share our technology 
share our passion
surgical innovations group plc
annual report and accounts 2010 surgical innovations group plc specialises in 
the design and manufacture of innovative devices 
for use in minimally invasive surgery mis and 
industrial markets
specialising in the design and manufacture of creative 
solutions for mis and industrial markets our pioneering 
products are user orientated with ergonomics at the 
core of our technology
our growth strategy
 continuous innovation and product development
 technology transfer into other areas of mis 
 development of both new and existing oem relationships 
  continued expansion through organic 
growth of si brand in international markets 
  explore acquisition opportunities in new 
therapeutic markets   review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 01
review of the year 01  19
at a glance highlights 01
the queen’s award 02
at a glance our business  04
chairman’s statement 06
business and financial review  08
corporate social responsibility  16
governance 20  35
board of directors 20
senior management and advisers  22
clinical advisory board  24
surgical innovations’ trade marks  26
report of the directors  27
report on remuneration  31
corporate governance  34
 
accounts 36  61
 report of the independent auditor – group  36
 consolidated statement of comprehensive income  37
consolidated balance sheet  38
consolidated cash flow statement  39
consolidated statement of changes in equity  40
 notes to the consolidated financial statements  41
 report of the independent auditor – company  56
company balance sheet  57
 notes to the company financial statements  58
fiveyear summary  61
shareholder information 62  68
notice of annual general meeting  62
explanatory notes to the notice of annual general meeting 66
form of proxy  67
warning to shareholders – boiler room scams ibc
revenue  £m
operating margins 
pretax profit  £m
net cash generated from operating activities £m
review of the year
at a glance highlights
£7 045m 
55
07 08 09 10
4770
4312
4541
7 045
22 
07 08 09 10
15
19
6
22
£1 549m 
487
£2202m 
07
07
08
08
09
09
10
10
0731
0428
0820
0700
0264
1439
1549
2202
 financial highlights
  revenue increased 55 to £7 045 million 
2009 £4541 million
  pretax profit increased 487 to 
£1549 million 2009 £264000
  operating margins increased to 22 
2009 6
  net cash of £22 million generated from 
operating activities 
  basic earnings per share of 048p 
2009 0 14p
operational highlights
  own brand sales increased 30 to 
£3852 million 2009 £2956 million 
driven by flagship resposable
®
 products
  oem revenues increased 71 to 
£2506 million 2009 £1463 million
  industrial sales boosted by delivery 
of £616000 order 
  continued major investment in research 
and development plant and manufacturing
visit our website  
wwwsurginnocom the queen’s award
review of the year
surgical innovations group plc      annual report and accounts 2010 02
surgical innovations si celebrates winning the queen’s award
announced on the queen’s birthday – 21 april 2010 – si was awarded 
the queen’s award for enterprise the uk’s most prestigious award for 
outstanding innovation and business performance
receiving the award under the innovation category  the accolade 
acknowledges the technical and clinical excellence si has achieved 
with its pioneering yelloportplus
®
 – a port access system which 
acts as a channel into the body allowing surgeons to carry out 
delicate keyhole procedures 
the awards are made each year by her majesty queen elizabeth ii 
on the advice of the prime minister  who is assisted by an advisory 
committee that includes representatives of government industry 
and commerce and the trade unions 
speaking about the award graham bowland managing director 
of surgical innovations said “we are delighted to win such a 
prestigious royal award for our contribution to the healthcare 
industry  this award acknowledges the commitment and also 
the dedication made by every single one of our employees from 
design through to production and also acknowledges yorkshire’s 
thriving healthcare technology sector” 
chairman doug liversidge cbe added “the board would like 
to extend its congratulations and say a personal thank you to 
everyone involved in this achievement and their contribution 
towards the overall success of the group ”
“ designing and developing yelloportplus
®
 
was a real milestone in the history of surgical 
innovations and travelling to buckingham 
palace to meet the queen was a real honour 
and pleasure it certainly is a day i will 
always remember ”
mike white
product development director   review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 03
after the presentation the rt hon david blunkett mp revealed 
how he was a “guinea pig” for the device while he was serving as 
home secretary the labour mp spoke about how he was 
diagnosed with gastrooesophageal reflux during this time and 
was introduced to si’s cofounder professor mike mcmahon who 
operated on him using si’s instruments
other awards we’ve won
regional innovation award 2010
medilink yorkshire and humber innovation 
and healthcare business award 2010
individual of the y ear  
large company 2010
yorkshire productivity awards
y orkshire innovator award 2010
thebusinessdeskcom 
yorkshire business masters 2010
“ i’m here as a recipient of the wonders 
of instrumentation that have been 
created by this company ”
rt hon david blunkett
labour mp
00
read more stories like this 
wwwsurginnocomnews surgical innovations group plc      annual report and accounts 2010 04
at a glance our business
review of the year
si brand
specialising in the design and manufacture of creative solutions 
for mis and industrial markets our pioneering products are user 
orientated with ergonomics at the core of our technology 
si reports under three operating statements
oem 
we design and manufacture our own successful 
brand of resposable
®
 medical devices
si has introduced advancements such as 
yelloport plus
®
 laparoscopic port access 
system logi
®
range resposable laparoscopic 
instrument system fastclamp endoscopic 
clamping system and quick
®
range single use 
laparoscopic instrumentation
we are proud to be an oem supplier to several 
leading medical device manufacturers
it is testament to our design and manufacturing 
skills that our products are in demand by highly 
renowned medical companies si can offer an 
effective solution providing expertise in the design 
and development of an instrument combined with our 
manufacturing capability to produce a final device 
ready for ultimate sale
industrial
we are excited about the growth of the 
group’s business providing industrial 
solutions for major international companies 
the solutions are based on our core technology 
developed over the years in our surgical 
instruments business we believe that there is 
scope to develop and expand this segment using 
our core technology 
strategy
  new product development to enhance 
the si brand
  increase our network of specialist 
distributors
  expand the use of yelloportplus
®
 
within the us market 
strategy
  develop the oem proposition to provide 
a fullservice solution from concept 
through to the development and 
manufacture of innovative devices
  use si’ s core intellectual property to create 
medical device solutions for oem partners 
  continue promotion and adoption of 
si’s resposable philosophy with major 
medical device companies
strategy
  continue to seek opportunities where 
si’s intellectual property can be 
adapted to industrial applications 
  continue to engage with major 
industrial partners  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 05
oem revenue
£2506000  
00
00
read more on this division  
page 10  11
read more on this division  
page 12  13
si brand revenue
£3852000  
percentage of group revenue
key product ranges
 yelloportplus
®
 logi
®
range
 logic
®
range
36
54
percentage of group revenue
percentage of group revenue
companies we are working with
 gyrus
	 t elefle x
 carefusion
key industrial applications
 aero engine
 power generation
10
industrial revenue 
£687 000 
00
read more on this division  
page 14  15
00
international growth
the growth strategy of the business is based upon 
the distribution of si branded products through 
our worldwide independent dealer network
00
read more online  
wwwsurginnocom surgical innovations group plc      annual report and accounts 2010 06
chairman’s statement
review of the year
i am pleased to report a record year in 
the continuing development of the group 
our strategy of producing innovative high 
quality and costeffective instruments to an 
increasingly costconscious market coupled 
with the strong investment in 2008 and 2009 
has really started to bear fruit both for our 
own branded and oem products 
given the growth of the business and to 
provide greater clarity of progress in the key 
markets in which we operate the group 
is for the first time reporting across three 
segments si brand oem and industrial 
results
revenue for the period was £7 045 million 
2009 £4541 million and profit before tax 
increased nearly fivefold to £1549 million 
2009 £264000 
a large part of this growth has arisen from 
sales in the oem segment which accounted 
for 35 of total revenue 2009 32 
a year of progress and innovation
“ the group has undergone 
yet another year of 
transformation successfully 
meeting the demands 
of rapid growth we have 
continued to invest heavily 
in the business while rd 
capability has undergone 
a stepchange to speed up 
new product development 
and improvements to our 
existing technology  ”
doug liversidge cbe
chairman
summary of chairman’s statement
  total revenue for the period increased by 
55 to £7 045 million and profit before tax 
increased nearly fivefold to £1548 million 
  capitalised investment in rd rose by 
57 to £1674 million 
  the board is confident about future growth 
prospects of the business for 2011  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 07
sales growth of si branded products was 
driven by our resposable
®
 products and 
overall revenues were boosted by the delivery 
of a £616000 order in the industrial segment 
in may 2010 sales to industrial customers 
accounted for 10 of total revenues for 2010 
retained profit for the period was £1 788 million 
2009 £525000 including a taxation 
cash flow and investment 
during the year the group generated net cash 
of £2202 million from operating activities 
enabling the group to continue its strong 
investment in product development with 
capitalised investment in research and 
development rd increasing by 57 
to £1674 million 2009 £1066 million 
reflecting a stepchange in the structure 
of the rd team as well as a stronger 
focus on new product development 
elsewhere capital expenditure remained 
strong with £628000 invested in plant 
and equipment while the total number 
of employees and agency staff increased 
from 76 at the end of 2009 to 117 at the end 
of 2010 we have continued to make staff 
appointments in all areas of the business 
while the rd team has been reorganised 
in such a way as to encourage product 
concept generation 
the clinical advisory board now consists 
of nine highly experienced surgeons covering 
a wide range of specialisms in mis with 
mr marco adamo and mr jon conroy joining 
the board in january 2011 the latter extending 
the team’s expertise into arthroscopy
dividend 
in 2009 si successfully applied to the courts 
to cancel the group’s accumulated losses 
the purpose of this was to enable the board 
to implement a dividend strategy at such time 
as it considers appropriate while a strategy 
remains under review the board believes that 
at this stage in the group’s development it 
would be more appropriate to continue its 
focus on strong inward investment 
acquisitions 
the board continues to review acquisition 
opportunities in the area of mis where 
strong synergies exist with the group and 
where our rd expertise and inhouse 
manufacturing capabilities can create 
improvements to the products and cost 
savings for the end user
outlook
trading in the period since the year end has 
been encouraging particularly from the core 
business where we have seen further orders 
for si branded products particularly for 
yelloportplus
®
 the rd team continues 
to improve the si branded product range to 
generate a wider range of new products and 
enhancements for our global distributor 
network and affirm our position as a leading 
innovator within the field of mis
in february 2011 we were pleased to announce 
the fouryear exclusive contract for a minimum 
of 22 million with usbased mediflex 
surgical products “mediflex” with regard 
to the inclusion of yelloportplus
®
 in surgical 
trays in the us 
we are also being approached by several other 
oem customers to develop new laparoscopic 
products on an exclusive basis 
we remain confident about the future growth 
prospects of the business for the remainder 
of 2011 and further into 2012 and 2013 as 
new products are launched towards the end 
of this year and the increasing traction with 
oem customers gains momentum
i would like to thank the board and staff 
for their tireless work in 2010 and their 
contribution to the rapid growth of the 
business we are better positioned than ever 
to take full advantage of the opportunities 
that are available to us and i look forward 
to reporting on the continuing success 
of the group over the coming year
doug liversidge cbe
chairman
19 april 2011
00
innovation
in 2010 si officially received the queen ’ s award for 
enterprise for their pioneering yelloportplus
®
 device 
– a port access system which acts as a channel into 
the body allowing surgeons to carry out delicate 
keyhole procedures review of the year
surgical innovations group plc      annual report and accounts 2010 08
business and financial review
operating review
the investment made in the group throughout 
2008 and 2009 started to make a material 
impact in 2010 and resulted in a year of 
record performance 
all three segments of the business demonstrated 
significant growth in 2010 the main focus 
remains our core business of mis either 
through our own branded products or on 
behalf of our oem customers 
we continued to make significant investment in 
rd as well as in our manufacturing capability  
rd
the group ’ s continuing success and growth is 
dependent on its ability to create new concepts 
and intellectual property in the field of mis 
significant investment of £1 834 million was 
made in 2010 2009 £1 066 million in the rd 
team as well in a change in its structure rd 
now employs 28 individuals and is divided into 
concept and development teams 
the concept team of seven has been given 
a wide brief to generate new ideas across all 
areas of mis working closely with the clinical 
advisory board the team has a target to 
generate six concepts per annum which can 
be transferred to the development team for 
further work the team is working on a 
‘‘ the investment made in 
the group throughout 2008 
and 2009 started to make 
a material impact in 2010 
and resulted in a year of 
record performance ’’
significant investment in research 
and development
graham bowland
chief executive officer
summary of business and financial review
  ownbrand sales driven by flagship 
resposable
®
 products
  significantly improved trading with 
oem partners
  industrial sales boosted by delivery of 
£616000 order
  continued significant investment in rd 
across a range of products
  creation and expansion of concept and 
product development teams   review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 09
number of new products and improvements 
which are on course to be brought to the 
market by the end of 2011 furthermore in 
2010 the group filed nine new uk patents 
as compared to five in 2009 
the rd team has also benefited from the 
investment in inhouse manufacturing a 3d 
printer and advanced cad technology with 
the result that new ideas and prototypes can 
now be presented to potential customers in 
a matter of days rather than months 
looking forward the group expects to continue 
its high level of investment in rd as part of an 
ongoing strategy to ensure a regular stream of 
new products and continual product improvement 
manufacturing
during 2010 £628000 was invested 
in tooling plant and machinery this was 
a continuation of the £839000 invested 
in 2009 the focus in 2010 was in areas 
where additional capacity was required 
and in plastic injection moulding which 
now enables the group to manufacture 
inhouse instrumentation in their entirety 
the manufacturing facility now operates 
a continuous daily threeshift system 
constituting a much higher return on capital 
employed as compared to 2009 capacity has 
increased in all areas of the facility and this 
has been complemented by the introduction 
of lean manufacturing practices to optimise 
process performance this will continue 
throughout 2011 computerised data control 
measuring has now been introduced to all 
areas of the machine shop giving us the 
ability to analyse tolerance information and 
enhance quality control 
our facility allows for further capacity in the 
foreseeable future and investment scheduled 
for the current financial year will facilitate 
the continued growth and optimisation of
number of patents filed in 
the uk alone 
 
9 patents 
in 2010 
in the uk 
alone 
09 10
5
9
at a glance key performance indicators
research and development
the group expects to continue its high level of 
investment in rd as part of an ongoing strategy 
to ensure a regular stream of new products and 
continual product improvement 
the directors have monitored the overall progress of the group and the individual 
strategic elements by reference to certain financial and nonfinancial kpis
financial performance
kpis are in place to measure sales profitability rate of divisional growth cash generation 
and returns on capital employed 
customer satisfaction
kpis are established to measure and improve customer relationships quality of service 
and our order delivery times
employee satisfaction
kpis are agreed to measure staff morale training needs and personal development
leadership
kpis are set to measure the performance of directors and management in conjunction 
with overall group strategy and planning
innovation
kpis are positioned to measure the creativity and inventiveness of employees to improve 
the number of patents filed design rights applied for and internal products developed
00
700p
600p
500p
400p
300p
200p
100p
000p
mar 03
nov 10
jul 10
mar 10
nov 09
jul 09
mar 09
nov 08
jul 08
mar 08
nov 07
jul 07
mar 07
nov 06
jul 06
mar 06
nov 05
jul 05
mar 05
nov 04
jul 04
mar 04
nov 03
jul 03
share price performance 
  review of the year
surgical innovations group plc      annual report and accounts 2010 10
business and financial review continued
operating review continued
manufacturing continued
the manufacturing arm injection 
moulding capacity will be expanded and 
further automation within the cleanrooms 
is planned as part of our wider initiative to 
improve operating efficiencies throughout 
the group 
si brand
revenues from si branded products increased 
over the period by 30 to £3852 million 
2009 £2956 million this growth was driven 
by si’s flagship resposable
®
 products 
yelloportplus
®
 and logi
®
range 
demand for resposable
®
 instruments where 
some elements are disposable and others 
reusable reflects a culture change within 
the medical device industry and provides 
costeffective solutions to an increasingly 
costconscious environment 
the sales and marketing of si’s products 
continued apace in its target regions the 
business development team now consists 
of four full time employees who are looking 
to expand distribution of si’s products 
through its network of over 45 dealers in 
europe the middle east india australasia 
and the us the team continues to attend 
international exhibitions in these territories 
in 2010 it became evident that the routes 
to market in the us are different for each 
product for example the most effective way 
to distribute the logi
®
range is via a master 
dealer while yelloportplus
®
 benefits from 
being distributed via serviced tray companies 
since the year end we announced a 22 million 
contract with mediflex surgical products with 
regard to the inclusion of yelloportplus
®
 
in surgical trays throughout the us
in the uk the group extended its exclusive 
distribution partnership with elemental 
healthcare for a further three years with 
particular focus on yelloportplus
®
 and 
logi
®
range instruments 
new product development and product 
enhancement for the si brand continues 
apace and is driven by the rd team’s close 
working relationship with the clinical 
advisory board 
all our existing products are under continuous 
scrutiny by the rd team to improve quality 
and performance as well as product line 
extensions investment in our own machinery 
allows us to provide a greater range of disposable 
elements that complement the reusable parts 
we are currently expanding the logi
®
range 
to include a broader range of jaws in different 
sizes introducing it to new areas of 
laparoscopic surgery  
with increasing focus on safer surgery and 
cosmesis the cosmetic aspect surgery 
there is a drive for smaller and even less 
invasive surgery  to respond to this si is taking 
the strategic step of developing a range of 
3mm resposable
®
 instrumentation which is 
compatible with its existing nondisposable 
handles that are already in the market place 
si is also designing percutaneous instruments – 
surgical devices that access the patient 
through a needle puncture rather than a port – 
and updates on these developments will be 
provided in due course 
as a result the group has steadily built a 
reputation as a leading innovator in the field 
of mis 
oem 
revenues in the oem segment increased 
during the period by 71 to £2506 million 
2009  £1 463 million of which royalties were 
£347 000 the growth in this part of the business 
is a reflection of our strong relationships with 
large medical device companies such as gyrus 
t eleflex medical and carefusion 
our product ranges
design icon
 logi
®
 logic
®
 quick
®
 yelloport
®
 yelloportplus
®  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 11
what have we done
  revenues from si products increased over the period by 30 
to £3852 million 2009 £2956 million
	 	 since	the	y ear	end	w e	announced	a	 22	million	contr ac t	with	medifl e x	
surgical products with regard to the inclusion of yelloportplus
® 
in surgical trays throughout the us
  in the uk the group extended its exclusive distribution partnership 
with elemental healthcare for a further three years
what’s next
  the business development team is looking to expand further the 
international distribution network
	 	 de v el opment 	 o f 	 de vices 	 using 	 si ’ s 	 fl e x 	 t ec hnol ogy  	
  expansion of the logi
®
range enabling the devices to be used 
in a broader range of laparoscopic procedures
  taking the strategic approach of developing a range of 3mm 
resposable
®
 instrumentation to meet future patient demand 
for improved surgical cosmesis
demand for resposable
®
 instruments where some 
elements are disposable and others reusable reflects 
a culture change within the medical device industry 
and provides costeffective solutions to an increasingly 
costconscious environment
si brand
resposable
®
 technology is saving hospitals thousands 
of pounds a year
hospitals that switch to resposable
®
 technology – surgical 
instruments that combine both disposable and reusable components – 
can save thousands of pounds a year according to information 
released by si and its uk distributor elemental healthcare
carrying out the study into the use of yelloportplus
®
 the 
companies discovered that those hospitals who had switched from 
disposable to resposable
®
 saved £108000 over 500 procedures
‘‘ we don’t want patients and surgeons to have 
to compromise on quality which is why our 
resposable
®
 range has been designed to satisfy 
both surgeons and procurement managers it has 
the high quality aspect of a disposable product yet 
still provides the cost effectiveness of a reusable ’’ 
david marsh
cofounder and joint managing director surgical innovations group plc      annual report and accounts 2010 12
review of the year
business and financial review continued
operating review continued
oem continued
the oem business is reliant on our partners 
to drive business on our behalf and it can on 
occasion be unpredictable in terms of repeat 
revenue streams from individual partnerships 
t o counteract this we collaborate closely with 
our partners to gain understanding of the 
challenges they encounter in the marketing and 
acceptance of their specific oem product lines 
the greatest attraction to our oem customers 
is undoubtedly our strategic positioning of a 
valueadded fullservice offering of design 
regulation and manufacturing this approach 
has made us of particular interest to us medical 
device companies and it is from here that the 
majority of enquiries are now being generated 
crucially and strategically the group retains 
the full intellectual property rights for any 
devices it develops in return for providing 
exclusive worldwide distribution rights to the 
oem customer over a fixed period of time 
importantly the group is not offering contract 
manufacturing or a longterm assignment of 
a licence with the exception of revenues that 
are generated from royalties the ownership 
of all intellectual property enables the group 
to take back distribution rights at the end of 
any distribution agreement or if sales targets 
are not met 
industrial 
total revenues for the industrial segment 
during the year were £687 000 2009 £122000 
as previously stated the delivery of a 
£616000 order in may 2010 significantly 
boosted sales and revenues as predicted 
sales in the second half of the year returned 
to historic levels we continue to seek 
opportunities where our intellectual property 
can be adapted to industrial applications and 
the group continues to engage with major 
industrial partners we look forward to 
updating shareholders on our progress 
employees and management
in 2010 we continued to make appointments 
across all areas of the business increasing 
the total number of employees and agency 
staff to 117 2009 76 i would like to thank 
all our staff and management for their 
support and hard work in the last year 
financial review
revenue
revenue increased 55 to £7 045 million 
2009 £4541 million this increase was as 
a result of a 71 increase in oem revenues 
to £2506 million together with increases in 
the other two reporting segments si brand 
and industrial 
gross margin
gross margin has increased to 50 
2009 42 with the group again targeting 
an improvement in 2011 with increasing 
volumes operational efficiencies and 
substantial investment in machinery 
operating expenses 
the group’s operating expenses increased 
in 2010 by £404000 26 as a consequence 
of investment in business development 
personnel and associated sales and 
marketing costs
employee numbers increased substantially 
during the year in areas which will add future 
value to the business and provide a level 
of customer service that benefits our 
organisation as a consequence operating 
expenses are projected to increase in 2011 
but at levels that provide overall group 
profitability within planned objectives
notwithstanding our investment in personnel 
the group continues to rigorously control 
costs and is aware of the need to generate 
cash within the business as a means of 
funding future capital and product investment 
oem revenue growth £m
 
£2506m 
71
09 10
1463
2506  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 13
oem 
what have we done
  total revenues for the oem segment during the year were £2506000 
2009 £1463000
	 	 la unc h	o f	ins tr umenta tion	r ang e	f or	 t el e fl e x	medical 
  continued collaboration with gyrus medical
  successful transfer of si valve technology within thirdparty port 
access system
what’s next
	 	 continued	collabor a tion	with	 t el e fl e x	medical	t o	ensur e	success f ul	
adoption of developed technology
  promotion of si’s oem proposition to us medical device companies
  development of new intellectual property with exclusive rights 
to key oem partners
the group’s ability to conceive develop and 
manufacture products to order for oem partners 
while retaining full intellectual property rights is 
a key factor in securing si’s future growth
surgical innovations wins fiveyear contract with t eleflex medical
buil ding	upon	a	pr e vious	r ela tionship  	 t el e fl e x	ap pr oac hed	si	t o	
develop new handle technology the articulating reusable handles 
ha v e	been	under	de v el opment	b y	 t el e fl e x	and	si	f or	tw o	y ear s	and	
the	unique  	fl e xibl e	na tur e	impr o v es	the	er g onomics	and	ease	o f	
use for surgeons performing keyhole surgery si retains the full 
intellectual property rights for the devices subject to the rights of 
t el e fl e x 	 t o 	 utilise 	 the 	 int ell ec tual 	 pr operty 	 in 	 the 	 sal e 	 o f 	 the 	 de vices 	
pursuant to the supply agreement the initial roll out of the 
technology will be throughout europe with the potential for 
expansion into the us
‘‘ this order represents an important milestone 
for our oem business we have been working 
successfully with teleflex for more than ten years 
and we are delighted to continue this successful 
relationship our inhouse design prototype and 
manufacturing facilities allow us to develop new 
and improved technologies ’’
graham bowland
chief executive officer review of the year
surgical innovations group plc      annual report and accounts 2010 14
business and financial review continued
financial review continued
finance income and costs
the net financial expense for the year was 
£30000 2009 £27 000 this reflects the 
reduced returns available on the group’s 
cash deposits coupled with the cost of asset 
finance we continue to finance assets 
used in the manufacturing processes of the 
business ensuring funds remain within the 
group for both internal product development 
and our working capital needs 
profitability and operating margins
the group’s operating profit for 2010 was 
£1579 million 2009 £291000 this is after 
charging £8000 of noncash expenditure 
relating to sharebased payments we are 
greatly encouraged by the substantial uplift 
in operating margin to 22 2009 6 we 
believe there is further room for improvement 
through product mix and continued capital 
investment within the manufacturing facility
capitalised development costs
the group has a policy of continuous product 
development both for si brand and oem 
partner devices as in previous years the 
board is confident in the success of these 
products and accordingly £1674 million of 
costs have been capitalised during the year 
increasing the total amount of capitalised 
costs to £3984 million 
yelloportplus
®
 continues to generate revenues 
and under the group’s accounting policy 
£73000 of associated development costs 
were amortised in the period 2009 £101000 
together with £111000 in relation to other 
products where revenue commenced in 
the period 
following review the board recognised an 
impairment charge of £334000 within the 
financial statements and at 31 december 2010 
confirmed that no further provision for 
impairment was necessary
foreign currency
the group maintains foreign currency bank 
accounts and wherever possible supplier 
payments are made in euros or dollars 
to utilise currency receipts 
the group has used forward exchange 
contracts and will continue to monitor the 
need for such contracts depending upon 
the level of natural hedging achievable 
taxation
the group recognised a tax credit of £239000 
resulting from deferred tax reflecting the 
extent to which recoverability of tax losses 
can be foreseen with reasonable certainty 
the group holds deferred tax assets on the 
balance sheet of £432000 2009 £193000 
in addition there are a further £16 100 million 
2009 £14600 million of tax losses that have 
not been recognised 
earnings per share eps
the group achieved 048p 2009 014p 
underlying basic eps in 2010 there were 
shares issued during the year and full details 
of all the eps calculations are set out in note 
6 to the accounts
cash and net funds
at the end of 2010 the group had £442000 
2009 £622000 in net funds net funds are 
defined as cash and cash equivalents less 
obligations under finance leases
working capital
working capital increased to £3942 million 
2009 £3630 million as a result of a reduction 
of £211000 in trade and other payables 
to £607 000 2009 £818000 the business 
generated net cash from operations of 
£2202 million 2009 £1439 million however  
after accounting for the acquisition 
of noncurrent assets of £2044 million 
2009 £1517 million there was a net cash 
increase in the year of £60000 
2009 decrease of £316000
industrial revenue growth £’000
 
£687 000 
463
09 10
122
687  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 15
what have we done
  total revenues for the industrial segment during the year were 
£687 000 2009 £122000
  delivered a £616000 order in may 2010 for our key industrial partner
what’s next
  continue to seek opportunities where si’s intellectual property can be 
adapted to industrial applications 
  continue to engage with major industrial partners
the group’s industrial segment provides industrial 
solutions for major international companies we 
believe there is scope to develop and expand this 
segment using our core technology 
indus trial
surgical innovations delivers major industrial order
on 17 may 2010 si announced that it had delivered a £616000 
order to one of its key industrial partners the order originally due 
for completion in december 2009 was delayed as a consequence 
o f	thir d	par ty	t ec hnical	difficulties  	whic h	w er e	r esolv ed	in	mar c h	
2010 this is the largest single order the group has received within 
its industrial division
‘‘ fulfilling this order represents an important step 
for our industrial division and we are delighted that 
a commercially successful outcome has arisen 
from the eighteen month development project 
we look forward to continuing development of the 
industrial business as we strive to develop the 
technology for a wider range of applications within 
the field ”
graham bowland
chief executive officer review of the year
surgical innovations group plc      annual report and accounts 2010 16
corporate social responsibility
committed to our stakeholders
impact on society
at surgical innovations we strive to play 
an integral role in society and our core value 
is to meet the needs of forwardthinking 
surgeons and clinicians by supplying 
highquality costeffective instrumentation 
that empowers surgeons and provides 
patients with an improved quality of life
 si has chosen to bring “manufacturing home” 
to west yorkshire – a goal that has been 
achieved through total capital investment of 
£26 million since moving facilities in april 
2008 this strategic move has enabled us to 
design and manufacture all products 
inhouse thereby tripling our workforce by 
the end of 2010 it has also led to a significant 
reduction in the group’s carbon footprint
 on a fundraising level si organises internal 
activities to raise money for a local children’s 
charity and we actively encourage employee 
participation in local fundraising events 
such as a recent abseiling event at the 
royal armouries leeds many members 
of the si team also regularly participate 
in sponsored sporting challenges for their 
own individual charities for which si has 
a policy of financially matching employee 
sponsorship contributions 
environmental impact
si’ s objective is to create a climate of excellence 
not only for our products and services but also 
for employees and persons affected by our 
activities and the environment in order to achieve 
this we have an environmental policy and 
are committed to regular monitoring of our 
environmental performance against objectives 
regulated by a committed managed system 
the environmental policy reviews the impact 
of all si’ s policies operations and investment 
decisions and covers emissions and fuel 
efficiency  noise waste energy use and recycling 
relations with suppliers partners and 
contractors
si uses criteria of a reputable standard to select 
major suppliers partners and contractors 
and ties to ensure that all our major suppliers 
meet the requirements of our iso 90012000 
recently we helped two of our major suppliers 
to implement this criteria by continued support 
and encouragement in all cases we will try 
to ensure a longterm partnership which 
benefits all parties involved 
relations with regional stakeholders
working with key stakeholders across the region 
allows si to play a key role in the healthcare 
sector of yorkshire and humber and enjoying 
a longstanding relationship with both 
medilink and medipex enables the company 
to benefit from the sector expertise available 
relations with regional educational institutes
surgical innovations strives to play an 
integral role in society and 2010 has seen 
the company venture further into the wider 
community recognising the importance to 
invest in the younger generation by working 
with local schools and universities 
a group of btec science students from a 
local high school visited surgical innovations 
in february to learn about the potential career 
opportunities available to them before being 
given a tour of the factory and set a 
design challenge
alongside this activity si has been working 
the thackray medical museum to create an 
individual exhibit for the museum which will 
go on display in the next quarter the purpose 
of the exhibit is to showcase si’s worldleading 
products explaining the history of the company 
and encouraging schoolchildren to understand 
the diverse opportunities available in a medical 
career – from doctor to designer
   review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 17
the strategy for si’s work with the 
younger generations is to inform and educate 
schoolchildren on the opportunities available 
to them through design and manufacturing 
with a company such as si and to plant the 
seed of enthusiasm required for a career 
in innovation 
implementing this strategy si held an 
open day welcoming school leavers in the 
area to learn more about the manufacturing 
apprenticeships on offer whilst gaining an 
overall appreciation of the business 
working with universities in the region si 
is currently running two knowledge transfer 
partnerships ktp with the university of 
leeds and the university of bradford 
ktps aim to help businesses improve their 
competitiveness and productivity through 
the better use of knowledge technology and 
skills that reside within the knowledge 
base through specifically managed projects 
organised by si and the universities to ensure 
commercial benefit
in addition to this si is also working with both 
the university of bradford and the university 
of leeds to sponsor students through their 
masters degree studies this collaboration 
will enable students to work on specific 
si projects guided by representatives of 
academia and industry to provide them 
with valuable research and development 
knowledge within a commercial environment
relations with employees
si has a happy and motivated team of 
employees and endeavours to ensure the 
highest working standards for all staff 
an example of this is business improvement 
training which is carried out through the nvq 
awards designed to give employees an 
important insight into the layout and 
processes of si’s business 
 si has a number of safe working practices in 
place these include sending representatives 
on the nebosh programme a nationally 
recognised qualification that covers the main 
legal requirements for health and safety in 
the uk
 a health and safety committee made up 
of employees from across the organisation 
is in place to continually review and update 
the health and safety policy this ensures a 
safe working environment for both employees 
and visitors to the si facility 
 to assess staff performance annual 
appraisals are carried out by department 
heads and an annual ‘employee of the year’ 
award takes place to recognise and reward 
who we collaborate with review of the year
surgical innovations group plc      annual report and accounts 2010 18
corporate social responsibility continued
relations with employees continued
achievements made throughout the year 
there are also regular team building events to 
increase staff morale unite the organisation 
and encourage interdepartmental interaction
in a bid to ensure a work life balance si offers 
flexibility in working hours and extended 
holidays for long service as well as extra time 
off at christmas if all work is completed on 
time these excellent terms of employment 
which are above and beyond industry norms 
have led to a high working morale and high 
staff retention many employees have worked 
for si for over ten years
 si has employed an hr manager who will 
look at reviewing and implementing policies 
and procedures with an objective of gaining 
the investors in people accreditation
relations with customers
si’s ultimate customer is the surgeon and 
the true evaluator of si products a high 
proportion of sales consist of repeat 
purchases which is a meaningful indicator 
of quality as surgeons will only use products 
that deliver their needs and offer patients 
the highest level of care
si continually looks to improve the quality 
of these products by advancing technologies 
seeking to understand customer requirements 
and being advised by its clinical advisory 
board which is made up of internationally 
renowned surgeons 
all products are designed to meet the 
requirements of iso 90012000 and 
iso 134852003 for sales in europe and 
where appropriate meet similar regulations 
throughout the world specific quality 
objectives are also set by the management 
team during the quality system review 
process and these are communicated 
to all employees on a regular basis 
finally to ensure that all our products exceed 
customers ’ expectations si continually monitors 
their performance carrying out post market 
surveillance with all our customers 
and distributors
vip visits
2010 has been a busy year for si with vip 
visits from across the country
following his appointment as prime minister 
in june 2010 we were delighted to welcome 
the rt honourable david cameron to our 
leeds facility on his first major visit since 
the election 
greg mulholland mp for leeds spoke 
after his visit “we are incredibly proud 
that this innovative company is designing 
and manufacturing leadingedge surgical 
equipment and exporting all round the world 
it shows that with vision flair and drive 
british companies can be world leaders 
it is so exciting that surgical innovations 
is doing this right here in leeds” 
following this exciting visit si was honoured 
once again when hrh the princess royal 
visited the head office in february 2011
hrh the princess royal met staff and took 
a tour of the design and manufacturing 
facilities before officially opened the company’s 
injection moulding centre
the visit was a real honour and further 
recognition of the achievements of the 
entire team in recent years
some of the country’s finest surgeons 
travelled to leeds to mark the event as well 
as uk and international distributors and a 
number of stakeholders to celebrate the 
success of si and highlight how the company 
is waving the british flag of excellence around 
the world 
2010 has been a busy year for si with vip 
visits from across the country  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 19
“this highlights how close collaboration 
and strong innovation have helped to develop 
surgical innovations into a successful 
company that is waving the british flag 
of excellence around the world ” surgical innovations group plc      annual report and accounts 2010 20
governance
board of directors
name doug liversidge cbe 
position nonexecutive chairman
age 74
board committees remuneration 
committee chairman audit committee
doug was educated in sheffield and graduated 
with a degree in metallurgy in 1957  employed 
for 21 years at british steel doug attained the 
position of chief quality manager
after moving to g w thornton as managing director 
and subsequently appointed chief executive doug 
guided the company through its flotation on the 
london stock exchange in march 1987 and was 
instrumental in the company winning numerous 
prestigious business awards including the queen’s 
award to industry for export achievement and twice 
the cutlers acclaim award for corporate growth 
in 1991 doug was awarded south yorkshire 
businessman of the year
until recently he was chairman of medilink yorkshire 
and humber and proud to hold the office of master 
cutler in hallamshire from 1998 to 1999 in 2000 
doug was appointed chairman of the south yorkshire 
learning  skills council by government office leeds 
and awarded the cbe in the 2000 new year’s honours 
list for services to industry
name graham bowland
position chief executive officer 
and company secretary
age 49
graham graduated from cardiff university with 
an honours degree in physics in 1982 he qualified 
as a chartered accountant in 1987 whilst working 
for a local firm of chartered accountants
after gaining substantial experience in the private 
sector graham joined si in february 1999 as 
financial controller and was promoted in the 
same year to the group board as finance 
director and company secretary
appointed joint managing director of surgical 
innovations limited in 2000 and made sole 
managing director in 2008 graham has been 
instrumental in building upon the company’s 
reputation within the industry for innovation and 
inhouse manufacturing in 2010 graham became 
group chief executive officer continuing to build 
the company’s strategy as well as representing the 
leeds city region on its innovation panel reporting 
to the leeds enterprise partnership
name colin glass
position nonexecutive director
age 67
board committees audit committee 
chairman remuneration committee
colin is a chartered accountant and a partner in 
winburn glass norfolk he is a founder director of 
surgical innovations limited and was instrumental 
in securing early funding and in the reverse takeover 
of haemocell plc in 1998 which resulted in the 
quotation of the company on aim 
colin is a nonexecutive director of several companies 
including straight plc and getech group plc he is the 
chairman of si’s audit committee and a member of 
si’s remuneration committee using his expertise 
in financial and corporate advisory matters colin 
has built up a wide range of contacts from various 
industries and organisations which benefit the 
companies with which he is involved annual report and accounts 2010      surgical innovations group plc 21
 governance 20  35
name ray simkins
position nonexecutive director
age 67
board committees remuneration 
committee audit committee
ray is a mechanical engineer by training and has 
qualifications from buckingham technical college 
and massachusetts institute of technology mit 
he has worked for getz since 1966 where he 
has represented their business interests in the 
us japan thailand malaysia and singapore 
he is currently president of the getz group with 
interests throughout the asiapacific region
ray has been a nonexecutive director since 1996 
and was instrumental in securing investment from 
getz prior to the reverse takeover of haemocell plc 
in 1998 ray is a member of both the si’s audit 
and remuneration committees and with a wealth 
of experience in international distribution 
management he provides invaluable input into 
many aspects of the board’s activities
name professor mike mcmahon
position nonexecutive clinical director
age 68
mike a founder director of surgical innovations 
limited became nonexecutive clinical director 
in october 2007  holds a chair in surgery at the 
university of leeds and is consultant surgeon 
at the nuffield hospital leeds 
he is the immediate past president of the 
association of laparoscopic surgeons of 
great britain and ireland als and was recently 
a royal college of surgeons tutor in mis he also 
established the leeds institute for minimally 
invasive therapy  
mike’s past roles include president of the pancreatic 
society of great britain and ireland and chairman 
of the education committee of the european 
association of endoscopic surgery surgical innovations group plc      annual report and accounts 2010 22
governance
senior management and advisers
mike graduated from brunel university with a first 
class honours degree in product design in 1996 
after winning the james dyson award for product 
design at london’s new designers exhibition 
he worked for dyson appliances before joining 
si as a design engineer in 1997 
the first project that mike was involved with at si 
logic
®
 went on to win best medical device in the 
1999 plastics and rubber weekly prw awards 
for excellence and has patents filed worldwide
a member of the chartered society of designers 
since 2002 mike was appointed to the management 
board of si as design director in 2006 and is 
dedicated to expanding the company’s product 
portfolio with innovative ergonomic and commercially 
successful instrumentation
name mike white
position product development director
age 37
paul joined the company as manufacturing 
director in 2005 he has a background in mechanical 
engineering with extensive experience of manufacturing 
both in the uk and overseas 
paul began his career as an apprentice at 
renolds power transmission in bradford before 
moving into management at a subcontract 
engineering company in heckmondwike he then 
moved into production management at pinco 
bradford a textile engineering manufacturer 
paul also spent eight months in the us where he 
was responsible for setting up a textile engineering 
plant before returning to the uk where he joined si 
paul has been instrumental in the recent setting 
up of inhouse manufacturing thereby enabling 
the more effective and efficient manufacture 
of products
name paul birtles
position manufacturing director
age 45
name stephen seed
position quality manager
age 45
stephen was educated in sheffield and graduated 
with a degree in mineral processing in 1988 
he began his quality career in the county durham 
mining industry soon moving into the chemical 
industry and then into engineering
stephen now has over 20 years’ experience as 
a quality manager he is a chartered quality 
professional member of the chartered quality 
institute and is a qualified lead auditor for iso 13485 
the medical device manufacturing standard
stephen joined si as quality manager in 2006 since 
when he has completely rewritten the company’s 
quality systems and employed his lean six sigma 
experience to continually improve procedures 
and practices annual report and accounts 2010      surgical innovations group plc 23
 governance 20  35
duncan studied business studies at sheffield 
polytechnic completing his studies in 1977  he then 
went on to study for his professional accountancy 
examinations becoming an associate member 
of the chartered institute of management 
accountants cima in 1984
duncan has spent the majority of his professional 
career working in both civil and mechanical 
engineering businesses he joined si in 2008 
as a member of the senior management team and 
has since built a strong financial and administrative 
team providing valuable support to the board of 
directors and the company
name duncan pidsley
position financial controller
age 54
name mark hughes
position business development manager
age 29
mark is fluent in spanish and has a strong 
command of several other european languages 
having left durham university in 2004 with a ba hons 
in modern european languages and an msc 
in computer science 
mark has developed his career working in uk based 
business in both national and international business 
sales roles managing challenging relationships 
with large firms such as smith and nephew 
and caterpillar
joining surgical innovation limited’s export sales 
team in late 2009 mark travels thousands of miles 
a year to meet distributors and visit international 
exhibitions and his fivestrong team has made 
significant contribution to the 2010 sales growth 
company secretary and registered office
n graham bowland
clayton wood house 
6 clayton wood bank 
leeds ls16 6qz
registered number 
2298163
nominated adviser 
seymour pierce limited
20 old bailey 
london ec4m 7en
solicitors
walker morris
kings court 
12 king street 
leeds ls1 2hl
auditor
grant thornton uk llp
no 1 whitehall riverside 
leeds ls1 4bn
broker
seymour pierce limited
20 old bailey 
london ec4m 7en
registrars
capita registrars
the registry 
34 beckenham road 
beckenham 
kent br3 4tu
bankers
hsbc bank plc
7 prospect crescent 
harrogate hg1 1rn
financial public relations
the communications portfolio
7 ensign house 
admirals way 
london e14 9xq surgical innovations group plc      annual report and accounts 2010 24
governance
clinical advisory board
peter qualified from leeds medical school in 1983 
with honours after initially gaining a first class 
honours degree in pathology in 1980 after basic 
surgical training at the general infirmary in leeds 
and becoming a fellow of the royal college of 
surgeons he went on to complete a doctorate in 
medicine with research into new techniques in the 
surgery for inflammatory bowel disease this work 
was awarded the prestigious patey prize by the 
surgical research society in 1990 
his research interests continued as a lecturer 
in surgery at the university of liverpool before 
working as a chief resident at the mayo clinic 
rochester minnesota 
in 1996 he was appointed to the staff at the leeds 
general infirmary and has gone on to develop a 
national referral practice for the management of 
recurrent pelvic malignancy he has been involved 
in the laparoscopic management of colon and rectal 
disease since its inception and currently runs an 
active training and research fellowship he has 
lectured throughout the world and has published 
over 160 papers
ian graduated as an operating department 
practitioner in 1994 he has continued to train 
in this area and in 2004 completed a diploma 
in advanced surgical practice at huddersfield 
university and went on to complete the royal 
college of surgeons basic skills course he is 
a surgical first assistant for the leeds general 
infirmary where he has worked since 1981 
ian specialises in laparoscopic bariatric surgery 
upper gi and cholorectal surgery he has been 
the first assistant in over 500 bariatric cases 
and 50 colorectal pouch procedures in the uk
name peter sagar
key speciality colorectal
name ian brayshaw
key speciality laparoscopic bariatric
philippe qualified from the medical school in nancy 
and then qualified from poitiers in general surgery 
in 1986 and urology in 1989 he is now a consultant 
at king’s college hospital in london honorary 
professor of urology at the beijing hospital and 
honorary consultant laparoscopist at guy’s 
hospital and university college of london hospital 
his main field of interest lies in pioneering 
laparoscopic procedures and he has performed over 
2000 major laparoscopic procedures in oncological 
urology urogynaecology and abdominal surgery 
philippe has been teaching and mentoring radical 
prostatectomy in 40 centres for the past three years 
he is currently a course director for laparoscopic 
skills baus china rcs uclh esi and is an adviser 
to the royal college of surgeons for laparoscopic 
skills courses he is an adviser on the board 
of the international society of cryosurgery
name phillippe grange
key speciality laparoscopy and urology
marco is a consultant surgeon and bariatric 
surgery lead at the prestigious university college 
london hospital uclh where he has worked since 
2007  he graduated in 1995 with full marks and 
honours in palermo italy and also completed his 
training in general surgery at the same university 
he has been living in the united kingdom since 
2000 dedicating his activity to advanced 
laparoscopic surgery and laparoscopic bariatric 
obesity surgery he was awarded an md by the 
university of leeds for his research on appetite 
hormones and bariatric surgery 
he is a pioneer of single incision bariatric surgery 
having performed the first single incision 
laparoscopic sleeve gastrectomy in the uk and 
often runs advanced training courses for uk and 
european surgeons in laparoscopic bariatric 
surgery and laparoscopic hernia surgery 
name marco adamo
key speciality bariatric
the clinical advisory board brings 
together a wealth of experience 
and expertise it works closely 
with the design team to develop 
and test products annual report and accounts 2010      surgical innovations group plc 25
 governance 20  35
gary comes to us as the director of surgery at 
st francis hospital new york with an international 
reputation in minimally invasive surgery and 
surgical oncology having trained in south africa 
as a gastrointestinal surgical oncologist he 
pioneered numerous laparoscopic techniques 
and was responsible for the development 
of flexible laparoscopy which has become 
an integral part of minimally invasive 
intraabdominal solid tumour resection and 
minimally invasive esophagectomy mie
he spent the past decade as chief of general 
surgery at long island jewish medical center 
and in 2005 was appointed vice chairman of 
surgery for the nslij health system and site 
director for surgery at the lij medical center 
he is associate professor of clinical surgery 
at the albert einstein college of medicine 
upon immigrating to the us gary was appointed 
assistant professor of surgery at suny stony brook 
during that tenure he was appointed medical 
director of the operating room at university 
hospital and was appointed chairman of the 
medical executive committee in 1998
he has published extensively in his field and 
has been invited to lecture throughout the world 
including britain south africa chile argentina 
and colombia he is also a standing member of 
the american college of surgeons’ ultrasound 
education faculty 
gary has patents in surgical safety devices and 
has lectured internationally on optimising the 
surgical care environment he participates on 
many national clinical trials in novel cancer 
therapies and is on the clinical advisory board 
of numerous cutting edge technology companies
alberic was senior lecturer in surgery at 
st george’s hospital medical school from 1990 
to 2003 consultant general and upper digestive 
surgeon at st george’s hospital from 2004 to 2007 
and director of bariatric surgery at university 
college london hospital from 2007 to 2009
he has been a council member of the 
british obesity surgery society boss for 
four years and is currently president of the 
society he chairs the national bariatric 
surgery registry data committee
he first undertook laparoscopic cholecystectomy 
in 1991 tepp hernia repair in 1992 and was the 
first uk surgeon to offer daycase laparoscopic 
cholecystectomy and hernia repair 
he has been active in bariatric surgery since 
1995 when he took on the aftercare of a cohort 
of patients who had undergone weightloss 
surgery in the 1970s and 80s the team he now 
leads has 14 years’ experience in the nhs and 
the independent sector
alfred consultant at university college hospital 
london achieved a distinction in obstetrics and 
gynaecology in 1985 and went on to obtain his 
doctorate in medicine from the university of 
london in 1993
alfred gained his part ii to become a member of the 
royal college of obstetricians and gynaecologists 
in 1993 having obtained part i in 1987 
he has written a book entitled “basic urogynaecology” 
1993 and has also contributed to many others 
including “the investigation and management of 
urinary incontinence in women” 1995 and a more 
recent chapter in r kearney  a cutner “laparoscopic 
colposuspension and paravaginal repair”  alfred has 
been a member of several committees and currently 
holds the position of president of the bsge
jon is a consultant orthopaedic surgeon specialising 
in joint replacements and arthropscopic or “keyhole”  
surgeries to the hip and knee and is a member of the 
british hip society international society of hip 
arthroscopy the british orthopaedic association 
and a fellow of the royal college of surgeons 
of england he also holds a masters degree in 
mechanical engineering from the university of 
leeds and has published research in several 
medical journals and won the glaxosmithkline 
orthopaedic essay prize in 2005 and the john fitton 
prize for orthopaedic specialist registrars in 2006 
name gary gecelter
key speciality mis and oncology
name alberic fiennes
key speciality bariatric
name alfred cutner
key speciality gynaecology and urology
name jon conroy 
key speciality orthopaedics  governance
surgical innovations group plc      annual report and accounts 2010 26
        south 
     uk eu us africa
logi    
® ®
 ™ ™
logic    
® ® ® 
™
quick   
 ®
 
®
 ™ ™
resposable   
 ® ®
 ™ ™
surgical innovations   
 ™
 
™ 
®
 
®
swingtop   
 ® ® ®
 
®
yelloport   
 ® ® ®
 
®
yelloportplus   
 ® ® ®
 
®
frictionfinish   
 
™
 ® 
™ ™
surgical innovations’ trade marks
as at 31 december 2010 annual report and accounts 2010      surgical innovations group plc 27
 governance 20  35
the directors present their annual report together with the audited financial statements for the year ended 31 december 2010
principal activities and business review
the company is the holding company of a group whose principal activities in the year involved the design development and manufacture of 
devices for use in minimally invasive surgery mis and industrial markets surgical devices are targeted at the operating theatre environment 
in both public and private hospitals in international markets the group sells through independent healthcare distributors through original 
equipment manufacture oem and licensing contracts with major suppliers of medical equipment a review of the group’s activities during 
the year is included within the chairman’s statement on pages 6 and 7 and the business and financial review on pages 8 to 15
results and dividends
the consolidated statement of comprehensive income for the year is set out on page 37  
the directors believe that at this stage in the group’s development it would be more appropriate to continue its focus on strong inward 
investment and hence are not recommending the payment of a dividend and the whole of the gain will be transferred to reserves
research and development
the group’s activities in this area have focused principally on the continuing development of innovative instruments for use in the field of mis
employees
the commitment and ability of our employees are key factors in achieving the group’s objectives
employment policies are based on the provision of appropriate training whilst annual personal appraisals support skill and career development
the board encourages management feedback at all levels to facilitate the development of the group’s business the group seeks to keep 
its employees informed on all matters affecting them by regular management and departmental meetings the company operates an 
enterprise management incentive emi share option scheme
it is the group’s policy to give full and fair consideration to all applications for employment from disabled persons having regard to their particular 
aptitudes and abilities and to encourage the training and career development of all personnel employed by the group including disabled persons 
should an employee become disabled the group would where practicable seek to continue the employment and arrange appropriate training
directors
the names of the current directors of the company and their biographical details are set out on pages 20 and 21 all directors served 
throughout the year
directors’ interests
the interests in the share capital of the company of those directors in office at the end of the year were as follows
       31 december 1 january 
       2010 2010 
ordinary shares of 1p each      beneficial  beneficial
d b liversidge cbe      5 171821 4171821
n g bowland       4217 498 1617498
c glass       4881602 3881602
r simkins      2369461 2369461
m j mcmahon      13188281 12188281
apart from the interests disclosed above and the options referred to on page 33 no directors held interests at any time during the year in the 
share capital of the company or other group companies there have been changes in directors’ interests between the year end and 19 april 2011
otherwise than as disclosed in note 16 no director has an interest in any material contract other than contracts of service and employment 
to which the group was a party
copies of the directors’ service contracts are available for inspection at the registered office of the company clayton wood house 
6 clayton wood bank leeds ls16 6qz and will be available at this year’s annual general meeting agm for 15 minutes prior to and during 
the whole course of the meeting
report of the directors governance
surgical innovations group plc      annual report and accounts 2010 28
report of the directors continued
substantial shareholdings
other than the directors’ own holdings the board has been notified that as at 14 april 2011 the following shareholders on the company’s 
share register were interested in 3 or more of the issued ordinary share capital of the company
        number   
        of shares  
getz bros  co bvi inc       49248810 1255
barclayshare nominees limited       31124894  794
r c greig nominees limited       23699054 604
pershing nominees limited       20530492 523
the bank of new york nominees       19155416 488
td waterhouse nominees europe       15539075 396
hsdl nominees limited       13546962 345 
share issues
during the year the following ordinary shares of 1p were issued in respect of exercised share options
 600000 at 15p
  3000000 at 17p
  3050000 at 20p
  1000000 at 30p
creditor payment policy
the group’s current policy concerning the payment of suppliers is to
  settle the terms of payment with those suppliers when agreeing the terms of each transaction
  ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and
  pay in accordance with its contractual and other legal obligations
the payment policy applies to all payments to creditors for revenue and capital supplies of goods and services without exception 
the company has trade creditors
statement of directors’ responsibilities
the directors are responsible for preparing the report of the directors and the financial statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements for each financial year under that law the directors have to prepare the 
financial statements in accordance with international financial reporting standards as adopted by the european union ifrss under 
company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state 
of affairs and profit or loss of the company and group for that period in preparing these financial statements the directors are required to
  select suitable accounting policies and then apply them consistently
  make judgements and accounting estimates that are reasonable and prudent 
  applicable ifrss have been followed subject to any material departures disclosed and explained in the financial statements and
  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business 
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions 
and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements 
comply with the companies act 2006 they are also responsible for safeguarding the assets of the company and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities annual report and accounts 2010      surgical innovations group plc 29
 governance 20  35
statement of directors’ responsibilities continued
insofar as each of the directors is aware 
  there is no relevant audit information of which the company’s auditor is unaware and
  the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and 
to establish that the auditor is aware of that information
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website 
legislation in the uk governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions 
summary of key performance indicators kpis
the directors have monitored the overall progress of the group and the individual strategic elements by reference to certain financial 
and non‑financial kpis
financial performance
kpis are in place to measure sales profitability rate of divisional growth cash generation and returns on capital employed 
customer satisfaction
kpis are established to measure and improve customer relationships quality of service and our order delivery times
employee satisfaction
kpis are agreed to measure staff morale training needs and personal development
leadership
kpis are set to measure the performance of directors and management in conjunction with overall group strategy and planning
innovation
kpis are positioned to measure the creativity and inventiveness of employees to improve the number of patents filed design rights applied 
for and internal products developed
charitable donations
the group made a small number of charitable donations during the year principally to local projects and sponsorship of employees charitable 
fundraising events
political donations
the group made no political donations 
principal risks and uncertainties
the management of the business and the nature of the group’s strategy are subject to a number of risks
the directors have set out below the principal risks facing the business
the directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks 
identified below where possible processes are in place to monitor and mitigate such risks
patents and proprietary rights
the group’s success is dependent upon its ability to establish file and protect intellectual property relating to the development of its 
proprietary products for eventual sale or license whilst the group seeks patent protection where appropriate for its developments there can 
be no assurance that patent applications will mature into granted patents or that existing patents will provide the group with sufficient 
protection in the case of infringement by third parties or be successfully challenged or revoked by competitors
regulatory approval
as an international business a significant proportion of the group’s products require registration from national or federal regulatory bodies 
prior to being offered for sale with our major product lines now having fda approval in the us we are subject to their audit and inspection 
of our manufacturing facilities there is no guarantee that any product developed by the group will obtain and maintain national registration 
or that the group will always pass regulatory audit of its manufacturing processes failure to do so could have severe consequences upon 
the group’s ability to sell products in the relevant country
product obsolescence
due to the nature of the market in which the group operates products are subject to technological advances and as a result obsolescence 
the directors are committed to the research and development strategy in place and are confident that the group is able to react effectively 
to the developments within the market governance
surgical innovations group plc      annual report and accounts 2010 30
report of the directors continued
principal risks and uncertainties continued
dependence upon reimbursement
the commercial success of the group’s products is partly dependent upon reimbursement levels for laparoscopic procedures set by governments 
health authorities private insurers and other organisations there is no guarantee that changes in reimbursement policy in the group’s main 
markets will not have an impact on the ability to sell products into those markets
financial risk 
the directors are confident that the banking facilities currently in place are more than adequate for the group’s working capital requirements 
for the foreseeable future
some of the group’s sales and purchases are made in currencies other than sterling and consideration is given to the use of forward currency 
contracts to reduce the exposure
the directors are satisfied that credit risk is adequately managed and the level of bad debts is consistent with the nature of the industry 
further details with regard to this are given in note 12
auditor
grant thornton uk llp has indicated its willingness to continue in office a resolution for its re‑appointment as independent auditor will be 
proposed at the agm
by order of the board
n g bowland
chief executive officer
19 april 2011 annual report and accounts 2010      surgical innovations group plc 31
 governance 20  35
report on remuneration
executive director’s remuneration
the board recognises that the executive director’s remuneration is of legitimate concern to the shareholders the group operates within 
an innovative and competitive arena that places constant demands on the technical abilities of the group its performance depends on the 
individual contributions of the executive director and employees and it believes in rewarding all those who have made a positive contribution 
in the development of the group
remuneration committee
the remuneration committee which meets as required is made up of the following directors
d b liversidge cbe chairman
c glass
r simkins
remuneration policy
the principal objective is to develop policies and recommend proposals appropriate to facilitating the recruitment retention and motivation 
of the executive director and in so doing to avoid the group bearing more than a reasonable and necessary cost where practical and 
appropriate the remuneration of the executive director and other senior management is aligned with the interests of shareholders
the remuneration committee considers that a successful remuneration policy needs to be sufficiently flexible to take account of future 
changes in the group’s business environment and in remuneration practice any changes to policy for years after 2010 will be described 
in future reports on remuneration
the remuneration of the executive director comprises four main elements
  basic salary to remain competitive in the marketplace reflecting the experience level of competence of the individual and comparative 
base salaries elsewhere within the group
  annual bonus payment to provide additional short‑term remuneration which directly reflects group and individual performance
  share options through the regular grant of options to reward achievements of target and outstanding business performance over the 
longer term and
  pension arrangements to enable the director to make appropriate provision for retirement
it is group policy that a significant proportion of the remuneration of the executive director should be performance related 
contracts of service
no director has a service contract with a notice period in excess of one year governance
surgical innovations group plc      annual report and accounts 2010 32
report on remuneration continued
directors’ emoluments – information subject to audit
details of directors’ emoluments for the year are as follows
          
    salary      
    and  total total pension pension 
     fees benefits emoluments  emoluments  contributions contributions 
    2010 2010 2010 2009 2010 2009 
     £’000 £’000 £’000 £’000 £’000 £’000
executive      
n g bowland   118 7 125 103 6 4
non‑executive      
d b liversidge cbe
1
   28 — 28 25 — —
c glass
2
   20 — 20 13 — —
r simkins
3
   20 — 20 13 — —
m j mcmahon   20 — 20 13 — —
total   206 7 213 167 6 4
1 d b liversidge’s fees are paid to quest investments limited a company of which he is a director
2 c glass’ fees are paid to winburn glass norfolk a firm of which he is a partner
3 r simkins’ fees are paid to getz bros  co inc a company of which he is vice president
benefits received consist of the provision of motor cars and private health
at 31 december 2010 a loan of £18600 made available to n g bowland in 2009 was still repayable
pension contributions represent payments made to defined contribution schemes non‑executive directors are not entitled to retirement benefits
remuneration of the non‑executive directors is determined by the board annual report and accounts 2010      surgical innovations group plc 33
 governance 20  35
directors’ share options
details of the share options held by directors are as follows
    at exercised at    
    1 january during 31 december  option  
    2010 the year 2010  price  date granted
d b liversidge cbe   1000000 1000000 — 170p  november 2000
1
    1000000 — 1000000 170p  april 2001
1
    1500000 — 1500000 170p  november 2007
1
    1000000 — 1000000 150p  january 2009
1
    400000 — 400000 170p  november 2009
1
n g bowland   1000000 1000000 — 300p  november 2000
1
    1000000 1000000 — 200p  november 2001
1
    2545454 — 2545454 350p  november 2007
2
    1454546 — 1454546 170p  november 2007
1
    2000000 600000 1400000 150p  january 2009
1
    2200000  2200000 170p  november 2009
1
c glass   1000000 1000000 — 170p  november 2000
1
    1000000 — 1000000 170p  april 2001
1
    1500000 — 1500000 170p  november 2007
1
    1000000 — 1000000 150p  january 2009
1
    400000 — 400000 170p  november 2009
1
r simkins   2000000 — 2000000 170p  may 2001
1
    1500000 — 1500000 170p  november 2007
1
    1000000 — 1000000 150p  january 2009
1
    400000 — 400000 170p  november 2009
1
m j mcmahon   1000000 1000000 — 170p  november 2000
1
    1000000 — 1000000 170p  april 2001
1
    1500000 — 1500000 170p  november 2007
1
    1000000 — 1000000 150p  january 2009
1
    400000 — 400000 170p  november 2009
1
1 share options are exercisable between nil and ten years from the date of the grant
2 share options are exercisable between three and ten years from the date of the grant
the market price of the company’s shares at the end of the financial year was 530p and the range of market prices during the year was 
between 163p and 530p
on behalf of the board
d b liversidge cbe
non‑executive chairman
19 april 2011 governance
surgical innovations group plc      annual report and accounts 2010 34
corporate governance
principles of good governance
the board continues to support the principles of good governance the board has adopted such procedures as it considers practical and 
appropriate for a group of its size so as to affect good governance
application of principles
directors 
the company supports the concept of an effective board leading and controlling the group the board is responsible for approving group 
policy and strategy it meets regularly and has a schedule of matters specifically reserved to it for decision management supplies the board 
with appropriate and timely information and the directors are free to seek any further information they consider necessary all directors have 
access to advice from the company secretary and independent professionals at the group’s expense training is available for new directors 
and other directors as necessary
the board members are
d b liversidge cbe – non‑executive chairman
n g bowland – chief executive officer
c glass  – non‑executive director
r simkins  – non‑executive director
m j mcmahon  – non‑executive director
accountability and audit
the board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investments and the company’s assets
the audit committee comprises c glass chairman d b liversidge cbe and r simkins who are all non‑executive directors
the committee considers the appointment and terms of engagement of the external auditor and assesses the independence of the external 
auditor and reviews the auditor’s policy for the rotation of audit partners
the terms of reference of the committee include reviewing the scope and results of the external audit and its effectiveness
communication with shareholders
the board is committed to effective communication between the group and its shareholders
it regards the agm as a means of communicating directly with private investors and encourages their participation all directors normally 
attend the agm and private investors have the opportunity to meet the directors and discuss any issues on an informal basis separate 
resolutions are passed on each issue so that they can be given proper consideration and there is a resolution to approve the annual report 
and accounts
the shareholders can gain access to information on the group as well as to the annual report and accounts through the website wwwsurginnocom annual report and accounts 2010      surgical innovations group plc 35
 governance 20  35
internal controls
the board of directors is ultimately responsible for the group’s management and internal control systems during the financial period and 
to the date of approval of the financial statements it has reviewed the operation and effectiveness of the group’s systems of internal control 
which can provide only a reasonable but not absolute assurance against material misstatement or loss 
the board discharges its responsibility for internal financial control through the following key procedures
  the establishment of an organisational structure appropriate to the size of the business with clearly defined levels of authority and division 
of responsibilities for approval of external payments and receipt and dispatch of goods
  a comprehensive budgeting and financial reporting system which compares actual performance with budget on a monthly basis and
  the formulation by the board of policies and of approval procedures in a number of key areas such as credit control expenditure 
authorisation stock ordering and quality assurance
going concern
on the basis of the budget for 2011 and forecasts prepared by the directors the board has a reasonable expectation that the company and 
the group have adequate resources to continue in operational existence for the foreseeable future for this reason they continue to adopt the 
going concern basis in preparing the financial statements
on behalf of the board
d b liversidge cbe
non‑executive chairman
19 april 2011 accounts
surgical innovations group plc      annual report and accounts 2010 36
report of the independent auditor – group
to the members of surgical innovations group plc
independent auditor’s report to the members of surgical innovations group plc
we have audited the group financial statements of surgical innovations group plc for the year ended 31 december 2010 which comprise the 
consolidated statement of comprehensive income the consolidated balance sheet the consolidated cash flow statement the consolidated 
statement of changes in equity and the related notes the financial reporting framework that has been applied in their preparation 
is applicable law and international financial reporting standards ifrss as adopted by the european union
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the companies act 2006 our audit 
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s 
report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the statement of directors’ responsibilities set out on pages 28 and 29 the directors are responsible for the 
preparation of the group financial statements and for being satisfied that they give a true and fair view our responsibility is to audit and express 
an opinion on the group financial statements in accordance with applicable law and international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s apb’s ethical standards for auditors 
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion the group financial statements
  give a true and fair view of the state of the group’s affairs as at 31 december 2010 and of its profit for the year then ended 
  have been properly prepared in accordance with ifrss as adopted by the european union 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 report of the directors for the financial year for which the group financial statements are prepared 
is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion
  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
other matter
we have reported separately on the parent company financial statements of surgical innovations group plc for the year ended 31 december 2010 
timothy lincoln
senior statutory auditor
for and on behalf of grant thornton uk llp
statutory auditor chartered accountant
leeds
19 april 2011 annual report and accounts 2010      surgical innovations group plc 37
 accounts 36  61
consolidated statement of comprehensive income
for the year ended 31 december 2010
 2010  2009
    nonrecurring   non‑recurring  
   headline costs total headline costs total 
  notes £’000 £’000 £’000 £’000 £’000 £’000
revenue 2 7045 — 7045 4541 — 4541
cost of sales  3526 — 3526 2447 200 2647
gross profit  3519 — 3519 2094 200 1894
other operating expenses  1932 — 1932 1528 — 1528
share‑based payments   8 — 8 75 — 75
operating profit 3 1579 — 1579 491 200 291
finance costs 5 39 — 39 40 — 40
finance income  9 — 9 13 — 13
profit before taxation  1549 — 1549 464 200 264
taxation 6 239 — 239 261 — 261
profit and total comprehensive income for the period  
attributable to the owners of the parent  1788 — 1788 725 200 525
earnings per share total and continuing       
basic 7   048p   014p
diluted 7   045p   014p
the consolidated statement of comprehensive income above relates to continuing operations
the group has no recognised gains or losses other than the results for the year as set out above
the accompanying accounting policies and notes form part of the financial statements accounts
surgical innovations group plc      annual report and accounts 2010 38
       2010 2009 
      notes £’000 £’000
assets   
non‑current assets   
property plant and equipment     8 2477 2056
intangible assets     9 3295 2139
deferred tax asset     6 432 193
       6204 4388
current assets   
inventories     10 2033 2047
trade receivables     11 2 168 2135
other current assets     11 513 460
cash and cash equivalents      2622 2508
       7 336 7150
total assets      13540 11538
equity and liabilities   
equity attributable to equity holders of the parent company   
share capital     13 3815 3738
share premium account      75 18809
capital reserve      329 329
retained earnings      6369 14236
total equity      10588 8640
non‑current liabilities   
obligations under finance leases      653 511
       653 511
current liabilities   
bank overdraft      1 177 1123
trade and other payables      607 818
obligations under finance leases      350 252
accruals      165 194
       2299 2387
total liabilities      2952 2898
total equity and liabilities      13540 11538
the accompanying accounting policies and notes form part of the financial statements
the financial statements on pages 37 to 55 were approved by the board of directors on 19 april 2011 and were signed on its behalf by
d b liversidge cbe
director
19 april 2011
company registered number 2298163
consolidated balance sheet
as at 31 december 2010 annual report and accounts 2010      surgical innovations group plc 39
 accounts 36  61
       year ended  year ended 
       31 december 31 december  
       2010 2009 
       £’000 £’000
cash flows from operating activities  
operating profit      1579 291
adjustments for  
depreciation of property plant and equipment      448 345
amortisation of intangible assets      518 101
share‑based payment      8 75
operating cash flows before movement in working capital      2553 812
decreaseincrease in inventories      14 331
increasedecrease in receivables      86 913
decreaseincrease in payables      240 47
cash generated from operations      2241 1441
interest paid      39 40
tax received      — 38
net cash generated from operating activities      2202 1439
cash flows from investing activities      
interest received      9 13
acquisition of non‑current assets      2044 1517
net cash used in investment activities      2035 1504
cash flows from financing activities  
cash received from issue of shares      152 —
repayment of bank loans      — 6
repayment of obligations under finance leases      259 245
net cash used in financing activities      107 251
net increase in cash and cash equivalents      60 316
cash and equivalents at beginning of period      1385 1701
cash and cash equivalents at end of period      1445 1385
cash at bank and in hand      2622 2508
bank overdraft      1 177 1123
cash and cash equivalents at end of period      1445  1385
consolidated cash flow statement
for the year ended 31 december 2010 accounts
surgical innovations group plc      annual report and accounts 2010 40
    share share capital retained  
    capital premium reserve earnings total 
    £’000 £’000 £’000 £’000 £’000
balance as at 1 january 2009   3738 18809 329 14836 8040
employee share‑based payment options   — — — 75 75
profit and total comprehensive income for the period   — — — 525 525
balance as at 31 december 2009   3738 18809 329 14236 8640
employee share‑based payment options   — — — 8 8
reorganisation   — 18809 — 18809 —
transactions with owners   77 75 — — 152
profit and total comprehensive income for the period   — — — 1788 1788
balance as at 31 december 2010   3815 75 329 6369 10588
consolidated statement of changes in equity
for the year ended 31 december 2010 annual report and accounts 2010      surgical innovations group plc 41
 accounts 36  61
1 group accounting policies under ifrs
a basis of preparation
these financial statements have been prepared on the basis of the ifrs accounting policies set out below 
the financial statements have been prepared in accordance with ifrs as adopted for use by the european union including ifric 
interpretations and in line with those provisions of the companies act 2006 applicable to companies reporting under ifrs
the preparation of financial statements in conformity with ifrs requires the use of certain critical accounting estimates it also requires 
management to exercise its judgement in the process of applying the group’s accounting policies
the directors have considered the available cash resources of the group and its current forecasts and are satisfied that the group has 
adequate resources to continue in operational existence for the foreseeable future and so the going concern basis has been adopted in the 
preparation of these financial statements
the financial statements have been prepared under the historical cost convention
the consolidated financial statements are presented in sterling rounded to the nearest thousand
these accounts reflect the first time adoption of improvements to ifrs and amendments to ifrs 1 and ifrs 2 the effect of the adoption 
of these standards has been presentational only given this the opening comparative balance sheet has not been represented as the 
information is unchanged from that presented previously
b consolidation
subsidiaries
the group financial statements consolidate those of the parent company and of its subsidiary undertakings the results of subsidiaries 
accounted for under the merger accounting method are included in the consolidated statement of comprehensive income as if they had 
always been part of the group intra‑group sales and results are eliminated on consolidation and all sales and results relate to external 
transactions only
c foreign currency translation
transactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions 
foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates 
of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income
d property plant and equipment
these are stated at the cost of acquisition less any provision for depreciation cost includes expenditure that is directly attributable to the 
acquisition of the items 
the carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying 
value may not be recoverable
the assets’ residual values useful lives and depreciation methods are reviewed and adjusted if appropriate at each financial year end
depreciation is charged so as to write off the cost of property plant and equipment less estimated residual value over their estimated useful 
economic lives at the following rates
office and computer equipment – 10–20 per annum
plant and machinery  – 10 per annum
tooling  – 20 per annum
placed equipment – 333 per annum
leasehold improvements – over the remaining term of the lease
tooling developed for the group’s own products is only depreciated when brought into use
placed equipment relates to equipment placed in clinical settings to generate a stream of recurring revenue from the single use element 
of the equipment
notes to the consolidated financial statements accounts
surgical innovations group plc      annual report and accounts 2010 42
notes to the consolidated financial statements continued
1 group accounting policies under ifrs continued
e intangible assets
research and development
expenditure on research activities is recognised as an expense in the period in which it is incurred
development expenditure arising from the group’s development activities is capitalised and amortised over the life of the product only if the 
group can demonstrate the following
  the technical feasibility of completing the intangible asset so it will be available for use or sale
  the intention to complete the intangible asset and use or sell it
  the ability to use or sell the intangible asset
  that it is probable that the asset created will generate future economic benefits
  there is the availability of adequate technical financial and other resources to complete the development and to use or sell the intangible 
asset and
  the development cost of the asset can be measured reliably
where no intangible asset can be recognised development expenditure is recognised as an expense in the period in which it is incurred 
capitalised development costs are amortised over the life of the product within cost of sales which is usually no more than ten years
f impairment of non‑financial assets
impairment reviews are carried out on a development project by project basis periodically and where there is a specific indicator 
of impairment an asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is based 
on  the accounting policy in e above and is greater than its estimated recoverable amount the recoverable amount is the higher of an 
asset’s fair value less costs to sell and its value in use
g inventories
inventories are stated at the lower of cost using weighted average and net realisable value
cost is the purchase cost including transport for raw materials together with a proportion of manufacturing overheads based on normal 
levels of activity for work in progress and finished goods
net realisable value is based on estimated normal selling price less further costs expected to be incurred to completion and sale provision 
is made for obsolete slow moving or defective items where appropriate such provisions are based upon established future sales and 
historical experience
h trade receivables
trade receivables are recognised initially at fair value thereafter at amortised costs less provision for impairment a provision for impairment 
of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the 
original terms of the receivables the amount of the provision is the difference between the asset’s carrying amount and the present value 
of estimated future cash flows the amount of the loss is recognised in the consolidated statement of comprehensive income as are 
subsequent recoveries of amounts previously written off
i cash and cash equivalents
cash and cash equivalents include cash in hand deposits held on call at banks and bank overdrafts bank overdrafts are shown within 
borrowings in current liabilities on the balance sheet
j trade payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate
k share capital
ordinary shares are classified as equity
incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction net of tax from proceeds  annual report and accounts 2010      surgical innovations group plc 43
 accounts 36  61
1 group accounting policies under ifrs continued
l income tax
the charge for current tax is based on the results for the period as adjusted for items which are non‑assessable or disallowed and any 
adjustment to tax payable in respect of previous years it is calculated using rates that have been enacted or substantively enacted by the 
balance sheet date
deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the 
carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit 
in principle deferred tax liabilities are recognised for all taxable and temporary differences and deferred tax assets are recognised to the extent that 
it is probable that taxable profits will be available against which deductible temporary differences can be utilised such assets and liabilities are not 
recognised if the temporary difference arises from the initial recognition of goodwill or negative goodwill or from the initial recognition other than 
in business combination of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit 
tax benefits are not recognised unless the tax positions are probable of being sustained once considered to be probable management 
reviews each material tax benefit to assess whether a deferred tax asset should be recognised based on the ability under tax statute 
to recover those tax losses and through the assessment of probable future taxable profits in which to recover those tax losses
where the group is able to control the distribution of reserves from subsidiaries and there is no intention to distribute the reserves deferred 
tax is not recognised for these temporary differences 
deferred tax is calculated at the rates that are enacted or substantively enacted at the balance sheet date deferred tax is charged or credited 
in the consolidated statement of comprehensive income except when it relates to items credited or charged directly to equity in which case 
the deferred tax is also dealt with in equity
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the group intends 
to settle its current tax assets and liabilities on a net basis
information as to the calculation of the income tax expense is included in note 6
m employee benefits
pension obligations
the group provides pension benefits to its employees through contributions to defined contribution group personal pension policies 
the amounts charged to the consolidated statement of comprehensive income are the contributions payable in the period
share‑based compensation
all share‑based payment arrangements granted after 7 november 2002 that had not vested by 1 january 2006 are recognised in the financial 
statements the group issues share options to certain employees which are measured at fair value and recognised as an expense in the 
consolidated statement of comprehensive income with a corresponding increase in profit and loss reserve the fair value of the employee 
services received in exchange for the grant of the options is recognised as an expense the total amount to be expensed over the vesting 
period is determined by reference to the fair value of the options granted
the fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become 
unconditionally entitled to the awards at each balance sheet date the group revises its estimate of the number of options that are expected 
to vest it recognises the impact of the revision to original estimates if any in the consolidated statement of comprehensive income with 
a corresponding adjustment to retained earnings
n income recognition
revenue
revenue is the total amount receivable by the group for the supply of goods and services excluding vat and trade discounts it is recognised 
that significant risks and rewards are transferred when title of goods passes and the group fulfils its contractual obligations 
royalty income
royalty income is derived from agreements with other parties for them to manufacture and distribute products such royalty income 
is recognised in the same period as the licensee makes the related sale 
design contracts
as soon as the outcome of a design contract can be estimated reliably contract revenue and expenses are recognised in the consolidated 
statement of comprehensive income in proportion to the stage of completion of the contract the stage of completion is assessed by reference 
to work performed an expected loss on the contract is recognised immediately in the consolidated statement of comprehensive income
interest income
interest income is recognised using the effective interest rate method accounts
surgical innovations group plc      annual report and accounts 2010 44
notes to the consolidated financial statements continued
1 group accounting policies under ifrs continued
n income recognition continued
government grants
government grants are recognised in the consolidated statement of comprehensive income so as to match them with the expenditure 
towards which they are intended to contribute to the extent that the grants received are intended as a specific reduction against certain 
assets they are recognised in the consolidated statement of comprehensive income over the expected useful life of the related assets
o leases
where the group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset the lease is treated 
as a finance lease the asset is recorded in the balance sheet as property plant and equipment and is depreciated over its estimated useful 
life or the term of the lease whichever is the shorter future instalments under such leases net of finance charges are included in creditors 
rentals under operating leases are charged on a straight‑line basis over the lease term
p significant areas of judgement
in applying the aforementioned accounting policies management has made appropriate estimates in key areas and the actual outcome may 
differ from those calculated the key sources of estimation and judgement uncertainty at the balance sheet date that have a significant risk 
of causing material adjustment to the carrying amount of assets and liabilities in the next financial year are
forecasts and discount rates
the carrying value of a number of items on the balance sheet is dependant on the estimates of future cash flows arising from the group’s operations
  the impairment test for capitalised development costs is dependant upon forecasts of the cash flows resulting from expected sales and 
cost of sales over the projected life of the relevant product allowance is also made for any future costs of associated product development 
an impairment charge of £334000 2009 nil resulted from the annual impairment testing conducted in 2010 and
  the realisation of deferred tax assets recognised is dependant on the generation of sufficient future taxable profits the group recognises 
deferred tax assets where it is likely that the benefit will be realised and recognises no more than three years 2009 five years of future 
profitability given uncertainty after this timeframe
trade receivables
the group provides in certain agreed situations products on extended credit terms in order to establish a presence in an export market 
the directors constantly review the likelihood of realisation of these receivables and make provision based on their best estimates when 
the full value of the receivable will not be recoverable
q provisions
the group measures provisions at the directors’ best estimates of the expenditure required to settle the obligation at the balance sheet date 
these estimates are made taking account of information available and different possible outcomes 
r equity
equity is broken down into the elements listed below
  “share capital” represents the nominal value of equity shares
  “share premium” represents the excess over nominal value of the fair value of consideration received for equity shares net of expenses 
of the share issue
  “capital reserve” represents the excess over nominal value of the fair value consideration attributed to equity shares issued in part 
settlement for subsidiary company shares acquired and
  “retained earnings” 
as at 31 december 2010 the following standard and interpretation is in issue but not yet effective
  ias 24 revised 2009 related party disclosures effective 1 january 2011
the effect of the adoption of this new standard is expected to be presentational only annual report and accounts 2010      surgical innovations group plc 45
 accounts 36  61
2 segmental reporting
for management purposes the group is organised into three business segments si brand oem and industrial these revenue streams are 
the basis on which the group reports its segment information
segment results assets and liabilities include assets directly attributable to a segment as well as those that can be allocated on a reasonable 
basis unallocated items comprise mainly corporate assets and liabilities and head office expenses 
these operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results
business segments
the principal activities of the si brand business unit are the research development manufacture and distribution of si branded minimally invasive devices
the principal activities of the oem business unit are the research development manufacture and distribution of minimally invasive devices 
for third party medical device companies through either own label or co‑branding
the principal activities of the industrial business unit are the research development manufacture and sale of minimally invasive technology 
products for industrial application
the following segmental analysis has been produced to provide a reconciliation between the information used by the key decision maker 
within the business and the information as it is presented under ifrs
      si brand oem industrial total 
year ended 31 december 2010     £’000 £’000 £’000 £’000
revenue     3852 2506 687  7 045
result      
segment result     1151 930 390 2471
unallocated expenses     — — — 892
profit from operations     — — — 1579
finance income         — — — 9
finance costs     — — — 39
profit before taxation     — — — 1549
tax      — — — 239
profit for the year     — — — 1788
included within the segmentoperating results are the following significant non‑cash items
     si brand oem industrial unallocated total 
     £’000 £’000 £’000 £’000 £’000
depreciation of property plant and equipment    262 70 — 108 440
amortisation of intangible assets    134 50 — — 184
impairment of intangible assets    63 4 267 — 334
share‑based payments    — — — 8 8
capitalisation of intangible assets    884 635 115  —  1634
      si brand oem industrial total 
year ended 31 december 2009     £’000 £’000 £’000 £’000
revenue      2956 1463 122 4541
result      
segment result     1240 255 70 1565
unallocated expenses     — — — 1274
profit from operations     — — — 291
finance income         — — — 13
finance costs     — — — 40
profit before taxation     — — — 264
tax      — — — 261
profit for the year     — — — 525 accounts
surgical innovations group plc      annual report and accounts 2010 46
notes to the consolidated financial statements continued
2 segmental reporting continued
business segments continued
included within the segmentoperating results are the following significant non‑cash items
     si brand oem industrial unallocated total 
     £’000 £’000 £’000 £’000 £’000
depreciation of property plant and equipment    193 35 — 117 345
amortisation of intangible assets    101 — — — 101
impairment of intangible assets    — — — — —
share‑based payments    — — — 75 75
capitalisation of intangible assets    638 305 122 — 1065
unallocated costs include those costs that cannot be split between segments
the reportable segment assets and liabilities at 31 december 2010 and capital expenditure are as follows
     si brand oem industrial unallocated total 
     £’000 £’000 £’000 £’000  £’000
assets    7317 2122 55 4046 13540
liabilities     — — — 13540 13540
        assets liabilities 
        £’000  £’000
segment assetsliabilities       9494 —
unallocated
property plant and equipment       477 —
prepayments and accrued income       232 —
other debtors       283 —
cash and cash equivalents       2622 —
deferred tax asset       432 —
borrowings       — 2180
trade and other payables       — 607
accruals       — 165
equity       — 10588
        13540 13540
the reportable segment assets and liabilities at 31 december 2009 and capital expenditure are as follows
     si brand oem industrial unallocated total 
     £’000 £’000 £’000 £’000  £’000
assets    7124 707 150 3557 11538
liabilities       — — — 11538  11538
        assets liabilities 
        £’000 £’000
segment assetsliabilities       7981 —
unallocated     
property plant and equipment       396 —
prepayments and accrued income       299 —
other debtors       161 —
cash and cash equivalents       2508 —
deferred tax asset       193 —
borrowings       — 1886
trade and other payables       — 818
accruals       — 194
equity       — 8640
        11538  11538 annual report and accounts 2010      surgical innovations group plc 47
 accounts 36  61
2 segmental reporting continued
business segments continued
segment assets consist primarily of property  plant and equipment intangible assets inventories and trade and other receivables assets not 
allocated to a segment primarily consist of tangible fixed assets prepayments and accrued income and cash and cash equivalents
liabilities are not capable of allocation to individual segments
geographical analysis
        2010 2009 
        £’000 £’000
united kingdom       2 119 1454
europe       2908 1827
us        1410 624
rest of world       608 636
        7 045 4541
revenues are allocated geographically on the basis of where revenues were received from and not from the ultimate final destination of use
during 2010 £1 110000 16 of the group’s revenue depended on a single customer in the oem segment 2009 £606000 15
3 operating profit
the profit for the year is stated after charging
        2010  2009 
        £’000  £’000
depreciation of owned assets        231 273
depreciation of assets held under finance lease        217 72
amortisation of capitalised development costs       184 101
impairment of capitalised development costs       334 —
research and development costs       160 —
foreign exchange losses       31 169
auditor’s remuneration  
– fees payable to the company’s auditor for the audit of the company’s annual financial statements   22 25
– tax compliance fees        15 15
operating lease rentals  
– land and buildings        151 150
the amortisation and impairment of capitalised development costs are accounted for within other operating expenses within the 
consolidated statement of comprehensive income
4 employees
the average monthly number of employees including executive directors employed by the group during the year was as follows
        2010  2009 
        number number
directors       1 1
production       39 39
development       21 12
administration        13 11
        74 63
the costs incurred in respect of these employees were
        2010  2009 
        £’000  £’000
wages and salaries        1820 1262
social security costs        165 119
pension costs        48 37
        2033 1418
a detailed analysis of directors’ emoluments is shown in the table on page 32 accounts
surgical innovations group plc      annual report and accounts 2010 48
notes to the consolidated financial statements continued
4 employees continued
key management including non‑executives
        2010  2009 
        £’000  £’000
salaries       484 371
social security costs       44 38
pension costs       16 14
share‑based payments       8 75
total       552 498
5 finance costs
        2010  2009 
        £’000  £’000
on finance leases       22 14
on bank overdrafts       17 26
        39 40
6 taxation
tax on profit
        2010  2009 
        £’000  £’000
over provision from previous years        — 202
deferred tax credit recognised in year        239 59
tax credit on profit       239 261
factors affecting the tax charge for the year
the taxation assessed for the year is lower than the standard rate of corporation tax in the uk at 28 2009 28 the differences are 
explained as follows
        2010  2009 
        £’000  £’000
profit on ordinary activities before taxation        1549 264
corporation tax at standard rate of 28 2009 28       434 74
effects of  
research and development enhanced expenditure        386 250
expenses not tax deductible        8 22
capital allowances for the year in excess of depreciation        237 411
other short‑term timing differences       — 506
over provision from previous years        — 202
utilisation and recognition of trading losses        58 —
tax credit for the year       239 261
deferred taxation
the movement in the deferred taxation account during the year was
        2010  2009 
        £’000  £’000
balance brought forward        193 134
consolidated statement of comprehensive income movement arising during the year    239 59
balance carried forward        432 193
the deferred taxation recognised in the financial statements at 27 is set out below
        2010  2009 
        £’000  £’000
trade losses        432 193 annual report and accounts 2010      surgical innovations group plc 49
 accounts 36  61
6 taxation continued
deferred taxation continued
the recoverability of the deferred tax asset is dependent on future taxable profits in excess of those arising from the reversal of deferred tax 
liabilities the recognition of the deferred tax assets is based upon profit forecasts for the three‑year period ending 31 december 2013
certain deferred tax assets and liabilities have been offset the following is the analysis of the deferred tax balances after offset for financial 
reporting purposes
        2010 2009 
        £’000 £’000
deferred tax assets       4347 4594
deferred tax liabilities       839 651
net unrecognised deferred tax assets       3508 3943
at the balance sheet date the group has unused tax losses of £17 7 million 2009 £153 million available for offset against certain future 
profits a deferred tax asset of £432000 2009 £193000 has been recognised in respect of such losses no deferred tax asset has been 
recognised in respect of the remaining £16 1 million 2009 £146 million of such losses due to the difficulty in making reliable predictions 
of future profit streams
7  earnings per ordinary share
basic earnings per ordinary share
the calculation of basic earnings per ordinary share for the year ended 31 december 2010 was based upon the profit attributable to ordinary 
shareholders of £1788000 2009 £525000 and a weighted average number of ordinary shares outstanding for the year ended 31 december 2010 
of 375812587 2009 373841902
diluted earnings per ordinary share
the calculation of diluted earnings per ordinary share for the year ended 31 december 2010 was based upon the profit attributable to ordinary 
shareholders of £1788000 2009 £525000 and a weighted average number of ordinary shares outstanding for the year ended 31 december 2010 
of 397 339910 2009 373841902 all share options at the financial year end were anti‑dilutive
        2010 2009 
earnings       £’000  £’000
earnings for the purpose of basic and diluted earnings per ordinary share     1788 525
8 property plant and equipment
      office and  improvements  
     plant and computer placed to leasehold  
    tooling machinery equipment equipment property total 
    £’000 £’000 £’000 £’000 £’000 £’000
gross carrying amount 31 december 2009   1521 1638 719 183 257 4318
accumulated depreciation and impairment   1 129 482 556 71 24 2262
carrying amount 31 december 2009   392 1 156 163 112 233 2056
gross carrying amount 31 december 2010   1661 2 126 811 277 312 5 187
accumulated depreciation and impairment   1233 651 641 133 52 2710
carrying amount 31 december 2010   428 1475 170 144 260 2477
      office and  improvements  
     plant and computer placed to leasehold  
    tooling machinery equipment equipment property total 
    £’000 £’000 £’000 £’000 £’000 £’000
carrying amount 1 january 2009   342 562 151 91 197 1343
additions – separately acquired   139 700 107 54 58 1058
depreciation   89 106 95 33 22 345
carrying amount 31 december 2009   392 1 156 163 112 233 2056
additions – separately acquired   140 488 92 94 55 869
depreciation   104 169 85 62 28 448
carrying amount 31 december 2010   428 1475 170 144 260 2477 accounts
surgical innovations group plc      annual report and accounts 2010 50
notes to the consolidated financial statements continued
8 property plant and equipment continued
leased plant and equipment
the group leases tooling plant and machinery and fixtures and fittings under a number of finance lease arrangements the carrying amount 
and depreciation charge for such assets are disclosed below 
        2010  2009 
        £’000  £’000
tooling  
net book value       70 115
depreciation charge for the year       46 23
plant and machinery  
net book value       1329 982
depreciation charge for the year       142 76
office and computer equipment  
net book value       89 27
depreciation charge for the year       29 12
security
at 31 december 2010 the property plant and equipment of the group are subject to a fixed and floating charge to secure both the bank loan 
and overdraft facility
9 intangible assets
        capitalised capitalised 
        development development 
        costs costs 
        2010 2009 
        £’000 £’000
cost  
at 1 january 2010       2310 1244
additions       1674 1066
at 31 december 2010       3984 2310
accumulated amortisation  
at 1 january 2010       171 70
charge for the year       184 101
impairment charge for the year       334 —
at 31 december 2010       689 171
carrying amount  
at 31 december 2010       3295 2139
at 31 december 2009       2 139 1174
the £3984000 of capitalised development costs net of £73000 of government grant represents expenditure that fulfils the requirements 
of ias 38 these costs will be amortised over the future commercial life of the product commencing on the sale of the first commercial item 
up to a maximum product life cycle of ten years and taking account of expected market conditions and penetration
included within the above are assets that are currently unavailable for use and these have been assessed for annual impairment as required 
by the group’s accounting policies intangible assets and impairment of non financial assets
10 inventories
        2010  2009 
        £’000  £’000
raw materials        1396 990
finished goods        637 1057
        2033 2047
included in the analysis above are provisions against inventory amounting to £14000 2009 £200000 annual report and accounts 2010      surgical innovations group plc 51
 accounts 36  61
10 inventories continued
in 2010 a total of £3068000 of inventories was included in profit and loss as an expense within cost of sales 2009 £2210000 cost 
of sales included an amount of £164000 resulting from write down of inventories 2009 £323000
inventories are pledged as securities for bank overdrafts
the group’s inventories are comprised of products which are not generally subject to rapid obsolescence on account of technological 
deterioration in condition or market trends consequently management considers that there is little risk of significant adjustments to the 
group’s inventory assets within the next financial year
11 trade and other receivables
        2010  2009 
        £’000  £’000
trade receivables       2 168 2135
prepayments and accrued income       231 299
other debtors       282 161
        2681 2595
all amounts are short term the carrying value of trade receivables is considered a reasonable approximation to fair value
of the trade receivables £1028276 relates to five customers 2009 £1 104000
all of the group’s trade and other receivables have been reviewed for indicators of impairment certain trade receivables were found 
to be impaired and a provision of £19000 2009 £33000 was recorded accordingly
in addition some of the unimpaired trade receivables are past due at the reporting date the age of financial assets past due but not impaired 
is shown below
        2010  2009 
        £’000  £’000
not more than three months       109 101
more than three months but not more than six months       13 60
more than six months but not more than one year       — 156
more than one year       61 96
the group is exposed to credit risk through offering extended credit terms to those customers operating in markets where extended payment 
terms are themselves taken by local government and state organisations this risk is managed through constant review and personal 
knowledge of the customer concerned payment plans are agreed and monitored in all such cases to minimise credit risk 
12 financial instruments
the group is exposed to market risk through its use of financial instruments the group’s risk management is co‑ordinated by the directors 
who focus actively on securing the group’s short to medium‑term cash flows through regular review of all the operating activities of the 
business long‑term financial investments are managed to generate lasting returns
the group does not actively engage in the trading of financial assets for speculative purposes nor does it write options the most significant 
financial risks to which the group is exposed are described in the following sections
foreign currency sensitivity
exposures to currency exchange rates arise from the group’s overseas sales and purchases most of which are denominated in euros and dollars
to mitigate the group’s exposure to foreign currency risk cash flows in euros and dollars are monitored on an ongoing basis
foreign currency denominated financial assets and liabilities are set out below
      2010  2009 2010 2009 
      €’000  €’000 ’000  ’000
financial assets     360 310 839 907
financial liabilities     2 123 41 4
short‑term exposure     358 187 798 903
the group has no long‑term foreign exchange exposure accounts
surgical innovations group plc      annual report and accounts 2010 52
notes to the consolidated financial statements continued
12 financial instruments continued
foreign currency sensitivity continued
the group has significant short‑term exposure to the dollar at 31 december 2010 an analysis of the effect of a reasonable possible movement of the 
currency rate against the dollar during 2011 of 3 shows potential foreign currency gains of £9000 on 31 december 2010 dollar trade receivables
the group gives consideration to the use of forward currency contracts to reduce foreign currency exposure and at 31 december 2010 there 
are partial forward currency contracts with the value of £20000
credit risk analysis
the group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date and which are 
set out below
        2010  2009 
        £’000  £’000
cash and cash equivalents       2622 2508
trade and other receivables       2450 2296
        5072 4804
the group continually monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls
management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good 
credit quality including those that are past due
in respect of trade and other receivables that are not impaired the group is not exposed to any significant credit risk exposure to any single 
counterparty or any group of counterparties having similar characteristics the credit risk for liquid funds is considered negligible since the 
counterparty is a reputable bank with a high quality external credit rating
liquidity risk analysis
the group manages its liquidity needs by carefully monitoring all scheduled cash outflows liquidity needs are monitored in various time 
bands on a day‑to‑day and week‑to‑week basis as well as on the basis of a rolling four‑week projection longer‑term needs are monitored 
as part of the group’s regular rolling monthly re‑forecasting process
the group maintains cash to meet its liquidity requirements for up to twelve‑month periods 
funding for long‑term liquidity is additionally secured by an adequate amount of committed credit both through working capital and asset 
finance facilities
during the year ended 31 december 2010 the group continued to have access to sufficient funds to meet its business expansion needs 
excess cash is placed on short‑term interest‑bearing deposit accounts
the group policy is to generate sufficient cash from operating activities to adequately meet cash requirements for investment activities
the group’s liabilities have contractual maturities which are summarised below
       current  noncur r ent
       within within over 
       6 months 6–12 months 12 months 
31 december 2010      £’000 £’000 £’000
finance lease obligations      178 177 817
trade and other payables      607 — —
bank overdraft      1177 — —
       1962 177 817
       current  non‑current
       within within over 
       6 months 6–12 months 12 months 
31 december 2009      £’000 £’000 £’000
finance lease obligations      153 139 593
trade and other payables      818 — —
bank overdraft      1123 — —
       2094 139 593 annual report and accounts 2010      surgical innovations group plc 53
 accounts 36  61
12 financial instruments continued
maturity profile of borrowings
        2010  2009 
        £’000  £’000
gross lease payments not later than one year       355 292
later than one year but not more than five years       817 593
future finance charges       169 122
summary of financial assets and liabilities by category
        2010  2009 
        £’000  £’000
loans and other receivables  
trade and other receivables       2450 2296
cash        2622 2508
        5072 4804
        2010  2009 
        £’000  £’000
current liabilities  
trade payables financial liabilities measured at amortised cost      607 818
other short‑term financial liabilities       1527 1375
        2 134 2193
non‑current liabilities        653 511
        2787  2704 
net financial assets and liabilities       2285 2100
management is of the opinion that the carrying value of the above assets and liabilities is equal to their fair value
the group’s capital management objectives are
  to ensure its ability to continue as a going concern and
  to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk
the group monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presented on the face of the 
balance sheet
the financial assets of si group plc are cash and cash equivalents and trade receivables and fair value is deemed to be not materially 
different to the carrying value
13 share capital
        2010  2009 
        £’000  £’000
authorised 600000000  
2009 600000000 ordinary shares of 1p each       6000 6000
allotted called up and fully paid 381491902  
2009 373841902 ordinary shares of 1p each        3815 3738 accounts
surgical innovations group plc      annual report and accounts 2010 54
notes to the consolidated financial statements continued
13 share capital continued
at 31 december 2010 the following share options were outstanding
 number of shares  exercise dates
  at exercised lapsed at option date from which  
  1 january in during 31 december price per option may date on which 
scheme and date of grant 2010 year year 2010 1p share be exercised option expires
executive       
november 2000 1000000 1000000 — — 30p november 2003 november 2010
non‑executive unapproved
november 2000 3000000 3000000 — — 17p november 2003 november 2010
april 2001 5000000 — — 5000000 17p april 2004 april 2011
november 2007 6000000 — — 6000000 17p november 2009 november 2017
january 2009 4000000 — — 4000000 15p november 2009 january 2019
november 2009 1600000 — — 1600000 17p november 2009 november 2019
enterprise management
july 2001 2200000 2050000 150000 — 20p july 2004 july 2011
november 2007 5545454 — — 5545454 35p november 2010 november 2017
january 2009 2000000 — — 2000000 35p january 2012 january 2019
unapproved       
april 2001 1000000 1000000 — — 20p april 2004 april 2011
november 2007 1454546 — — 1454546 17p november 2009 november 2017
january 2009 2000000 600000 — 1400000 15p november 2009 january 2019
november 2009 2200000 — — 2200000 17p november 2009 november 2019
  these share options do not fall within the recognition and measurement of ifrs 2 and as such no charge for share‑based payments is recognised in the 
consolidated statement of comprehensive income in respect of them
share‑based payments
the total share‑based payment charge for the year was £8000
share options were exercised during the current year 2009 none
the fair values of options granted during the year were determined using the black‑scholes pricing model all the options issued in the year 
vested immediately the following principal assumptions were used in the valuation
volatility – 20
option life – 1 year
risk‑free investment rate – 25
certain share options issued prior to 7 november 2002 and so were outside the scope of the recognition and measurement requirements 
of ifrs 2 had their option price reduced during the year under ifrs 2 where an award granted before 7 november 2002 is modified after 
ifrs 2’s effective date the incremental fair value measured as the difference in the fair value of the award calculated immediately before 
and immediately after modification should be expensed over the remaining vesting period 
the following principal assumptions were used in the valuation
volatility – 20
option life – 1 year
risk‑free investment rate – 25
in total £8000 of employee remuneration expense all of which related to equity‑settled share‑based payment transactions has been 
included in the profit for 2010 2009 £75000 and credited to retained earnings annual report and accounts 2010      surgical innovations group plc 55
 accounts 36  61
14 share premium
         share 
         premium 
         £’000
balance as at 31 december 2009        18809
reorganisation        18809
issue of ordinary share capital        75
balance as at 31 december 2010        75
share premium comprises the cumulative difference between the net proceeds and nominal value of the company’s issued equity share capital
during the year the group obtained court approval to offset the accumulated share premium at 1 january 2010 against the accumulated 
retained earnings at 1 january 2010
15 contingent liabilities and financial commitments
these are as follows
a contingent liabilities
there were no contingent liabilities at 31 december 2010 2009 £nil
b operating leases
at 31 december 2010 the group had annual commitments under non‑cancellable operating leases as follows 
        2010  2009 
        land and  land and 
        buildings  buildings 
        £’000  £’000
within one year       147 147
one to five years        590 590
over five years       218 365
c capital commitments
at 31 december 2010 the group had no capital commitments 2009 £nil
16 transactions with related parties
a summary of transactions during the year and outstanding amounts at the balance sheet date is as follows
        amounts amounts  
        invoiced  payable at  
        to the 31 december 
        company 2010 
        £’000  £’000
quest investments limited
1
       25 3
winburn glass norfolk
2
        23 2
getz bros  co inc
3
       15 —
n g bowland
4
       — 19
acp
5
       107 54
as disclosed in the report on remuneration
1 director’s fees for d b liversidge cbe are paid to quest investments limited a company of which he is a director
2 director’s fees and advisory fees for c glass are paid to winburn glass norfolk a firm of which he is a partner
3 director’s fees and advisory fees for r simkins are paid to getz bros  co inc a company of which he is vice president
4 at 31 december 2010 £18600 from a loan of £20000 made available to n g bowland in 2009 was still repayable
5  acp acts as the master distributor for surgical innovations in the far east during the year surgical innovations invoiced acp £106933 for products and 
at 31 december 2010 there was an amount owing to surgical innovations of £54 141 13 r simkins is the ultimate beneficial owner of acp 
there is no controlling party at surgical innovations group plc 
17  pensions
the company currently operates a defined contribution group personal pension plan for the benefit of employees company contributions 
in 2010 were £48000 2009 £37 000 accounts
surgical innovations group plc      annual report and accounts 2010 56
report of the independent auditor – company
to the members of surgical innovations group plc
independent auditor’s report to the members of surgical innovations group plc
we have audited the parent company financial statements of surgical innovations group plc for the year ended 31 december 2010 which 
comprise the company balance sheet and the related notes the financial reporting framework that has been applied in their preparation 
is applicable law and united kingdom accounting standards united kingdom generally accepted accounting practice
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the companies act 2006 our audit 
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s 
report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the statement of directors’ responsibilities set out on pages 28 and 29 the directors are responsible for the 
preparation of the parent company financial statements and for being satisfied that they give a true and fair view our responsibility is to audit 
and express an opinion on the group financial statements in accordance with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion the parent company financial statements
  give a true and fair view of the state of the company’s affairs as at 31 december 2010 
  have been properly prepared in accordance with united kingdom generally accepted accounting practice 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 report of the directors for the financial year for which the financial statements are prepared 
is consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion
  adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us
  the parent company financial statements are not in agreement with the accounting records and returns
  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
other matter
we have reported separately on the group financial statements of surgical innovations group plc for the year ended 31 december 2010
timothy lincoln
senior statutory auditor
for and on behalf of grant thornton uk llp
statutory auditor chartered accountant
leeds
19 april 2011 annual report and accounts 2010      surgical innovations group plc 57
 accounts 36  61
company balance sheet
as at 31 december 2010
  2010  2009
    notes £’000  £’000  £’000  £’000
fixed assets     
investments    2  1018  1018
current assets     
debtors    3 3319  3508 
cash at bank     2536  2345 
     5855  5853 
creditors amounts falling due within one year   4 68  94 
net current assets      5787  5759
net assets     6805  6777
capital and reserves     
called up share capital    5  3815  3738
share premium account    6 75  18809 
accumulated profitlosses    6 2915  15770 
      2990  3039
shareholders’ funds      6805  6777
the accompanying accounting policies and notes form part of these financial statements
the financial statements on pages 37 to 55 were approved by the board of directors on 19 april 2011 and were signed on its behalf by
d b liversidge cbe
director
19 april 2011
company number 2298163 accounts
surgical innovations group plc      annual report and accounts 2010 58
notes to the company financial statements
1 accounting policies
a basis of preparation
the financial statements have been prepared under the historical cost basis and uk gaap 
b investment in subsidiary undertakings
the company’s investment in subsidiary undertakings is stated at cost less any provision for impairment 
c share‑based compensation
all share‑based payment arrangements granted after 7 november 2002 that had not vested by 1 january 2006 are recognised in the financial 
statements the group issues share options to certain employees which are measured at fair value and recognised as an expense in the profit and loss 
account with a corresponding increase in profit and loss reserve the fair value of the employee services received in exchange for the grant of the options 
is recognised as an expense the total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted
the fair values of these payments are measured at the dates of grant and are recognised over the period during which employees become unconditionally 
entitled to the awards at each balance sheet date the group revises its estimate of the number of options that are expected to vest it recognises 
the impact of the revision to original estimates if any  in the profit and loss account with a corresponding adjustment to retained earnings
2 investments
company         £’000
cost 
at 31 december 2010 and 1 january 2010        1551
provision for diminution in value 
at 31 december 2010 and 1 january 2010        533
net book value at 31 december 2010 and 1 january 2010        1018
the principal trading subsidiaries of the group comprise
    country of  
    incorporation proportion 
company description of shares held nature of business and operation held
surgical innovations limited ordinary £1 shares design and manufacture of minimally invasive devices great britain 100
haemocell limited ordinary £1 shares design and manufacture of autologous blood products great britain 100
3 debtors
        2010  2009 
        £’000  £’000
prepayments and accrued income        10 9
other debtors        42 44
amounts due from subsidiary undertakings       3267 3455
        3319 3508 annual report and accounts 2010      surgical innovations group plc 59
 accounts 36  61
4 creditors amounts falling due within one year
        2010  2009 
        £’000  £’000
accruals and deferred income        56 75
other creditors        12 19
        68 94
5 share capital
        2010  2009 
        £’000  £’000
authorised 600000000   
2009 600000000 ordinary shares of 1p each       6000 6000
allotted called up and fully paid 381491902   
2009 373841902 ordinary shares of 1p each        3815 3738
details of the share options are contained in note 13 of the consolidated financial statements
during the year the following ordinary shares of 1p were issued in respect of exercised share options
 600000 at 15p
  3000000 at 17p
  3050000 at 20p
  1000000 at 30p
a total of 7 650000 ordinary shares with a total nominal value of £76500 were issued for consideration amounting to £151000
6 reserves
        share  accumulated 
        premium profitslosses 
        £’000  £’000
at 1 january 2010       18809 15770
premium on shares issued        75 —
reorganisation of reserves       18809 18809
loss for the year        — 132
employee share‑based payments       — 8
at 31 december 2010        75 2915 accounts
surgical innovations group plc      annual report and accounts 2010 60
7  reconciliation of movements in shareholders’ funds
        2010  2009 
        £’000  £’000
loss for the financial year        132 233
issue of shares       152 —
employee share‑based payments        8 75
net increasedecrease in shareholders’ funds       28 158
opening shareholders’ funds        6777 6935
closing shareholders’ funds        6805 6777
8 loss for the financial year of surgical innovations group plc
the loss for the financial year dealt with in the financial statements of the holding company surgical innovations group plc was £132000 
2009 £232700
as permitted by section 408 of the companies act 2006 the profit and loss account has not been included in these financial statements
9 transactions with related parties
a summary of transactions during the year and outstanding amounts at the balance sheet date is as follows
         amounts  
        amounts  payable at  
        invoiced to 31 december 
        the group 2010 
        £’000  £’000
quest investments limited
1
       25 3
winburn glass norfolk
2
        23 2
getz bros  co inc
3
        15 —
as disclosed in the report on remuneration
1 director’s fees for d b liversidge cbe are paid to quest investments limited a company of which he is a director
2 director’s fees and advisory fees for c glass are paid to winburn glass norfolk a firm of which he is a partner
3 director’s fees and advisory fees for r simkins are paid to getz bros  co inc a company of which he is vice president
notes to the company financial statements continued annual report and accounts 2010      surgical innovations group plc 61
 accounts 36  61
 ifrs
    2010  2009  2008 2007 2006 
    £’000  £’000  £’000  £’000  £’000 
revenue    7 045 4541 4312 4770 4460
cost of sales    3526 2447  2032 2377 2593
gross profit    3519 2094 2280 2393 1867
other operating expenses    1932 1528  1500 1708 1 132
operating profit   1587 566 780 685 735
losses from discontinued operations   — 200 — — —
share‑based payments    8 75 — — —
finance income   9 13 118 96 —
finance costs   39 40  78 50 39
profit before taxation   1549 264 820 731 696
taxation   239 261  190 34 —
retained profit for the year    1788 525 630 765 696
earnings per ordinary share basic   048p 014p 017p 024p 027p
earnings per ordinary share diluted   046p 014p 017p 023p 027p
fiveyear summary shareholder information
surgical innovations group plc      annual report and accounts 2010 62
notice is hereby given that the annual general meeting of the company will be held at clayton wood house 6 clayton wood bank leeds 
ls16 6qz on 20 june 2011 at 100pm you will be asked to consider the following resolutions 
ordinary business
to consider and if thought fit pass the following resolutions which will be proposed as ordinary resolutions
1 to receive and adopt the audited accounts for the year ended 31 december 2010 and the reports of the directors and auditor thereon
2  to re‑elect mr d b liversidge cbe as a director of the company in accordance with article 107 of the company’s articles of association 
who offers himself for re‑election as a director 
3  to re‑elect mr n g bowland as a director of the company in accordance with article 107 of the company’s articles of association 
who offers himself for re‑election as a director
4  to re‑appoint grant thornton uk llp as auditor of the company to hold office until the conclusion of the next general meeting at which 
accounts are laid before the company and to authorise the directors to determine the auditor’s remuneration
5  to authorise the board generally and unconditionally pursuant to section 551 of the companies act 2006 the act to exercise all powers of 
the company to allot shares in the company and to grant rights to subscribe for or to convert any security into such shares in the company 
rights up to an aggregate nominal amount of £131305967 being approximately one‑third of the issued share capital of the company 
as at the date of this notice provided that this authority shall expire on the earlier of the date falling six months from the expiry of the 
company’s current financial year and the date of the next annual general meeting of the company after the passing of this resolution 
unless varied revoked or renewed by the company in general meeting save that the board may before the expiry of the authority granted 
by this resolution make a further offer or agreement which would or might require shares to be allotted or rights to be granted after such 
expiry and the board may allot shares and grant rights in pursuance of such an offer or agreement as if the authority conferred by this 
resolution had not expired and the authority granted by this resolution is in substitution for all previous authorities granted to the directors 
to allot shares and grant rights which to the extent that they remain in force and unexercised are revoked but without prejudice to any 
allotment or grant of rights made or entered into prior to the date of this resolution 4
special business
to consider and if thought fit pass the following resolutions which will be proposed as special resolutions
6  to empower the board subject to the passing of the previous resolution pursuant to sections 570 and 573 of the act to allot equity 
securities within the meaning of section 560 of the act for cash pursuant to the authority conferred upon them by the previous resolution 
as if section 5611 of the act did not apply to any such allotment provided that this power shall be limited to
 6 1  the allotment of equity securities in connection with a rights issue in favour of ordinary shareholders where the equity securities 
respectively attributable to the interests of all ordinary shareholders are proportionate as nearly as may be to the respective 
numbers of ordinary shares held by them but subject to such exclusions or other arrangements as the directors may deem 
necessary or expedient in relation to fractional entitlements treasury shares record dates or legal or practical problems under the 
law of or the requirements of any recognised regulatory body or any stock exchange in any territory and
 62  the allotment otherwise than pursuant to sub‑paragraph 61 above of equity securities up to an aggregate nominal amount 
of £393917 90 being approximately 10 of the issued share capital of the company at the date of this notice
  and shall expire on the earlier of the date falling six months from the end of the current financial year of the company and the date of the 
next annual general meeting after the passing of this resolution save that the company may before the expiry of any power contained in 
this resolution make a further offer or agreement which would or might require equity securities to be allotted after such expiry and the 
board may allot equity securities in pursuance of such offer or agreement as if the power conferred by this resolution had not expired
notice of annual general meeting annual report and accounts 2010      surgical innovations group plc 63
 shareholder information 62  68
special business continued
7  to authorise the company generally and unconditionally for the purpose of section 701 of the act to make one or more market purchases 
within the meaning of section 6934 of the act of ordinary shares of 1p each in the capital of the company ordinary shares provided that
 7  1  the maximum aggregate number of ordinary shares authorised by this resolution to be purchased is 39391790 shares 
representing approximately 10 of the company’s issued share capital as at the date of this notice
 7 2  the minimum price which may be paid for such ordinary shares is 1p per share exclusive of advance corporation tax and expenses
 7 3  the maximum price exclusive of advance corporation tax and expenses which may be paid for an ordinary share is not more 
than the higher of 5 above the average of the middle market quotations for an ordinary share as derived from the london stock 
exchange daily official list for the five business days immediately preceding the day on which the ordinary share is purchased 
and the amount stipulated by article 51 of the buy‑back and stabilisation regulation commission regulation 22732003 and
 7 4  unless previously revoked or varied the authority conferred by this resolution shall expire on the earlier of the date falling six 
months from the end of the current financial year of the company and the date of the next annual general meeting of the company 
save that the company may before such expiry make a contract or contracts to purchase ordinary shares after such expiry as if the 
power conferred by this resolution had not expired
by order of the board
n g bowland          registered office
company secretary         clayton wood house
19 april 2011          6 clayton wood bank
           leeds ls16 6qz shareholder information
surgical innovations group plc      annual report and accounts 2010 64
notice of annual general meeting continued
notes
1  this notice is the formal notification to shareholders of the company’s annual general meeting its date time and place and the matters 
to be considered if you are in doubt as to what action to take you should consult an independent adviser
2  pursuant to regulation 41 of the uncertificated securities regulations 2001 as amended and section 360b of the companies act 2006 
only those shareholders registered in the register of members of the company at 100pm on 16 june 2011 as holders of ordinary shares 
of 1p each in the capital of the company shall be entitled to attend and vote at the meeting in respect of the number of shares registered 
in their name at that time changes to entries in the register of members of the company after 100pm on 16 june 2011 shall be disregarded 
in determining the rights of any person to attend and vote at the meeting
3  a member entitled to attend speak and vote may appoint a proxy to attend speak and vote instead of him or her a member may appoint 
more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share 
or shares held by that member a proxy need not be a member of the company a form of proxy is included at the end of this document and 
contains notes for its completion
  to be valid the form of proxy and any power of attorney or the authority under which it is signed or a notarially certified copy of it must 
be completed and lodged at the registrars of the company capita registrars at pxs 34 beckenham road beckenham kent br3 4tu 
not later than 100pm on 16 june 2011
4  completion and return of a form of proxy does not preclude a member from subsequently attending and voting at the meeting if a member 
appoints a proxy or proxies and then decides to attend the annual general meeting in person and vote using his poll card then the vote 
in person will override the proxy votes if the vote in person is in respect of the member’s entire holding then all proxy votes will be 
disregarded if however the member votes at the meeting in respect of less than the member’s entire holding then if the member indicates 
on his polling card that all proxies are to be disregarded that shall be the case but if the member does not specifically revoke proxies then 
the vote in person will be treated in the same way as if it were the last received proxy and earlier proxies will only be disregarded to the 
extent that to count them would result in the number of votes being cast exceeding the member’s entire holding 
5  to change your proxy instructions simply submit a new proxy appointment using the methods set out above note that the cut‑off time for 
receipt of proxy appointments see note 3 above also apply in relation to amended instructions any amended proxy appointment received 
after the relevant cut‑off time will be disregarded
  where you have appointed a proxy using the hard copy proxy form and would like to change the instructions using another hard copy proxy 
form please contact capita registrars at pxs 34 beckenham road beckenham kent br3 4tu
   if you submit more than one valid proxy appointment the appointment received last before the latest time for the receipt of proxies will 
take precedence
6  in order to revoke a proxy instruction you will need to inform the company by sending a signed hard copy notice clearly stating your intention 
to revoke your proxy appointment to capita registrars in the case of a member which is a company the revocation notice must be executed 
under its common seal or signed on its behalf by an officer of the company or an attorney for the company any power of attorney or any 
other authority under which the revocation notice is signed or a duly certified copy of such power or authority must be included with the 
revocation notice
  the revocation notice must be received by capita registrars at pxs 34 beckenham road beckenham kent br3 4tu no later than 100pm 
on 16 june 2011 if you attempt to revoke your proxy appointment but the revocation is received after the time specified then subject 
to paragraph 5 above your appointment will remain valid annual report and accounts 2010      surgical innovations group plc 65
 shareholder information 62  68
notes continued
7   copies of the following documents will be available for inspection at the registered office of the company during normal business hours 
until the date of the annual general meeting and on that day at the place of the meeting from at least 15 minutes prior to the meeting until 
its conclusion
   directors’ service contracts and
   letters of appointment for non‑executive directors
8  as at 19 april 2011 being the last practicable business day prior to the publication of this notice the company’s issued share capital 
consisted of 393917 902 ordinary shares of 1p each with one voting right per share 
9  if a corporation is a member of the company it may by resolution of its directors or other governing body authorise one or more persons 
to act as its representative or representatives at the meeting and any such representative or representatives shall be entitled to exercise 
on behalf of the corporation all the powers that the corporation could exercise if it were an individual member of the company
  corporate representatives should bring with them either an original or certified copy of the appropriate board resolution or an original 
letter confirming the appointment provided it is on the corporation’s letterhead and is signed by an authorised signatory and accompanied 
by evidence of the signatory’s authority
10  a member may not use any electronic address within the meaning of section 3334 of the companies act 2006 provided in this notice 
of meeting or in any related or accompanying document including the form of proxy to communicate with the company for any purposes 
other than those expressly stated  shareholder information
surgical innovations group plc      annual report and accounts 2010 66
explanatory notes to the notice of annual general meeting
the notes on the following pages give an explanation of the proposed resolutions
resolutions 1 to 5 are proposed as ordinary resolutions this means that for each of those resolutions to be passed more than half of the 
votes cast must be in favour of the resolution
resolutions 6 to 9 are proposed as special resolutions this means that for each of those resolutions to be passed at least three quarters 
of the votes cast must be in favour of the resolution
resolution 1 – accounts
the directors will present their report the auditor’s report and the audited financial statements for the financial year ended 31 december 2010 
to the meeting as required by law
resolutions 2 and 3 – reelection of directors
at each general meeting one‑third of the directors for the time being are required to retire if the number of relevant directors is not a multiple 
of three the number nearest to but not exceeding one‑third of directors should be obliged to retire directors due to retire by rotation are 
those longest in office since their last re‑election and as between persons who become or were last re‑elected on the same day those due 
to retire shall unless otherwise agreed among themselves be determined by lot a retiring director is eligible for re‑election in line with past 
practice two directors will retire by rotation doug liversidge and graham bowland retire by rotation and are offering themselves for re‑election
resolution 4 – reappointment of auditor 
the company is required to appoint an auditor at each general meeting at which accounts are laid to hold office until the next general meeting
the present auditor grant thornton uk llp  is willing to continue in office for a further year and this resolution proposes its reappointment 
and in accordance with standard practice authorises the directors to determine the level of the auditor’s remuneration
resolution 5 – authority to allot shares
the resolution grants the directors authority to allot relevant securities up to an aggregate nominal amount of £131305967 being 
approximately one‑third of the company’s ordinary share capital in issue at 19 april 2011 it is not the directors’ current intention to allot 
relevant securities pursuant to this resolution this authority replaces the existing authority to allot relevant securities but does not affect 
the ability to allot shares under the share option schemes
resolution 6 – disapplication of statutory preemption rights
this resolution disapplies the statutory pre‑emption rights which would otherwise apply on an issue of shares for cash pursuant to a rights 
issue where the securities attributable to the interests of all shareholders are proportionate as nearly as may be to the number of shares 
held and generally up to a further £393917 90 being 10 of the company’s ordinary share capital in issue at 19 april 2011 this replaces 
the existing authority to disapply pre‑emption rights and expires at the conclusion of the next annual general meeting of the company 
resolution 7 – purchase of own shares
in certain circumstances it may be advantageous for the company to purchase its own shares and this resolution seeks authority to do this 
the directors would only consider making purchases if they believed that such purchases would be in the best interests of shareholders 
generally having regard to the effect on earnings per share and the company’s overall financial position
the resolution gives general authority for the company to make purchases of up to 39391790 ordinary shares being 10 of the 
company’s ordinary share capital in issue at 19 april 2011 at a minimum price of 1p and a maximum price being the higher of 5 above 
the average of the middle market quotations for ordinary shares for the five business days prior to the purchase and the price stipulated by 
article 51 of the buy‑back and stabilisation regulations 2003 being the higher of the price of the last independent trade and the highest 
current independent bid on the trading venue where the purchase is carried out
companies are permitted to retain any of their own shares which they have purchased as treasury stock with a view to possible re‑issue 
at a future date rather than cancelling them the company will consider holding any of its own shares that it purchases pursuant to the 
authority conferred by this resolution as treasury stock this would give the company the ability to re‑issue treasury shares quickly and cost 
effectively and would provide the company with additional flexibility in the management of its capital base annual report and accounts 2010      surgical innovations group plc 67
iwe the undersigned being a membermembers of surgical innovations group plc hereby appoint the chairman of the meeting or
name of proxy  number of shares 
in block capitals please  
as myour proxy to vote for meus and on myour behalf at the annual general meeting of the company to be held at clayton wood house 
6 clayton wood bank leeds ls16 6qz on 20 june 2011 at 100pm and at any adjournment thereof iwe wish myour proxy to vote as shown 
below in respect of the resolutions set out in the notice of the meeting
please indicate by ticking the box if this proxy appointment is one of multiple appointments being made 
for the appointment of one or more proxy please refer to explanatory note 2 overleaf
  for against vote 
    withheld
1 to receive and adopt the audited accounts for the year ended 31 december 2010 and the 
 reports of the directors and auditor thereon
2 to re‑elect mr d b liversidge cbe as a director of the company 
3 to re‑elect mr n g bowland as a director of the company
4 to re‑appoint grant thornton uk llp as auditor of the company and to authorise the 
 directors to determine the auditor’s remuneration
5 to authorise the board to allot shares in the company and to grant rights to subscribe  
 for or to convert any security into such shares
6 to empower the board to allot equity securities for cash
7  to authorise the company to make one or more market purchases of ordinary shares of 1p 
 each in the capital of the company ordinary shares
if you want your proxy to vote in a certain way on the resolutions specified please place an “x” in the appropriate box if you fail to select any of 
the given options your proxy can vote as heshe chooses or can decide not to vote at all the proxy can also do this on any other resolution that 
is put to the meeting 
  the “vote withheld” option is to enable you to abstain on any particular resolution however 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 the votes “for” and “against” a resolution 
signed  dated this   day of   2011
name 
address
form of proxy
surgical innovations group plc
 shareholder information
surgical innovations group plc      annual report and accounts 2010 68
notes
1  every holder has the right to appoint some other persons of their choice who need not be a shareholder as hisher proxy to exercise all 
or any of hisher rights to attend speak and vote on their behalf at the meeting if you wish to appoint a person other than the chairman 
please insert the name of your chosen proxy holder in the space provided see above if the proxy is being appointed in relation to 
less than your full voting entitlement please enter in the box next to the proxy holder’s name see above the number of shares in 
relation to which they are authorised to act as your proxy if left blank your proxy will be deemed to be authorised in respect of your 
full voting entitlement or if this proxy form has been issued in respect of a designated account for a shareholder the full voting 
entitlement for that designated account
2  to appoint more than one proxy you may photocopy this form please indicate the proxy holder’s name and the number of shares in 
relation to which they are authorised to act as your proxy 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 
3  the “vote withheld” option is provided to enable you to abstain on any particular resolution however 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 the votes “for” and “against” a resolution
4  pursuant to regulation 41 of the uncertificated securities regulations 2001 entitlement to attend and vote at the meeting and the 
number of votes which may be cast thereat will be determined by reference to the register of members of the company at 600pm 
on the day which is two days before the day of the meeting or adjourned meeting changes to entries on the register of members after 
that time shall be disregarded in determining the rights of any person to attend and vote at the meeting 
5  to appoint one or more proxies or to give an instruction to a proxy whether previously appointed or otherwise via the crest system 
crest messages must be received by the issuer’s agent id number ra10 not later than 48 hours before the time appointed for holding 
the meeting for this purpose the time of receipt will be taken to be the time as determined by the timestamp generated by the crest 
system from which the issuer’s agent is able to retrieve the message the company may treat as invalid a proxy appointment sent by 
crest in the circumstances set out in regulation 355a of the uncertificated securities regulations 2001
6  the completion and return of this form will not preclude a member from attending the meeting and voting in person if you attend the 
meeting in person your proxy appointment will automatically be terminated
7   to be effective all votes must be lodged not less than 48 hours before the time of the meeting at the office of the company’s registrars 
at capita registrars the registry 34 beckenham road beckenham kent br3 4tu
form of proxy continued
surgical innovations group plc
 over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence 
concerning investment matters these are typically from overseas based “brokers” who target uk shareholders offering to sell them what 
often turn out to be worthless or high risk shares in us or uk investments these operations are commonly known as “boiler rooms”  these 
“brokers” can be very persistent and extremely persuasive and a 2006 survey by the financial services authority fsa has reported that 
the average amount lost by investors is around £20000
it is not just the novice investor that has been duped in this way many of the victims had been successfully investing for several years 
shareholders are advised to be very wary of any unsolicited advice offers to buy shares at a discount or offers of free company reports 
if you receive any unsolicited investment advice
  make sure you get the correct name of the person and organisation
  check that they are properly authorised by the fsa before getting involved by visiting wwwfsagovukregister
  report the matter to the fsa either by calling 0845 606 1234 or visiting wwwmoneymadeclearfsagovuk and
    if the calls persist hang up
if you deal with an unauthorised firm you will not be eligible to receive payment under the financial services compensation scheme 
the fsa can be contacted by completing an online form at wwwfsagovukpagesdoingregulatedlawalertsoverseasshtml
details of any share dealing facilities that the company endorses will be included in company mailings
more detailed information on this or similar activity can be found on the fsa website wwwmoneymadeclearfsagovuk
warning to shareholders – boiler room scams think surgery 
think surgical innova tions
surgical innovations group plc
clayton wood house 
6 clayton wood bank 
leeds ls16 6qz
t 44 0 113 230 7597 
f  44 0 113 230 7598 
w wwwsigroupplccom
for investor relations enquiries please email 
sisurginnocouk
for sales enquiries please email 
salessurginnocouk
for general enquiries please email 
sisurginnocouk


Summary:
 surgical innovations group plc      annual report and accounts 2010 06
chairman’s statement
review of the year
i am pleased to report a record year in 
the continuing development of the group 
our strategy of producing innovative high 
quality and costeffective instruments to an 
increasingly costconscious market coupled 
with the strong investment in 2008 and 2009 
has really started to bear fruit both for our 
own branded and oem products 
given the growth of the business and to 
provide greater clarity of progress in the key 
markets in which we operate the group 
is for the first time reporting across three 
segments si brand oem and industrial 
results
revenue for the period was £7 045 million 
2009 £4541 million and profit before tax 
increased nearly fivefold to £1549 million 
2009 £264000 
a large part of this growth has arisen from 
sales in the oem segment which accounted 
for 35 of total revenue 2009 32 
a year of progress and innovation
“ the group has undergone 
yet another year of 
transformation successfully 
meeting the demands 
of rapid growth we have 
continued to invest heavily 
in the business while rd 
capability has undergone 
a stepchange to speed up 
new product development 
and improvements to our 
existing technology  ”
doug liversidge cbe
chairman
summary of chairman’s statement
  total revenue for the period increased by 
55 to £7 045 million and profit before tax 
increased nearly fivefold to £1548 million 
  capitalised investment in rd rose by 
57 to £1674 million 
  the board is confident about future growth 
prospects of the business for 2011  review of the year 01  19
annual report and accounts 2010      surgical innovations group plc 07
sales growth of si branded products was 
driven by our resposable
®
 products and 
overall revenues were boosted by the delivery 
of a £616000 order in the industrial segment 
in may 2010 sales to industrial customers 
accounted for 10 of total revenues for 2010 
retained profit for the period was £1 788 million 
2009 £525000 including a taxation 
cash flow and investment 
during the year the group generated net cash 
of £2202 million from operating activities 
enabling the group to continue its strong 
investment in product development with 
capitalised investment in research and 
development rd increasing by 57 
to £1674 million 2009 £1066 million 
reflecting a stepchange in the structure 
of the rd team as well as a stronger 
focus on new product development 
elsewhere capital expenditure remained 
strong with £628000 invested in plant 
and equipment while the total number 
of employees and agency staff increased 
from 76 at the end of 2009 to 117 at the end 
of 2010 we have continued to make staff 
appointments in all areas of the business 
while the rd team has been reorganised 
in such a way as to encourage product 
concept generation 
the clinical advisory board now consists 
of nine highly experienced surgeons covering 
a wide range of specialisms in mis with 
mr marco adamo and mr jon conroy joining 
the board in january 2011 the latter extending 
the team’s expertise into arthroscopy
dividend 
in 2009 si successfully applied to the courts 
to cancel the group’s accumulated losses 
the purpose of this was to enable the board 
to implement a dividend strategy at such time 
as it considers appropriate while a strategy 
remains under review the board believes that 
at this stage in the group’s development it 
would be more appropriate to continue its 
focus on strong inward investment 
acquisitions 
the board continues to review acquisition 
opportunities in the area of mis where 
strong synergies exist with the group and 
where our rd expertise and inhouse 
manufacturing capabilities can create 
improvements to the products and cost 
savings for the end user
outlook
trading in the period since the year end has 
been encouraging particularly from the core 
business where we have seen further orders 
for si branded products particularly for 
yelloportplus
®
 the rd team continues 
to improve the si branded product range to 
generate a wider range of new products and 
enhancements for our global distributor 
network and affirm our position as a leading 
innovator within the field of mis
in february 2011 we were pleased to announce 
the fouryear exclusive contract for a minimum 
of 22 million with usbased mediflex 
surgical products “mediflex” with regard 
to the inclusion of yelloportplus
®
 in surgical 
trays in the us 
we are also being approached by several other 
oem customers to develop new laparoscopic 
products on an exclusive basis 
we remain confident about the future growth 
prospects of the business for the remainder 
of 2011 and further into 2012 and 2013 as 
new products are launched towards the end 
of this year and the increasing traction with 
oem customers gains momentum
i would like to thank the board and staff 
for their tireless work in 2010 and their 
contribution to the rapid growth of the 
business we are better positioned than ever 
to take full advantage of the opportunities 
that are available to us and i look forward 
to reporting on the continuing success 
of the group over the coming year
doug liversidge cbe
chairman
19 april 2011
00
innovation
in 2010 si officially received the queen ’ s award for 
enterprise for their pioneering yelloportplus
®
 device 
– a port access system which acts as a channel into 
the body allowing surgeons to carry out delicate 
keyhole procedures