult to
determine the directors have applied a prudent estimate of 5 years this assumption is reviewed at each balance
sheet date and amended if required
share based payments 
the calculation of the share based payments expense utilises assumptions and estimates for example volatility future
exercise rates which may differ from actual results details of the assumptions are set out in note 22
research and development tax credits
the company recognises research and development tax credits receivable in cash as a current asset under the
heading corporation tax receivable these credits are subject to acceptance by hm revenue  customs and the
resulting cash receipt from hm revenue  customs may be greater or less than this amount
5 revenue
throughout 2013 the company operated in one business segment that of research development and commercialisation
of scientific instruments all of the company’s assets are held in the uk and all of its capital expenditure arises in the uk
the revenue of the company for the year has been derived from its principal activity undertaken in the united kingdom
an analysis of revenue by geographic market has not been presented as many of the company’s products are sold
through international distribution channels and it is not possible to determine their final destinations the directors
consider that an analysis of revenue by geographic market using distributor locations would be misleading
government grants
included within the company’s revenue for the year ended 31 december 2013 is £157841 2012 £294580 from
uk government grants and european grant funded projects
in 2013 the company was awarded a grant of up to €308000 under the european commission’s 7th framework
programme as part of a consortium for a research project revenue of £26879 has been recognised to date as the
company believes it has fulfilled its practical and administrative obligations under this project and is committed to
fulfilling its future obligations which are subject to european commission reviews annually and final project signoff
in 2015
microsaicpp2044microsaicpp2044  07052014  1035  page 30 in 2010 the company was awarded a grant of up to €964000 under the european commission’s 7th framework
programme as part of a consortium for a research project revenue of £704649 has been recognised to date as the
company believes it has fulfilled its practical and administrative obligations under this project and is committed to
fulfilling its future obligations which are subject to european commission reviews annually and final project signoff
in 2014
6 expenses by nature
year to year to
31 december 31 december
2013 2012
£ £
loss from operations is stated after chargingcrediting
amortisation of intangible assets 56843 67169
depreciation of property plant and equipment 93261 58513
pension costs 60998 54755
share based payments – equity settled 74003 48568
operating lease rentals – land and buildings 78225 66225
exchange gainloss 1785 2618
research and development expenditure 927379 1298129
directors’ emoluments 467668 322505
year to year to
31 december 31 december
2013 2012
£ £
services provided by the company’s auditors
fees payable to the company’s auditors for the audit of the financial statements 13000 12000
fees payable to the company’s auditors for other services
– tax compliance 5000 4000
– other – 1250
18000 17250
7 finance income
year to year to
31 december 31 december
2013 2012
£ £
bank interest 7843 7313
other interest – 3180
7843 10493
microsaic systems plc annual report and financial statements 2013 31
microsaicpp2044microsaicpp2044  07052014  1035  page 31 8 tax on loss on ordinary activities
year to year to
31 december 31 december
2013 2012
£ £
domestic current period tax
uk corporation tax 80000 150000
adjustment for prior periods 40516 32163
current tax credit 120516 182163
deferred tax – –
tax on loss on ordinary activities 120516 182163
factors affecting the current tax credit for the period
loss before tax 2405674 2049232
loss before tax multiplied by standard rate of uk corporation tax 
of 20 2012 20 481135 409846
effects of
non deductible expenses 18875 7207
depreciation 18652 11703
capital allowances 47592 13111
research and development expenditure 13523 4833
tax losses carried forward 397677 273294
previous period research and development adjustment 40516 32163
current tax credit 120516 182163
the company has estimated tax losses of £7746000 2012 £5758000 available for carry forward against future
trading profits a deferred tax asset in respect of these losses has only been recognised to the extent of the deferred
tax liability in respect of accelerated capital allowances see note 15 
9 basic and diluted loss per ordinary share
year to year to
31 december 31 december
2013 2012
loss after tax attributable to equity shareholders £2285158 £1867069
weighted average number of ordinary 025p shares for the purpose of 
basic and diluted loss per share 48481309 40935477
basic and diluted loss per ordinary share 471p 456p
potential ordinary shares are not treated as dilutive as the company is loss making therefore the weighted average
number of ordinary shares for the purposes of the basic and diluted loss per share are the same
32 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
microsaicpp2044microsaicpp2044  07052014  1035  page 32 10 intangible assets
intangible assets comprise patents and trademarks owned by the company the cost is amortised on a straight line
basis over a five year period as this has been judged as their estimated useful life 
£
cost
at 1 january 2013 342164
additions 59789
disposals 29050
at 31 december 2013 372903
amortisation
at 1 january 2013 213279
charge for the year 56843
disposals 29050
at 31 december 2013 241072
net book value
at 31 december 2013 131831
at 31 december 2012 128885
11 property plant and equipment
plant and fixtures and
equipment fittings total
£££
cost
at 1 january 2013 556103 123494 679597
additions 120221 99321 219542
disposals 32101 – 32101
at 31 december 2013 644223 222815 867038
depreciation
at 1 january 2013 476970 118362 595332
charge for the year 13063 80198 93261
disposals 32101 – 32101
at 31 december 2013 457932 198560 656492
net book value
at 31 december 2013 186291 24255 210546
at 31 december 2012 79133 5132 84265
the gross carrying amount of fully depreciated assets still in use at 31 december 2013 is £441931
microsaic systems plc annual report and financial statements 2013 33
microsaicpp2044microsaicpp2044  07052014  1035  page 33 12 inventories 
year to year to
31 december 31 december
2013 2012
£ £
raw materials 203538 109133
work in progress 1303 66371
finished goods – 14848
204841 190352
13 trade and other receivables
year to year to
31 december 31 december
2013 2012
£ £
amounts falling due within one year
trade receivables 178132 24000
other receivables 126988 127499
other taxes and social security 110100 30030
415220 181529
14 trade and other payables
year to year to
31 december 31 december
2013 2012
£ £
amounts falling due within one year
trade payables 346323 286339
other taxes and social security 57029 53756
other payables 39449 9840
accruals and deferred income 269762 396368
712563 746303
15 provisions
deferred tax
£
balance at 1 january and 31 december 2013 –
deferred taxation provided in the financial statements
31 december 31 december
2013 2012
£ £
accelerated capital allowances 36321 15602
tax losses carried forward 36321 15602
––
a deferred tax asset in respect of tax losses has only been recognised to the extent of the deferred tax liability in
respect of accelerated capital allowances
34 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
microsaicpp2044microsaicpp2044  07052014  1035  page 34 16 share capital
number £
allotted called up and fully paid ordinary shares of 025p each
ordinary shares as at 31 december 2012 42539748 106349
ordinary shares issued for cash in the year 9968628 24922
ordinary shares as at 31 december 2013 52508376 131271
following adoption of new articles of association in april 2011 the company does not have a stated authorised share
capital the company has one class of share ordinary shares of 025p each with each share carrying one vote and
equal rights to discretionary dividends
the company issued the following ordinary shares of 025p each for cash in the year
shares issue cash
issued price consideration
number p£
placing – may 2013 9951443 43 4279120
share incentive plan – june 2013 17185 32 5500
9968628 4284620
17 reserves
the share premium account represents the excess over the nominal value for shares allotted less issue costs 
the share option reserve represents accumulated charges made under ifrs 2 in respect of share based payments
where share options expire unexercised at the end of their exercise period the amounts within the share option
reserve relating to those options are transferred to retained earnings
18 operating lease commitments
at the year end the company had future minimum lease payments under noncancellable operating leases which fall
due as follows 
31 december 31 december
2013 2012
£ £
land and buildings
within one year 97400 47557
between one and two years 164768 –
262168 47557
19 capital commitments
at the balance sheet date the company had the following capital commitments 
31 december 31 december
2013 2012
£ £
contracted for but not provided in the financial statements – –
microsaic systems plc annual report and financial statements 2013 35
microsaicpp2044microsaicpp2044  07052014  1035  page 35 36 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
20 directors’ emoluments
year to year to
31 december 31 december
2013 2012
£ £
salaries and fees 424629 282357
other payments 30974 29025
pension costs 12065 11123
467668 322505
during the year no options were exercised by or granted to the directors 
in the year to 31 december 2013 two directors accrued benefits under money purchase retirement benefit schemes
2012 two
further information is provided in the directors’ remuneration report
21 employees 
year to year to
31 december 31 december
2013 2012
number number
the average monthly numbers of employees
directors 7 7
other staff 28 24
35 31
year to year to
31 december 31 december
2013 2012
£ £
employment costs including directors
wages and salaries 1556991 1329969
social security costs 180818 151302
pension costs 60998 54755
employment related share based payments 74003 48568
1882810 1487458
the employment related share based payments credit of £48568 for 2012 is due to the write back of prior year share
based payment charges totalling £81901 following the exit of staff members from the company’s share option
schemes 
microsaicpp2044microsaicpp2044  07052014  1035  page 36 22 sharebased payments
share option schemes
the company operates approved and unapproved share option schemes as a means of encouraging ownership and
aligning interests of staff and shareholders
year to 31 december 2013 year to 31 december 2012
weighted weighted
number of average number of average
options exercise price options exercise price
outstanding at the beginning of the year 3312388 535p 1944025 594p
granted during the year –– 1984863 412p
cancelled during the year 541397 883p 616500 324p
exercised during the year –– ––
outstanding at 31 december 2770991 468p 3312388 535p
exercisable at 31 december 904800 608p 1174757 815p
the estimated fair values of the share options were calculated by applying the black scholes model the period
of exercise for all options granted is between 1 and 10 years from date of grant and the vesting periods last up to
five years from the date of grant the model inputs were
risk gross
share free expected dividend
date of grant price rate volatility yield
may 2006 10750p 525 35 –
february 2008 12931p 525 35 –
december 2010 2586p 150 75 –
april 2011 3200p 050 50 –
june 2012 4000p 050 33 –
july 2012 4200p 050 33 –
december 2012 3900p 100 33 –
 the share prices and corresponding option exercise prices for grants made up to 2010 have been adjusted for a bonus issue and share
subdivision that took place in april 2011
number number
latest of options of options
exercise exercise estimated 31 december 31 december
date of grant price date fair value 2013 2012
director and employee share options
may 2006 4310p may 2013 795p – 116000
may 2006 4310p may 2015 795p 116000 116000
may 2006 4310p may 2016 795p 116000 116000
february 2008 12931p feb 2018 266p 266800 266800
december 2010 2586p dec 2020 110p 406000 406000
july 2012 4200p jul 2022 121p 590000 590000
december 2012 3900p dec 2022 136p 1276191 1276191
advisor share options
may 2006 10067p may 2013 548p – 250560
april 2011 10067p may 2013 11p – 136165
june 2012 10067p may 2013 16p – 38672
2770991 3312388
microsaic systems plc annual report and financial statements 2013 37
microsaicpp2044microsaicpp2044  07052014  1035  page 37 22 sharebased payments continued
share incentive plan sip
all employees are eligible to participate in the company’s hm revenue and customs approved sip after 12 months’
service the sip operated for the first time in 2013 participating employees made a cash contribution to the plan from
their gross pay which was used by the plan trust to purchase partnership shares the company issued one matching
share for each two partnership shares the matching shares vest on the completion by the participating employee of a
further three years’ service and can be withdrawn from the plan taxfree after five years’ service
there were 4 participants in the scheme at 31 december 2013 during the year the company issued 11457
ordinary shares as partnership shares into the sip for consideration of £5500 5728 ordinary shares were issued as
matching shares with a market value of £2750 at the year end the sip held 17185 ordinary shares 2012 nil on
behalf of the scheme participants the fair value of the matching shares is taken as the company share price at the
time of the granting and this is charged to the statement of income over the three year vesting period the charge for
2013 was £458 2012 nil
23 financial instruments
the company’s financial instruments comprise cash and various trade receivables and trade payables that arise
directly from its operations no trading in financial instruments is undertaken
the main risks arising from the company’s financial instruments are liquidity currency and interest rate the board
oversees the management of these risks which are summarised below
liquidity risk
the company is financing its operations from equity funding provided by shareholders and revenues generated by the
business the company seeks to manage liquidity risk to ensure sufficient funds are available to meet requirements 
the company invests its cash reserves in bank and money market deposits as a liquid resource to fund its operations
the company’s strategy for managing cash is to maximise interest income at low risk whilst ensuring availability to
match the profile of the company’s cash flows
interest rate risk
the company does not face any significant interest rate risk as it has no borrowings
surplus funds are invested to maintain a balance between accessibility of funds and competitive rates of return whilst
investing funds safely
credit risk
the company manages its credit risk in cash and cash equivalents by spreading surplus funds between creditworthy
financial institutions 
the company is also exposed to credit risk attributable to trade and other receivables the maximum credit risk
in respect of the financial assets at each period end is represented by the balance outstanding on trade and other
receivables the company has limited exposure to credit risk as the majority of its trade and other receivables are
due from major international corporations and institutions 
foreign currency risk
the company is based in the united kingdom and the majority of its transactions are denominated in pounds sterling
the company has no long term commitments to purchase goods or services in foreign currencies purchases
denominated in foreign currency are expensed at the exchange rate prevailing at the date of the transaction and
comprise an immaterial proportion of the company’s total expenditure 
the only assets and liabilities denominated in foreign currencies relate to trade receivables and trade payables with
overseas counterparties together with small balances of us dollar and euro currencies to settle these liabilities
the risks and sums involved are considered to be immaterial
38 microsaic systems plc annual report and financial statements 2013
notes to the financial statements continued
for the year ended 31 december 2013
microsaicpp2044microsaicpp2044  07052014  1035  page 38 where a significant transaction in a foreign currency is anticipated with a high degree of certainty the company takes
out a forward exchange contract to mitigate the risk of currency fluctuation no such instruments were held at
31 december 2013
fair values
the directors consider that there is no material difference between the book value and the fair value of the financial
instruments at 31 december 2013 and 31 december 2012
capital management
the company’s capital base comprises equity attributable to shareholders particularly as represented by cash as the
company’s focus has been on establishing itself as a successful supplier of scientific instruments the primary objective
in managing cash spend has been to achieve progress on product development and commercialisation in a cost
efficient manner and in managing liquidity risk to ensure the company continues as a going concern
24 related party transactions
the remuneration paid to the directors is shown in note 20 to the financial statements and in the directors’ remuneration
report
there were no other related party transactions
25 control
as at 31 december 2013 no individual shareholder had a controlling interest in the company
26 subsequent events
there have been no significant events after the balance sheet date
microsaic systems plc annual report and financial statements 2013 39
microsaicpp2044microsaicpp2044  07052014  1035  page 39 microsaic systems plc
company number 3568010
notice is hereby given that the annual general meeting of microsaic systems plc the “company” shall be held at the
offices of numis securities limited the london stock exchange building 10 paternoster square london ec4m 7lt
on 2 june 2014 at 11 am for the purpose of considering and if thought fit passing the following resolutions of which
resolutions 1 to 6 inclusive shall be proposed as ordinary resolutions and resolution 7 shall be proposed as a special
resolution
ordinary resolutions
1 that the company’s financial statements for the year ended on 31 december 2013 together with the directors’
report and auditors’ report thereon be and are hereby received and adopted
2 that upon the recommendation of the directors saffery champness be and hereby are reappointed as auditors to
the company and that the board be authorised to fix the remuneration of the auditors
3 that andrew hamish darby be and hereby is reappointed as a director of the company following his appointment
to the board with effect from 16 april 2014 and his subsequent retirement pursuant to article 811a of the articles of
association of the company the “articles”
4 that peter ivor tudor edwards be and hereby is reappointed as a director of the company following his retirement
pursuant to article 811b of the articles
5 that eric morgan yeatman be and hereby is reappointed as a director of the company following his retirement
pursuant to article 811c of the articles
6 that the directors be and are hereby generally and unconditionally authorised in accordance with section 551 of
the companies act 2006 to exercise all the powers of the company to allot equity securities as defined by section
560 of the companies act 2006 up to an aggregate nominal value of £4375698 representing one third of the
company’s issued share capital at the date of this document provided that this authority shall unless renewed varied
or extended by the company in general meeting expire on the date which is 15 months after the date on which this
resolution is passed or if earlier on the conclusion of the next annual general meeting of the company save that the
company may before such expiry make an offer or agreement which would or might require equity securities to be
allotted after such expiry and the directors may allot such equity securities in pursuance of such offer or agreement
as if this authority had not expired and provided further that this authority shall revoke and replace all unexercised
authorities previously granted to the directors to allot shares but without prejudice to any allotment of shares or grant
of rights already made offered or agreed to be made pursuant to such authorities
special resolution
7 that the directors be and are hereby empowered pursuant to section 570 of the companies act 2006 to allot
equity securities as defined by section 560 of the companies act 2006 for cash as if section 5611 of the
companies act 2006 did not apply to any such allotment provided that this power shall be limited to
a the allotment of equity securities pursuant to an offer or issue by way of rights open offer or other preemptive
offer
i to the holders of ordinary shares in the capital of the company and other persons entitled to participate
therein in proportion as nearly as may be practicable to their respective holdings and
ii to holders of other equity securities as required by the rights of those securities or as the directors otherwise
consider necessary but subject to such exclusions or other arrangements as the directors may deem
necessary or expedient in relation to treasury shares fractional entitlements record dates legal or practical
problems in or under the laws of any territory or the requirements of any regulatory body or stock exchange
and
40 microsaic systems plc annual report and financial statements 2013
notice of the annual general meeting
microsaicpp2044microsaicpp2044  07052014  1035  page 40 b the allotment otherwise than pursuant to resolution 7a above of equity securities up to an aggregate nominal
amount of £2625419 representing 20 twenty per cent of the company’s issued share capital at the date of
this document and such power shall expire if it has not previously expired by nonfulfilment of conditions on the
date which is 15 months after the date on which this resolution is passed or if earlier the conclusion of the
company’s next annual general meeting unless renewed varied or revoked by the company prior to or on such
date save that the company may before such expiry make offers or agreements which would or might require
equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of any
such offer or agreement notwithstanding that the power conferred by this resolution has expired 
provided that this authority revokes and replaces all unexercised powers previously granted to the directors to allot
equity securities as if section 5611 of the companies act 2006 did not apply but without prejudice to any allotment
of equity securities already made or agreed to be made pursuant to such authorities 
by order of the board
andrew holmes
company secretary
8 may 2014
explanatory comments on the resolutions proposed at the annual general meeting the “meeting” of the
company to be held at the offices of numis securities limited the london stock exchange building
10 paternoster square london ec4m 7lt on 2 june 2014 at 11 am
resolution 1 – the company is required by its articles and by the companies act 2006 to lay the directors’ and auditors’
reports and copies of the annual accounts before the meeting
resolution 2 – this resolution concerns the reappointment of saffery champness “sc” recommended by the directors
as auditors to the company whilst resolving to reappoint sc as auditors to the company the resolution also authorises
the board to fix the auditors’ remuneration
resolutions 3 to 5 – directors appointed by the board since the last annual general meeting are required to retire from
office by the articles of the company and seek reappointment at the meeting similarly a minimum of one third of the
directors are also required to retire each year and seek reappointment at the meeting biographies of the directors are
contained in the company’s annual report for the year ended 31 december 2013
resolutions 6 and 7 – these resolutions concern the authority of the directors to allot up to one third of the company’s
existing issued share capital including up to 20 per cent as if the statutory preemption rights did not apply so as to raise
funds at short notice
please also read the notes below which provide further information in respect of the meeting
registered office
gms house
boundary road
woking
surrey
gu21 5bx
microsaic systems plc annual report and financial statements 2013 41
microsaicpp2044microsaicpp2044  07052014  1035  page 41 the following notes explain your general rights as a shareholder and your rights to attend and vote at the
meeting or to appoint someone else to vote on your behalf
notes
quorum
1 the quorum for the meeting shall be two shareholders present in person or by proxy if within fifteen minutes from the
appointed time for the meeting a quorum is not present then the meeting will stand adjourned to the same day in the
next week or if that day is a public holiday to the next working day thereafter at the same time and place or to such
other day time or place as the directors may determine and no notice of such adjournment need be given at an
adjourned meeting shareholders present in person or by proxy will form a quorum
website address
2 information regarding the meeting including information required by section 311a of the companies act 2006
is available from wwwmicrosaiccom
entitlement to attend and vote
3 only those holders of ordinary shares of 025p each in the capital of the company “shares” registered on the
company’s register of members at 6 pm on 29 may 2014 shall be entitled to attend and vote at the meeting
appointment of proxies
4 members entitled to attend speak and vote at the meeting in accordance with note 3 above are entitled to appoint
one or more proxies to attend speak and vote in their place if you wish to appoint a proxy please use the form of proxy
enclosed with this document the “form of proxy” in the case of joint members only one need sign the form of proxy
the vote of the senior joint member will be accepted to the exclusion of the votes of the other joint members for this
purpose seniority will be determined by the order in which the names of the members appear in the register of members
in respect of the joint shareholding the completion and return of the form of proxy will not stop you attending and
voting in person at the meeting should you wish to do so a proxy need not be a member of the company you may
appoint more than one proxy provided each proxy is appointed to exercise the rights attached to a different share or
shares held by you if you choose to appoint multiple proxies use a separate copy of this form which you may
photocopy for each proxy and indicate after the proxy’s name the number of shares in relation to which they are
authorised to act which in aggregate should not exceed the number of shares held by you please also indicate if the
proxy instruction is one of multiple instructions being given all forms must be signed and returned in the same envelope
5 you can appoint the chairman of the meeting or any other person as your proxy if you wish to appoint someone other
than the chairman cross out the words “the chairman of the meeting” on the form of proxy and insert the full name
of your appointee
6 you can instruct your proxy how to vote on each resolution by ticking the “for” and “against” boxes as appropriate or
entering the number of shares which you are entitled to vote if you wish to abstain from voting on any resolution please
tick the box which is marked “vote withheld” it should be noted that a vote withheld is not a vote in law and will not be
counted in the calculation of the proportion of votes “for” and “against” a resolution 
if you do not indicate on the form of proxy how your proxy should vote heshe can exercise hisher discretion as to
whether and if how so how heshe votes on each resolution as heshe will do in respect of any other business including
amendments to resolutions which may properly be conducted at the meeting
a member that is a company or other organisation not having a physical presence cannot attend in person but can
appoint someone to represent it this can be done in one of two ways either by the appointment of a proxy described
in notes 4 to 6 above or of a corporate representative members considering the appointment of a corporate
representative should check their own legal position the company’s articles of association and the relevant provision
of the companies act 2006
a company incorporated in england and wales or northern ireland should execute the form of proxy under its common
seal or otherwise in accordance with section 44 of the companies act 2006 or by signature on its behalf by a duly
authorised officer or attorney whose power of attorney or other authority should be enclosed with the form of proxy
42 microsaic systems plc annual report and financial statements 2013
notice of the annual general meeting continued
microsaicpp2044microsaicpp2044  07052014  1035  page 42 appointment of proxy using hard copy form
7 the form of proxy and any power of attorney or a notarially certified copy or office copy thereof under which it is
executed must be received by capita asset services at pxs1 34 beckenham road beckenham br3 4zf  united
kingdom at 11 am on 29 may 2014 in respect of the meeting any forms of proxy received before such time will be
deemed to have been received at such time in the case of an adjournment the form of proxy must be received by
capita asset services no later than 48 hours before the rescheduled meeting
on completing the form of proxy sign it and return it to capita asset services at the address shown on the reverse of the
form of proxy as postage has been prepaid no stamp is required you may if you prefer return the form of proxy in
a sealed envelope to the address shown above
termination of proxy appointments
8 in order to revoke a proxy instruction you will need to inform the company please send a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to capita asset services at pxs1 34 beckenham road
beckenham br3 4zf  united kingdom
in the case of a member which is a company incorporated in england and wales or northern ireland the revocation
notice must be executed under its common seal or otherwise in accordance with section 44 of the companies act 2006
or by signature on its behalf by an officer or attorney whose power of attorney or other authority should be included with
the revocation notice 
if you attempt to revoke your proxy appointment but the revocation is received after the time of the meeting or the taking
of the vote at which the proxy is used then subject to the paragraph directly below your proxy will remain valid
if you submit more than one valid proxy appointment in respect of the same shares the appointment received last before
the latest time for receipt of proxies will take precedence
completion of a form of proxy will not preclude a member from attending and voting in person if you have appointed
a proxy and attend the meeting in person your proxy appointment will be automatically terminated
issued shares and total voting rights
9 the total number of shares in issue in the capital of the company at the date of this notice is 52508376 ordinary
shares of 025p each 
on a vote by a show of hands every holder of shares who being an individual is present in person by proxy or being
a corporation is present by a duly authorised representative not being himself a member shall have one vote on a poll
every holder of shares who is present in person or by proxy shall have one vote for every complete share held by him
and such proportion of a vote that represents the number of fractions of a share so held
communication
10 except as provided above members who have general queries about the meeting should use the following means
of communication no other methods of communication will be accepted
• calling capita asset services’ shareholder helpline lines are open from 900am to 500pm monday to friday
excluding public holidays
i from the uk 0871 664 0300 calls cost 10p per minute plus network extras
ii from outside the uk 44 208 639 3399 calls from outside the uk are charged at applicable international
rates or
• in writing to capita asset services at the registry 34 beckenham road beckenham br3 4tu united kingdom
you may not use any electronic address provided either
• in this notice of meeting or
• any related documents including the form of proxy for this meeting to communicate with the company for any
purposes other than those expressly stated
microsaic systems plc annual report and financial statements 2013 43
microsaicpp2044microsaicpp2044  07052014  1035  page 43 directors c j nicholl chairman
c r jump chief executive officer
a h darby
p i t edwards
a s holmes
j c ramage
e m yeatman
company secretary a s holmes
company number 3568010
company website wwwmicrosaiccom
registered office gms house
boundary road
woking
surrey 
gu21 5bx
auditors saffery champness
chartered accountants
lion house
red lion street
london 
wc1r 4gb
bankers hsbc bank plc
95 gloucester road
london 
sw7 4sx
solicitors dorsey  whitney europe llp
199 bishopsgate
london 
ec2m 3ut
nominated adviser and broker numis securities limited
the stock exchange building
10 paternoster square
london 
ec4m 7lt
registrars capita asset services
the registry
34 beckenham road
beckenham 
kent 
br3 4tu
financial pr citigate dewe rogerson limited
3 london wall buildings
london wall
london 
ec2m 5sy
corporate information and advisors
44 microsaic systems plc annual report and financial statements 2013
microsaicpp2044microsaicpp2044  07052014  1035  page 44 linkway financial printers
typeset  printed in london uk 16290
microsaic cover 4pp covermicrosaic cover 4pp cover  07052014  1048  page 4 microsaic systems plc
gms house
boundary road
woking
surrey  gu21 5bx
uk
t  44 01483 751577
f  44 01483 757901
e  infomicrosaiccom
w wwwmicrosaiccom
  
  
 
 
 
 
microsaic cover 4pp covermicrosaic cover 4pp cover  07052014  1048  page 1


Summary:
 4 microsaic systems plc annual report and financial statements 2013
microsaic has enjoyed a highly productive
year in 2013 making notable progress in
our ongoing evolution into a successful
commercial business we continue to
execute our strategy of developing
commercial partnerships whilst at the
same time growing direct sales to end
users in parallel we have continued to
make significant technological advances
that will in time give us the capability
needed for our next generation of
products this will further broaden the
range of applications that our miniaturised
mass spectrometry ms instruments can
address
microsaic’s chipbased technology has allowed us to
miniaturise the mass spectrometer – the gold standard for
chemical analysis – far beyond any other product on the
market this miniaturisation greatly simplifies deployment
drastically cutting power consumption and other running
costs and makes ms much more accessible to lab scientists
than it has ever been before 
our lead ms instrument the microsaic 4000 mid
®
 was
officially launched in march 2013 at pittcon the major
annual international trade fair focused on scientific and
laboratory equipment which took place in philadelphia
usa the market’s response and subsequent acceptance
of the 4000 mid
®
has been enthusiastic and through
a combination of direct sales and shipments to our oem
partner we achieved a near doubling of our revenue for
the full year 2013 to £117 million £061 million in 2012 
commercial strategy
our main route to market for our product is as an original
equipment manufacturer oem through partnerships with
companies that have established global sales channels
these companies also have complementary products that
when combined with our product can deliver synergistic
benefits for the end users during the year we strengthened
our relationship with our existing oem partner biotage ab
in june biotage ab launched its fully integrated system for
flash chromatography and mass identification which
incorporated our core ms instrument the 4000 mid
®

demand for the integrated product the isolera™ dalton
has been good and shipments of the 4000 mid
®
to biotage
are in line with expectations
we continue to develop relationships with new potential
commercial partners in the pharma biotech and other
related sectors in this regard we were pleased to announce
in april 2013 the signing of an oem agreement for the
global nonexclusive marketing and sale of the 4000 mid
®
as a standalone instrument for use in direct and rapid ms
analysis successful trials have also been completed with
a number of other potential partners and discussions are
advancing with several of these aimed at securing
commercial agreements 
strategic report – chief executive’s review
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 4 microsaic systems plc annual report and financial statements 2013 5
we were pleased to announce on 14 april 2014 the
signing of a precontract commercial agreement to provide
the miniature mass spectrometer – the microsaic 4000
mid
®
– as an original equipment manufacturer oem
the agreement is for the global exclusive marketing and
sale of the 4000 mid
®
 along with the recently released
midas™ interface unit as a standalone instrument for use
in protein separation applications the partner is a major
international healthcare equipment company
the agreement is focused on the use of the 4000 mid
®
in conjunction with protein separation a major application
that is used globally and has increasing market demand
it follows a period of rd collaboration in which microsaic
has successfully adapted and enhanced the 4000 mid
®
to address this new application 
we will work towards completion and signing of a full
commercial contract which is anticipated to include a
commitment to purchase up to 50 units and consumables
of the 4000 mid
®
in the first year increasing to over
200 units and consumables from the fourth year onwards
the initial period of the contract is expected to be
48 months the selling price is in line with the board’s
expectations shipments under the agreement are
anticipated to commence in q1 2015
in addition to oem agreements for our products in the
major ms application areas we achieved a number of
direct sales to customers in new and highvalue application
areas direct contact with users is proving to be valuable as
a means of prioritising future product development and
rd programmes a number of key direct sales have
already been achieved and a pipeline has been established
for the coming year
the 4000 mid
®
is currently manufactured at our facility in
woking but in line with our commercial strategy and as
sales increase in 2014 we will be outsourcing the
production of the units to an accredited thirdparty supplier
new technologies
our marketing plan for 2013 has been directed towards
positioning microsaic as a solution provider for chemical
analysis rather than simply as a mass spectrometer vendor
in line with this plan we have been leveraging our technical
expertise to develop nextgeneration products that we
believe will significantly expand the range of applications
that our innovative ms instruments can address and that
endusers will increasingly demand
in january 2014 we launched the midas™ compact
interface module the midas™ unit has been designed to
extend the use of ms in the laboratory from specialist
analytical chemists to the wider research community
it connects to the 4000 mid
®
and offers automated sample
preparation and injection for direct ms analysis in realtime
at the lab bench or in the fume hood
our strategy is to commercialise midas™ alongside the
4000 mid
®
through partnerships with wellestablished
suppliers in the areas of analytical and medicinal chemistry
and directly to customers in niche application areas
in june 2013 we presented a working prototype of our
chipbased triple quadrupole mass spectrometer for the first
time at the american society of mass spectrometry asms
this new technology can analyse more complex materials
such as medical eg blood or saliva or environmental
samples and is an important achievement that has the
potential to further extend microsaic’s leading position in
miniaturised ms instrumentation we recently exhibited our
latest progress with this system at the major trade fair
pittcon in march 2014 where the reception from delegates
was very encouraging negotiations are ongoing with
a number of possible key ms instrument partners to develop
the triple quadrupole into a fully commercial product with
an expected launch date in 2015 
at the same event we displayed our concept product 4500
mid
®
instrument for the first time this system is an
extension of the 4000 mid
®
and has been designed for the
mass identification of larger molecules in sample mixtures
such as proteins and peptides we intend to launch this
product in the next twelve months and are already engaged
in discussions with potential oem partners to develop this
system further for commercialisation in several areas
microsaicpp0107microsaic0107  07052014  1038  page 5 financial results
revenues increased 92 to £1165235 in 2013 2012
£606281 oem sales volumes of the 4000 mid
®
have
been the principal contributor to this rise with regular
monthly shipments being made sales of consumables are
also rising and will become more significant over time as
the installed base grows 
research and development revenue streams are becoming
a less significant proportion of the total company income
but continue to make a contribution spending on rd
amounted to £927379 and was focused on product
enhancements in order to open up new application
opportunities for the mid
®
and on our triple quadrupole
mass spectrometer
the total comprehensive loss for the year was £2285158
compared to £1867069 in the previous year excluding
the effects of sharebased payments accounting the
operating expenses for 2013 and 2012 were £1462395
and £1228084 – the increase arising from business
development and marketing activities and augmenting the
business infrastructure as commercial operations ramp up
in may the company placed 9951443 ordinary shares
with new and existing shareholders this represented a 23
increase in the company’s issued share capital we wish to
thank our investors for supporting this placing which will
enable the company to execute its organic revenue growth
plans as well as allow investment in the development and
production of instruments and technologies the gross
proceeds raised from the issue amounted to £428 million
cash in hand at 31 december 2013 was £324 million
as with previous years the going concern basis has
continued to be adopted in preparing the financial
statements following the progress made by the company
to date and the progress anticipated in the near term the
directors have a reasonable expectation that the company
will have access to adequate funds to continue operations
for at least twelve months further details are provided in
the notes to the financial statements
enhancing the team
to ensure the company is equipped with the necessary skills
and personnel to drive continuing revenue growth and to
support the transition into a successful commercial business
we have made a number of new hires during the year
we have created a new business development team whose
objective is to grow direct sales and establish new
commercial relationships and routes to market our
customer services team has been enhanced significantly and
the engineering team has been expanded in order to ensure
our oem and direct customers have the technical support
they require i am now confident that we have the
commercial and technical personnel in place to support
senior management as we look to drive the growth of the
business in the years ahead
i am delighted to report the appointment of andrew darby
as finance director andrew darby has over 17 years of
experience in senior finance strategic and operational roles
within quoted companies in the information technology
sector he joins microsaic from active risk group plc
formerly an aimlisted company specialising in enterprise
risk management software solutions 
in october we announced the formation of the company’s
first scientific advisory group members of the group have
impressive credentials across a wide range of areas in
industry and research and will be able to advise us on
future applications for our chipbased technology
6 microsaic systems plc annual report and financial statements 2013
strategic report – chief executive’s review continued
for the year ended 31 december 2013
microsaicpp0107microsaic0107  07052014  1038  page 6 outlook 
i am very pleased with the progress that microsaic made
across all areas of its business in 2013 we have built
a strong foundation around the 4000 mid
®
though our
oem partnerships and are confident of signing further
agreements with other interested oem partners who have
established global sales distribution channels sales are
building and we are gaining increasing recognition for the
potential of our innovative ms technologies and new
products within the scientific analytical instrumentation
market where we believe we have an opportunity to make
ms accessible across a broader range of applications and
to a much larger number of lab scientists than ever before
we now have the team in place needed to support the
expected growth and development of our business
we are focused on three business strategies that underpin
our ambitions for 2014 and beyond
• developing oem partnerships with synergistic
companies which can provide microsaic with access
to enhanced sales distribution channels alongside our
own direct sales channel
• stepping up marketing communications and the
promotion of the core brand values of microsaic
• outsourcing the manufacture of the main product
ensuring highquality build reliability and high volume
capacity
all our activities are aligned to these three priorities our
‘plug  play’ usability designs remain unique and the
increasing market acceptance of our chipbased technology
will provide the platform for further growth and
differentiation from competitors we remain intent on
broadening the application base and enhancing user
experience of the mid
®
in order to make it the benchtop
analytical tool of choice for chemists it is my belief that
these strengths and focused strategy puts microsaic
systems in a strong position to capitalise in an evolving
market
microsaic systems plc annual report and financial statements 2013 7
microsaicpp0107microsaic0107  07052014  1038  page 7