Annual Report and Accounts 2006 - Optos

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Corporate Social Responsibility Optos aims to operate to high standards in all its activities, employ skilled and responsible people and strive to build trusted relationships within the markets where it does business. The safety and reliability of the Company’s scanning laser technology and the efficacy and quality of the images the P200 device produces are of benefit in health and eye care, providing practitioners with added clinical value in the earlier detection of both eye and systemic disease, and improving patient education and management. Optos is committed to being a socially responsible company and accepts that its responsibilities in this context extend to all stakeholders, including, but not limited to, its shareholders, employees, customers, suppliers, financers and the environment in which it operates. Particular attention and adherence is paid to the legislative and regulatory requirements within each county in which Optos operates. Optos has a clear policy on health and safety, and is committed to delivering excellent performance in these areas through measurement of its operations in safety management and protection of health, both internally and externally. Optos is proud of its culture in which staff feel responsible and assume responsibility for making a difference in delivering high standards within the organisation and to customers. The Company also partners with its customers to offer the optomap® Retinal Exam during national diabetes month and at selected health fairs. The Company also participates in careers days at local schools, and supports summer student placements. Optos also works with the Special Olympics, providing the optomap® Retinal Exam for the Special Olympics Opening Eyes programme, which is a joint effort between the Special Olympics and Lions Club International. 24 Optos plc Annual Report & Accounts 2006
Directors’ Remuneration Report INTRODUCTION All matters relating to executive remuneration are determined by the remuneration committee, a committee of the Board. A resolution to approve the report will be proposed at the annual general meeting of the Company at which the financial statements for the year ended 30 September 2006 will be approved. Certain items in the remuneration report are required to be audited and are identified as such against the relevant heading. REMUNERATION COMMITTEE The Board considers that the Chairman of the Board should be a member of the remuneration committee as it is essential that the Chairman be involved in the work of the remuneration committee and, in particular, the setting of the executive Directors’ remuneration. Since January 2006, the remuneration committee has consisted of the following non-executive directors – Dr John Padfield, Barry Rose, Anne Glover and Patrick Paul. The remuneration committee is required to meet at least twice a year and at such other times as the Chairman of the remuneration committee shall require. The remuneration committee is responsible for determining the remuneration of the executive Directors and the senior management team together with their terms and conditions of employment. It is also responsible for considering management recommendations for remuneration and employment terms of the Company’s staff, including, for example, incentive arrangements for bonus payments and grant of share options. No members of the remuneration committee have any personal financial interest (other than as shareholders), conflicts of interest arising from cross-directorships or day-to-day involvement in running the business. The remuneration committee makes recommendations to the Board, and other Directors attend meetings when invited by the remuneration committee. No Director plays a part in any discussion about his or her own remuneration. REMUNERATION POLICY The remuneration committee has established a policy on the remuneration of executive Directors and the Board has established a policy for non-executive Directors for the current and subsequent years. The remuneration committee’s decisions are made on the basis of rewarding individuals for the nature of the jobs they undertake and their performance according to defined objectives to deliver the Company’s strategy. Proper regard is given to the need to attract and retain high-quality, well-motivated staff at all levels, and to the remuneration being paid by similar companies. The remuneration policy is reviewed annually by the remuneration committee. POLICY FOR EXECUTIVE DIRECTORS’ REMUNERATION During the financial year ended 30 September 2006, the remuneration committee appointed New Bridge Street Consultants LLP to provide further advice on structuring executive Directors’ remuneration packages, together with a report on the proposals for a Long-Term Incentive Plan (“LTIP”). For the next financial year, the executive Directors will receive a combination of basic salary, management incentive scheme (as described below), pension and benefits in kind. The basic salary is the only pensionable part of the remuneration package. The remuneration committee gives consideration to several components In respect of the executive Directors’ remuneration, which together comprise the total remuneration package. These consist of the following: • Basic salary is determined by the remuneration committee at the beginning of each year and when an individual changes position or responsibility. In deciding appropriate levels, the remuneration committee considers the position in the Company, personal and Company performance, and relies on objective research which gives up-to-date information on a comparable group of companies. Basic salaries were reviewed in September 2005, with increases taking effect from 1 October 2005 and further increases on 15 February 2006. The basic salaries were last reviewed in September 2006, with increases taking effect from 1 October 2006. The next review will take place in September 2007. • Quarterly Performance Incentives are paid, provided that objectives established by the remuneration committee are met for each financial year. For 2006, the objectives put emphasis on net installs, revenue per site of existing customers and control of expenditure. • Benefits in Kind, which comprise Company car allowance, private health insurance, life insurance and Company sick pay. Where a Director is on international assignment, the additional benefits provided are housing allowance, school fees and specified family travel. • Pension Contribution. The Company operates a contracted-out defined contribution scheme for executive Directors whereby the Company contributes 10% of a Director’s gross salary. Prior to February 2006, the Company contribution was 7%. The Company has operated discretionary share option arrangements. The discretionary options have been granted pursuant to four different types of option agreement. Most terms of those option agreements are identical. However, the terms on which options vest differ between the types of agreement. The four types of vesting are as follows: • Time-based vesting over the three years commencing on the date on which the option was granted. One third of the options vest on grant and the remaining two-thirds vest over the following 36 months on a monthly basis. • Time-based vesting over three years as described above but with full acceleration of vesting on the admission of the Company’s shares to trading on certain stock exchanges, including the London Stock Exchange. • Time-based vesting by reference to the flotation of the Company. Under this form of option agreement, one third of the shares under option vest on the admission of the Company’s shares to trading on certain stock exchanges, including the London Stock Exchange. The remaining two-thirds then vest in two tranches – on the date six months after admission and on the date 12 months after admission. • Vesting as to one third immediately, with the remaining two-thirds vesting subject to satisfaction of performance targets. Such targets are based on the Company achieving two successive quarters of positive operating profit and two successive quarters of positive earnings over the period from grant to 31 March 2006 and 31 March 2007 respectively. These performance periods were accelerated by 12 months due to the IPO and the conditions have been achieved. In addition to the above, two further vesting arrangements have been utilised in respect of two separate grants. The first grant is subject to time-based vesting with one third of the option vesting on the first, second and third anniversaries of the date of grant. The second grant is subject to performance-based vesting, with the option vesting over four quarters dependent on the North American business attaining certain performance levels. Optos plc Annual Report & Accounts 2006 25
Page 1 and 2: Revolutionising eye care helping sa
Page 3 and 4: Highlights Year ended Year ended
Page 5 and 6: 2004 > Germany - commercial launch
Page 7 and 8: 3.4m optomap® Retinal Exams in 200
Page 9 and 10: Image of a healthy eye taken by the
Page 11 and 12: $3.3 million to $4.3 million. Losse
Page 13 and 14: “When Ann came to see me, we carr
Page 15 and 16: Operational and Financial Review co
Page 17 and 18: “He is very lucky - if the melano
Page 19 and 20: Operational and Financial Review co
Page 21 and 22: Patrick Robin David Paul (60) Non-E
Page 23 and 24: Corporate Governance continued Duri
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Page 29 and 30: Directors’ Remuneration Report co
Page 35 and 36: Directors’ Report continued FINAN
Page 37 and 38: Independent Auditors’ Report to t
Page 39 and 40: Consolidated Balance Sheet As at 30
Page 41 and 42: Consolidated Cash Flow Statement Fo
Page 43 and 44: Notes to the Consolidated Financial
Page 67 and 68: Company Balance Sheet At 30 Septemb
Page 69 and 70: Notes to the Company Financial Stat
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Optos plc Annual Report & Accounts
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Annual Report and Accounts 2006 - Optos

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