Creo Medical Limited Annual Report 2021

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FY2021 Annual Report · Creo Medical Limited

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Annual Report & Accounts 2021

Anything is possible
with the right approach

Creo Medical Group

transforming energy
transforming surgery
transforming lives

Contents

Strategic Report
our achievements

At a glance

Creo timeline

Chief Executive’s review

our business model and Investment case

our technology

Kamaptive Technology

Healthcare market drivers

our markets and opportunities

our strategy

strategy in action – Build

Chief Commercial officer review

Clinical education to deliver clinical adoption

Clinical case studies

Chief Technology officer’s review

strategy in action – Buy

strategy in action – Partner

Chairman’s statement

Environmental, social and governance report

section 172(1) statement

Financial review

Principal risks and uncertainties

Corporate Governance
Board of directors

directors’ report

directors’ responsibilities

Corporate governance report

directors’ remuneration report

Financial Statements
Independent auditor’s report

Consolidated statement of profit
or loss and other comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

What’s on the inside?

Strong foundations for
growth now in place

Creo’s CCo, david Woods, explains the
continued commercialisation of the Creo brand.

read more on pages 28 to 29

Parent Company statement of financial position

Parent Company statement of changes in equity

Parent Company notes to the financial statements

105

106

107

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

our achievements

CoMMerCial HiGHliGHts

FinanCial HiGHliGHts

Continued growth:

over 1,000 speedboat Inject procedures performed

to date.

speedboat Inject procedure volumes doubled over

previous year.

Pipeline of clinicians to be trained under Clinical

Education Programme has doubled.

25% increase in the Group’s direct sales force since

the start of 2021.

New market penetration with multiple cases of Peroral
Endoscopy Myotomy (“PoEMs“) procedures in the Us
using speedboat Inject.

Kamaptive licensing heads of terms (“HoTs“) agreed
with multiple partners with advanced discussions
ongoing.

strengthened IP portfolio with 376 granted patents

and 870 pending patents.

Health economic study indicated that savings of up to
£10k could be saved per speedboat Inject procedure
versus traditional surgical outcomes, with the NHs
saving over £2m to date.

Positive outcome on first pancreatic ablation using

MicroBlate Fine.

Revenue

£25.2m

(2020: £9.4m)

Operating loss

£29.9m

(2020: £23.5m)

Underlying operating loss*

R&D expenditure

£19.0m

(2020: £18.0m)

Net assets

£73.3m

(2020: £62.8m)

Gross Margin

46.0%

(2020: 42.8%)

£12.9m

(2020: £10.2m)

Cash raised from share issue
in the year

£34.3m

Cash and cash equivalents at
the year end

£43.5m

(2020: £45.1m)

operational HiGHliGHts

* Underlying operating loss is defined on page 48.

Continued progress:

strengthening of supply chain and R&d capabilities
through the acquisition of Aber Electronics limited
(“Aber“) in November 2021.

Fully integrated Albyn Medical and Boucart Medical

into the Creo family operating in-line with expectations
under the Creo brand.

Completion of the purchase of the freehold of Creo
House, Chepstow, and the adjacent building for
£4.25m to support the Company's planned and
sustained growth.

opening of Us office on the East Coast, in danbury,
Connecticut, to provide a base for Us operations and
enable in-person clinical and education programmes.

Established APAC Hub based in singapore.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportAt a glance

anything is possible
with the right approach

Our mission is to improve patient outcomes by
applying advanced energy to the emerging field
of therapeutic endoscopy.

WHY

WHAT WE DO

Using our CROMA Advanced
Energy Platform, powered by
our Kamaptive Technology,
we can utilise advanced bipolar
radio frequency and high
frequency microwave energy
to power our range of unique
endoscopic devices.

see pages 12 to 15

These core devices, combined with our
advanced energy, can provide safer,
more efficient and more cost-effective
procedures meaning improved patient
outcomes and improved lives.

See more about how our Advanced
Energy works on our website:
www.creomedical.com

“Speedboat Inject and the entire Creo
platform represents one of the most
innovative contributions to endoscopic
energy delivery in the past several
decades...“

Creo Medical was founded in 2003 by
Professor Chris Hancock, initially to
target the treatment of cancers through
the use of high frequency
microwave energy.

one in two1 people will likely be diagnosed
with cancer in their lives. We will all likely
know someone who will be or has been
impacted in some way, either by cancers or
diseases. These diseases can be treated
using advanced energy, which can have a
huge impact for those people, our friends
and family. Chris was driven to apply this
technology to make a difference to improve
people’s lives, and this is the foundation on
which Creo is built.

1 in 2

will get diagnosed with
cancer in their lifetime

1. https://www.nice.org.uk/news/blog/1-in-2-people-will-get-cancer

Dr Blair Jobe
Read more on page 25.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

WHO BENEFITS

Patients
organ preservation rather
than surgical intervention

Improved patient outcomes

Reduced risk

shorter procedure times

low recurrence risk (rate

less than 1%2)

Doctors
Minimally invasive curative

treatment

Reduced risks associated
with surgical procedures

Greater potential of a
curative resection

Hospitals
Reduced procedure costs

Reduced procedure time

and fewer follow up
appointments

Reduced waiting times

“ Speedboat Inject has been
used successfully in both upper
GI (“POEM”) and lower GI
procedures, delivering excellent
clinical outcomes and opening
up additional markets for
our technology.”

David Woods – CCO
Read more on page 24.

2. saito, Y., Fukuzawa, M., Matsuda, T. et al. Clinical outcome of endoscopic submucosal dissection versus endoscopic mucosal resection of large colorectal tumors as

determined by curative resection. surg Endosc 24, 343–52 (2010). https://pubmed.ncbi.nlm.nih.gov/19517168/

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportAt a glance continued

our global footprint

We are expanding our international footprint by
growing our direct sales force and appointing
carefully selected distributors.

WHERE WE OPERATE

Creo Medical Group

Direct sales

Distributors (signed)

Distributors
(under negotiation)

uK, Chepstow
despite the pandemic, Creo Medical has
seen UK staff numbers grow significantly
over the past year.

us, danbury, Connecticut
our Us office has been a real success since
opening mid-way through 2021, providing
specialist functions to both the Us market
and the wider Creo Group.

290

People

Offices

Countries direct

Countries
indirect

Over 4,600

Hospital, Doctor
& Clinical Customers

5m+

Products Sold

1,000+

Speedboat Inject Procedures
performed

Figures correct as at 31 december 2021

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

uK
As well as its Chepstow HQ, Creo also has
UK offices in Inverness, Bangor, Bath,
Colchester and York.

spain, France, Germany and Belgium
our mainland European presence has been
strengthened considerably by the acquisitions
of Albyn Medical and Boucart Medical. our
offices in spain, France, Germany and Belgium
provide product warehouses and support our
experienced local sales and distribution teams.

asia-pacific (“apaC”), singapore
singapore is the newest of our offices and is now up and
running as a regional APAC hub as we look to strengthen
our presence across the region.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportCreo timeline

December
2016

Creo Medical is
admitted to the AIM
market of the london
stock Exchange with
£20m raised through
share placing

2017

CE Mark and FdA
clearance gained for
speedboat Inject
and Creo’s CRoMA
Advanced Energy
Platform

2017

2019

First patient treated
with speedboat Inject

First commercial order
for speedboat Inject

2020

Product suite receives
regulatory clearance
in EU & Us

We are on track to meet
our strategic objectives

Since our admission to the London Stock Exchange
in 2016, we continue to make progress against our
strategic objectives by bringing our technology to
market and driving clinical adoption.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Q3 2020

Commercialisation
agreement with NHs
gives UK hospitals
access to devices at
preferential rates

Q3 2020

Acquisition of
Albyn Medical

Q4 2020

Acquisition of
Boucart Medical

Q4 2020

First clinical use of
MicroBlate Fine and
successful pancreatic
tumour ablation

Q3 (Sep)
2021

£34.3m raised through
share placing to accelerate
commercial roll-out and
fund product development
and Kamaptive Energy
programme

Q3 (July)
2021

opened Us Headquarters

Q2 (June)
2021

Acquisition of freehold
site in Chepstow, UK
for £4.25m

Q1 (Mar)
2021

speedboat is used
for PoEM procedure

Q4 (Nov)
2021

Acquisition of Aber
Electronics

Q4 (Dec)
2021

1,000th clinical
procedures reached
on speedboat

Q1 (Jan)
2022

Kamaptive licensing
and partnership HoTs
signed for robotics and
non-thermal Plasma

Q2 (April)
2022

opened APAC hub based
in singapore

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportChief Executive’s review

Building momentum

“Strong strategic
and operational progress.”

Craig Gullford
Chief Executive

Overview
I am immensely proud of our progress this year,
despite difficult circumstances in all our
regional markets as CoVId-19 restrictions
persisted. during the year we continued to
make strong progress against our strategic
objectives and build momentum through
sustained commercial progress. Revenue from
Creo's core product portfolio is growing and is
in-line with management’s cumulative revenue
forecasts at the time of IPo in december 2016,
despite the adverse conditions over the last
two years.

We have seen significant growth in commercial
orders and adoption of speedboat Inject in the
Us and Europe. Pleasingly, we have made
significant progress against our target to
leverage our IP through our Kamaptive brand
by agreeing Head of Terms (HoTs) with a
number of carefully selected partners to provide
access to our advanced energy in large and
growing markets where the Group is not
currently operating.

The opening of the Group’s Us headquarters
during 2021 has helped to support Creo’s
commercial roll-out in the key Us market.
Post-period end, we also opened our regional
hub in singapore to support the commercial
roll-out of Creo’s products in the APAC region

and this is expected to satisfy the backlog
of demand, following numerous distributor
agreements being signed throughout 2021. In
addition, Creo completed the purchase of the
freehold of Creo House, our head office in
Chepstow, along with the adjacent building,
to support the Group’s planned and
sustained growth.

These all represent important steps on our
journey to commercialisation. our successful
Placing and open offer in september 2021
positions us well to deliver our strategic
objectives and take the business to the next
stage of its development: to strengthen our
product portfolio and enhance our Kamaptive
Advanced Energy Technology for licensing
and partnerships.

Building momentum
We have taken great strides in delivering
against our three strategic pillars: Build;
Buy and Partner.

Build
over the course of 2021, Creo’s pipeline of
doctors waiting to be trained through our
Clinical Education Programme has more than
doubled compared to 2020. This demand
continues to build.

The number of global training centres across
our direct markets increased threefold during
2021. Creo trained a significant number of
leading clinicians in 2021 who are now product
users, and the Group expects this number to
rise in 2022.

Even at this early stage, clinicians have
identified additional uses for speedboat Inject
in new procedures in upper gastrointestinal
tract (“GI”), including the successful application
in Peroral Endoscopic Myotomy (“PoEM”)
procedures, opening up additional markets
where our technology can be effective.

once the final FdA clearance has been received
for spydrBlade Flex, all products in our four
technology families – Speedboat, MicroBlate,
SlypSeal and SpydrBlade – will be cleared for
clinical use in both the Us and Europe. our
focus this year has been on delivering our
best-in-class Clinical Education Programme to
provide training for leading clinicians in the use
of our speedboat technology and CRoMA
Advanced Energy Platform.

opening of united states, east
Coast Headquarters in danbury,
Connecticut.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

The recently opened Us office in danbury,
Connecticut includes a learning centre and fully
equipped training laboratory where our Us
based team has been able to demonstrate
products and provide lab-based training
sessions. With on-going travel restrictions
across the world and the postponement of
elective procedures to, understandably, focus
resources on caring for patients with CoVId-19,
we have used remote technology extensively
for live events, which is yielding positive clinical
results and building an active user community.

our decision to purchase the freehold of
Creo House in Chepstow, UK strengthens
our infrastructure and provides additional
manufacturing capacity for our full suite
of devices. It also provides our team with a
secure base to allow us to continue to build a
world class MedTech company.

Buy
We have made excellent progress in integrating
our Albyn Medical and Boucart Medical
acquisitions into the Creo family. Both
businesses now operate under the Creo
Medical brand and the extensive European
sales force is now equipped to sell Creo
products across the European markets. This
approach is already delivering benefits which
will only accelerate as we introduce the full
product range into other regions.

Towards the end of 2021, we announced the
acquisition of Aber Electronics limited, a UK
based manufacturer and designer of power
amplifiers and radio frequency products. As an
existing supplier to Creo, this acquisition fits well
with our ‘Buy’ strategy, adding manufacturing
operations and specialist microwave and radio
frequency capability to Creo’s product
development for Kamaptive as well as securing
a key element of our supply chain.

Partner
Early in 2022 I was pleased to report that we
had signed non-binding heads of terms with a
number of third parties which relate to the
Group’s spydrBlade, Cool Plasma and
MicroBlate technologies. This is accelerating
the development of the “powered by
Kamaptive” brand, by enabling partners to
leverage our core Kamaptive technology.

We believe that such partnerships have the
potential to create shareholder value through
granting third-party access to Creo’s advanced
energy technology in large and growing
markets adjacent to those where the Group is
already operating. This includes fields such as
laparoscopic surgery, robotically assisted
surgery, and non-thermal plasma sterilisation.

With the right partners, we believe that Creo’s
technology has the potential to fundamentally
change the way that patients are cared for and
to improve patient outcomes.

Our people and responsibilities
We are a fast growing organisation – now
290 strong. I have been impressed with the
way our management teams have retained and
reinforced our strong culture, in particular as
we scale up our operations, manufacturing
capability, international growth and integrate
our acquisitions into the Creo family. We have
enhanced our human resources function to
support our growth and ensure we operate and
think as a global organisation from the start.

our people are clearly the critical element
within this. Without their innovation, can-do
spirit and commitment to the business, we
would not have delivered the progress we have
during the year and I would like to thank each
and every one of them for making this possible.

Looking forward
our mission remains the same: to improve
patient outcomes by bringing advanced energy
to therapeutic endoscopy.

We see our strong progress in the
commercialisation of our innovative, minimally
invasive, electrosurgical endoscopy devices
accelerating as our user community continues
to grow. We anticipate that high vaccination
rates in both Europe and the Us will lessen the
impact of CoVId-19 during 2022 and allow
clinicians to focus on the huge backlog of
elective cases, increasing activity in our key
areas of clinical focus – core GI and soft tissue
ablation. Whilst continued restrictions in Asia
have slowed progress in the region, we have
continued to recruit distributors in APAC and in
those other markets where we don’t have a
direct presence. We are well placed to support
these distributors as they start to satisfy a
backlog in demand in their markets as they
emerge from the CoVId-19 pandemic.

The successful integration of Albyn Medical
and Boucart Medical have transformed our
commercial footprint in Europe and we will
continue to evaluate other strategic acquisition
opportunities to accelerate our reach in other
regions including the UsA. Along with the
development of licensing partners, we will
continue our transition to a fully integrated
specialty medical device manufacturer with
product origination, development and
commercialisation capabilities.

2022 has already started positively, with strong
performances seen from our core product
portfolio. Throughout the rest of the year, we
look forward to continuing to execute and
expand our three-tiered organic strategy
through the education and training of clinicians,
the roll-out of our product portfolio in APAC
and further commercial orders and adoption of
speedboat Inject in the Us and Europe. With
our strong cash position and clear strategy,
Creo is well positioned to drive shareholder
value in 2022.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportOur business model

How we transform
energy and lives

We have established a resilient and scalable model that
combines the strengths of our pioneering products with the
reach of our commercial teams for the benefit of our stakeholders.

This overall model which, in turn, supports our three pillars: to convert projects into products, to
convert trainees into users and to convert production into manufacturing.

WE USE OUR
KEY STRENGTHS

TO CREATE
VALUE

Our technology

Read more on pages 12 to 15

Large and growing

addressable markets

Read more on pages 16 to 19

Highly skilled and
experienced team

Read more on page 42

Advanced energy expertise
and extensive IP portfolio

Read more on pages 30 to 31

Strong balance sheet with
committed long-term
investors, including key
members of our team

Read more on pages 48 to 49

Large number of global

customers, integrated direct
sales force and broad product
portfolio

Read more on pages 2 to 5

Research and development
Developing leading-edge
disruptive technology

New Products

Applying our technology to
create new and innovative
products

Distributing our products

worldwide through our own
global sales channels and
through directly managed
third-party distributors

First class Clinical Education

Training Programme

Licensing our Kamaptive
technology to carefully
selected partners

Building manufacturing and
operational capacity for
growth

FOR OUR
STAKEHOLDERS

Patients

Improved outcomes, including
lower risk of remote burns and
thermal damage to adjacent
tissue, faster recovery and less
time in hospital

Physicians

Peace of mind from simple and
adaptive products that provide
predictable tissue effects and
save time

Healthcare providers

Improved outcomes, lower
costs, reduced hospital stays
for patients and less frequent
follow up appointments

Investors

Attractive growth prospects

Employees

Dynamic, creative and
entrepreneurial culture, with
exciting opportunities for
development

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Our investment case

unrivalled disruptive
technology

INNOVATION AND
TECHNOLOGY

HEALTHCARE TRENDS
GROWING OUR
ACCESSIBLE MARKETS

GLOBAL OPERATIONAL
FOOTPRINT

Creo invests heavily in R&d and have
over 30 years of experience within the
core team headed by Professor Chris
Hancock, our founder and CTo.

our technology is at the forefront
of a paradigm shift in healthcare,
moving to minimally invasive
technologies.

We develop our advanced energy
capabilities to enable us to meet
unmet clinical needs.

developing cutting edge products
to combine with our advanced
energy technology and our ability to
partner with world leading device
manufacturers will open this
technology to a wider market.

our technology is protected by our

extensive patent portfolio.

 Read more in our CTO Q&A

on pages 30 to 31.

We are at the beginning of this

revolution where procedures move
away from traditional surgical theatres
to endoscopy suites with advantages
in cost, time and patient outcomes.

Current market size is significant

with low saturation and the size of
the markets will continue to grow
and expand.

A number macro and socio-economic
factors are driving the demand for our
technology and solutions.

Commercial teams established.

Undertaking acquisitions to enable
growth and support our offering by
providing a broad range of clinical
solutions.

Establishing worldwide operational
capacity to enhance service to our
customers.

our Clinical Education Programme
is delivering outstanding training to
physicians worldwide and will embed
our products, our brand, and enhance
skills to deliver better patient outcomes.

Committed to ensuring that our global
footprint not only improves lives but
that of the wider community.

 See our healthcare drivers on

pages 16 to 17.

 See more on pages 38 to 44.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report

Our technology

our core
technology

Speedboat Technology
speedboat is our flagship
advanced energy device product
with over 1,000 procedures
performed using the device.
5 functions 1 device

speedboat device technology is another unique device
technology with the only known bipolar surgical dissection blade
in any form of surgery#. Additionally, speedboat integrates
microwave technology allowing for precise control of bleeding
during surgery. These features can also be uniquely integrated
with irrigation and injection capability. As with all the Creo device
families, speedboat device technology has applications in many
different areas of clinical therapy and surgery.

SpydrBlade Technology
surgical device combining
speedboat blade and precise
microwave coagulation in a
unique multi-modal jaw design.

spydrBlade device technology optimises the power of the
CRoMA Platform, where advanced bipolar RF energy is used to
cut tissue and precisely controlled microwave energy is used for
the coagulation and sealing of tissue during surgery. The
spydrBlade jaw structure utilises speedboat’s unique blade
technology which allows cutting tissue as the jaws close, with the
jaws of the device open as well as while the jaws are closed as a
blade. No other laparoscopic surgical device is known to have
these fundamental resection features#.

Flexible bipolar RF and microwave energy scissor device

Grasps, cuts and coagulates highly perfused tissue

switch between cutting using RF energy and coagulating
using microwave energy across the jaws of the device

Electrical Current – Advanced Bipolar falling within the MF

spectrum (300hkz – 30 mhz)

Electromagnetic – Microwave falls within the sHF

spectrum (3-30 GHz)

Protective Hull

Integrated Injection Needle

1 to 1 rotation feel

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Delivered by

SlypSeal Technology
Haemostasis device
leveraging our unique
‘non-stick’ technology.

slypseal device technology is believed to be the only ‘non-stick’
electrosurgical haemostasis device technology in the market#.
This key feature overcomes a perennial challenge in surgery and
transforms the surgeon’s ability to precisely manage bleeding
with the unique ability to reapply with the ‘non-stick’ feature,
addressing the risk of ‘re-bleeds’. This combined with the
precision and control of microwave coagulation opens up the
possibility many different device structures in the future.

MicroBlate Technology
tissue microwave ablation
devices – including the
smallest microwave ablation
device we know of.

our MicroBlate tissue ablation technology brings microwave
energy in the super High Frequency band at 5.8GHz into clinical
practice for the first time. operating at such a high frequency
offers unrivalled level of control and feedback via the CRoMA
Platform allowing physicians to precisely ablate diseased tissue
in multiple tissue types using many different clinical access
methods. Creo is launching the first two devices in the MicroBlate
range, which allow unique levels of minimally invasive access due
to the size, design and technology in the MicroBlate range.

Flexible haemostasis device

Microwave needle ablation device

designed for treatment of upper and lower GI bleeds*

designed to same form and dimensions as a standard

Microwave energy allows non-stick coating for easy device

removal once tissue coagulation is complete

Integrated injection needle

biopsy needle

diameter of less than 1mm for use to ablate tumours in a

wide range of tissue types, including highly perfused tissue

* CE Mark approval for use in lower GI tract. FdA clearance for use in upper

and lower GI tract.

# Based on management’s expert knowledge.

Flexible microwave ablation device

designed for soft tissue ablation where flexibility and small

diameter is required to allow access

Created to ablate nodules and tumours

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportOur technology continued

Intelligent energy
with safety at heart.

– Energy with Finesse and Intelligence

– Heightened Controlled Accuracy

What is Kamaptive
Technology?

Kamaptive is Creo Medical's proprietary
intelligent energy technology, found at the
heart of all Kamaptive enabled advanced
energy platforms and devices.

Kamaptive represents seamless and
empowering access to next level,
game-changing patient outcomes, through
use of full spectrum energy in surgical,
medical and therapeutic applications.

CRoMA

Kamaptive technology’s architecture allows
multiple Creo development teams to design,
test and build innovative devices
independently whilst functioning with the
CRoMA Platform without complex software
changes or menu options for users.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

– Eliminate Collateral damage

– Intuitive Adaptive Interface

Miniaturised

New Possibilities

Creo Medical has been working to adapt
Kamaptive Technology to miniaturised
hand-held devices for heightened accuracy
and control. The intuitive intelligence of the
interface allows for the platform to be
versatile and resilient in scale and function.

Kamaptive’s full spectrum adaptive
technology allows for partnership
opportunities in new and innovative fields
from robotics to laparoscopy. Kamaptive
Technology intuitively adapts to the specific
tool in use, self provisioning and intelligently
enhancing the settings of the CRoMA
Platform for the purpose of the device
being used.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportHealthcare market drivers

addressing and delivering unmet
needs in large, growing markets
while improving patient outcomes
and reducing healthcare costs

TECHNOLOGY

HEALTH ECONOMICS

Technology is getting smaller and smarter, opening
more markets for less invasive procedures, allowing
us to target even more difficult to reach parts of the
body where current surgical intervention is limited.

Technology allows people to collaborate and even

operate remotely across the other side of the world.

As robotic assisted surgery develops there is a huge
opportunity to utilise our advanced energy capabilities.

Rising obesity, sedentary lifestyle, poor diet and aging

populations are driving incidence rates.

Increase in screening programmes is driving earlier

detection, meaning a shift towards earlier therapeutic
minimally invasive intervention.

Continued focus on device hygiene and move towards

single use devices .

Clinical evidence on both safety and efficacy is key to
de-risking and facilitating adoption of new technology.

Reimbursement of key procedures will drive adoption

(ssd, PoEM, ablations).

Robotic surgery

Reducing mortality rates of cancers1

Growth of installed surgical robots worldwide

Number of new cases in 2020, both sexes, all ages

Installed ortho robotic systems

2000

1500

1000

500

1,576

1,113

39.1%

784

626

506

117

162

200

382

268

2010

2011

2012

2013

2014

2015

2016E

2017E

2018E

2019E

2020E

source: Goldman sachs Investment Research.

3.3%

7.8%

5.0%

6.0%

Approximately: 17.8 million cases

12.5%

12.2%

10.7%

Breast:
2.2 million

Lung:
2.2 million

Colorectum:
1.9 million

Prostate:
1.4 million

Stomach:
1 million

Liver:
0.9 million

Cervix uteri:
0.6 million

Oesophagus:
0.6 million

Other cancers:
7 million

CA CANCER J ClIN 2021;71:209 -249: Global Cancer statistics 2020:
GloBoCAN Estimates of Incidence and Mortality Worldwide for 36 Cancers
in 185 Countries.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Data study
Cost effectiveness
analysis of speedboat
submucosal dissection

Data gathered under a joint study with the
NHS validates potential healthcare benefits and
clinical opportunity for Speedboat technology.

MACRO ECONOMICS

KEY FINDINGS:

Growing waiting lists caused by CoVId-19

have placed significant resource demands on
healthcare systems requiring more cost and
time effective procedures.

Governments looking to fund and utilise
cutting edge technology as a solution.

There is a move towards single use devices
as they become more cost-effective and
reduce the risk of cross contamination.

Creo team using Speedboat Inject to
remove a 40cm lesion

up to £10,000 saving
per procedure, double that of originally
thought. The potential NHs savings could
amount to c£180m per annum.

Faster diagnosis
as tumour/lesion can be removed
during initial investigation rather than
during surgery.

improved patient
outcome
as shorter procedure and recovery times
allow patients to leave hospital on same day.

reduced risk
as patients would ordinarily have up to 30cm
of bowel removed under traditional surgery
with associated risk of complication.

life changing
as patients can typically require a
temporary or permanent ostomy with
stoma bag following traditional surgery.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportOur markets and opportunities

the market opportunities
grow as Creo continues
to innovate

Procedures in this market include
removal of benign precancerous
and cancerous tissue in lower and
upper GI, achlasia, diverticulum,
SSD, EMR, Polypectomy and
POEMS. Allowing procedures to
be performed in outpatient clinics
thereby reducing complications.

MARKET OVERVIEW
~28m Colonoscopy procedures are
performed in the UsA and Europe
each year1,2.

Resulting in ~5.5m procedures to

remove lesions1,2.

Up to 15% of these are complex

lesions3 and would benefit from an
ssd using the speedboat device,
i.e. over 800k procedures.

Achalasia, a swallowing disorder in
the oesophagus where minimally
invasive treatment is limited and
new, is estimated to have 400k
procedures per annum4.

Creo’s MicroBlate technology could provide an alternative way to ablate soft
tissue tumours and treat patients for whom there may be limited options for
surgical therapy. Two potential clinical uses are being developed within Lung
and Hepatobiliary.

MARKET OVERVIEW
Lung
lung cancer is the leading cause of

cancer deaths (~1.8m) globally with over
2.2m new cases each year5.

only 34% of lung cancers are diagnosed

at early stages (I-II) due to poor
screening techniques, resulting in high
mortality6.

surgery, or percutaneous approaches
have been the primary therapeutic
treatments for early-stage cancer
although invasive with high risk
of complications.

over 748k procedures are potential

for non-surgical treatment of early-stage
(I-II) disease .

No flexible endoscopic therapy is

currently available.

Hepatobiliary
Pancreatic and liver cancers account for
over 1.4m cancers globally each year7.
High mortality rate due to late diagnosis:
liver at 80% and pancreas at 90% at five
years8.

Most cancers are inoperable due to

late-stage diagnosis (Pancreas <20%
operable)8.

over 500,000 potential procedures

targeted for MicroBlate Fine to tackle
inoperable cancers and small tumours.

MicroBlate Fine with Endoscopic

Ultrasound enables a less invasive,
endoscopic alternative to treat
hepatobiliary tumours and to treat
patients where surgery is not an option .

1. Us Market Report suite for GI Endoscopic devices 2019, idata Research, idata_UsGI19_Ms, February 2019.
2. Europe Market Report suite for GI Endoscopic devices 2019, Idata Research, idata_EUGI10_Ms, April 2019.
3. The “difficult” Colorectal Polyps and Adenomas: Practical Aspects, Herszenyi, dig dis 2019:37:394-399.
4. Bartel MJ, Brahmbhatt Bs, Wallace MB: Management of colorectal T1 carcinoma treated by endoscopic resection from the Western perspective. dig Endosc 2016;28: 330–341. 41 Benedix F, Köck.
5. WHo, IARC Cancer Today online Analysis 2020.
6. Morgensztern d, Ng sH, Gao F, Govindan R. Trends in stage distribution for patients with non-small cell lung cancer: a National Cancer database survey. J Thorac oncol. 2010 Jan.
7. WHo, IARC Cancer Today online Analysis 2020.
8. American Cancer society, Cancer Facts and Figures 2020.
9. BMJ 2019:364:1536.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

ENDOSCOPIC RESECTION & GI DISORDERSSOFT TISSUE ABLATIONdisrupt using our
core technology

ENDOSCOPY

$30bn Energy sub-market
of $5bn of which $3-4bn
is addressable13,14

CAGR

6.3%15

ROBOTIC
SURGERY

Robotic surgery ~$4.8bn
in 2020 > $9.65bn in 202516

CAGR

17%16

develop future
opportunities through
innovation of our
Kamaptive technology

LAPAROSCOPIC

$10bn in 2019 with energy
sub market of $3bn
> $6bn in 202717

CAGR

6.5%17

MARKET
OPPORTUNITIES:
To disrupt the surgical endoscopy
market using our advanced energy
technology.

Enhancing our technology to

facilitate more procedures and reach
into other clinical areas, for example
leveraging speedboat benefits in
PoEM procedures and using
MicroBlate Fine for palliative cancer
care and haemostastis of gastric
varices (further studies required).
Potential to move minimally invasive

therapy closer to diagnosis,
improving waiting lists and patient
outcomes.

Accelerated treatment pathways will

drive adoption and use.

developing our technology for

robotics and laparoscopic markets
through Kamaptive partnerships.

CLINICAL CHALLENGES:
Rising obesity, sedentary lifestyle,

poor diet and ageing populations are
key drivers.

With additional screening treating

rising cases with solutions that vary in
effectiveness and risk can be costly.

late diagnosis giving rise to high

mortality and limited surgical options.
surgical alternatives come at higher

cost, risk of complications,
and longer patient recovery.

GI bleeds including bleeding
in the oesophagus, stomach
or duodenum often requiring
endoscopic guided intervention.

MARKET OVERVIEW
Gastrointestinal bleeding is a

common medical emergency with
upper GI bleeds having a mortality
rate from 2%-10%9.

Upper GI bleeds account for

approximately 500,000 admissions
yearly in the Us10.

Currently, gastrointestinal bleeds are
managed through thermal energy,
mechanical ligation or a topical spray
used to coagulate the bleed.

A total of $2.5bn is spent annually in

Us on Upper GI bleeds10.

Risk of bleeding occurs in 10-20%
of patients, resulting in a second
endoscopic treatment11.

Currently major markets in the

Americas, Europe and Asia spend
in excess of $560m on haemostasis
devices to manage gastrointestinal
bleeding12.

10. Gleeson F, Clarke E, lennon J, et al. outcome of accident and emergency room triaged patients with low risk non‐variceal

upper gastrointestinal haemorrhage. Ir Med J 2006;99:114–17.

I-data Research 2019-UsA, Europe and China Markets.

11. diagnosis and Management of Upper Gastrointestinal Bleeding Am Fam Physician. 2012 Mar 1;85(5):469-476.
12.
13. Boston scientific investor presentation, 2015.
14. Conmed investor presentation, August 2016.
15. Markets and Markets, dec-15, Md 2212; stratistics MRC, May-15, MRs 25447; BCC research, Mar-16, HlC093C;

TechNavio, Jun-15, 3280756; TMR, Jul-14, 2014 07-02; IQ4I, 2014, 8664243; occam, Jun-16, HME-2610516.

16. Robotic surgery devices Global Market Report 2021: CoVId 19 Growth And Change To 2030,

The Business Research Company.

17. Coherent Market Insights, laparoscoic devices Market Analysis – Jan 2020.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportHAEMOSTASISOur strategy

our growing
technology portfolio

OUR STRATEGY IN ACTION

Build

Developing our technology offering and products; ensuring we execute on our
commercial and operational goals to enable our technology to be adopted globally.

Progress in 2021

Focus for 2022

• Progress on next generation CRoMA

• optimisation and launch of new products

Promote our unique suite of flexible,

minimally invasive endoscopy devices

platform

• Growing sales team 25%

• Clinical Education Programmes converting

trainees to users

• opening of Us and APAC offices

• 129 new patents granted (376 granted patent

and 870 pending applications in total)

• Purchase of land and buildings for UK HQ

(speedboat 2.7, MicroBlate Fine, MicroBlate
Flex and spydrBlade)

Read more on page 22

• Further development of Kamaptive

and CRoMA

• Verification of new products through

extensive clinical data

• Grow user pipeline – driving sales funnel

To perform a number of different
procedures which would usually
require invasive surgery

Read more on page 22

Buy

To accelerate our mission to reach as many patients as possible,
we aim to strengthen our clinical reach via our Buy Strategy.

Progress in 2021

Focus for 2022

• Acquisition of Aber Electronics

• Continue to evaluate strategic acquisitions

Providing complementary products to

provide greater value

• successful integration of Albyn Medical

that extend commercial footprint

Read more on pages 32 to 33

and Boucart Medical

• Identify targets similar to Albyn and

• Albyn and Boucart now operating under

the Creo brand

Boucart which can provide established
commercial and distribution routes in the
Us and APAC

Partner

We recognise that we may not always have the necessary resources to utilise
all our IP and to reach all stakeholders that can benefit from this technology.

Progress in 2021

Focus for 2022

• HoTs with a number of strategic partners
for the licence of Kamaptive Technology
for use in robotic assisted surgery and
non-thermal sterilisation

• Additional investment in IQ Endoscopes for

the design and development of a disposable,
single-use sterile endoscope to provide safe
and efficient internal diagnostics, which can
be used with Creo’s devices

• deliver immediate product iterations for

current partnerships

• Build upon our Kamaptive innovation and

intelligence prototyping

• develop consumable product range with

our advanced energy capabilities

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Utilise our patented advanced energy
technology powered by Kamaptive

Read more on pages 34 to 35

OUR TECHNOLOGY PORTFOLIO

Delivered by CROMA powered by Kamaptive technology

Gastrointestinal Lesions
(including Bowel and Upper GI
cancer) & Swallowing Disorders

Gastrointestinal Bleeding

Soft tissue ablation

Gastroenterology
products

Urology/Gynaecological
products

Hygiene & Cross-
contamination products

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportStrategy in action – Build

Building and transforming-

Our build strategy is essentially two-fold; developing our
technology and products and ensuring we execute on our
commercial and operational goals to enable our technology
to be adopted globally.

We have taken great strides forward in our build strategy in
2021. our speedboat Inject device has now been used in
more than 1,000 procedures and the clinical results have
proven our technology (see our clinical case studies on
pages 28 to 29). We look to extend this across our product
range through our growing development teams.

The integration of our 2020 acquisitions has transformed
our business, along with our organic expansion, creating
a truly global operation. We have developed our clinical
education team across all regions to now offer a global
training programme, see pages 26 to 27, with support from
our highly skilled clinical sales teams. We are continually
learning and beginning to deliver increased adoption by
moving physicians through the learning curve to become
proficient users of our technology (see CTo report on
pages 30 to 31).

Patient Outcomes
In addition to the growing number of excellent outcomes
from speedboat Inject, MicroBlate Fine was successfully
used to treat pancreatic cancer using minimally invasive,
EUs guided techniques in december 2020. during 2021 the
Company was delighted to report that, following the
procedure using MicroBlate™ Fine, the patient remains well
and is enjoying life. subsequent scans of the patient’s
pancreas continue to confirm the treatment’s durability.

The procedure was led by dr. Carlos Robles-Medranda at
IECEd. IECEd is the most advanced Gastroenterology and
digestive Endoscopy centre in latin America and is endorsed
by the World Endoscopy organization (“WEo”) which leads
the promotion of endoscopy throughout the world. When
asked about his experience with MicroBlate™ Fine, dr
Robles-Medranda stated: “I am excited about the potential of
this technology for use in EUs guided therapy; the microwave
energy allows me to precisely target and ablate difficult
lesions. I believe this technology will have a positive impact on
my patients, and I will continue to offer this treatment option.”
Find the video GIE case study at https://www.videogie.org/
article/s2468-4481(21)00202-2/fulltext.

Commercial progress
The final quarter of 2021 saw a significant uplift in
commercial orders and adoption of speedboat Inject in the
Us (upper and lower GI) and Europe (lower GI). speedboat
Inject offers substantial cost savings in lower GI procedures
versus a traditional surgical procedure as well as improved
clinical outcomes.

despite the pandemic, speedboat submucosal dissection
(“ssd”) procedure volumes doubled during 2021 versus
2020 when procedures utilising Creo products were
delayed as a result of routine diagnostics and elective
procedures being postponed due to CoVId-19.

Clinical training
over the course of 2021, Creo’s pipeline of doctors waiting
to be trained as part of the Group’s Clinical Education
Programme has more than doubled from the number
trained in 2020. demand for training on Creo’s products
continues to build and the number of global training centres
across our direct markets increased threefold over the
course of 2021.

Creo trained a significant number of leading clinicians in
2021, who are now product users, and the Company
expects this number to rise in 2022. In order to service this
increased demand, Creo has increased its direct sales force
by 25% since the beginning of 2021. see pages 26 to 27 for
more about our Clinical Education Programme.

Global capacity
The opening of the Company’s Us headquarters during
2021, with a learning centre and fully equipped training
laboratory, has helped to support Creo’s commercial
roll-out in the key Us market. Creo has also secured office
space in singapore for its APAC hub which opened during
Q2 2022. This will support the commercial roll-out of Creo’s
products in APAC during 2022 and is expected to satisfy
the backlog of demand, following the signing of numerous
distributor agreements throughout 2021. In addition, Creo
completed the purchase of the freehold of Creo House,
Chepstow, and the adjacent building, to support the
Company’s planned and sustained growth.

Healthcare economics
To further validate our technology, clinical data confirms
that the health economic benefits of using the Company’s
CRoMA Advanced Energy Platform with speedboat Inject,
provides substantially more cost-savings for the NHs
than originally thought. (see Healthcare drivers at
pages 16 to 17).

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Case studies
14.5cm lesion removed via
speedboat submucosal
dissection

“It seemed like a very obvious solution…like a definite way forward.
And afterwards, seeing how it all went – I would not have recovered,
I’m sure, from abdominal surgery at the speed I did from your
operation. So I would recommend your surgery 100%. Not a single
hesitation.

“Me and my family were so grateful for that opportunity. The
difference, you know, had I had to go the other route, if you hadn’t
been around to do this? Well, I could probably still be recovering from
all the surgeries that would have carried on consequently.

“I’m a Jehovah’s Witness. First of all, we believe very strongly in the
sanctity of life, so we will do anything and everything to try and keep
ourselves well. But we do also have a strong conviction, not to accept
blood, or any of the four main components. So I was concerned about
blood loss and one of the reasons we opted for the endoscopic route
was to avoid that double hit of two lots of surgeries, the stoma bag
etc. That was very important to us.”

Patient C

10cm lesion removed via
speedboat submucosal
dissection

“I just feel that I’m back to normal, completely. I’m not quite sure
where I would have been if we’d not done this. The stoma bag route
would have left, I think, an altered life after – whereas with this I’m
back to normal. I really am.

“(The effect of the surgery) was negligible, manageable to the extent
to it being a non-event. I still couldn’t square how much work was
done for how little I felt that work had been done.

“10 days ago I had my 66th birthday. I’m happy as anything. I’m getting
out doing my stuff, exactly as I used to. And I don’t have any problems
like that. So, to me, I would recommend it. Absolutely. 100%.”

Patient R

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Patient HistoryGovernanceFinancial StatementsStrategic ReportChief Commercial Officer review

sound foundations for
growth now in place

direct sales
force

training centres

The integration of the Albyn and Boucart sales teams is
now complete, with these teams trained to sell all Creo
medical devices into their extensive customer base and
now operating under the Creo Medical brand. Product
management teams are fully aligned as they build the
appropriate go-to-market strategies for each region and
assess the opportunities to take the Albyn product portfolio
into the Us. A new CRM system was installed during the
year to aid collaboration across the teams internationally
and ensure opportunities are captured and monitored as
they progress through the sales cycle.

Many of our launch events were virtual this year with
live endoscopy events in the UK, Us, India and spain
demonstrating procedures with key opinion leaders
(“Kols”) proving very successful and Creo is well
recognised in our target communities. our key message
of better clinical outcomes, better economic outcomes
and better patient and provider satisfaction is increasingly
supported by clinical case studies and health economics
data. A paper titled ‘Cost-effectiveness analysis of
speedboat submucosal dissection in the management of
large non-pedunculated colorectal polyps’ demonstrated
that the use of speedboat Inject is highly likely to be a
cost-effective strategy for treating both benign and
malignant large non-pedunculated colorectal polyps
(colonic lesions found inside the large intestine)
and rectum and may lead to cost savings for
healthcare providers, see page 17.

David Woods
Chief Commercial Officer

Highlights
our journey to commercialisation continued at pace during
the year as we focused on getting our new technology to
market. The impact of CoVId-19 meant that healthcare
systems across the world were under pressure dealing with
the pandemic with elective procedures delayed, but never
the less we made good progress in building our user
communities and rolling out our Clinical Education
Programme in the UK, Us and Europe in particular. We
opened our Us headquarters and ended the period with 12
training sites in major academic centres in our key regions,
putting us in a strong position for the year ahead.

Commercial orders for speedboat Inject are growing in
line with expectations, validated by independent health
economics data showing potential savings of over £10,000
versus traditional surgical outcomes. during the year
speedboat Inject has been used successfully in both upper
GI (“PoEM”) and lower GI procedures, delivering excellent
clinical outcomes and opening up additional markets for
our technology.

Commercial progress
The year saw high levels of activity in the UK, Us and
Europe as we strengthened our teams, set up the training
centres and enhanced our education of leading clinicians.
These centres allow both product demonstrations and
immersive training sessions providing a mixture of
classroom-based didactic learning and hands-on lab
sessions. As CoVId-19 restrictions diminish, we expect to
accelerate the training of clinicians. our Us headquarters in
danbury, Connecticut, opened in June 2021 and is already
delivering a positive learning experience for key clinicians.

We are replicating this model in the Asia Pacific region,
expanding our direct presence and opened an office in
singapore in April 2022. This region was locked down for
most of the period, with travel restrictions in place but the
in-country team adjusted their approach, engaging
extensively with clinicians using remote technology and
continuing to build their user community. We continued
signing up distributors, primarily in the Asia Pacific region
but now extending our reach into latin America with
partners in Chile, Ecuador and Venezuela.

David Woods CCO and Chris Hancock CTO
opening Singapore office

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Focus for 2022
Building on the sound foundations put in place in 2021, we
intend to push forward with plans to increase the number of
training centres and grow our clinical presence. This enables
us to extend our Clinical Education Programme to include
new devices and expand the portfolio by adding relevant
Albyn products and introducing them to new markets.

Kamaptive’s licencing programme delivers a precise, safer
energy that enables surgery on other parts of the body and
through other technologies, such as robotics, which extends
our reach and user community.

“Speedboat Inject and the entire Creo
platform represents one of the most
innovative contributions to endoscopic
energy delivery in the past several
decades. The operator is now liberated
beyond the confines of present
techniques and apply surgical
oncologic principles (en bloc vs. piece
meal resection) to both staging and
definitive endoscopic therapies within
the GI tract. The ease of use and
intuitive nature of the Speedboat
device and CROMA Platform make all
approaches to endoscopic submucosal
dissection much more accessible to the
entire field of surgical endoscopy. It
is my hope that the scope of this
technology will be broadened to
include intra-abdominal and thoracic
procedures.”

Dr Blair Jobe

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportClinical education to deliver clinical adoption

We have made significant
progress in encouraging
clinical adoption of our flagship
Speedboat Inject device
through our world leading
Clinical Education Programme.

We continued the roll-out of our Clinical Education
Training Programme globally during 2021, increasing the
number of trainers and champions, along with further
growing our mentoring support for trainees. Furthermore,
we are developing a user community to support clinicians
through the training process, improving the user
experience and enabling new skills to be taken back to
clinics and healthcare centres to benefit their patients.

Feedback from trainees on the programme:

“There are very few courses that offer this level
of hands on training and the kind of expertise
where you get to meet people who were
directly involved in development of the
technology.”

Dr Vanja Giljaca
Heartlands Hospital, Birmingham, UK
Consultant Gastroenterologist.

The number of procedures performed using speedboat
Inject passed 1,000 this year.

Not only are these procedures saving time and money
for healthcare providers, but they are improving peoples’
lives and helping us achieve our main goal of improving
patient outcomes as the case studies below demonstrate.

“My experience of this professional education
programme is really excellent. It’s nothing like
I’ve ever experienced before and I have been
on several other ESD courses.”

Increase in clinicians trained

New products being rolled out

New product areas being developed

– Robotics etc.

“Thanks to Creo’s Speedboat
inject we were able to remove
a non-cancerous tumor which
could only otherwise have
been removed through surgery
which would have had life
changing impacts.”

Nisha Patel
Imperial Hospital, London, UK
Consultant Gastroenterologist.

“I do believe that the procedures can be done
faster and can be done in a safer way and that’s
why I actually found interest in this technology.”

Dr Sergei Vosko
Israel

“The training far exceeded my expectations, its
been brilliant having two full days of 1-on-1
teaching experience…the advantage of having
a trainer that’s really skilled giving you his tips
and tricks and sharing them willingly has been
absolutely fantastic; it’s really something I’m
going to employ back home.”

Dr Galya Chinnery
Surgical Gastroenterology Unit, University
of Cape Town, South Africa.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Social Media Interaction
Kamaptive Community – online mentoring programme

@Creoendoscopy
linkedin.com/showcase/creo-endoscopy/
twitter.com/CreoEndoscopy

Social icon

Rounded square

Only use blue and/or white.

For more details check out our
Brand Guidelines.

@CreoMedical

Social icon

Rounded square

Only use blue and/or white.

For more details check out our
Brand Guidelines.

linkedin.com/company/creo-medical/
twitter.com/CreoMedical

Team in Belgium performing the first ever SSD procedure in
the country.

Team after Speedboat POEMs procedure in the US.

Team completing 4 cases using Speedboat Inject in a single day.

Hands on training clinic at Kings Live event in London during
the year.

MicroBlate Fine’s 1st patient treatment extended patient’s life
expectancy.

Team after an en-bloc resection using Speedboat in early 2022.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportClinical case studies

speedboat submucosal
dissection (“ssd”)

using advanced energy on a mid-rectal
lateral spreading tumour with focal
depression

Patient History
A 70-year-old man with rectal bleeding and positive FIT was referred for colonoscopy, which
picked up a 30mm mid-rectal lateral spreading tumour with focal depression. The case was
discussed at the local multidisciplinary meeting where it was felt that the lesion may harbour
high grade dysplasia and en-bloc resection should be attempted.

Procedure
speedboat submucosal dissection (“ssd”) of the lesion was performed. Microwave
coagulation was also applied to a few prominent vessels on the defect, following resection. The
patient was discharged 1 hour later. No delayed complications were noted. (see fig. 1).

Figure 1

Outcome
En Bloc resection of the lesion was achieved. Histology spoke of a high-grade tubular adenoma
(fig. 2).

No intraprocedural/delayed complications were noted. This was a day-case procedure (same
day discharge).

Conclusion
This case highlights that ssd is an efficient technique for safe en-bloc resection of advanced
polyps of the colorectum. The alternatives would have led to histopathological confusion with
regards to completeness of resection, and TEMs/TAMIs (procedures requiring general
anaesthetic and, often, in-hospital stay).

Dr Iosif Beintaris
Consultant Gastroenterologist, North Tees and Hartlepool NHS Foundation Trust, UK

Figure 2

See our website for more details:
www.creomedical.com/case-studies/

ssd tunnelling case study

SSD tunnelling technique was used on a patient with a sessile lesion up to 10cm that had
raised suspicion of high grade dysplasia or cancer. Because of the safety afforded by the
insulated protective hull we were able to work closer to the muscle bed, allowing for deep
dissection. Active bleeding was controlled with the device, without need for instrument
exchange. Histology showed a near invasive cancer. The procedure was curative and en-bloc
treatment completed without the need for subsequent check site procedures demonstrating
a preferential pathway that precludes need for surgical intervention.

Creo MediCal Group plC ANNUAl REPoRT ANd ACCoUNTs 2021

using advanced energy on a large
G-type lst of lower rectum involving
the anal canal

Patient History
A 63-year-old female patient with history of hypothyroidism referred for rectal
bleeding, weight loss and a positive FIT test (65 µg/g). In colonoscopy (fig. 1 & 2),
an 80mm G-type lsT with 2 dominant nodules was found in lower rectum and
partly involving the dentate line/anal canal.

Procedure
The procedure was performed under general anaesthesia using the speedboat Inject
device and the CRoMA Advanced Energy generator (advanced bipolar RF, 5.8 GHz
microwave). A tunnelling dissection was performed. The speedboat Inject device
provided excellent bleeding control with isolation and MW pre-coagulation of large
vessels prior to resecting. Resection was precise and delicate with continuous
alignment of the blade to the submucosal/muscular plane.

Figure 1

Outcome
Given the large size of the polyp and length of the procedure, the patient was
admitted overnight for observation, antibiotics and pain control. The postoperative
course was uneventful and the patient was discharged the following day.

The histological (fig. 3) assessment revealed a tubulovillous adenoma with low
grade dysplasia completely excised from peripheral and deep margins .

Conclusion
This case highlights the safety and efficacy of the speedboat Inject device and
the CRoMA Advanced Energy platform in removing endoscopically and in en
bloc fashion a large polyp located in a challenging position such as the lower
rectum and the anal canal.

dissection with the speedboat Inject device was gentle and predictable making

the whole procedure safe, reasonably fast and satisfying.

only alternative to the procedure would be a surgical transanal excision but

high risk of complications and suboptimal resection.

The clearance provided by the device is reassuring making risk of recurrence

unlikely and absence of charring on the margins renders histological
assessment more accurate.

The impact on the patient and hospital has been minimal compared to an
equivalent surgical alternative. The patient was treated as a day case and
required no admission or other investigations and treatment. This offers a
substantial advantage over alternative methods, including a financial element.
Without ssd service and associated skills the case would have been treated
with suboptimal modalities or referred to another referral centre/hospital with
potentially serious impact on logistics, waiting times, patient experience,
continuity of care and clinical risk management.

Figure 2

Dr Sergio Coda Consultant Specialist GI Endoscopist, Director of Bowel
Cancer Screening Programme at BHR University Hospitals NHS Trust, UK

Figure 3

Creo MediCal Group plC ANNUAl REPoRT ANd ACCoUNTs 2021

GovernanceFinancial StatementsStrategic ReportChief Technology Officer’s review

Q&a

Chris Hancock
Chief Technology Officer

Q: What were your key highlights
from 2021?

A: We made significant progress during
the year in gaining clinical validation for
our products, both through the roll-out of
the Clinical Education Programme and
increased use in patient procedures. A
particular highlight for me was watching
speedboat Inject being used in a Peroral
Endoscopic Myotomy (“PoEM”) procedure
in the Us, which enabled a 13 year-old boy
to swallow again.

Q: How have the products and
your technology expanded?

A: We have continued to strengthen our
IP portfolio, with 12 new GB patent applications
filed to protect key inventions developed by the
Research and development team during the
last 12 months that relate to enhancements to
our existing products, new flexible instruments
and extensions to the functionality of the
CRoMA platform.

our focus this year has been on development
of our existing products with the majority of our
R&d budget spent on optimising our devices
in response to clinical feedback, including
extending the length of the needle in MicroBlate
Fine and reducing the diameter of speedboat
devices from 3.7mm to 2.8mm to enable
additional access into the body.

Whilst we need to ensure our core technology
is protected and future proof, our patents filed
this year demonstrate our progress in using
advanced energy for diagnostics as well as
therapeutics. For example, patents for Raman
spectroscopy probes have been filed that
will measure the inelasticity of tissue to sense
changes in thin walled organs, such as the GI
tract, and instantly diagnose unhealthy tissue,
which will enable clinicians to ‘see’ abnormal
tissue and ‘treat’ it using one of Creo’s
medical devices.

our IP estate now comprises of 121 product
families with 376 granted patents and 870
pending applications as at 31st december 2021.

Q: Speedboat Inject was developed
to treat early-stage colon cancers.
What has the new technology
meant for patients and the NHS?

A: This was our first product, designed for use
in the gastrointestinal tract. Using bipolar radio
frequency and super high-frequency
microwave energy it can dissect, resect,
coagulate and inject, all in a single device.

for food and liquid to pass from the oesophagus
to the stomach due to the muscles in the
oesophagus failing to open properly, or not
opening at all.

speedboat Inject is used to tunnel through the
muscles, opening up the entrance to the
stomach and allowing patients to eat and drink
again. This non-invasive procedure has been
conducted over 100 times in the Us.

other possible conditions that we are looking
to treat with speedboat technology include
haemorrhoids and urinary tract cancers.

The treatment, undertaken using endoscopy,
allows clinicians to pinpoint, excise and remove
cancerous lesions from the body.

Q: Are there any new products on
the horizon over the next 12 months
and beyond?

Before the introduction of our device, patients
would have to have undergone open surgery or
laparoscopic surgery to remove cancer cells.
They would be looking at a week-long stay in
hospital and some would have needed a
colostomy bag for six months afterwards.

speedboat Inject means that only mild sedation
is needed, and in some cases, no sedation is
required at all. Patients can be out of hospital
within a few hours of the treatment and, at
worst, will only need an overnight stay. This
means recovery times are drastically reduced.

This doesn’t just benefit patients. We estimate it
saves the NHs around £10,000 per procedure,
freeing up valuable resources and beds.

Q: What’s the future for Speedboat
Inject? Do you see it being used for
other conditions?

A: The device has proved highly effective in
treating colon cancers and as more and more
clinicians are trained and become confident in
using it, I expect the number of patients who
have access to the treatment to grow.

A: As we evolve our partnership strategy for
Kamaptive, the focus for our R&d during the
year ahead will be on extending our advanced
energy technology beyond our initial devices
for use in robotics, handheld laparoscopic
applications, non-thermal plasma for wound
care and scope decontamination and
electroporation.

We are working towards the next generation
of CRoMA, introducing a distributed
architecture, for energy sources and
diagnostic modules, with plans including
additional features such as other new energy
sources , tissue measurement and
characterisation modules, and the ability to
use higher power and multiple microwave
frequency sources , opening up potential for
the treatment of large tumour ablation and
brain tumours.

Further work on Raman spectroscopy will
support our vision of being able to ‘see’
diseased or abnormal tissue in any region of
the body and ultimately use this information to
‘treat’ using our miniature devices, improving
outcomes for patients.

As well as expanding the uses of speedboat
Inject, we are developing two new products
that are already being trialled by clinicians in
the Us and elsewhere.

Extending our work into new energy modalities
continued as we filed a new patent that
demonstrated how non-thermal plasma could
be used to eliminate the biofilm in wound care.

We are also looking at where we can expand
use of the device to help treat other conditions.
In the Us it is being successfully used to treat
achalasia, a rare disorder that makes it difficult

Creo MediCal Group plC ANNUAl REPoRT ANd ACCoUNTs 2021

Q: How is Creo creating a team
capable for success?
A: To ensure that we match our skills and
resources to support both research and
development, we increased our technical staff
by 40%. Recruits ranged from software
engineers, industrial designers and electronics
graduates to process and quality engineers to
work on developing the next iteration of our
CRoMA Advanced Energy Platform and
Kamaptive capabilities, our products and to
support the move into manufacturing. Whilst
we are looking for specific expertise to grow
our team, finding people who are a good fit
with the Creo ‘can-do’ spirit and collaborative
culture has been equally important.

We restructured the R&d function to ensure
each device has its own fully equipped
development team to enable effective delivery,
working closely with production. Concept
teams now focus on applied research to
enhance the features of our instruments and
generator, undertaking feasibility studies and
building proof of concepts with rapid iteration
of ideas.

The engineering team is currently based in the
UK, in North Wales and Bath and the addition
of Aber Electronics in Essex will complement
our research and design expertise, providing
additional specialist microwave and radio
frequency knowledge and technology.

Q: What continues to drive you and
the business?

A: It was unbelievably sad that we lost one of
our own and a dear friend this year who
passed away with kidney cancer. sandra swain
was instrumental in the development of our
technology and the business would not be
where it is without her. Her passing highlights
the importance of our mission to continue to
innovate and bring products to market to
improve patient outcomes.

As we are all very aware, the NHs is facing
huge waiting lists of those requiring operations.
We are also seeing patients who avoided
seeking medical attention during the pandemic
continue to present with signs of cancer. Creo
Medical and our range of medical devices has
an important part to play in tackling this by
giving clinicians the means to treat early-stage
cancers without the need for major operations
or lengthy hospital stays.

longer term, my hope is we will be able to
integrate diagnostics into our devices, using
our technology to rapidly screen and detect,
as well as treat cancers.

overview of Creo Medical patent families

376 granted patents

870 patents pending

SPEEDBOAT & ENDO

FLUID & PLASMA

PLATFORM

SPEEDBOAT

patents

applications

HAEMOSTAT

patent

applications

PLATFORM GENERATOR &
INTERFACE ELEMENTS

125

patents

281

applications

PLASMA
STERILISATION

patents

applications

ABC/APC

patents

applications

LIPOTUNNELLER

patents

applications

CYST
TREATMENT

patents

applications

GRASPERS

patents

RADIATING
SNARE

applications

patents

applications

RESECTOR

patents

COLD SNARE

END ABLATOR

patents

applications

DUODENAL
ABLATION

SCOPE-CONVEYED
FLEXIBLE ABLATOR

patents

LIGAMENT
TIGHTENING

patents

276

applications

patents

applications

RESECTOR & GRASPER

ABLATION

WIRELESS
ENDOSCOPIC
CAPSULE

patents

applications

As of 31 december 2021, we had 376 granted
patents and 870 pending applications
around the world.

Jurisdictions: us, Cn, Jp, Ca, in, sG, au, HK, Kr,
il, Za, Br, ru, ep (at, Be, CH, CZ, dK, de, es, Fr,
GB, Gr, ie, it, nl, no, pt, sW)

Looking forward
Underpinning Creo’s ambitions is our vision of how the energy produced at various
frequencies within the Electromagnetic spectrum can be harnessed and targeted to improve
both therapeutics and diagnostics.

To be able to ‘see’ diseased or abnormal tissue in any region of the body, and then use this
information to ‘treat’ it using miniature structures being developed by Creo, is our ultimate
goal. see our Markets and opportunities section on page 19 to see market opportunities for our
Kamaptive technology.

ENERGY

Our developments

Possible future developments

Kamaptive
Today

Kamaptive
Tomorrow

ELF

VLF

RADIO FREQUENCIES MICROWAVE INFRA-RED VISIBLE X-RAY GAMMA RAY

FREQUENCY

50 Hz

1 MHz

500 MHz

1 GHz

10 GHz

30 GHz

600 THz

3 PHz

300 PHz

30 EHz

WAVELENGTH 6,000 km

300 m

60 cm

30 cm

3 cm

10 mm

500 nm

100 nm

1 nm

10 pm

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportStrategy in action – Buy

strengthening
and growing

To accelerate our mission to reach as many patients as we
can we aim to identify and undertake key acquisitions to
strengthen our commercial and clinical reach.

The transformational acquisitions of Albyn Medical and
Boucart Medical in 2020 have helped to significantly
advance our strategy. Throughout this year we have been
integrating these businesses with the Creo business and
making them and their products part of the Creo Brand.

This integration has helped us to establish routes to market
for our products in Europe, significantly strengthening our
pool of expertise, Kols, and commercial team as well
as contributing significant revenues and cashflow for
the business.

As the acquisitions have bedded in, the business is
exploring potential options to leverage the skills, experience
and products of the Creo Consumables group in Europe,
combining these with the core advanced energy
technology. This synergy also enables us to provide a
broader and balanced solution to our end users to support
more of their needs for performing endoscopy services,
benefiting both patient and healthcare providers. We are
excited by the opportunities here to support the growth of
both the consumable market and our core technology as
we move forward.

Aber Electronics
The Group acquired Aber Electronics limited in November
2021 for £1.4m.

Aber are microwave and radio frequency specialists. They
have long been an existing supplier to Creo, with their
power amplifiers a key component of our CRoMA
Advanced Energy Platform.

The team are extremely experienced, supplying the
broadcast, film, defence and medical industries for over 11
years and counting.

Aber are currently developing key components for Creo's
2nd generation CRoMA Advanced Energy Platform. They
will continue to work from their Colchester base in the same
way as before, albeit with stronger direct links to the Creo
team and with the demands of the Creo business front
and centre.

For Creo, this acquisition will complement our research,
design and manufacturing processes. It also provides
additional specialist microwave and radio frequency
capability and expertise within the business, helping enable
the adaptation of the Company’s technology for its
partnering programme whilst also securing a key element
of the Group’s supply chain.

team at aber electronics limited led by andy Haynes
(top right).

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Q&a with luis Collantes

Q. How has the commercial team responded to the opportunity
to sell the Creo technology within Europe?
A. Following training of the sales teams across Europe in July of
last year, across our territories the teams have continued to develop
their understanding of the Creo devices and the advanced energy
capabilities. Given their access to numerous endoscopists and
clinicians, we have been able to identify and offer targeted clinical led
training to increase our user base and generate increased sales for
the Group. The teams have also welcomed additional investment and
training to develop their skillset and career opportunities.

Q. What has been the reaction of customers to the acquisition?
A. Albyn Medical has been in the GI and Urology market for years
with very close relationships with its clients. Becoming part of this
bigger project was initially unexpected, however after explaining
the reasons and synergies, it became clear for everyone that the
potential of Creo Medical's technology combined with the Albyn
team and product range was a great opportunity for them to have
access to great technology with a great service.

Q. What are the benefits from combining the consumable
business with the wider Creo Group?
A. Being part of Creo has increased opportunities to expand the
consumable product offering worldwide, through existing sales
channels developed in direct markets and through M&A
opportunities. In addition we have seen that market opportunities
have arisen in our traditional markets from the Creo brand name,
highlighting sales synergies both ways. Cross skilling of workforce
and synergistic benefits of sharing services has enabled the
business to identify new market opportunities, introduce the Creo
technology in Europe whilst allowing us to deliver year-on-year
growth on the consumable brand of products.

Q. What are the challenges and differences?
A. Change can always be difficult to some extent, but the business
has adapted well and kept its focus, partly because we are used to
change but more from our positive and flexible staff. One concern
identified is a detraction from driving sales in the consumable
business as a result of introducing new devices and technologies.
However through restructuring of teams, training, ongoing support
from our colleagues and clear goals, we are confident in delivering
continued growth and developing the core technology adoption
across Europe.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Strategy in action – Partner

accelerating and
expanding

We recognise that we may not always have the resource
to utilise all our IP and to reach all the stakeholders that
can benefit from this technology.

Cool plasma sterilisation
We continued to develop our non-thermal Plasma
sterilisation technology. Working with microbiologists
at the University of the West of England we validated the
efficacy of our technology by demonstrating the effective
denaturing of biofilm in endoscopes and denaturing of
microbes, viruses and bacteria in lab conditions.

Following this breakthrough we actively sought partners to
advance this technology in various applications in wound
care, medical instrument sterilisation and urinary tract
infections. The recent HoTs signed aims to further advance
this technology during 2022 and open our technology to
significant markets.

Further Investment in IQ Endoscopes
Creo made a further £1 million investment into IQ
Endoscopes along with the development Bank of Wales to
maintain its current stake in the company.

The investment will allow IQ Endoscopes to achieve
regulatory approval for its single use flexible gastroscope,
as well as accelerating the development of its single use
flexible colonoscope – both of which complement Creo’s
suite of products.

IQ Endoscope’s Q Vision Technology will replicate the
physical handling and ergonomic performance of re-
useable endoscopic technologies, through a patented and
sustainable single use platform. single use endoscopy will
not only eliminate all threat of cross contamination between
endoscopy procedures, but also increase throughput of
patients and allow greater access to flexible endoscopy
procedures on a global scale.

We intend to partner with leading organisations and
select technology partners to bridge the gap between
organic growth and pure M&A to further enhance
shareholder value.

We believe that partnering will accelerate our growth,
create shareholder value and realise the full potential of our
Kamaptive Technology as it will give Creo access to the
expertise of third parties on a de-risked basis and access to
new adjacent markets. This includes fields such as
laparoscopic surgery, robotically assisted surgery, and
non-thermal plasma sterilisation.

Robotics
during 2021 we’ve focused on ensuring our Advanced
Energy Platform CRoMA, powered by our Kamaptive
Technology, is ready for licensing and we have identified a
number of target areas where we are looking to partner.

As a result, in January 2022 the Company entered into
non-binding heads of terms (the HoTs) with a number of
parties which relate to the Company’s spydrBlade and
MicroBlate technologies and Plasma sterilisation. This is
accelerating the development of the “powered by
Kamaptive” brand, by enabling partners to leverage our
core Kamaptive technology.

Robotic-assisted surgery, with a global market of $4.8bn,
and projected to reach $9.65bn by 2025, is one of the fields
with the most potential.

surgical robots enable surgeons to carry out complex
surgical procedures with greater precision. They are
primarily used in gynaecological, urological, orthopedic,
general, neurosurgeries, and other minimally invasive
surgeries. Key to this will be the ability to provide medical
devices and advanced energy to be utilised by robotic
platforms. We believe that the HoTs signed with robotic
partners will allow them to power their platforms with
Creo’s Kamaptive technology and use advanced energy
to enhance their capability, enabling Creo to achieve its
vision sooner and treat more patients.

We believe that robotic surgical platforms powered by
Kamaptive Technology have the potential to accelerate
this inevitable change in the way that patients are cared
for and treated.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Strategic Report

Governance

Financial Statements

realising the power of Kamaptive
through partnering and licensing
opportunities.

“ We are delighted to have secured
this Series A fund from our
original investors as well as
welcoming new co-investors to
the round. We would like to thank
both the Development Bank of
Wales and Creo Medical PLC for
their support and funding since
our Seed Investment in July 2020.
This new funding will allow us to
accelerate our regulatory
approval programme for our
range of single use endoscopes
as well as progressing with our
strong product development
roadmap. We will continue to
expand our team in South Wales
and look to build critical
foundations that will allow us to
rapidly commercialise our
technology on a global scale.

Creo Medical have a been an
incredibly supportive partner
since our inception. Our
independent missions are very
aligned and we continue to
explore all options to support the
growing need for endoscopic
technologies and procedures.”

Matt Ginn
CEO
I.Q. Endoscopes

Robotics

Advanced Energy Solutions

New innovative devices

See pages 14 and 15 for more on our Kamaptive technology

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Patient History
Chairman’s statement

sound progress
underpinned by
strong governance

Charles Spicer
Chairman

Acquisition

290

People

offices
worldwide

Overview
like most PlC Chairs, I would have rather not been talking
to shareholders about the CoVId-19 pandemic for a third
successive year. The reviews earlier in this Annual Report
by our CEo and CCo detail how restrictions on travel,
limited access to hospitals and delays in elective
procedures have unavoidably slowed the clinical adoption
and commercial roll-out of our CRoMA Advanced Energy
Platform around the world. But despite these challenges,
we have further broadened and deepened our range of
products during the period to treat a longer list of medical
indications and so improve the lives of a broader group of
patients. This continues to stimulate interest in adopting
CRoMA from our clinical champions, especially in
Europe and the Us where patients are benefiting from
Creo’s technologies.

Governance
We have not allowed the CoVId-19 pandemic to hinder
our corporate governance efforts, which remain front and
centre of our work. Within this section of the report, we
have set out details in respect of our continued EsG
commitment, information regarding our s172 compliance
with examples from the year, as well as the summary of our
compliance with the Quoted Companies Alliance (QCA)
Corporate Governance Code. As we continue to grow,
both organically through acquisition and through
partnership, the Board is unanimous in its view that it is
strong governance which underpins the success of our
activities and which provides a sound framework for the
business to operate within.

Management and staff
As in previous years, the Board would like to applaud our
management team and all our employees for another year
of important strategic milestones. Together they have
shown perseverance, flexibility and inventiveness in
developing Creo’s products and their international markets,
despite the headwinds described above which have limited
the rate at which we could train new users globally.
Thankfully, our rightly celebrated colleagues in the vaccine
sector have been remarkably successful in developing and
rolling out effective vaccines in our priority UK, Continental
European and North American markets. We have been
encouraged to see the cautious lifting of travel and other
restrictions in our key markets in recent months.

Integration of acquisitions
The successful integration of the two acquisitions
completed in 2020 has been a strategic priority during
the year. This nicely illustrates our Build – Buy – Partner
strategy in action and lays the groundwork for significant
shareholder value creation. The Board thanks the
commercial teams led by david Woods and luis Collantes
who have worked tirelessly together across geographies,
time zones and specialities to leverage Creo’s growing and
unique set of strengths and skills.

Albyn Medical and Boucart Medical are both well integrated
into the Group and have been rebranded under the Creo
Medical umbrella. This offers an unrivalled one-stop solution
across Europe in the fields of gastroenterology, urology and
endoscopy, backed by strong customer service and Creo’s
outstanding innovation, to deliver a unique and winning
combination to our customers. The timing of the acquisitions
was ideal as it has given the business a sound commercial
footing that would not have been feasible to build organically
during a global pandemic.

Shareholders
It is customary for the chair on behalf of the Board to thank
fellow shareholders for their continuing support during the
year under review and we continue that custom sincerely.
The successful Placing and open offer raising £34.3m
(after costs) in september 2021 was another important
strategic milestone. Executed in volatile and challenging
small cap capital markets, the placing has widened our
already strong and deep shareholder base. We appreciate
the patience and support of our longstanding shareholders
and welcome our new holders onto the share register.

The Company is deploying the proceeds of the Placing
to accelerate our growth strategy and further product
development. With a strengthened balance sheet we can
continue on the path to being a truly global independent
medtech innovator able to operate in a market led by much
larger Us and Asian companies. We need these resources
to optimise the opportunities for our world class technology
and products to compete with competitors, support our
partners in all applicable markets and strengthen our
position in negotiations with potential licensing partners.

We encourage active dialogue with all shareholders to
ensure our strategy and business model is well understood
and that we, in turn, understand the priorities of our
shareholders. Notwithstanding the restrictions on in person
meetings, both the Executive and Non-Executive directors
have maintained and developed frequent contact with
shareholders backed by regular updates via RNs and plan
more of the same in 2022.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

In November, we announced the appointment of Numis
as Joint Broker alongside our Nominated Adviser and
broker, Cenkos securities. This provides shareholders and
potential shareholders with widened equity research
coverage and enhanced international share trading facilities
in the company's shares.

ESG
Ever since our foundation, Creo Medical has taken
seriously our responsibility to the environment, our diverse
stakeholders (led by the patients) and to ethical, transparent
and well governed business practices. As we grow
internationally, we are putting in place a sector leading
EsG framework which is outlined below in our EsG report.

Outlook
Creo Medical continues to innovate, to educate and to
commercialise. While nothing can be guaranteed in an
uncertain world, the Board looks forward to further
updating shareholders during 2022 on important
product advancements, meaningful commercial
progress and landmark partnerships. The sound
progress made over the past year underpins
the Board’s strong confidence in the Group’s
opportunities in 2022 and beyond.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportEnvironmental, social and governance report

Building our
esG commitment

“Improving individual patient
outcomes means much less if
we’re not doing this responsibly.”

Creo Employee

Creo’s mission is simple – to improve patient outcomes. As we
increase our production, expand into new counties and bring new
companies as well as people into the fold of the Creo Group, it is
imperative our mission is allied with our commitment to be a
responsible company. This means being an ethical employer as
well as contributing positively to the environment we operate in.
Regardless of how our technology develops and improves, this
aim will remain a constant.

We have taken great strides in putting in place a robust EsG framework
to allow us to achieve our EsG goals as the Group continues to grow and
expand into current and new countries. We have:
Built a team responsible for delivering our EsG objectives
Created a roadmap to help us meet our EsG commitments with

TCFd guidelines in mind

Put in place the structure to collect and measure data from our

activities around the globe to allow us to make informed decisions
and set structured and meaningful targets

Implemented working and social policies as described below to

ensure we attract and retain the best talent

Continue to support our communities

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

esG Framework
esG efforts underpinned by our core values

Environmental
Emission targets
Reduce Wastage
sustainability
Iso Accreditation

Working with
employees
and the wider
community
to address
environmental
issues.

Social
our People
our Community
Training
Employee Wellbeing

The Board is keen to
ensure Creo commits
to sustainable
business practices
and implement TCFd
disclosures and
actions.

Creo
Core
Values

Ensuring there is
clear communication
between those
in charge of
governance and
the wider
workforce and
stakeholders.

Governance
Anti-Bribery policy
Equality & Inclusion
stakeholder
Awareness
directors’ duties
HCP Compliance

OUR CORE VALUES

Collaboration
Creative
Life changing
Can-do
Disruptive

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportEnvironmental, social and governance report continued

environment

We recognise as we grow as a business in terms of global reach, selling single-use products and increasing headcount, we will create a carbon
impact on the environment. There is no escaping that fact. However, as a responsible business we aim to minimise this impact. To enable this we are
working towards actively measuring what our carbon footprint is so we can implement strategies and programmes that can help decarbonise our
operations, minimise the greenhouse gases that we emit and to contribute to a net-zero environment.

The TaskForce on Climate Related disclosures (“TCFd”) will likely become mandatory for the Group to report against by 2025 and sets an
appropriate framework from which Creo can integrate a robust environmental programme into our business. We aim to assess and develop
key areas of this framework within the business during 2022 and have started this journey by designing high level strategies, which have been
communicated to the Board. Furthermore, we have incorporated climate risk and EsG risks into our risk management process, see page 50.
In addition, to support these efforts we have created a team focused on EsG delivery and developing our data capture and metrics.

TCFD framework

Governance

Strategy

Risk Management Metrics and Targets

disclose the organisation’s
governance around climate-
related risks and opportunities.

disclose the actual and
potential impacts of climate-
related risks and opportunities
on the organisation’s
businesses, strategy, and
financial planning where such
information is material.

disclose how the organisation
identifies, assesses and
manages climate-related risks.

disclose the metrics and
targets used to assess and
manage relevant climate-
related risks and opportunities
where such information is
material.

Recommended Disclosures

a. describe the Board’s

oversight of climate-related
risks and opportunities.

a. describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium, and
long term.

a. describe the organisation’s
processes for identifying
and assessing climate-
related risks.

b. describe management’s role
in assessing and managing
climate-related risks and
opportunities.

b. describe the impact of

oversight of climate-related
risks and opportunities
on the organisation’s
businesses, strategy, and
financial planning.

b. describe the organisation’s
processes for managing
climate-related risks.

a. disclose the metrics used by
the organisation to assess
climate-related risks and
opportunities in line with
its strategy and risk
management process.

b. disclose scope 1, scope 2,
and, if appropriate, scope 3
greenhouse gas (GHG)
emissions, and the related
risks.

c. describe the resilience of

the organisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 20C
lower scenario.

c. describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.

c. describe the targets used by
the organisation to manage
climate-related risks and
opportunities and
performance against targets.

We are still at early stages of implementing these guidelines throughout our organisation however examples below demonstrate our commitment
to mitigating climate change:

Environmental management system
our efforts have been centred around successfully implementing our Iso 14001:2015 Environmental Management system and analysing the
potential for Creo to take wide-ranging action in the future. Creo France has already achieved Iso 14001:2015 and we achieved this in the UK
in early 2022.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

nEmissions and Utilities Usage
one of our key EsG goals for 2021 was to record and collect relevant
data and metrics around our emissions and energy usage. This data is
not just important for disclosure requirements which we believe will
become mandatory for the Group in the foreseeable future but also to
provide insightful knowledge so it can help shape our strategy to
manage our emissions and usage in future.

We have identified our usage for the current year and will use this
data to help track our progress against our usage and emissions
goals for 2022.

As part of our plan to reduce emissions Creo is planning to offer a
Company Car scheme for electric vehicles to all eligible employees. This
will help reduce the total emissions spent via travelling using vehicles.

We are continuing with our cycle to work schemes in 2022 which
become more relevant as people transition back to the office.

during the year we continued with the migration from fluorescent
lighting to lEd across all our sites and issued guidance to home workers
on energy use and conservation in the home (as well as on-site).

Waste Management and Recycling
As a producer we place electrical items onto the UK and global market
which will eventually become waste. We understand our obligations to
manage this, both morally and legally. We have joined a producer
compliance scheme (“PCs”) to support and assist our efforts.

We’ve also started to measure the amount of plastic packaging used in
our production line, in order to comply with the UK Plastic Packaging Tax
that will be introduced in April 2022. Although an exact figure is not yet
available, we believe we currently fall under the tax’s threshold of using
more than 10 tonnes of plastic packaging containing less than 30%
recycled plastic per year. However, we will continue to look at sustainable
practices to manage our plastic usage and suitable alternatives.

We make a conscious effort to reduce the amount of waste (in particular
single-use plastics) generated within Creo, and across all our offices as
part of our Iso 14001:2015 work. Notable examples of waste reduction
and recycling include:
Introducing the practice of separating rubbish to our offices, with

different-coloured bins for hard plastics, soft plastics, cans and tins,
paper and cardboard, batteries, and general waste

Reviewing our supplier policies to reduce the amount of plastic used

in our production line

Eliminating single-use cups from our offices after their re-

introduction during the pandemic

Conducting audits of our specialist waste contractors to ensure

proper compliance, as part of our Iso 14001:2015 efforts

Supply Chain
We continue to audit our supply chain and have begun introducing audits
on waste management and developing processes to assess environmental
concerns within our supply chain. Furthermore, we are exploring
potential partners that recycle our production waste via 3d printers for
various production process creating a circular environment/economy.

Focus for 2022
Analyse the TCFd recommended disclosures, establish which could

benefit Creo most and implement those throughout Creo.
Analyse the potential for Creo to support decarbonisation and

establish a circular economy.

Measure all emissions that the Creo Group directly or indirectly

produces as accurately as possible and analyse future disclosure
requirements for Creo.

Minimise waste throughout our production and supply chain

processes, and in the future incorporate environmental concerns
into the design stage.

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nGovernanceFinancial StatementsStrategic ReportEnvironmental, social and governance report continued

social

Our People
Our core values and strong culture are
critical to our future development.

our people are one of Creo’s key assets. We
strive to collaborate, using our creative can-do
spirit to ensure we remain at the forefront of
innovative technology and provide a fun and safe
environment which is open to all, as we aim to
improve as many patient lives as possible.

Equal Opportunities
Creo is committed to providing an equal
opportunity for all and to eliminating
discrimination by giving fair and equal
treatment to all employees and job applicants
regardless of age, disability, race, sex, sexual
orientation, marriage or civil partnership status,
pregnancy, maternity and paternity, gender
reassignment, religion or belief. or any other
aspect which makes them unique.

An Equality, diversity and Inclusion Policy is in
force which aims to ensure that all employees
are selected, trained, compensated, promoted
and transferred solely on the strength of their
ability, skills, qualifications and merit. There is a
policy of including women in all recruitment
selection pools and on all interview panels.

Employee Wellbeing
The physical health and wellbeing of our
employees is fundamental. Changing conditions
over last year with various lockdowns, ongoing
restrictions has been no doubt been difficult for
many. We have continued to take a holistic view
and managed by maintaining our flexible
approach and focusing on output delivered,
not on where or how we worked.

In the UK, the growth in headcount has meant
we will need to create additional working
space to accommodate all our teams but we
anticipate a new normal of hybrid working
which should ensure there is appropriate
flexibility but recognise teamwork and face to
face connection will enhance collaboration
and provide needed social interaction for
some. The key will be balance and we will
continue to monitor our workforce and adjust
our approach accordingly.

during the year we rolled out medical and
wellbeing 24-hour access to all employees
through various partnerships. This provides
employees with 24-hour support and
promotes their wellbeing as well as providing
access to doctors, opticians and therapists
where required.

Financial support programmes with our
banking relationships and as part of wellbeing
programme have also been added to further
support our people.

during the year we implemented a tax
advantaged share Incentive Plan for all UK
employees where employees, if they choose, can
purchase shares in the Group as part of a salary
sacrifice scheme. This has been well received
and supported by 69% of our staff.

Communication
We believe that keeping in touch, strong
leadership and communication is critical to
positive employee engagement and will
continue to be encouraged throughout the
organisation. This has evolved as our business
grows in size and geography. We continue to
hold town hall meetings to discuss progress
against our objectives, created internal press
releases and actively encourage an open-door
policy to ask questions and challenge our
executive team.

We were also able to hold a summer BBQ
bringing together teams across the Group to
meet each other for the first time, in many
cases, and celebrate our achievements to date.

during the year we introduced a new language
support lessons for our colleagues in the UK to
learn one of the local languages in our other
European offices. This has helped us to engage
and connect with our European colleagues and
encourage greater collaboration and
communication. This piloted scheme will be
measured for its success and potentially rolled
out across the Group.

Building the Creo family
Retaining and attracting the best talent
remains key to Creo’s future success and
strategy. We have and continue to recruit the
best talent in all areas to ensure we maintain a
competitive advantage and strive to offer
market leading employment packages and
working conditions to motivate and empower
our staff. We are implementing a new talent
review system for our current colleagues to
identify their potential and motivate them to
realise this potential.

Creo encourage all of our staff to complete
regular training and empower them to seek
focused training for the roles and career
progression accompanied with specific group
training to upskill across the Group. We
continue to sponsor many for their continued
development through professional
qualifications from Finance degrees through to
Engineering Phds. Training is key to the Creo
ethos and ensuring that we continue to have
the best talent and continue to disrupt.

Key Group composition metrics for 2022
Gender of Employees across the Creo Group

63%

Male employees

37%

Female employees

Male

Female

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Male Board
members

Female Board
members

Male

Female

Health and Safety:
Ensuring the health and safety of our employees, our partners, the end
patient and wider Creo family is our number one priority and an
important part of our culture. We are proud of our record to date and
continue to invest in maintaining a robust workplace safety programme.

Working in our Local Communities
We actively encourage employees to get involved in local charities and
community projects. our new community impact policies will also
include the introduction of extra annual leave for our employees for
volunteering days to support these efforts.

We’re currently in the process of unifying our Health and safety policies
(allowing for legal differences in the different countries we operate in)
across the Creo Group. We’ve received a RosPA award for our UK sites
in 2020 and 2021 and also have an ultimate long-term aim to achieve the
Iso 45001 occupational Health and safety standard across the entire
Creo Group.

At Creo we’ve engaged in multiple ad hoc initiatives on national,
regional, and local levels, some examples are:
National – Bowel Cancer UK: we work with them on activities and

fundraising campaigns, for example their ‘Walk Together’ campaign
in June 2021.

Regional – Velindre Cancer Centre: we support their annual events

and campaigns, such as Golf days and Bike Rides.

local – Community Initiatives: for example, sponsoring Chepstow

CC’s Youth Cricket Teams.

Europe – we annually support a gala dinner ‘Kids against cancer’
where funds are raised to help children from underdeveloped
countries have cancer treatment in spain.

We’re also planning to work closely with a local school in 2022 – we’re
planting 200 trees on their school campus, and we hope to work more
closely with them in the future, for example through knowledge sharing
initiative days and tours of our facilities, with the aim to spark an interest
in technology, the medical world and the local community which may
lead to positive outcomes for their lives.

2022 Focus
Expand the volunteering policy we’re launching (in January 2022) to
cover other areas of community impact work, for example individual
employees’ actions.

Introduce a core Health and safety policy for the whole Creo Group,

allowing for variations across different locations, by 2025.
support our employees as we adapt to the “new normal” of

hybrid-working between the office and remote work, particularly with
the expansion of the Chepstow office.

COVID-19
We continued to take a risk averse strategy, putting people’s health
ahead of the business and have led by example throughout the
pandemic by ensuring we followed the recommended guidelines and
beyond within individual regions through working from home, social
distancing and best-practices for returning to work with appropriate
safety measures in place.

The Board made the decision during the year to repay the furlough
money paid to the Company as they considered the Company thankful
to be in such a strong position at this time.

Creo Medical originally purchased hundreds of ventilators and oxygen
concentrators in 2020 to donate to the NHs to support the UK’s initial
CoVId-19 response. However, when cases of the infection began to
decline and they were deemed as not being needed, the equipment was
given to Hope2sleep, a sleep condition charity based in Hull.

After learning about the emergency situation in India, both organisations
decided to donate these vital supplies to the international humanitarian
effort. This included 122 ventilators and 95 oxygen concentrators,
alongside tubing, masks and filters.

Creo Medical and Hope2sleep connected with BAPIo, a non-profit
organisation run by British-Indian doctors, who have been organising a
range of fundraising, support and donation initiatives. This has included
procuring key medical equipment, providing clinical triaging and
reporting through remote telemedicine services, and delivering critical
food supplies. dr Ramesh Mehta oBE, the founder of the charity, was
able to signpost and guide both organisations in their donation efforts.

“Being able to access a doctor out
of hours when I had a medical
emergency allowed me to get the
advice I required and provides
great peace of mind and makes
me feel supported by Creo.”

Creo Employee

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GovernanceFinancial StatementsStrategic ReportEnvironmental, social and governance report continued

Governance

The Directors recognise the importance of sound corporate
governance and are committed to maintaining high standards of
corporate governance, not only to ensure compliance but to give
employees a robust framework to work within.

This starts with setting the ‘tone at the top’ and communicating this
through the Company in all its decisions and actions. Ways in which we
have set this tone can be found in our s.172 statement on pages 45 to 47.

Healthcare compliance
With an increased and direct presence in the UsA we will be subject
to many governance requirements, despite our infancy. The team are
well versed in Us healthcare compliance rules and we have engaged
with a Us-based Medtech specialist law firm along with other firms in
other jurisdictions, including the EU, to support the business as it grows
and to put in place standard documents and procedures which the
business can operate under.

We understand, however, that governance comes in many forms, and we
have set out below some examples of how Creo seeks to ensure that
good governance runs through the business.

In the UK we have become a member of the Association of British
HealthTech Industries (“ABHI”), which provides support and guidance
on best practice for Medtech companies.

Anti-Bribery, Modern Slavery and Ethical Workplace
training
Creo has a responsibility to safeguard its business interests and to
educate its employees about key ethical and legal issues that affect our
daily business dealings with our customers, suppliers and colleagues.

In an effort to fulfil this important responsibility, we launched a new
online platform with a series of dedicated online courses that are
mandatory for Creo staff to complete, which ensure all staff are aware of
our anti-bribery policies, modern slavery policies and our ethics and
diversity workplace conduct.

Risk management
our approach to Risk Management is outlined on pages 50 to 51.

Focus for 2022
Monitor and fulfil new corporate reporting requirements that Creo
becomes subject to, most notably reporting our Gender Pay Gap.
Monitor worldwide compliance requirements for medical devices on
an ongoing basis, for example regarding healthcare practitioner
interactions; update our policies and processes in this regard, if
necessary.

Create new EsG internal committee with relevant stakeholders and

report to the Board in line with the risk committee process.

Creation of an internal risk committee with additional risk review
protocols to review and monitor key risks across the business.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Section 172(1) statement

engaging with
our stakeholders

The Board ensures that the impact on each
stakeholder group is carefully considered.

(e) Maintaining a reputation for high standards of business conduct:
Creo’s mission is clear: to improve lives. As such, ethical values and

high standards of business conduct are at the heart of what we do. We
expect all employees and representatives of the Company to maintain
the high standards that we set ourselves. These values and business
conduct requirements are enshrined in our corporate governance, our
policies, our working practices and our systems (including our third-
party audited Iso:13485 quality management system). It is the Board’s
view that by encouraging high working standards we will mitigate
against risks arising in our day-to-day activities.

Please also see our Governance report on pages 59 to 63.

(f) The need to act fairly between members of the Company:
The Board recognises that members have different views and
objectives. Accordingly, in making decisions, the Board always seeks
to ensure that its decisions are equitable and fair as between the
members of the Company whilst also balancing the interests between
all stakeholders.

Stakeholder Engagement
The Board takes into account the concerns of its stakeholder groups in
its discussions and decision-making. In discharging the duty set out in
section 172(1) of the Companies Act 2006, the Board ensures that the
impact on each stakeholder group is carefully considered by
management when formulating all proposals requiring Board approval.

The continued impact of the CoVId-19 pandemic during 2021, has
unavoidably constrained the ability of the Board to engage with
stakeholders in person. Nevertheless, the Board has continued to
receive regular feedback from stakeholders.

set out on the next pages are some examples of key decisions made by
the Board during the year together with a summary of certain key
stakeholder group considerations, along with details of, in the Board’s
view, Creo’s key stakeholder groups, the key concerns of those groups
and how the Board seeks to engage with them.

The Board of Directors’ statement regarding Section 172(1) of
the Companies Act 2006 and our commitment to transparent
and constructive dialogue with all our stakeholders.
The Board of Directors (the “Board”) considers, in good faith, that
it acts and has acted at all times, both individually and collectively,
in a way that would be most likely to promote the success of the
Company for the benefit of its members as a whole having regard
to the matters set out in s172(1)(a-f) of the Companies Act 2006:

(a) The likely consequences of any decision in the long term:

The long-term success of the Company and the Group as a whole is
always a salient factor for strategic decision-making. The Company
is developing technology and products which address long-term
clinical needs and for which there are sizeable addressable markets.
The nature of these markets dictate that a long-term view is taken.
This is further exemplified through our investment in our Clinical
Education Programme and the relationships which we are
developing with commercial partners.

(b) The interests of the Company’s employees:
Core to the success of any company is its employees. Creo is no

different. As a significant and critical factor, employee wellbeing and
development has continued to be a priority during 2021. our People
section on page 42 provides further details on the investment that we
have made in our employees during the year and the steps that we
have taken to ensure that all employees have been supported during
the continued pandemic.

others:
The adoption of Creo’s core technologies by customers requires the
business to not only build strong relationships but to provide support
through ongoing clinical education on the safe use of our products.
By developing strong customer relationships, we seek to ensure that
we release products to the market in a measured and controlled
manner to minimise the risk of misuse and ensure products are
customer sponsored for the long term (i.e. through clinical education
and peer support by key opinion leaders).

Within our wider business, the Group is both a customer and supplier
of third-party, original Equipment Manufacturer (“oEM”) and own
Brand labelling (“oBl”) products. It is therefore essential that strong
relationships with any third-party partner is built on trust and mutual
respect and is collaborative.

(d) The impact of the Company’s operations on the community and

the environment:

We place a high value on our relationships with our communities
around the globe, and have an acute awareness of the impact our
operations and products have on the environmental and how we can
mitigate any such impact. our EsG report on pages 38 to 44 provides
further details in this regard and the steps that we are taking.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021
Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report

directors’ section 172 statement

Section 172(1) statement continued

Key decisions
An overview of certain principal decisions during the reporting period, including how the Board has
taken into account the factors set out in section 172 of the Companies Act 2006, is set out below:

FUNDRAISE

Actions
£29.3m raised by way of
conditional placing and
£5.0m by way of open
offer.

Utilised internal and
external resource to
undertake the transaction.

Key stakeholder group considerations
Shareholders – considered the timing and need to raise additional capital to
provide funding for key projects along with medium term working capital
requirements.

Employees – additional funding provides employees with greater job security and

confidence, along with the resource to grow the business.

Partners, Customers and Suppliers – partners, customers and suppliers want

to engage with a financially stable third party with supportive shareholders.

ACQUISITION
OF ABER
ELECTRONICS

Actions
Acquired the entire issued
share capital of Aber
Electronics limited.
Utilised internal and
external resource to
undertake due diligence
and advise on the
transaction.

Key stakeholder group considerations
Shareholders – deployed capital to secure a key part of Creo’s supply chain and
gain additional Microwave and Radio Frequency expertise to support the wider
group. Considered shareholder value risk mitigation in respect of supply chain
disruption.

Employees – provided employees, both existing and new, with additional

opportunities for career development and growth.

Customers and Partners – considered product development roadmap and

mitigated continuity of supply risk.

Environment – considered the environmental impact from manufacture and the

ability to control and hone processes to improve efficiencies.

FREEHOLD
ACQUISITION

Actions
Acquired the freehold of

Key stakeholder group considerations
Shareholders – deployed capital to secure main manufacturing facility and

Creo House and adjacent
buildings in Chepstow.

provide for expansion. Considered shareholder value risk mitigation and removed
a long-term lease obligation.

Utilised internal and
external resource to
undertake due diligence
and advise on the
transaction.

Employees – provided additional real estate to expand the business.
Customers – considered the ability to meet current and future customer demand

for products.

Community and the Environment – By reinforcing Creo’s commitment to its
current Chepstow site, it provides additional employment opportunities to the
local community.

Key stakeholders Groups

BUSINESS
PARTNERS/
SUPPLIERS

Key concerns
strong relationships
Clear and ongoing

dialogue to allow effective
business planning
Financial strength
Regulatory compliance

How we engage
We interact in an ethical and equitable manner with all business partners and

suppliers.

We strive to have open, constructive and effective long-term relationships through

open engagement, regular meetings and dialogue.

We have dedicated internal resource to directly engage with regulators in a timely

and professional manner.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

COMMUNITY
AND THE
ENVIRONMENT

Key concerns
safety
sustainability
Community contribution

How we engage
We actively engage with local government networks, with the intention of making

a positive economic impact on the region.

Where possible, we try to source locally to support our community.
our Clinical Education Programme provides our clinical community the

opportunity to communicate further their practice which, in turn, benefits their
patient community and thus society as a whole.

SHAREHOLDERS Key concerns

The development of our
product portfolio and its
commercialisation
deployment of capital
against a clear strategy

Growth
Corporate governance
EsG matters

Key concerns
Career development
and remuneration
Health & safety and

wellbeing

diversity
leadership

EMPLOYEES

PARTNERS

Key concerns
Quality products that
meet clinical needs
Competitive pricing
Clinical education and

support

How we engage
Regular communication with key shareholders, not least to communicate our

strategy and business model.

our Annual General Meeting (“AGM”) and any General Meetings allow

shareholders have direct discussions with the Board.

Investor roadshows following the release of half and full-year results.
Attendance by directors and employees at investor and sector-specific

conferences allow interested parties to have direct dialogue.

Timely and appropriate releases of business information via the RNs and RNs Reach.
social media updates provide information on day-to-day activities of the business.

How we engage
our executive team, supported by a number of senior managers, engage directly

with all employees.

Team structures and organisation planning to facilitate effective delegation

and reporting.

Investment in IT solutions enables communication, in particular with remote

working.

Employees are encouraged to control their career development, aligned to the

longer-term growth of Creo.

during the reporting period we have continued to support the health and safety

and wellbeing of all employees.

our performance management processes and the promotion of a culture of

continuous improvement throughout the business.

All employees have the ability to raise grievances and to escalate concerns

through our whistleblowing procedures.

How we engage
We engage with key opinion leaders (“Kols”) around the world.
Kols and clinicians provide feedback at the concept stage, on devices through
design processes, usability studies and pre-clinical testing and analysis. This
input assists strategic decision making so we deploy capital on concepts and
products that offer the greatest impact for our customers, their patients and
ultimately, Creo’s business.

our Clinical Education Programme provides guidance and training on the safe

use of products and real-time feedback from the use of devices.

Creo’s expanded direct sales team supports all customers and users, as well as

distribution partners.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportFinancial review
Financial review

Commercial footprint established
via acquisitions and organic growth

Richard Rees
Chief Financial Officer

I am pleased to announce our fifth Annual Report and
accounts since our IPo on AIM in 2016. The adversity faced
by the business from CoVId-19 has, in part, been mitigated
through the strength of the balance sheet following the
2021 fund raise. Following our Build, Buy Partner strategy
the acquisitions of Albyn Medical and Boucart Medical have
been successfully integrated into the business and have
brought immediate revenue and positive cash flow to the
Group, which strengthens the business and confirms Creo
as a platform for future growth.

Revenue and other income
despite CoVId-19 disrupting sales channels and restricting
access to clinical training and travel, the Group has made
significant progress in establishing sales channels through
new products as well as development of our commercial
footprint via acquisitions and organic growth. We opened
offices in the Us, and APAC as well as purchased the land
and additional buildings at our UK headquarters. The
acquisition of Aber Electronics has helped to secure our
supply chain and the acquisitions of Albyn and Boucart
Medical in 2020 have been successfully integrated into the
Creo family generating revenues and positive cashflow to
the Group.

Revenues billed in the period in relation to speedboat Inject
and CRoMA totalled £0.3m (2020: £32k). £24.9m was
generated through distribution sales of Creo Europe
(formally known as Albyn and Boucart). other operating
income of £0.05m in the 12-month period to 31 december
2021 (december 2020: £0.05m) relates to research grants.

Gross Margin
Gross margin improved from 42.8% in 2020 to 46.0%
in 2021.

Operating loss
The operating loss for the period increased to £29.9m
(december 2020: £23.5m), reflecting the increased
operating expenses in relation to clinical and development
activities together with further investment in headcount and
business infrastructure including securing Us and APAC
offices to support the business and enable it to continue to
develop and commercialise its technology. This continued
investment in the business will support anticipated growth
and development in the coming periods.

The underlying operating loss (also referred to as adjusted
EBITdA) for the period was £19.0m (december 2020: £18.0m).

Whilst EBITdA is not a statutory measure, the Board
believes it is helpful to include for investors as an additional
metric to help provide a meaningful understanding of the
financial information as this measure provides an
approximation of the ongoing cash requirements of the
business as it continues to pursue its future development
and begins to commercialise its approved products. The
adjusted EBITdA position excludes share-based payment
expenses which are non-cash and incorporates the recovery
of research and development expenditure which the Group
is able to benefit from through R&d tax credit schemes.

(All figures £’000)

operating loss
loss before Income tax
Total comprehensive loss for the period

Underlying operating loss adjustments:
share-based payments
depreciation and amortisation
R&d expenditure recovered via tax credit scheme

Underlying operating loss (non-statutory measure)

12 months to
31 december 2021

12 months to
31 december 2020

(29,907)
(30,339)
(26,260)

(23,484)
(23,462)
(20,745)

2,564
2,562
5,744

728
1,597
3,146

(19,037)

(18,013)

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

“We have made significant
progress in establishing a
longer-term sales channel.”

Accounting policies
The Group’s financial statements have been prepared in accordance
with International Financial Reporting standards. The Group’s
accounting policies have been applied consistently throughout the
period and are described on pages 78 to 85.

Key Performance Indicators
As the Group continues to develop and commercialise its core
technology, the directors consider the key financial performance
indicators to be the level of cash held in the business, sales and
operating expenses controlled to budget. The Board performs regular
reviews of actual results against budget, and management monitors
cash balances on a monthly basis to ensure that the business has
sufficient resources to enact its current strategy.

Certain KPIs concern non-financial measures, such as the number of
trainees for our Clinical Education Programme, integration of acquired
entities, EsG metrics such as carbon emissions and diversity ratios
and progress against our build buy partner strategy. All non-financial
measures are monitored on a monthly basis. The Board will continue
to review the KPIs used within the business and assess them as the
business grows.

Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out on
pages 50 to 51.

Directors
details of the directors who served during the period ending
31 december 2021 are set out on pages 54 to 55. six of the directors
serving on the Board at the year end were male with one female.

Conflicts of interest
To address the provisions of section 175 of the Companies Act 2006
relating to conflicts of interest, the Company’s Articles of Association
allow the Board to authorise situations in which a director has, or may
have, a conflict of interest. directors are required to give notice of any
potential situations or transactional conflicts that are to be considered
at the next Board meeting and, if considered appropriate, conflicts are
authorised. directors are not permitted to participate in such
considerations or to vote regarding their own conflicts.

Tax
The tax credits recognised in the current and previous fiscal year
relate mainly to R&d tax credit claims. A deferred tax asset has been
recognised in respect of the business combination relating to our Albyn
subsidiaries. A £0.75m deferred tax asset has been recognised in
respect of tax losses in Creo Medical limited which we will utilise
through group relief of the future profits in Creo Medical UK limited.
No further tax assets in relation to these losses has been recognised
due to the uncertainty over the timing of future recoverability.

Expenses
Administrative expenses comprising R&d, operational support, sales
and marketing, and finance and administration costs totalled £41.5m
(december 2020: £27.6m). R&d spend for the year totalled £12.9m
(december 2020: £10.2m) reflecting the continued innovation and
development of our technology during the year. Adjusting for share-
based payments, depreciation, amortisation and tax income as shown
in the table above, underlying administrative expenses are £30.6m
(december 2020: £22.1m).

This annualised increase of £8.5m reflects a full year of trade through
Creo Europe, the continued investment made by the Group in clinical
and development activities and the move from small discrete production
batches into full-scale manufacturing. Personnel costs continue to be
the largest expense and represent approximately 65% of the Group’s
underlying administrative expenses.

Loss per share
loss per share was 15 pence (december 2020: 13 pence).

Dividend
No dividend has been proposed for the period to 31 december 2021
(31 december 2020: £nil).

Cash flow and balance sheet
Net cash used in operating activities was £26.0m (december 2020:
£16.3m), driven by the continued investment in research and
development and, establishing a Us and APAC presence. Net cash used
in investing activities was £7.8m (december 2020: £21.0m) driven by the
acquisition of Aber Electronics and purchase of land and buildings for
UK headquarters. Cash generated from financing activities was £32.0m
of which £34.2m was raised through an open offer and share
Placement during the period.

Total assets at the end of the period increased to £100.6m (31 december
2020: £92.5m), a 8.8% increase, reflecting the increase in assets and
goodwill as a result of the business combination, offset by the operating
cash outflow for the period. Cash and cash equivalents at 31 december
2021 was £43.5m (31 december 2020: £45.1m). Net assets were £73.3m
(31 december 2020: £62.8m), a 16.7% increase due to fund raise offset
by operating loss and share based payment expense.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportPrincipal risks and uncertainties

approach to
managing risk

The ability to manage and mitigate risks is a key part
of the Group achieving its objectives and fulfilling its
strategy. We have continued to develop our risk
management framework and reporting process.

We take a bottom-up approach with key risks
identified at a department head level, being
reported to the Audit Committee and
ultimately the Board.

The Audit Committee formally reviews the
effectiveness of the Group’s risk management
processes and internal control systems on
behalf of the Board. The Board has overall
responsibility for risk management and
internal controls.

Our risk management process is designed to
identify, evaluate and mitigate significant
risks to the business.

Risk Reporting Process
Review of key risks to the business and progress against risk appetite.
Communicate risk appetite to rest of the business.

Board

Review of central risk register, process and progress against risk appetite targets

Audit Committee

Risk
Appetite

Risk updates from each department updated in central risk register.
Progress against risk appetite targets reviewed.

Quarterly Risk Meeting

Identification of risks recorded in risk register, mitigations
and update of impact/probability of risk

Department Heads

Reporting

Although we believe that our risk management procedures are adequate, the methods used to manage risk may not identify current or future risks or
the extent of future exposures.

Key risks and uncertainties:

Principal Risk
and Impact

Barriers to
the Market

Description

How we manage the risk

YoY
Movement

Risk our products do not meet the
necessary regulatory requirements
for the market, are not competitively
priced, do not provide value over
competitor products.

Risk that our technology becomes
outdated or superseded by a
competitor.

Engagement with Kols and clinicians through our Clinical

Education Programmes.

development of next generation CRoMA and additional suite

of products utilising Kamaptive technology.

Benchmarking prices of products in local markets.
Extensive IP portfolio to protect our technology in the market.
Clear marketing strategy targeting individual markets.

Breach of legal
and regulatory
requirements

Risk that the Group breaches legal
or regulatory requirements in local
jurisdictions which could result in fines,
penalties and damage to the Creo
brand.

our Quality Assurance and Regulatory Assurance Team is
focused on the regulatory needs for product development
and develops quality documentation to support all regulatory
applications.

We have CE marking for six of our devices as well as our

CRoMA platform, and FdA clearance for our speedboat Inject,
MicroBlate Fine, MicroBlate Flex and slypseal Flex devices
in addition to the CRoMA platform.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Principal Risk
and Impact

Operational
Risks

Description

How we manage the risk

YoY
Movement

Risk that Creo is impacted by supply
chain issues, manufacturing delays
or lack of manufacturing capacity,
product defects, supplier
dependence.

director of operations in place to review supply chain risks.
Ensure alternative suppliers are available or secure current

supply chain (e.g. Aber acquisition).

We have an outsourcing partner ready if demand required

additional manufacturing capacity.

IT and Cyber
security Risks

The risk of industrial hacking for
sensitive information and/or with
the intention of deliberate malice
resulting in disruption to the business.

director of IT in place to help manage IT and cyber security

risks.

Cyber strategy review undertaken during 2021 and actions

being implemented from this.

Cyber security awareness training implemented across all

In the event of a data breach the
Group is liable to be fined for a
breach of GdPR legislation.

entities.

Executive and
Personnel
Risks

Risk of over-dependence on key staff
and executives

Risk that we cannot recruit the right
talent for the Company to achieve its
objectives.

We have implemented a share option scheme to retain key
employees and enter into contracts that contain limited
non-competition provisions with key personnel.

We have taken great steps over the last 12 months to continue

to recruit more people across the whole business.
We recruited a HR director whose team is focused on

obtaining, developing and managing talent within the business.

By capturing IPR through patent applications, we are able to

ensure ownership of knowledge and create foundations for our
product pipeline.

Product
Liability Risks

Criminal or civil proceedings might be
filed against the Group by study
subjects, patients, the regulatory
authorities, other companies and any
other third party using or marketing
our products.

A number of our products have obtained approvals/clearance
from third-party regulatory bodies in the EU and United states.

our design process seeks to mitigate issues by including

preclinical and clinical trials in the development of our products.

We invite input from Key opinion leaders on product

development and their needs.

our QMs system is designed to comply with Iso 13485.

Business
Disruption
Risks

Brexit may cause issues with supply
chain, increase export and import
prices, cause delays in selling/
purchasing goods.

The Company property is well secured and we have taken

reasonable steps to protect the contents.
A disaster recovery plan has been developed.
We monitor developments on an ongoing basis to allow the

CoVId-19 or similar pandemic
disruption to business stopping us
manufacture, sell and operate as
usual.

business to react when necessary.

The business is continually monitoring the development of
CoVId-19 and the possible impact it could have on our
business. We are seeking to comply with and, where possible,
go beyond government guidance as issued from time to time.

Financial and
Going Concern
Risks

Risk that the Company does not have
sufficient cashflow to meet its
liabilities and is no longer a going
concern.

Risk that we do not have sufficient
cashflow to seize opportunities and
projects when they arise.

The 2021 fund raise added significant strength to the balance

sheet to allow Creo to achieve its near-term objectives.
We work closely with a number of agencies and bodies to

maximise the amount of grant funding that is available to assist
with our technological development while minimising our spend.

The European distribution business (Albyn) is profitable and

generates cash for the business.

We are constantly talking to current and new investors about
our commercial plan and opportunities and the funds those
opportunities would require.

local and Group budgets are reviewed each month with a 5
year forecast every 6 months to ensure sufficient cashflow.

The strategic Report was approved by the Board of directors on 22 May 2022 and was signed on its behalf by

Richard Rees
Chief Financial Officer
22 May 2022

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report

the directors
recognise the
importance of
sound corporate
governance

and are committed to
maintaining high standards
of corporate governance.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Corporate
GoVernanCe

Board of directors

directors’ report

directors’ responsibilities

Corporate governance report

directors’ remuneration report

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportBoard of Directors

Executive Directors

Craig Gulliford

Professor
Christopher Hancock

Richard Rees

David Woods

Chief Executive Officer

Chief Technology Officer

Chief Financial Officer

Chief Commercial Officer

Richard joined Creo Medical as
CFo in July 2016. Prior to joining
Creo, Richard was CFo of sPTs
Technologies, a UK-based,
global manufacturer of
semiconductor capital
equipment. In 2011, Richard was
part of the sPTs Technologies’
management team that, together
with Bridgepoint Capital,
acquired sPTs Technologies for
$200m from sumitomo Precision
Products. In 2014, sPTs
Technologies was acquired by
orbotech ltd for more than
$350m.

Prior to joining sPTs
Technologies, Richard spent
seven years at KPMG in audit.

Craig was a founding angel
investor in Creo Medical and
became CEo in 2012.

Craig qualified with an Msc in
Electronic Engineering from the
University College of North
Wales. Craig’s early career
developed in the Middle East,
working with large corporates
delivering complex commercial
projects. Craig has over 25
years’ experience in building
international businesses from
early stage through to significant
scale. In January 1999, Craig
joined a start-up software and
hardware business where, as
Coo, he was part of a small
team that grew the Company
both organically and through
acquisition, from a loss-making
start-up to a profitable
business delivering significant
shareholder returns and an exit
in 2007.

Craig is a Non-Executive
director of I.Q. Endoscopes
limited.

Chris is the founder of Creo
Medical and has over 25 years’
experience in medical device
development, including four
years at Gyrus Group plc in his
role as senior Engineer.

Chris holds a personal Chair in
the Medical Microwave systems
Research Group at Bangor
University. Chris is a Fellow of
the Institute of Physics, a
Chartered Physicist, Fellow of
the Institute of Engineering
and Technology, a Chartered
Engineer and a senior Member
of the Institute of Electrical and
Electronics Engineers. Chris is
also a Royal Academy of
Engineering Visiting Professor at
UCl and was awarded the
Katherine Burr Blodgett Gold
Medal and Prize in 2019 for work
on Creo’s CRoMA Advanced
Energy Platform technology.
Chris is a named inventor and
lead author on over 1,000
granted patents, patent
applications and international
journal publications.

david joined Creo as CCo in
August 2020, having previously
sat on Creo’s Board as a
Non-Executive director. david
provides leadership and
strategic direction for Creo’s
commercial divisions, overseeing
all strategic global commercial
activities.

david is an industry veteran
within the MedTech sector.
His experience encompasses
Gastroenterology, General
and orthopaedic surgery,
Pulmonology and Ear, Nose
and Throat.

Prior to joining Creo, david
was the President and CEo of
PENTAX Americas and M&A
director of Hoya Corporation,
Pentax life Care division.
david brings significant
operating experience, market
understanding and a proven
track record of achievement to
the Creo team at a crucial time
when Creo is moving from early
clinical adoption to global
commercialisation expansion.

david was awarded the
American society for
Gastrointestinal Endoscopy
President’s Award in 2010,
recognising exceptional
contributions to the society
and its mission.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Non-Executive Directors

Charles Spicer

John Bradshaw

Ivonne Cantu

Chairman

Independent
Non-Executive Director

John is a chartered accountant
with more than 25 years’
experience as a chief financial
officer with venture capital
backed and listed companies.
Prior to his retirement in July
2021, John was Chief Financial
officer of syncona Investment
Management limited, the
Investment Manager of syncona
limited, a FTsE 250 listed life
sciences investment company.
John served as a Non-Executive
director and chair of the audit
committee of AIM listed IXICo
plc from october 2013 until
April 2022.

John chairs Creo’s Audit
Committee and is a member of
the Remuneration Committee.

Charles is an experienced
director of public and private
companies, primarily in the
MedTech sector. He is also
Chairman of IXICo plc and Korn
Wall limited (Kwickscreen).
In addition, Charles is the senior
Independent director of MJ
Hudson Group plc and Chair of
the Remuneration Committee
and is Chair of the UK
department of Health’s Product
development Awards selection
Panel B for Invention for
Innovation (i4i). He served as a
director of Aircraft Medical
(acquired by Medtronic Inc. in
2015) and stanmore Implants
(acquired by stryker Inc. in 2016).
Charles was previously Chief
Executive of MdY Healthcare
plc, a strategic healthcare
investor and, prior to that, Head
of Healthcare Corporate Finance
at both Numis securities and
Nomura International.

Charles is a member of Creo’s
Audit Committee.

Ivonne joined Creo’s Board
on 1 February 2020 and has
extensive experience in
corporate finance, having acted
as a corporate finance adviser to
UK and international companies
for more than 20 years at
Cenkos securities plc and
previously at Merrill lynch.

Ivonne is currently director of
Investor Relations and
sustainability at Benchmark
Holdings plc, an AIM listed
aquaculture biotechnology
company and a Non-Executive
director and Chair of the
Remuneration Committee at
Primary Health Properties plc.

In addition, Ivonne is a trustee of
la Vida, a UK registered charity
which supports grassroots
projects in the fields of
education, environment and
health throughout latin America.

Ivonne holds a Bsc in
Engineering from Universidad
Panamericana in Mexico and an
MBA from the Wharton school
of Business.

Ivonne chairs Creo’s
Remuneration Committee and
is a member of the Audit
Committee.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021
Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

55
55

GovernanceFinancial StatementsStrategic Report

Directors’ report

the directors present their report together with
the audited consolidated financial statements for
the 12 months to 31 december 2021. these will be
laid before the shareholders of the Company at
the next annual General Meeting (“aGM”).

Creo Medical Group plc (admitted to the AIM market of the
london stock Exchange (lsE:CREo)) is incorporated in
England and Wales with registration number 10371794.
The Company’s registered office is at Creo House, Unit 2
Beaufort Park, Beaufort Park Way, Chepstow, Wales,
United Kingdom NP16 5UH.

Principal activity
The principal activity of the Group during the period
continued to be that of research and development
and the manufacture and sale of medical devices and
instruments. The principal activity of the Company is
that of a holding company.

Directors
The directors who held office during the year and up to the
date of approval of the financial statements were as follows:

Executive Directors
Craig Jonathan Gulliford
Professor Christopher Paul Hancock
Richard John Rees
David Gerard Woods

Non-Executive Directors
Charles Alexander Evan Spicer
John Bradshaw
Ivonne Maria Gloria Cantu

Results and dividends
The Group results for the 12 months to 31 december 2021
are set out in the Consolidated statement of Profit or loss
and other Comprehensive Income on page 74.

Directors’ interests and indemnity arrangements
The directors’ interests in the shares of the Company are
disclosed in the Remuneration Report on pages 64 to 67.

The directors do not recommend the payment of a dividend.

Review of the period
A summary of the Group’s progress and development is set
out in:
The Chief Executive’s review on pages 8 to 9;
The Chief Technology officer’s review on pages 30 to 31;
The Chief Commercial officer’s review on pages 24 to 25;
The Chairman’s statement on pages 36 to 37; and
The Financial Review on pages 48 to 49,

each of which form part of the strategic Report. This
analysis includes a commentary on the position of the
Group at the end of the reporting period, an indication of
likely future developments in the business of the Group
including steps being taken in respect of the Group’s Build,
Buy and Partner strategy, details of the commercial
activities during the reporting period, details of the Group’s
activities in the field of research and development and the
steps being taken to commercialise the technology
being developed.

In accordance with section 234 of the Companies Act 2006
and as permitted by the Articles of Association of the
Company, the Company maintained insurance throughout
the year for its directors and officers against the
consequences of actions brought against them in relation
to the execution of their duties for the Company.

No director had, during or at the end of the year, a material
interest in any contract which was significant in relation to
the Group’s business except in respect of service
agreements and share option awards and as disclosed in
the directors’ Remuneration Report on pages 64 to 67.

The Company has not granted any indemnities to any of its
directors against liability in respect of proceedings brought
by third parties.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Share capital
details of the Company’s issued share capital are shown
in Note 21 to the consolidated financial statements on
page 100.

As at 31 december 2021, 181,099,186 fully paid ordinary
shares were in issue. The share capital comprises one class
of ordinary shares and these are admitted on the AIM
market of the london stock Exchange.

All shares are freely transferable and rank pari passu for
voting and dividend rights.

Substantial holdings
As at 31 december 2021, shareholders holding more than
3% of the share capital of Creo Medical Group plc1 were
as follows:

Political contributions
The Company made no political donations or incurred any political
expenditure during the year.

Disclosure of information to auditor
The directors who held office at the date of approval of this directors’
report confirm that, so far as they are each aware, there is no relevant
audit information of which the Company’s auditor is unaware; and each
director has taken all the steps that they ought to have taken as a
director to make themself aware of any relevant audit information and
to establish that the Company’s auditor is aware of that information.

Other information
An indication of likely future developments in the business can be found
in the strategic Report on pages 20 to 21. significant events which have
occurred since the end of the financial year have been included in
Note 28 of the consolidated financial statements on page 104.

Name of shareholder

Canaccord Genuity
Baillie Gifford
Finance Wales Investments
Capital Group
Creo Medical Group EBT
M&G Investments
AXA Framlington Investment

Managers

Hargreaves lansdown,
stockbrokers (Eo)
Tellworth Investments

Number of
shares

Voting rights
%

27,206,650
13,341,456
12,776,727
11,533,623
10,000,000
9,428,500

8,140,844

5,926,345
5,733,808

15.02
7.37
7.06
6.37
5.52
5.21

4.50

3.27
3.17

Information obtained from an analysis of Creo Medical’s share register
(dated 31 december 2021) undertaken on behalf of Creo Medical by
Equiniti – Rd:IR.

save as referred to above, the directors are not aware of
any persons as at 31 december 2021 who were interested in
3% or more of the voting rights of the Company or could
directly or indirectly, jointly or severally, exercise control
over the Company.

Financial risk management objectives and policies
The Company’s financial risk management objectives and
policies are shown in Note 18 to the consolidated financial
statements on pages 96 to 98. The main risks arising from
the Company’s financial instruments are interest rate risk,
exchange rate risk, credit risk, and liquidity risk, which are
continuously monitored by the Board.

Auditor
KPMG llP (“KPMG”) was reappointed as auditor at the last annual
general meeting, in accordance with section 489 of the Companies
Act 2006. during July and August 2021, the Company undertook a
competitive review and tender process for the auditing of its 2021
Annual Report. Following the conclusion of that process, and in
accordance with its terms of reference, the Audit Committee of the
Company recommended to the Board of the Company that
PricewaterhouseCoopers llP (“PwC”) be appointed as auditors of
the Group. PwC replaced KPMG llP who had acted as Creo Medical
Group plc’s auditors since 2016. Accordingly, PwC replaced KPMG as
auditors in August 2021.

By order of the Board

Richard Rees
director

Creo House
Unit 2, Beaufort Park
Beaufort Park Way
Chepstow
Wales
NP16 5UH
22 May 2022

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportStatement of Directors’ responsibilities
in respect of the financial statements

the directors are responsible for preparing the
annual report and the financial statements in
accordance with applicable law and regulation.

The directors are responsible for safeguarding the assets of the Group
and Parent Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.

The directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and Parent
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Parent Company and enable
them to ensure that the financial statements comply with the Companies
Act 2006.

The directors are responsible for the maintenance and integrity of the
Parent Company’s website. legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.

Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
UK-adopted international accounting standards and the Parent
Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 “Reduced
Disclosure Framework”, and applicable law).

Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and Parent Company and of the profit or
loss of the Group for that period. In preparing the financial statements,
the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable UK-adopted international accounting

standards have been followed for the Group financial statements and
United Kingdom Accounting standards, comprising FRs 101 have
been followed for the Parent Company financial statements, subject
to any material departures disclosed and explained in the financial
statements;

make judgements and accounting estimates that are reasonable and

prudent; and

prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and Parent Company will
continue in business.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Corporate governance
report

the directors recognise the importance
of sound corporate governance and are
committed to maintaining high standards
of corporate governance.

To achieve our vision, we:
invest in developing and protecting our intellectual property portfolio.
As at 31 december 2021 our portfolio comprised 376 granted patents
and 870 pending applications;

recruit staff with a strong pedigree from relevant commercial sectors;
bring a depth of expertise spanning R&d, quality, regulatory approval,
operations and commercialisation;

invest in the development of our people by supporting ongoing
academic qualifications and promote an entrepreneurial and
collegiate working environment;

identify and execute on focused accretive acquisitions to support

and/or accelerate our overall objectives;
nurture long-term strategic relationships with:

clinicians and key opinion leaders practicing in our fields of

interest around the world;

distribution partners to give us scalable geographical reach into

key markets where we do not have a direct presence;

commercial partners to allow us to strengthen our development
and to exploit the potential of our Kamaptive technology; and
shareholders to ensure that we have access to the support and

capital that we need to achieve our goals.

We face a number of challenges in the execution of our strategy, including:
uncertainty that our technology will be an attractive addition or an

alternative to existing surgical devices. This is mitigated by engaging
with key opinion leaders to gather relevant feedback and develop
products that meet clinical needs; and

uncertainty that regulatory clearances for products will be obtained
in a timely manner (if at all). To mitigate this, we employ a dedicated
team focused on the regulatory requirements of products who
provide the necessary documentation to support our regulatory
applications.

CoVId-19 has continued to impact all business globally during 2021. For
Creo, elective procedures have continued to be delayed and whilst there
has been some relaxation, worldwide travel restrictions and individual
restrictions on travel have hampered our ability to meet and train
clinicians on the safe use of our products. Nevertheless, as a business
we have continued to focus on what we are able to do within the
restricted environment in which we find ourselves, focusing on core
areas of product development and integrating the acquisitions which we
have been able to execute during this time.

Further detail on the principal risks and uncertainties are set out in more
detail on pages 50 to 51.

In accordance with the London Stock Exchange’s requirement for
all AIM-quoted companies to adopt and comply with a recognised
corporate governance code, the Board of Directors of Creo
Medical Group plc adopted the Quoted Companies Alliance (QCA)
Corporate Governance Code (Code).

We have set out below a summary of how we endeavour to comply
with the 10 principles of the Code taking into account the stage of
development of the Company and the resources available to it. In
addition to the Code, Creo also seeks guidance from its professional
advisors including its solicitors, auditors brokers and NoMAd on
recommended best practice for AIM companies.

The Board’s role is to ensure that Creo is managed for the long-term
benefit of all shareholders. our corporate governance processes are
designed to ensure control, reduce risk and enhance long-term value
generation and underpin Creo’s long-term objectives.

The Quoted Companies Alliance Corporate Governance Code
The Code is constructed around 10 principles and takes key elements of
good governance and applies them in a manner which is workable for
the needs of a growing company in pursuit of medium to long-term
value creation for shareholders. Each principle is set out below, together
with a commentary of Creo’s compliance. To the extent that an
explanation of Creo’s compliance set out against one principle is equally
as relevant against another principle, the explanation is deemed to apply
to all relevant principles.

Deliver growth
1. ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH
PROMOTE LONG-TERM VALUE FOR SHAREHOLDERS
Creo is an advanced energy medical device company focused on the
development and commercialisation of minimally invasive medical
devices, bringing advanced energy to endoscopy. our vision is
to improve patient outcomes through the development and
commercialisation of a suite of electrosurgical medical devices,
each enabled by the CRoMA Advanced Energy Platform.

CRoMA is powered by Creo’s Kamaptive full-spectrum adaptive
technology to optimise surgical capability and patient outcomes.
Kamaptive is a seamless, intuitive integration of multi-modal energy
sources, optimised to dynamically adapt to patient tissue during
procedures such as resection, dissection, coagulation and ablation of
tissue. Kamaptive technology provides clinicians with increased
flexibility, precision and controlled surgical solutions. CRoMA currently
delivers advanced bipolar radiofrequency (“RF”) energy for precise
localised cutting and focused high frequency microwave (“MW”) energy
for controlled coagulation and ablation via a single accessory port.
This technology, combined with the Group’s range of patented
electrosurgical devices, is designed to provide clinicians with flexible,
accurate and controlled clinical solutions. The directors believe the
Company’s technology can impact the landscape of surgery and
endoscopy by providing a safer, less-invasive and more cost-efficient
option for procedures.

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GovernanceFinancial StatementsStrategic ReportCorporate governance report continued

Deliver growth continued
2. SEEK TO UNDERSTAND AND MEET SHAREHOLDER
NEEDS AND EXPECTATIONS
We encourage active communication with all shareholders to ensure our
strategy and business model is understood and to aid our understanding
of any concerns that shareholders may have. The Board believes that this
active engagement provides a stable shareholder base for the long term.

Whilst CoVId-19 restrictions have limited our ability to meet
shareholders in person, during 2021 we have continued to engage with
our key shareholders through the use of virtual meeting spaces and have
provided timely updates to the market via the RNs on our activities.

3. TAKE INTO ACCOUNT WIDER STAKEHOLDER AND
SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR
LONG-TERM SUCCESS
Creo’s key stakeholders are our patients, our customers, our employees
and workers, our business partners, suppliers, patients and doctors, the
wider communities in which we operate and, of course, our shareholders.

EsG is at the heart of Creo and the Board takes into account wider
stakeholder and social responsibilities when making its decisions.
Creo is still in the early stages of its EsG journey and is committed
to playing its part.

Pages 38 to 44 set out certain detail of how we have taken into account
the needs of our wider stakeholders and how we step up to meet our
social responsibilities.

Further examples of how we seek to meet this requirement of the Code is
set out below:
Shareholders – Whilst CoVId-19 restrictions have limited our ability
to meet shareholders in person, during 2021 we have continued to
engage with our institutional shareholders through the use of virtual
meeting spaces and have provided timely updates to the market via
the RNs on our activities.

Employees – during 2021 we have continued to grow organically and
through acquisition. In line with government guidance, many of our
employees continue to work from home, supported by the necessary
technology which we have deployed to all employees to facilitate
continued engagement, collaboration and to allow us to work as
one team.

Business partners and suppliers – long-term success requires strong
and equitable relationships. We seek to pay suppliers within agreed
credit times and encourage all suppliers and business partners to meet
and adhere to the high ethical standards that we seek to achieve.
Modern Slavery – In line with our underlying principle to improve
lives, the Company has adopted an Anti-slavery and Human
Trafficking policy and we continue to seek to ensure that all suppliers
and business partners adopt and adhere to similar policies.

Anti-Bribery and Corruption – The Company has an Anti-Bribery and
Corruption policy which is communicated to all employees and
training on which is provided. We seek to include provisions in our
agreements with third parties to ensure that bribery and corruption
does not form part of any business undertaken by or on behalf of the
Company and is not within our supply chains. In addition, we have
implemented soPs, policies, training and guidance to support
sunshine Act compliance through our Us activities.

Compliance – We have dedicated employees dealing with Health and
safety compliance. Further, our supply chain team work to ensure
that compliance flows through our supply chain. The nature of our
products requires Creo to operate in accordance with the Iso: 13485
standard and our internal quality management system has recently
been successfully audited by Bsi for recertification.

4. EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING
BOTH OPPORTUNITIES AND THREATS, THROUGHOUT THE
ORGANISATION
Internal Controls
The Board is responsible for maintaining a sound system of internal
financial and operational control and the ongoing review of their
effectiveness. The Board’s measures are designed to manage, not
eliminate, risk and, as such, provide reasonable, but not absolute,
assurance against material misstatement or loss. some key features of
the internal control system are:
Management accounts information, budgets, forecasts and business

risk information which are regularly reviewed by the Board;

due to the nature of the products being developed by the Company,
our rigorous quality management system that is compliant with the
Iso:13485 standard and which is externally audited;

operational, accounting and employment policies which are regularly

reviewed and updated as appropriate;

Clearly defined organisational and reporting structures within the

Company; and

Established financial reporting and control systems within

the Company.

The Company reviews its internal controls regularly to ensure that they
give the necessary flexibility to enable growth and the delivery of
long-term shareholder value while having the correct checks and
balances in place.

during 2021 Creo acquired Aber Electronics limited (“Aber”). Benefiting
from the integration work already performed following the acquisitions
of Albyn Medical sl and Boucart Medical sRl in 2020, the Group is
working to ensure that Aber has the same levels of governance as are
in place throughout the Group.

Risk Register
The Company maintains a risk register which is reviewed regularly and
which allows the Board to appraise external and internal threats to the
business and to plan and mitigate accordingly. Further detail on the
principal risks and uncertainties are set out in more detail on pages
50 to 51.

Intellectual property
The Company has worked with its patent agent, Mewburn Ellis, since
2003. Mewburn Ellis advises on Creo’s patent applications and the
execution of our portfolio. They offer strategic advice and support to
assist in the identification of areas where the business may want to
consider further development or registration to support existing
applications and/or protection.

Legal
Creo’s General Counsel, supported by external advisors in relevant
jurisdictions, assists the management team and wider employee bases
and advises on legal aspects of the business. The General Counsel takes
an active role in the management of the business to ensure that
compliance is at the core of all that we do.

Code of Conduct
The Company has adopted a Code of Conduct which sets out the
standards that it expects all employees and representatives of the
Company to meet to ensure that we maintain the high standards that
we set ourselves. It is the Board’s view that by encouraging high working
standards we will mitigate against risks arising in our day-to-day activities.

Insurance
AoN provides insurance broker services to Creo as the markets in which
we seek to operate have unique risks which, if they were to materialise,
could significantly impact on the business and its stakeholders. Under
the advice and guidance of AoN, we have put in place a scheme of
insurance which reflects both the current and medium-term needs of
the business and this is continually monitored through periodic reviews
with our advisors and our underwriters.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Maintain a dynamic management framework
5. MAINTAIN THE BOARD AS A WELL-FUNCTIONING,
BALANCED TEAM LED BY THE CHAIR
The Board
Creo has a strong and effective leadership team. Creo’s Board comprises
of an Independent Non-Executive Chairman, four Executive directors,
and two further Non-Executive directors, one of which acts as Creo’s
senior independent Non-Executive director. Brief biographies for each
Board member can be found on pages 54 to 55.

Conflicts of interest
To address the provisions of section 175 of the Companies Act 2006
relating to conflicts of interest, the Company’s Articles of Association
allow the Board to authorise situations in which a director has, or may
have, a conflict of interest. directors are required to give notice of any
potential situation or transactional conflict that are to be considered at
the next Board meeting and, if considered appropriate, conflicts are
authorised or directors do not attend or participate in such discussions.
directors are not permitted to participate in such considerations or to
vote regarding their own conflicts.

Executive Board Members
Craig Gulliford, Chief Executive officer
Richard Rees, Chief Finance officer
Prof. Christopher Hancock, Chief Technology officer
David Woods, Chief Commercial officer

Non-Executive Board Members
Charles Spicer, Independent Non-Executive Chairman
John Bradshaw, senior Independent Non-Executive director
Ivonne Cantu, Non-Executive director

The Company’s Articles of Association require one third of its directors
to stand for re-election at each AGM, with each director to be re-elected
at least every three years. The Company’s Articles of Association are
available on our website. At our 2021 AGM, Craig Gulliford and Charles
spicer both stood for re-election. Both resolutions were duly passed.

6. ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE
THE NECESSARY UP-TO-DATE EXPERIENCE, SKILLS AND
CAPABILITIES
The Board considers that it contains an appropriate range of skills,
experience and knowledge, but is mindful of the need to continuously
review the needs of the business to ensure that this remains true.
Creo’s Board members are of sufficient calibre to bring independent
judgement to issues of strategy, performance, resources and standards
of conduct, which are vital to the future growth and success. The Board
believes that it operates in an open and constructive manner, working
effectively as a team.

Each director is aware of the importance of keeping their skills and
capabilities up to date. The Board are kept up to date on changes to the
AIM rules briefings from the Company’s nominated adviser, as well as
other regulatory and market matters on an ad hoc basis.

Charles spicer acts as Creo’s Independent Non-Executive Chairman.
Charles has a limited shareholding in the Company, via his sIPP, and a
limited interest in the Company’s share option scheme. The Board does
not consider Charles’s limited share and option holdings to be significant
and therefore consider him to be an independent Non-Executive director.

The Board is supported by a number of professionals both internal and
external, including the Company’s General Counsel, the CFo (who is a
chartered accountant), the senior Independent Non-Executive director
(who is a chartered accountant) and external advisors.

John Bradshaw acts as Creo’s senior independent Non-Executive
director. John has a limited interest in the Company’s pre-IPo share
option scheme. The Board does not consider that John’s limited share
option holding to be significant and therefore consider him to be an
independent Non-Executive director.

The Board feels that it has an appropriate balance between
independence, knowledge of the Company’s technology, sector
experience and professional standing to allow it to discharge its duties
and responsibilities well. All directors are encouraged to debate and use
independent judgement based on their respective knowledge and
experience on all matters affecting the business.

The time commitment expected of the directors is commensurate with
the size and complexity of a quoted company and as necessary to
properly perform their duties. during the 12 months ending 31 december
2021, the directors attended the following meetings:

Director

Scheduled
Board
Meetings

Ad hoc
meetings*

Audit
Committee

Remuneration
Committee

4/4
Charles spicer
4/4
John Bradshaw
4/4
Ivonne Cantu
4/4
Craig Gulliford
Richard Rees
4/4
Christopher Hancock 4/4
4/4
david Woods

13/13
11/13
11/13
13/13
13/13
11/13
11/13

5/5
5/5
5/5
–
–
–
–

2/3 (as an attendee)
3/3
3/3
–
–
–
–

i.e. update calls, sub-committee meetings, or meetings where only a quorum is required.

7. EVALUATE BOARD PERFORMANCE BASED ON CLEAR
AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS
IMPROVEMENT
The Board seeks to improve the ways in which it interacts and the
manner in which information is presented to it. The processes that have
been put in place allow for a consistent approach to reporting, thus
aiding analysis by the Board of all matters at hand.

While the Company does not currently have any formal appraisal
processes or evaluation criteria for Board members, the Chairman and
Non-Executive directors regularly discuss performance with members
of the executive team which, in the Board’s opinion, is sufficient for the
Company’s purposes currently. This will be kept under review and the
Board will consider whether formal evaluations are appropriate in
the future.

8. PROMOTE A CORPORATE CULTURE THAT IS BASED ON
ETHICAL VALUES AND BEHAVIOURS
Ethical values and behaviours are at the heart of what we do. The Board
seeks to enshrine such ethical values and behaviours throughout the
conduct of all of Creo’s activities. our values are set out in our policies,
our working practices and our systems.

The nature of our products requires a robust quality management
system which is third-party audited to the Iso: 13485 standard.
Underpinning this quality management system are processes to ensure
that necessary safeguards are in place to ensure the integrity of this
system and accordingly the quality of the products under development.

The Board leads by example. The Board seeks to treat all persons fairly
and equitably, through clearly defined parameters of operation. This
includes full compliance with safe working practices but also maintaining
and protecting a positive and supportive working environment.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportCorporate governance report continued

9. MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES
THAT ARE FIT FOR PURPOSE AND SUPPORT GOOD
DECISION-MAKING BY THE BOARD
As Chairman, Charles spicer provides leadership to the Board and is
responsible for agreeing the agenda for Board meetings, ensuring (with
the Company secretary) that the directors receive the information that
they need to participate in Board meetings in a timely fashion, and that
the Board has sufficient time to discuss issues on the agenda, especially
those relating to strategy and governance.

Craig Gulliford, Creo’s Chief Executive officer, is responsible for the
day-to-day leadership of Creo, the management team and its
employees. The Chief Executive officer is responsible, in conjunction
with senior management, for the execution of the Company’s strategy, as
approved by the Board, and the implementation of Board decisions.

The Board is collectively responsible for the long-term success of the
Company. Its principal role is to provide leadership within a framework of
prudent and effective controls, which enables risk to be assessed and
managed. The Board considers the management team’s strategic
proposals and, following a rigorous review, determines strategy and
ensures that the necessary resources are in place for the management
team to execute against that strategy.

Board meetings
The Board seeks to meet regularly, but in any event to hold Board meetings
on a quarterly basis, together with meeting for an annual strategy event. In
addition to the scheduled meetings, members of the Board regularly hold
informal discussions with both Executive directors and senior operational
managers of the Company to discuss strategic business developments and
other topics important to the Company’s progress.

Further, Board calls are held when needed to allow the executives to
update the Board on specific matters and/or to approve specific actions
for which Board approval is required.

The Board and its Committees are provided with information ahead of
meetings to give time for review and analysis. For each Board meeting
an agenda is prepared and approved by the Chairman and followed.
The Board maintains an ongoing list of matters arising from the Board
meetings which are then followed up at subsequent meetings to ensure
that matters and decisions are being implemented.

Reserved matters
The Board has adopted a schedule of specific matters reserved for the
Board to consider and, if thought appropriate, decide upon. These
reserved matters relate to:
strategy and oversight, including the approval of annual budgets;
Changes to the capital structure of the Company and the corporate

structure of the Group;

Approval of financial statements and reports and any capital spend

above agreed limits;

Approval of contracts outside of the ordinary course of the business;
Changes to Board and committee membership;
Remuneration of Executive directors and issues relating to share

options;

Any delegation of authorities;
Governance; and
Approval of policies.

Board Committees
The Board delegates certain duties to Board Committees, all of which
operate within clearly defined terms of reference and, where applicable,
in accordance with the Code.

Audit Committee
The Audit Committee currently consists of three Non-Executive directors.
It is chaired by John Bradshaw and its other members are Charles spicer
and Ivonne Cantu, all of whom are independent Non-Executive directors.

The Board considers that the members of the Audit Committee have
sufficient competence to understand, analyse and, when necessary,
challenge the management accounts and public financial statements
of the Company:

John Bradshaw is a chartered accountant with more than 25 years’
experience as a chief financial officer with venture capital backed and
listed companies. Prior to his retirement in July 2021, John was Chief
Financial officer of syncona Investment Management limited, the
Investment Manager of syncona limited, a FTsE 250 listed life sciences
investment company.

Charles Spicer is a seasoned Non-Executive Chairman and director,
previously being Head of Healthcare Corporate Finance at both Numis
securities and Nomura International.

Ivonne Cantu has extensive experience in corporate finance, having
acted as a corporate finance adviser to UK and international companies
for more than 20 years at Cenkos securities plc and previously at Merrill
lynch. Ivonne is currently director of Investor Relations and sustainability
at Benchmark Holdings plc.

The role and responsibilities of the Audit Committee are clearly defined
in terms of reference which were last reviewed and updated on 5 May
2021. A copy of the terms of reference are available on our website at
www.creomedical.com/investors/corporate-governance/ and on
request from the Company secretary.

The Audit Committee has the primary responsibility of reviewing the
financial statements and the accounting principles and practice
underlying them, liaising with the external and internal auditors and
reviewing the effectiveness of internal controls. The Audit Committee’s
role includes monitoring the integrity of the financial statements of the
Company (including annual and interim accounts and results
announcements), reviewing internal control and risk management
systems, reviewing any changes to accounting policies, reviewing and
monitoring the extent of the non-audit services undertaken by external
auditors and advising on their appointment.

during 2021, the main items of business considered by the Audit
Committee included:
Review and recommend to the Board updates to the Audit

Committee terms of reference

Financial statements and Annual Report review
Consideration and review of the external audit report and

management representation letter
oversight of the audit tender process
Review of the interim results
Going concern assessment and review
Review of the 2021 audit plan
Risk management and internal control systems review
Auditors’ engagement and meetings (with and without executive

representation present) to discuss the above

The Audit Committee’s activities are reported at subsequent Board
meetings and the minutes of each meeting are provided to all members
of the Board.

The Company’s Auditor has unrestricted access to the Chairman of the
Audit Committee. The Chief Financial officer and a representative of the
Auditor of the Company are normally invited to attend meetings of the
Audit Committee.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Remuneration Committee
The Remuneration Committee is chaired by Ivonne Cantu and its other
member is John Bradshaw.

The Remuneration Committee ensures that the Company’s
remuneration policy and practice promotes, encourages and drives the
long-term growth of shareholder value in an effective manner and in
accordance with the Board’s strategy and policies.

The Remuneration Committee determines, within the agreed terms
of reference, the Company’s policy on the remuneration packages
for the Company’s chairperson, Executive directors and any senior
management, including the Company secretary, as it is designated to
consider from time to time. The Remuneration Committee also has
responsibility for determining (within the terms of the Company’s policy
and in consultation with the Chairman and/or the Chief Executive officer)
the total individual remuneration package for each Executive director, the
Company secretary and other designated senior executives (including
bonuses, incentive payments and share options or other share awards).
The remuneration of Non-Executive directors will be a matter for the
Chairman and Executive directors of the Board. No director or manager
is allowed to partake in any discussions as to their own remuneration.

The Remuneration Committee’s terms of reference were reviewed and
updated on 5 May 2021.

Build trust
10. COMMUNICATE HOW THE COMPANY IS GOVERNED
AND IS PERFORMING BY MAINTAINING A DIALOGUE WITH
SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
We seek to maintain dialogue with shareholders and other relevant
stakeholders through a number of channels. our Annual Report and
Accounts, full year and half year announcements are the primary sources
of information for shareholders. These are supplemented by regular and
appropriate RNs and RNs Reach announcements.

The above, together with other relevant information on the Company, can
be obtained from our website.

The Company’s collegiate and open working environment means that all
employees are able to relay concerns to the executive team directly. The
Company has a whistleblowing policy to allow and encourage all
employees to bring matters which cause them concern to the attention
of certain persons within the Company and, ultimately, to the attention of
the Chairman. during 2021, there were no incidents for consideration.

The Company has engaged Walbrook PR to advise on its communications
strategy and to assist in the drafting and distribution of regular news and
regulatory announcements. If shareholders or interested parties would like
to contact Walbrook regarding any communications they can be contacted
at creo@walbrookpr.com.

Going concern
The Board is required to assess whether the Group has adequate
resources to continue operations for the foreseeable future. The Board
reviewed detailed forecast cashflows which included plausible downside
scenarios and made inquiries of management (see more on page 79).
Following this, the directors have a reasonable expectation that the
Company and the Group will continue in operational existence for the
foreseeable future (being a period of at least 12 months from the date of
this report). For this reason, they continue to adopt the going concern
basis in preparing the financial statements.

By order of the Board
Richard Rees
Director

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportDirectors’ remuneration report
For the year ended 31 December 2021

this report sets out details of the directors’ remuneration
for 2021, our approach to pay and the activities of the
remuneration Committee during the year.

Business context
2021 was a year of significant strategic progress for the Group. The two
acquisitions completed in 2020, Albyn Medical and Boucart Medical
have been successfully integrated and delivered good results. This
reflects the strong leadership across Creo and Albyn Medical, a good
strategic and cultural fit, and a well executed integration plan. In
addition, during the year the Company expanded its presence in the Us,
a key market for the Group, and entered into heads of terms with several
parties to develop new applications and commercial channels for its
Kamaptive technology, including robotically assisted surgery.

on the commercial front, the Group was significantly impacted by
CoVId-19, with healthcare systems across the world postponing
elective procedures, training delayed and travel severely constrained.
The commercial team led by david Woods focused its efforts on refining
the Group’s commercial strategy from lead generation to conversion and
support. This included the development of training programmes,
establishment of training centres and expansion of the Group’s
commercial network and geographic presence.

The Company made good progress in the area of EsG in line with its
stated objectives at the beginning of the year see our EsG report on
pages 38 to 44.

Executive Directors’ pay for 2021
The Remuneration Committee approved a cash bonus for the Executive
directors representing 67% of the maximum payout reflecting the
strategic progress made in the year, and delivery against commercial,
financial and EsG targets. long-term incentive award was made to the
Executive directors under the Company’s JsoP arrangement equivalent
to 67% of annual salary.No salary increases were implemented during
the year.

Remuneration Committee membership
and responsibilities
The composition of the Remuneration Committee during the year was:
•
•

Ivonne Cantu (Chair)
John Bradshaw

By invitation of the Committee, meetings are also attended by the CEo,
CFo, the Company Chair, the General Counsel and the Global HR
director, who are consulted on matters discussed by the Committee,
unless those matters relate to their own remuneration.

Catrin Asbrey joined Creo Medical as Global HR director in september
2021. Catrin has 20 years’ experience in Human Resources across the
public and private sectors in a broad range of sectors. Initially her focus
has been on the integration of Albyn Medical, the implementation of
EsG policies and working with the Executive directors on organisational
design which is an important enabler of the Group’s success as it grows
and develops. during 2021 the Committee obtained an overview of the
wider workforce remuneration and benefits policies to assist them in
their consideration of appropriateness of remuneration packages of the
Executive directors.

The Company continues to seek professional, independent advice
from FIT Remuneration Consultants llP. FIT has no connection to the
Company or its directors other than in relation to advice provided to
the Remuneration Committee.

The responsibilities of the Remuneration Committee are to set a
remuneration policy for all Executive directors and such other members
of the executive management as it is designated to consider and to
review and determine on behalf of the Board specific remuneration and
incentive packages for each of the Company’s Executive directors to
ensure that they are fairly rewarded for their individual contributions to
the Company’s overall performance.

The Remuneration Committee assesses the performance of the
Executive directors in the context of recommending their annual
remuneration, including bonus awards and share option grants to the
Board for final determination. The remuneration of the Non-Executive
directors is recommended by the Executive directors and takes account
of the time spent on Board and Committee matters. The Board will make
the final determination although no director will participate in any
discussion about their own remuneration.

The Remuneration Committee’s overarching objective is to implement
a remuneration policy which promotes the long-term success of the
Group, is aligned to the Company’s entrepreneurial culture and values,
and addresses the interests of the Company’s main stakeholders. In
pursuit of this objective, the Company operates a remuneration policy
consisting of salary, benefits and pension and, subject to performance
conditions, an annual bonus and awards of long-term incentives. The
framework seeks to ensure that there is a close link between pay
outcomes and Group and individual performance. Pages 45 to 47
of this report sets out further details around the Board’s approach to
discharging its obligations pursuant to s172 of the Companies Act 2006.

The Committee adheres to principles of corporate governance appropriate
for an AIM company of Creo’s size and maturity as set out in the QCA
Code. The Committee also considers the views of shareholders on pay
and the feedback received informs its decision-making. In summary, in
establishing and implementing a remuneration policy the Remuneration
Committee takes into account the following guiding principles:
•

remuneration packages should be competitive but not excessive
when compared with a relevant peer group and should be sufficient
to recruit, retain and motivate individuals of the requisite calibre to
deliver long-term success;
remuneration packages should be clear and simple and aligned with
the interests of shareholders’ and other key stakeholders; and
• a significant proportion of remuneration should be based on

•

performance-related components with potential rewards subject to
the achievement of challenging performance targets based on
measures linked to the Group’s KPIs and to the best interests of
stakeholders, promoting an entrepreneurial culture.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

The JsoP plan implemented in FY2020 is currently intended to be the
primary vehicle for making long-term incentive awards to the Executive
directors.

As part of the FY2021 remuneration, the Remuneration Committee
approved an award under the JsoP for the Executive directors
equivalent to 67% of annual salary. The awards will vest after three
years subject to share price performance hurdles and will be subject
to a two-year holding period post vesting.

Service contracts
Executive directors are employed under contracts which may be
terminated by either party on no more than 12 months’ notice.

Remuneration Policy for the Chairman and
the Non-Executive Directors
The Chairman and the Non-Executive directors are employed on letters
of appointment which have an initial term of one year and then which
may be terminated at any time by either party with three months’ notice.

The remuneration of the Chairman is set by the Remuneration
Committee and the remuneration of the Non-Executive directors is set
by the Executive directors of the Board. No individual is involved in the
determination of their own pay. Neither the Chairman nor the Non-
Executive directors receive awards under Creo Medical’s incentive
schemes. Charles spicer and John Bradshaw were awarded share
options prior to the Company’s IPo in 2016 and have not been awarded
share options since.

Overview of Executive Directors’
remuneration
The main elements of the remuneration package for Executive
directors are:

BASE SALARY
The base salary is reviewed annually by the Remuneration Committee.
In determining the base annual salary, the Remuneration Committee
takes into account several factors, including the current position and
development of the Group, individual contribution, and internal and
external reference points including market salaries for comparable
organisations.

salaries in FY2021 were £280,000 (Craig Gulliford), £210,000 (Professor
Christopher Hancock), £210,000 (Richard Rees) and Us$325,000
(david Woods). No salary increases were implemented in FY2021 for the
Executive directors and no salary increases were approved for FY2022.
Across the Group salaries were increased in cases linked to increased
responsibility or promotions or as part of a benchmarking exercise.

ANNUAL BONUS
All Executive directors are eligible for a discretionary annual bonus
which is paid in accordance with a bonus scheme developed by the
Remuneration Committee. Payouts are based on an assessment of
performance against defined commercial, strategic, financial and EsG
objectives. The bonus is capped at 100% of salary. Across the Group,
senior managers are also eligible to discretionary bonus payments
based on the delivery against personal and Group performance
objectives and targets.

The Committee’s focus during the annual bonus assessment process for
FY2021 was to ensure that outcomes were appropriately aligned with
the overall performance of the Group and that payments were fair from
a range of stakeholder perspectives, particularly in light of CoVId-19
and its impact on the business, its employees, and shareholders. In this
context, the Executive directors’ annual bonus was determined based
on achievement against a set of objectives set out at the beginning of
the year and the overall performance of the Group. Bonus payouts of
67% of the maximum were approved for all Executive directors.

LONG-TERM INCENTIVES
long-term incentive awards are an important component of Executive
directors’ remuneration aimed at promoting the long-term success of
the Company in alignment with the interests of the Company’s
shareholders and broader group of stakeholders.

The Group operates a number of option plans under which certain
directors and members of staff have been granted options to subscribe
for ordinary shares. All options are equity settled. The options are
subject to service conditions and performance conditions and have
varying vesting periods and exercise prices (depending on the time of
grant). The Group has no legal or constructive obligation to repurchase
or settle the options in cash.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportDirectors’ remuneration report continued

Directors’ remuneration for 2021 (audited)
The remuneration of the Board of directors of Creo Medical Group plc during the 12-month period ending 31 december 2021 was:

(All figures £)

Executive:
Professor Christopher Hancock
Craig Gulliford
Richard Rees
david Woods

Salary

Taxable
benefits

210,000
280,000
210,000
237,854

22,256
22,114
21,900
32,043

Pension

21,000
28,000
21,000
11,893

Annual
bonus1

Share-
based
payments2

JSOP
PAYE & NI
Settlement3

12 months to
31 December
2021

12 months to
31 December
2020

220,900
292,601
219,451
274,070

361,329
392,826
284,839
83,970

227,041
174,031
93,300
–

1,062,526
1,189,572
850,490
639,830

737,500
949,253
727,712
245,281

Total executive

937,854

98,313

81,893 1,007,022 1,122,964

494,372

3,742,418

2,659,746

Non-Executive:
Charles spicer
John Bradshaw
Ivonne Cantu

Total Non-Executive

86,000
56,000
56,000

198,000

–
–
–

–

–
–
–

–

–
–
–

–

–
–
–

–

–
–
–

–

86,000
56,000
56,000

86,000
56,000
51,333

198,000

193,333

Total directors’ remuneration

1,135,854

98,313

81,893 1,007,022 1,122,964

494,372

3,940,418

2,853,079

Annual bonus includes amounts of £140,700, £187,600 £140,700 and £159,362 respectively to Professor Christopher Hancock, Craig Gulliford, Richard Rees and david Woods for
performance for the year ending 31 december 2021. This reflected the Remuneration Committee’s assessment of performance versus the targets set at the beginning of the year.
There was an element of deferred/contingent bonus which related to 2020 which was paid during the period which amounts to £80,200, £105,001, £78,751 and £90,494
respectively to Professor Christopher Hancock, Craig Gulliford, Richard Rees and david Woods. In addition, the figures include £24,214 to david Woods in relation to the final
amount of his 2020 agreed bonus.
The share-based payment charge relates to share options issued by the Group. The charge for the year of £1,122,964 for directors compares to the charge incurred by the Group
in total for all employees and suppliers of £2,564,183. see note 8 to the accounts for more details.

3. The JsoP PAYE and NI settlement amount relates to payments by the Group to settle the NI and PAYE liability during the year on the JsoP shares on behalf of the directors.

Directors’ shareholdings
The interests of the directors holding office at 31 december 2021 in the shares of the Company, including family interests, were:

(All figures £)

Executive:
Professor Christopher Hancock
Craig Gulliford
Richard Rees
david Woods

Total executive

Non-Executive:
Charles spicer
John Bradshaw
Ivonne Cantu

Total Non-Executive

Total directors’ shareholdings

31 December
2021
Number

31 December
2021
%

4,400,098
611,386
1,500
25,000

5,037,984

127,976
–
–

127,976

5,165,960

2.43%
0.34%
0.00%
0.01%

2.78%

0.07%
0.00%
0.00%

0.07%

2.85%

Directors’ interests in share options
directors’ interests in share options, granted under either the Creo Medical Group plc Enterprise Management Incentive share option scheme or
the Creo Medical Group PlC Unapproved share option scheme, and interests in awards granted under the Creo Medical Group plc JsoP, at
31 december 2021 were:

(All figures £)

Executive:
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock
Professor Christopher Hancock

31 December
2020
Number

417,240
72,000
1,184,210
107,914
268,293
114,035
1,419,959
115,000

Granted
during year

Cancelled
during year

Exercised
during year

–
–
–
–
–
–
–
–

–
–
–
–
–
–
1,419,959
–

–
–
–
–
–
–
–
–

31 December
2021
Number

417,240
72,000
1,184,210
107,914
268,293
114,035
–
115,000

Vested but
unexercised

Exercise
price

417,240
72,000
1,184,210
107,914
268,293
–
–
–

16.67p
16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Professor Christopher Hancock
Professor Christopher Hancock

31 December
2020
Number

–
–

Granted
during year

210,000*
2,348,288*

Cancelled
during year

Exercised
during year

–
–

Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford
Craig Gulliford

Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees
Richard Rees

david Woods

3,698,651

2,558,288

1,419,959

540,000
936,000
1,578,948
143,885
325,203
143,275
925,295
140,000
–
–

–
–
–
–
–
–
–
–
280,000*
1,553,658*

4,732,606

1,833,658

288,000
1,184,210
118,705
268,293
114,035
426,876
115,000
–
–

2,515,119

–

–
–
–
–
–
–
–
210,000*
731,519*

941,519

130,208

–
–
–
–
–
–
925,295
–
–
–

925,295

–
–
–
–
–
426,876
–
–
–

426,876

–

Total executive

10,946,376

5,463,673

2,772,130

Non-Executive:
Charles spicer

John Bradshaw
John Bradshaw

Ivonne Cantu

Total Non-Executive

118,421

27,000
78,947

105,947

–

224,368

–

–
–

–

–
–

–

Total Directors’ shareholdings

11,170,744

5,463,673

2,772,130

31 December
2021
Number

210,000
2,348,288

Vested but
unexercised

–
–

Exercise
price

0.01p
0.01p

4,836,980

2,049,657

540,000
936,000
1,578,948
143,885
325,203
143,275
–
140,000
280,000
1,553,658

540,000
936,000
1,578,948
143,885
325,203
–
–
–
–
–

5,640,969

3,524,036

288,000
1,184,210
118,705
268,293
114,035
–
115,000
210,000
731,519

288,000
1,184,210
118,705
268,293
–
–
–
–
–

3,029,762

1,859,208

130,208

–

13,637,919

7,432,901

118,421

27,000
78,947

105,947

16.67p
16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p
0.01p
0.01p

16.67p
76.00p
113.00p
153.75p
171.00p
0.01p
0.01p
0.01p
0.01p

0.01p

76.00p

21.39p
76.00p

–

224,368

13,862,287

7,657,269

–
–

–

–
–
–
–
–
–
–
–
–
–

–

–
–
–
–
–
–
–
–
–

–

–
–

–

* The Participant is entitled to any value above a hurdle price of £2.50 per share and the Trustee entitled to all value below this hurdle. The Participant
has also been granted an option to acquire the Trustee’s beneficial interest in the JsoP shares, which vests three years after the acquisition date
(subject to continued employment) and the exercise of which is subject to a three-month holding period once vested.

All share options are subject to employment conditions, those issued on or post admission at 76p, 113p, 153.75p, 171p and 0.01p are also subject to
performance conditions.

during 2021 JsoP awards were granted to the Executive directors over 5,463,673 ordinary shares. As part of these grants, 2,772,130 unapproved
share options were cancelled, with the net grant of 2,691,543 ordinary shares representing approximately 1% of the enlarged issued share capital of
the Company, details of which are set out on page 87 below and in Note 8 share-based payments. The shares were issued as part of the anti-dilution
agreements made as part of the december 2019 and september 2021 fund raises. The Company issued, 3,000,000 new shares to be admitted to
trading on AIM, to be held by the Company’s Employee Benefit Trust for the purposes of satisfying exercises of shares currently under option, as well
as for future JsoP awards. The voting rights on these new shares will be exercisable by the trustee of the Trust at its sole discretion.

other transactions that occurred with directors during the year are detailed in Note 24 to the financial statements under Related Party Transactions.

Ivonne Cantu
Chair of the Remuneration Committee
Creo House, Unit 2, Beaufort Park, Beaufort Park Way,
Chepstow, Wales, NP16 5UH
22 May 2022

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
enhanced global
footprint and
commercial
progress

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

FinanCial
stateMents

Independent auditor’s report

Consolidated statement of profit
or loss and other comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

Parent Company statement of financial position

Parent Company statement of changes in equity

Parent Company notes to the financial statements

105

106

107

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportIndependent auditors’ report to the members of Creo Medical Group plc

Report on the audit of the financial statements

Opinion
In our opinion:
Creo Medical Group plc’s group financial statements and parent

company financial statements (the “financial statements”) give a true
and fair view of the state of the group’s and of the parent company’s
affairs as at 31 december 2021 and of the group’s loss and the
group’s cash flows for the year then ended;

the group financial statements have been properly prepared in

accordance with UK-adopted international accounting standards;

the parent company financial statements have been properly

prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting standards,
comprising FRs 101 “Reduced disclosure Framework”, and
applicable law); and

the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual
Report and Accounts (the “Annual Report”), which comprise: the
Consolidated and Parent Company statements of financial position as
at 31 december 2021; the Consolidated statement of profit or loss and
other comprehensive income, the Consolidated and Parent Company
statements of changes in equity and the Consolidated statement of cash
flows for the year then ended; and the notes to the financial statements,
which include a description of the significant accounting policies.

Basis for opinion
We conducted our audit in accordance with International standards
on Auditing (UK) (“IsAs (UK)”) and applicable law. our responsibilities
under IsAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Independence
We remained independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in
the UK, which includes the FRC’s Ethical standard, as applicable to
other entities of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical standard were not provided.

We have provided no non-audit services to the parent company or its
controlled undertakings in the period under audit.

Our audit approach
Context
This is the first year of our audit. As a first year engagement, we have
invested time during the planning phase in gaining an understanding of
the business. We developed our audit plan, including the use of our
component auditors, which was approved by the Audit Committee in
advance of year end. We executed our audit in line with this plan with no
changes required.

Overview
Audit scope
The UK Group audit team has performed full scope audit work over
the four largest entities whose accounting records are based in the
UK i.e. Creo Medical Group Plc, Creo Medical limited, Creo Medical
Inc and Albyn Medical limited.

Albyn Medical sAs, Albyn Medical s.l and Boucart Medical sRl

were audited by local PwC component teams in France, spain and
Belgium respectively.

specified procedures were also performed by the UK Group audit
team over the remaining reporting units, not selected for full
scope audits.

Further audit procedures were carried out by the UK Group audit

team over central functions, the group consolidation and
consolidation journals.

our scoping resulted in coverage of 99.7% of the Group’s revenue,
99.0% of the Group’s net assets and 96.4% of the Group’s loss
before tax.

Key audit matters
Goodwill impairment assessment (group).
Recoverability of the Parent Company investment in subsidiaries

(parent).

Materiality
overall group materiality: £1,459,000 based on 5% of Group’s loss

before tax.

overall parent company materiality: £600,000 based on 0.5% of

the Parent Company’s net assets.

Performance materiality: £1,094,000 (group) and £450,000

(parent company).

The scope of our audit
As part of designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements.

Key audit matters
Key audit matters are those matters that, in the auditors’ professional
judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Key audit matter

How our audit addressed the key audit matter

Goodwill impairment assessment (group)
As at 31st december 2021, the Consolidated statement
of financial position includes £18.6m of goodwill (2020:
£18.3m). In accordance with International Accounting
standards, management has performed impairment
reviews in relation to the goodwill held in the Group’s
cash generating units (CGUs). Management has
prepared value in use calculations for each of the CGUs.
The impairment reviews include significant estimates
and judgements in respect of future growth rates, cash
flows and discount rates. The sensitivity of these key
assumptions is detailed in note 12, Intangible assets
and goodwill.

Recoverability of the Parent Company investment in
subsidiaries (parent)
As at 31st december 2021, the Parent Company’s
statement of financial position includes investments of
£26.8m (2020: £25.3m). In accordance with International
Accounting standards, at the end of each reporting
period management are required to assess whether
there is any indication that the investment value may be
impaired. Management has not identified any indicators
of impairment during the year.

As part of our assessment of the carrying value of goodwill we have:
Held discussions with management to identify the key judgements and estimates in

relation to the impairment assessments at the year end.

Agreed the impairment models to the FY22 strategic plan and tested the

mathematical accuracy of the model.

Challenged management as to whether the forecast Revenues and EBITdA margins

are reasonable by comparing them to historical trends and by considering the
accuracy of management’s forecasting in the past.

Reviewed management’s allocation to CGUs and agreed carrying values to

underlying support.

Understood management's consideration of wider risks including Covid-19.
Challenged the key assumptions identified, including consideration of the impact of
changes to these assumptions on headroom under different scenarios, such as
restrictions to future growth levels and changes to discount rates.

Used our in-house valuation experts to consider the appropriateness of the discount

rate used in relation to the wider market and sector comparatives.

Based on our audit work performed, we concur with the results of the impairment
assessment performed. We consider that the carrying value of goodwill is materially
correct and that the disclosures in the financial statements are appropriate.

We have considered whether there are any indicators of impairment, including comparing
to current market capitalisation. No indicators were identified.

In order to support that there are no indicators present we have also obtained the
relevant subsidiary cash flow forecasts that support the carrying value of the investment.
We have challenged key inputs and assessed managements methodology as follows:
Verifying the accuracy of the underlying calculations and agreeing cash flow forecasts

to the FY22 strategic plan.

Evaluating the appropriateness of forecast cash flows by understanding

management's process for forecasting and examining support.

Evaluating the appropriateness of projected growth rates and considered the impact

of restrictions to future growth.

Consideration of prior year and current performance in comparison to projected

results.

Considered sensitivity analysis to assess the impact of changes in key assumptions.
Evaluated the appropriateness of the discount rate including comparison to the

wider market.

We consider the carrying value of investment in subsidiaries to be materially correct with
no impairment being required.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole,
taking into account the structure of the group and the parent company, the accounting processes and controls, and the industry in which they operate.

of the Group’s 11 reporting components, 2 are considered to be financially significant to the Group. 5 further components were selected for full scope
audit work to ensure appropriate coverage over revenue and loss before tax. The Group engagement team also audited the Parent Company, which
was scoped in accordance with the Company materiality.

specified procedures were also performed by the UK Group audit team over the remaining reporting units, not selected for full scope audits.

Further audit procedures were carried out by the UK Group audit team over central functions, the group consolidation and consolidation journals.

our scoping resulted in coverage of 99.7% of the Group’s revenue, 99.0% of the Group’s net assets and 96.4% of the Group’s loss before tax.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportIndependent auditors’ report to the members of Creo Medical Group plc continued

Report on the audit of the financial statements

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – group

Financial statements – parent company

Overall materiality

£1,459,000.

£600,000.

How we determined it

5% of Group's loss before tax

0.5% of the Parent Company's net assets

Rationale for
benchmark applied

overall materiality is based on loss before tax.
This is a primary measure used by shareholders
and is a generally accepted auditing benchmark.

We determined materiality based on net assets (capped at 75%
as part of group scoping), which is more applicable than a
performance-related measure as the Parent Company is primarily
a Holding company and therefore does not have any revenue.

For each component in the scope of our group audit, we allocated a
materiality that is less than our overall group materiality. The range of
materiality allocated across components was £330,000 to £1,150,000.
Certain components were audited to a local statutory audit materiality
that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. specifically, we use
performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes.
our performance materiality was 75% of overall materiality, amounting
to £1,094,000 for the group financial statements and £450,000 for the
parent company financial statements.

In determining the performance materiality, we considered a number of
factors – the history of misstatements, risk assessment and aggregation
risk and the effectiveness of controls – and concluded that an amount at
the upper end of our normal range was appropriate.

We agreed with those charged with governance that we would report to
them misstatements identified during our audit above £73,000 (group
audit) and £30,000 (parent company audit) as well as misstatements
below those amounts that, in our view, warranted reporting for
qualitative reasons.

Conclusions relating to going concern
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s and the parent
company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised
for issue.

In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted,
this conclusion is not a guarantee as to the group’s and the parent
company’s ability to continue as a going concern.

our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.

Reporting on other information
The other information comprises all of the information in the Annual
Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. our
opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of
assurance thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent
material inconsistency or material misstatement, we are required to
perform procedures to conclude whether there is a material
misstatement of the financial statements or a material misstatement
of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report based on
these responsibilities.

With respect to the strategic report and directors’ report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies
Act 2006 requires us also to report certain opinions and matters as
described below.

Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit,
the information given in the strategic report and directors’ report for the
year ended 31 december 2021 is consistent with the financial statements
and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and parent
company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the strategic report and
directors’ report.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement of directors’ responsibilities in
respect of the financial statements, the directors are responsible for the
preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.

designing audit procedures to incorporate unpredictability around

the nature, extent and timing of our testing.
Reviewing financial statement disclosures.

There are inherent limitations in the audit procedures described above.
We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and
transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations,
or through collusion.

In preparing the financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or
to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the
financial statements
our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with IsAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.

Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that
the principal risks of non-compliance with laws and regulations related
to AIM listing Rules and employment legislation, and we considered the
extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations
that have a direct impact on the financial statements such as financial
reporting regulations, tax legislation and Companies Act 2006. We
evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to the
posting of journal entries designed to increase revenue or to extract
cash, together with the manipulation of accounting estimates which
could be subject to management bias. The group engagement team
shared this risk assessment with the component auditors so that they
could include appropriate audit procedures in response to such risks in
their work. Audit procedures performed by the group engagement team
and/or component auditors included:
Confirmation and enquiry with management and those charged with
governance over compliance with laws and regulations, including
consideration of actual or potential litigation and claims.

Reviewing board minutes for evidence of breaches of regulations or

instances of actual or suspected fraud.

Challenging assumptions made by management in its significant

accounting estimates.

Identifying and testing the validity of journal entries, in particular any

journal entries posted with unusual account combinations.

our audit testing might include testing complete populations of certain
transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for
testing, rather than testing complete populations. We will often seek
to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable
us to draw a conclusion about the population from which the sample
is selected.

A further description of our responsibilities for the audit of the financial
statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’
report.

Use of this report
This report, including the opinions, has been prepared for and only for
the parent company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior
consent in writing.

Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our
opinion:
we have not obtained all the information and explanations we require

for our audit; or

adequate accounting records have not been kept by the parent

company, or returns adequate for our audit have not been received
from branches not visited by us; or

certain disclosures of directors’ remuneration specified by law are

not made; or

the parent company financial statements are not in agreement with

the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Jason Clarke (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff
23 May 2022

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportConsolidated statement of profit or loss and other comprehensive income
for the 12-month period ended 31 December 2021

(All figures £’000)

Revenue
Cost of sales

Gross Profit

other operating income
Administrative expenses

Operating loss

Finance expenses
Finance income

Loss before tax

Taxation

Loss for the year

Exchange loss on foreign subsidiary
Changes to the fair value of equity investments at fair value through other comprehensive income

Total comprehensive loss for the year

Loss per Share
Basic and diluted (£)

The notes on pages 78 to 109 form part of the financial statements.

Note

9
9

21
18

31 december
2021

31 december
2020

25,161
(13,576)

11,585

52
(41,544)

(29,907)

(463)
31

9,429
(5,394)

4,035

49
(27,568)

(23,484)

(173)
195

(30,339)

(23,462)

5,744

3,146

(24,595)

(20,316)

(1,896)
231

(429)
–

(26,260)

(20,745)

(0.15)

(0.13)

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Consolidated statement of financial position
31 December 2021

(All figures £’000)

Assets
Non-current assets
Intangible assets
Goodwill
Investments
Property, plant and equipment
deferred tax
other assets

Current assets
Inventories
Trade and other receivables
Tax receivable
Cash and cash equivalents

Total assets

Shareholder equity
Called up share capital
share premium
Merger reserve
share option reserve
Foreign exchange reserve
Financial Assets at fair value through other comprehensive income
Accumulated losses

Total equity

Liabilities
Non-current liabilities
Interest-bearing liabilities
other liabilities
deferred tax liability
Provisions

Current liabilities
Interest-bearing liabilities
Trade and other payables
Non interest-bearing loans
other liabilities
Provisions

Total liabilities

Total equity and liabilities

As at
31 december
2021

As at
31 december
2020*

Note

12
12
18
13
16
15

14
15
16

21
21
21
21
21
18
21

19
17
16
20

19
17
17
17
20

8,692
18,563
1,733
8,603
1,705
146

39,442

8,504
4,830
4,299
43,534

61,167

100,609

181
149,448
13,603
7,940
(2,325)
231
(95,760)

73,318

5,175
–
1,786
593

7,554

3,705
9,921
1,676
4,221
214

19,737

27,291

100,609

10,268
18,262
500
3,378
474
112

32,994

6,812
4,593
2,973
45,092

59,470

92,464

158
115,263
13,603
5,376
(429)
–
(71,165)

62,806

6,542
1,873
1,996
1,219

11,630

4,023
8,504
1,790
3,474
237

18,028

29,658

92,464

* The prior year comparative has been restated. see Note 15 for more details.

These financial statements on pages 74 to 109 were approved by the Board of directors on 22 May 2022 and were signed on its behalf by:

Richard Rees
Director

Company registered number: 10371794

The notes on pages 78 to 109 form part of the financial statements.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Changes to the
fair value of
equity
investments at
fair value
through other
comprehensive
income

Foreign
Exchange
Reserve

Total
equity

47,714

(15,911)

49,306

1,555

82,664

–

–
(429)

(429)

(20,316)
(429)

(20,745)

–

160

728

(429)

62,807

–

–
–

–

–
231

231

–
(1,896)

(24,595)
(1,665)

(1,896)

(26,260)

–

34,207

2,564

231

(2,325)

73,318

Consolidated statement of changes in equity
for the 12-month period ended 31 December 2021

(All figures £’000)

Called up
share
capital

Note

Accumulated
losses

share
premium

Merger
reserve

Balance at 1 January 2019

120

(34,938)

65,836

13,603

Total comprehensive loss for the year
loss for the financial year

Total comprehensive loss

Transactions with owners, recorded

directly in equity
Issue of share capital
Equity settled share-based payment

transactions

Balance at 31 December 2019

Total comprehensive loss for the year
loss for the financial year
other comprehensive loss

Total comprehensive loss

Transactions with owners, recorded

directly in equity
Issue of share capital
Equity settled share-based payment

transactions

Balance at 31 December 2020

Total comprehensive loss for the year
loss for the financial year
other comprehensive loss

Total comprehensive loss

Transactions with owners, recorded

directly in equity
Issue of share capital
Equity settled share-based payment

transactions

–

(15,911)

–

49,276

–

150

(50,849)

115,112

13,603

–
–

–

(20,316)
–

(20,316)

–

–
–

–

152

–

–
–

–

158

(71,165)

115,264

13,603

–
–

–

(24,595)
–

(24,595)

–
–

–

34,184

–

–
–

–

Balance at 31 December 2021

181

(95,760)

149,448

13,603

The notes on pages 78 to 109 form part of the financial statements.

share
option
reserve

3,093

–

1,555

4,648

–
–

–

728

5,376

–
–

–

2,564

7,940

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Consolidated statement of cash flows
for the 12-month period ended 31 December 2021

(All figures £’000)

Cash flows from operating activities
loss for the period
depreciation/amortisation charges
Equity settled share-based payment expenses
Fair value adjustment to derivatives
Finance expenses
Finance income
R&d expenditure credit
Taxation
Impairment of intangible assets

(Increase)/decrease in inventories
Increase in trade and other receivables
Increase in trade and other payables

Interest paid
Tax paid
Tax received

Net cash used in operating activities

Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Acquisition of subsidiary net of cash acquired
Interest received

Net cash used in investing activities

Cash flows from financing activities
Capital repaid in respect of loans
Proceeds of new loan
Capital repaid in respect of lease liabilities
share issue

Net cash generated from financing activities

(decrease) in cash and cash equivalents
Effect of exchange rates in cash held

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

The notes on pages 78 to 109 form part of the financial statements.

Note

31 december
2021

31 december
2020

9
9

10
12

12
13
23
9

18
18
18
22

(24,595)
2,562
2,564
100
463
(31)
–
(5,744)
–

(24,681)

(2,967)
(3,170)
1,875

(20,316)
1,596
728
–
173
(195)
(2)
(3,146)
141

(21,021)

767
(394)
1,686

(28,943)

(18,962)

(463)
–
3,395

(173)
153
2,702

(26,011)

(16,280)

(146)
(5,976)
(1,752)
31

(7,843)

(1,844)
144
(515)
34,208

31,993

(1,861)
303

45,092

43,534

(91)
(485)
(20,586)
195

(20,967)

(497)
2,055
(391)
159

1,326

(35,921)
(35)

81,048

45,092

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements

1. ACCOUNTING POLICIES
General information
Creo Medical Group plc is a public company, limited by shares, registered and domiciled in England and Wales in the UK. The Company’s registered
number is 10371794 and the registered office is Creo House, Unit 2, Beaufort Park, Beaufort Park Way, Chepstow, Wales NP16 5UH.

The Group financial statements consolidate those of the Parent Company and its subsidiaries (together referred to as the “Group”). The Parent
Company financial statements present information about Creo Medical Group plc as a separate entity and not about its Group.

The Group financial statements have been prepared and approved by the directors in accordance with UK-adopted international accounting
standards (“Adopted IFRss”). The Company has elected to prepare its Parent Company financial statements in accordance with Financial Reporting
standard 101 Reduced disclosure Framework (“FRs 101”). In preparing these financial statements, the Company applies the recognition, measurement
and disclosure requirements of UK-adopted international accounting standards (“Adopted IFRss”), but makes amendments where necessary in order
to comply with Companies Act 2006 and has set out below where advantage of the FRs 101 disclosure exemptions has been taken.

Basis of preparation
This is the fifth annual financial report of the Company since the incorporation of Creo Medical Group plc on 12 september 2016 and the subsequent
acquisition of Creo Medical limited via a share for share exchange on 9 November 2016. The financial statements are presented in sterling and
rounded to the nearest pound. All accounting policies, other than new policies have been applied consistently throughout the year.

This financial report for the 12-month period ended 31 december 2021 (including comparatives for the 12 months ended 31 december 2020) was
approved by the Board of directors on 22 May 2022.

Changes in accounting policy and disclosures
New standards, amendments and interpretations
The following new standards, amendments and interpretations have been adopted by the Group for the first time for the financial year beginning on
1 January 2021:
• Amendments to IFRs 9, IAs 9, IFRs 7, IFRs 4 and IFRs 16 relating to Interest Rate Benchmark Reform – Phase 2.
• CoVId-19 Related Rent Concessions (Amendment to IFRs 16).

The adoption of these standards, amendments and interpretations has not had a material impact on the financial statements of the Group or
Parent Company.

New standards, amendments and interpretations issued but not effective and not adopted early
The following new standards, amendments to standards and interpretations have been issued but are not yet effective and therefore have not been
applied in preparing these consolidated financial statements:
• Amendments to IAs 37 onerous Contracts – Cost of fulfilling a contract. Effective 1 January 2022.
• Annual improvements to IFRs standards 2018-2020. Effective 1 January 2022.
• Amendments to IAs 16 Property. Plant and Equipment: proceeds before intended use. Effective 1 January 2022.
• Amendments to IFRs 3 Reference to the Conceptual Framework. Effective 1 January 2022.

The directors anticipate that none of the new standards, amendments to standards and interpretations is expected to have a significant effect on the
financial statements of the Group or Parent Company.

Measurement convention
The financial statements are prepared on the historical cost basis except that derivative financial instruments and equity investments are stated at
their fair value.

Business combinations and basis of consolidation
on 12 November 2021 Creo Medical limited purchased Aber Electronics limited becoming its Parent Company, with Creo Medical Group plc
becoming the ultimate parent company, see Note 23 for details.

The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a
business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses
whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the
ability to produce outputs.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any contingent
consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured,
and settlement is accounted for within equity. otherwise, subsequent changes to the fair value of the contingent consideration are recognised in
profit or loss. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Where non-controlling interests do not still have present access to the returns associated with the underlying ownership interests, the anticipated-
acquisition method will be applied and the acquisition accounted for as though 100% of the equity had already been acquired. This is the case for the
acquisition of Albyn Medical s.l. in 2020.

Accounting policies adopted are consistent across the Group. All Intra-Group balances and transactions, including unrealised income and expenses
arising from intra-Group transactions, are eliminated on consolidation.

Going concern
At the year ended 31 december 2021 the Group made a total comprehensive loss of £26.3m had cash and cash equivalents of £43.5m with net
assets of £73.3m. The financial statements have been prepared on a going concern basis which the directors believe to be appropriate for the
following reasons.

The directors have considered the applicability of the going concern basis in the preparation of the financial statements. This included the review
of financial results, internal budgets and cash flow forecasts for the period of at least 12 months following the date of approval of the financial
statements (“the going concern period”).

CoVId-19 has had a significant impact on the world economy, bringing additional pressures on healthcare providers around the world. For Creo,
users of the Group’s products have been redeployed to help to provide healthcare services and support to CoVId-19 patients, delaying elective
procedures. Whilst this has delayed the short-term commercialisation activities; the backlog this is creating will demand faster, more efficient
healthcare solutions.

Given the unprecedented situation, the directors have modelled further severe but plausible downside scenarios involving prolonged effects of
CoVId-19 during the going concern period. These scenarios include sensitivity analysis to delay future growth. Although the directors consider
severe downside scenarios to be unlikely, in such a case the Group would take mitigating actions and the directors concluded that the Group would
be able to reduce expenditure on its research and development programmes and other areas in order to meet its liabilities as they fall due for the
going concern period.

The Group completed a £34.3m fund raising with existing and new investors in september 2021, significantly strengthening the balance sheet with
£43.5m in cash as at 31 december 2021.

The directors have prepared forecasts which show under current business plans, the Group’s cash resources will extend at least 12 months from the
date of approval of the financial statements.

Based on the above, the directors are satisfied that the Group and Company will have sufficient funds to meet their liabilities as they fall due for the
going concern period and therefore have prepared the financial statements on a going concern basis.

Intangible assets
Intangible assets include the capitalisation of development costs and software for the period ending 31 december 2021.

software which is not an integral part of hardware assets are stated at historic cost, including expenditure that is directly attributable to the acquired
item, less accumulated amortisation and impairment losses.

Expenditure on research activities is recognised as an expense in the year in which it is incurred. Costs are classified as research expenditure rather
than development unless all of the below criteria are met, in which case these costs are capitalised on the balance sheet.

development criteria:
a. completion of the intangible asset is technically feasible so that it will be available for use or sale;
b. the Company intends to complete the intangible asset and use or sell it;
c. the Company has the ability to use or sell the intangible asset and the intangible asset will generate probable future economic benefits over and

above cost;

d. there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
e. the expenditure attributable to the intangible asset during its development can be measured reliably.

Amortisation commences when the project is available for sale or use within the business.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of disposal and value in use.

Amortisation is charged so as to write off the costs of intangible assets over their estimated useful lives, on the following basis:
software
development costs
Trade name
supplier relationships
Customer relationships

– 3 years straight line
– 5 years straight line
– 10 years straight line
– 10 years straight line
– 10 years straight line

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report

Notes to the financial statements continued

1. ACCOUNTING POLICIES continued
Property, plant and equipment (“PPE”)
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Cost includes the original purchase price
of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

leases are recognised if they meet the criteria in IFRs 16 as a lease. Where low value or short-term lease exemptions are taken the asset is classified
as PPE, otherwise it is classified as a right of use asset. Where land and buildings are held under leases the accounting treatment of the land is
considered separately from that of the buildings. leased assets acquired are stated at an amount equal to the lower of their fair value and the
present value of the minimum lease payments at inception of the lease, less accumulated depreciation and less accumulated impairment losses.
lease payments are accounted for as described below.

depreciation is charged so as to write off the costs of assets over their estimated useful lives, on the following basis:
Freehold land
Buildings
leasehold property improvements
office equipment
Fixtures and fittings
Motor vehicles
Plant and machinery
demo equipment

– not depreciated
– 40 years straight line
– 3 or 5 years straight line
– 2, 3 or 4 years straight line
– 3 or 4 years straight line
– 4 years straight line
– 3 years straight line or 4 years reducing balance
– 3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and
is recognised in income on the transfer of the risks and rewards of ownership.

The Company has no class of tangible fixed asset that has been revalued. on transition to IFRs the net book values recorded at 1 March 2013 have
been applied and these are based on historic cost at the date of acquisition.

Inventories
Inventories are stated at the lower of cost and net realisable value. Raw materials cost is based on the First In, First out (“FIFo”) principle using
standard costing techniques and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in
bringing them to their existing location and condition. Finished goods cost is based on standard cost with variances between actual and standard
going through the cost of sales line.

Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group uses the definition of a lease in IFRs 16.

This policy is applied to contracts entered into, on or after 1 January 2019. For leases acquired as part of a business combination the policy applies
from the acquisition date. The Group has taken the practical expedient not to reassess whether contracts at the date of initial application constituted
a lease.

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each
lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease
components and account for the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it
is located, less any lease incentives received. on transition, the right-of-use assets were recognised at an amount equal to the lease liability, adjusted
to the amount of prepaid lease payments relating to that lease recognised in the statement of financial position immediately before the date of
initial application.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless
the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the
Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain
adjustments to reflect the terms of the lease, country lease entered into and type of the asset leased.

lease payments included in the measurement of the lease liability comprise the following:
•
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

fixed payments, including in-substance fixed payments;

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

• amounts expected to be payable under a residual value guarantee; and
•

the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the
Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain
not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a
residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a
revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities
in ‘loans and borrowings’ in the statement of financial position.

Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT
equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Financial instruments
The Group predominantly enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade
and other accounts receivable and payable, loans from other third parties, loans to related parties and investments in non-puttable financial
instruments. Any transactions relating to share options issued by the entity are disclosed in the share-based payment accounting policy and Note 8.
The Group is also able to enter into a variety of derivative financial instruments to manage its exposure to foreign exchange risk, including foreign
exchange forward contracts and cross-currency swaps.

Impairment
The Group recognises loss allowances for expected credit losses (“ECls“) on financial assets measured at amortised cost, debt investments
measured at FVoCI and contract assets (as defined in IFRs 15).

The Group measures loss allowances at an amount equal to lifetime ECl, except for other debt securities and bank balances for which credit risk
(i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition, which are
measured as 12-month ECl.

loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECl.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECl, the
Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-
looking information.

The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, when demanded.

lifetime ECls are the ECls that result from all possible default events over the expected life of a financial instrument.

12-month ECls are the portion of ECls that result from default events that are possible within the 12 months after the reporting date (or a shorter
period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECls is the maximum contractual period over which the Group is exposed to credit risk.

Measurement of ECLs
ECls are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECls are discounted
at the effective interest rate of the financial asset.

Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVoCI are credit-impaired.
A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset
have occurred.

Write-offs
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.

Provisions under IFRs 9 may still be made to account for the probability of such default events, however such a provision being made is not
indicative that an actual default event will occur.

Trade and other receivables
Trade and other receivables are recognised initially at fair value. subsequent to initial recognition they are measured at amortised cost using the
effective interest method, less any impairment losses.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Notes to the financial statements continued

1. ACCOUNTING POLICIES continued
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the
Company’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

Trade and other payables
Trade and other payables are recognised initially at fair value. subsequent to initial recognition they are measured at amortised cost using the
effective interest method.

Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

Derivative financial instruments
derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or
loss. The Group has not applied hedge accounting in the current or comparative periods.

Foreign currencies
The functional currency of the Group is Pounds sterling. Transactions entered into by Group entities in a currency other than the reporting currency
are recorded at the rates ruling when the transaction occurred. Foreign currency monetary assets and liabilities are translated into sterling at the
rates ruling at the statement of financial position date. Exchange differences arising on the retranslation of the unsettled monetary assets and
liabilities are similarly recognised in the income statement.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group’s
presentational currency, sterling, at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are
translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.

Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in
the translation reserve or non-controlling interest, as the case may be. When a foreign operation is disposed of, such that control, joint control or
significant influence (as the case may be) is lost, the entire accumulated amount in the translation reserve, net of amounts previously attributed to
non-controlling interests, is recycled to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in
a subsidiary that includes a foreign operation while still retaining control, the relevant proportion of the accumulated amount is reattributed to
non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation
while still retaining significant influence or joint control, the relevant proportion of the cumulative amount is recycled to profit or loss.

Current and deferred tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the statement of financial position date.

deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based
on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted
at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised.

The Company incurs research and development expenditure which qualifies for Research and development (“R&d“) tax relief and as such, prepares
and submits an R&d claim to HMRC in relation to each accounting period. The claims are made on the basis that the Company and its activities
meet the necessary conditions.

As the Company is currently loss making, there is no corporation tax liability arising, therefore it has chosen to convert the tax relief into payable tax
credits instead of carrying forward a loss. This results in the credit being paid in cash directly to the Company following the submission of a
valid claim.

The Company is claiming R&d tax relief predominately under the small or medium-sized enterprises (“sME“) scheme therefore the credit is
accounted for as tax in accordance with IAs 12 Income Taxes. However, where the R&d expenditure is related to monies received from research
grants, the Company is claiming an R&d expenditure credit (“RdEC“) under the large Company scheme and as such the related credit is accounted
for ‘above the line’ in accordance with IAs 20 Accounting for Government Grants, specifically as a reduction from the related expenditure in the
statement of comprehensive income.

Employee benefits
Bonus
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by
employees of the Group.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will
have no legal or constructive obligation to pay further amounts. obligations for contributions to defined contribution pension plans are recognised
as an expense in the income statement in the periods during which services are rendered by employees.

Share-based payments
Equity-settled share options are granted to certain directors, employees and certain contractors which have been granted options to subscribe for
ordinary shares. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. Fair value of each
tranche is measured at the date of grant using the Black-scholes option pricing model or where they are based on market-based performance
conditions, the Monte Carlo model. Compensation expense is recognised over the tranche’s vesting period based on the number of awards expected
to vest, through an increase to equity. The number of awards expected to vest is reviewed over the vesting period, with any forfeitures
recognised immediately.

share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted
for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding
increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the related service, market and non-market vesting conditions are expected to be met,
such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service, market and non-
market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the
share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Where the Company grants options over its own shares to the employees of its subsidiaries it recognises, in its individual financial statements, an
increase in the cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge recognised in its consolidated
financial statements with the corresponding credit being recognised directly in equity. Amounts recharged to the subsidiary are recognised as a
reduction in the cost of investment in subsidiary. Where costs recharged match those incurred there is no net impact on the investment in subsidiary.

Financing income and expenses
Financing expenses comprise interest payable, finance charges on shares classified as liabilities and leases recognised in profit or loss using the
effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income statement
(see foreign currency accounting policy). Financing income comprises interest receivable on funds invested, dividend income, and net foreign
exchange gains.

Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, that can be
reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic benefit will be required to settle the obligation, the provision is reversed. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.

Revenue from contracts with customers
Revenue is recognised when substantially all of the risk and reward of ownership of the goods are transferred to the customer on despatch, and thus
has the ability to direct the use and obtain the benefits from the goods. Revenue is recognised net of any sales tax.

Performance obligations and revenue recognition policies
Revenue is recognised in accordance with IFRs 15 at the point at which the Group’s performance obligation has been satisfied. Below is a summary
of the recognition policies for each type of sale:

Type of product/service

Direct Sales of Devices/
Products

Sales to Distributors

Nature and timing of satisfaction of performance obligations, including significant
payments terms

Revenue recognition policies

Customers obtain control of medical devices or products when the
goods either leave the warehouse or when they physically arrive at the
customers’ premises based on the shipment terms.

Invoices are generated at this point with payment required within
30-60 days depending on customer terms.

distributors obtain control of medical devices or products when the
goods either leave the warehouse or when they physically arrive at the
distributors’ premises based on the shipment terms.

Invoices are generated at this point with payment required within
30-60 days depending on distributor terms.

Revenue is recognised when the goods
leave the warehouse or are delivered to the
customers’ premises (depending on
shipment terms).

Revenue is recognised when the goods
leave the warehouse or are delivered to the
distributors’ premises (depending on
shipment terms).

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

1. ACCOUNTING POLICIES continued

Type of product/service

Service/Maintenance
Contracts

Nature and timing of satisfaction of performance obligations, including significant
payments terms

Revenue recognition policies

service and maintenance contracts are for a set period of time as
specified with the customer. our performance obligations are satisfied
over the length of the contract.

Revenue is recognised over the life of the
contract on a straight-line basis. We
consider this matches the satisfaction of our
performance obligations of the contract.

Customers are invoiced monthly based on the annual value of the
contract agreed.

Demonstration/Placement
Equipment

Equipment may be provided free of charge to the customer provided
they purchase ancillary products, or it may transfer to them if they
purchase a set volume.

Where the rights to an asset are retained by
the Group the asset is depreciated over its
useful life.

No contract is deemed to exist under IFRs 15 in relation to the
placement of the equipment, due to the Group retaining the significant
element of risks and rewards including future cashflows, a lack of
commercial substance in relation to the equipment and recoverability of
the asset without ability to enforce compensation for the period of use of
the equipment. Where the Group retains control of the equipment it is
classified as fixed asset.

Where the customer obtains control of the
equipment the revenue is recognised over
the period in which the right was obtained.

Ancillary products sold are recognised at
the point of sale.

Where the customer obtains control the asset will be classified as a
sold product and not held as an asset.

Warranty

Products manufactured by the Group have a warranty period. Customers
have the right to return the product if it is faulty within this period.

Revenue is only recognised when we
consider it likely that the product will not
be returned.

We calculate a warranty provision based
on historical warranty data of comparable
products. The warranty provision is
accounted of under IAs 37 as a provision
and an expense.

Critical accounting judgements and policy update
The application of the Group’s accounting policies requires judgements in certain areas and to make estimates and assumptions concerning the
future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.
The following are those areas that are deemed to involve judgements and/or estimation about matters that have the most significant effect on the
amounts recognised in the financial statements.

Critical accounting judgements in applying the Group’s accounting policies
Capitalisation of development costs
Capitalisation of development costs requires analysis of the technical feasibility and commercial viability of the project concerned. Capitalisation of
the costs will only be made where there is clear demonstration that future economic benefit will flow to the Company.

Costs relating to the development of our initial slypseal, Microblate and spydrblade devices of £1.0m were expensed during the period.

No further development of these original products has been undertaken with an emphasis on developing the later versions of these devices. No
further development costs have been capitalised in the period.

The Group’s internal budgets demonstrate that the products will generate probable future economic benefits relating to speedboat and CRoMA and
therefore there is no impairment to capitalised development costs.

Recognition of deferred tax asset
Management judgement is required on whether the Group should recognise any deferred tax assets for losses. A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Given the nature and stage of development of Creo Medical limited there are significant losses accumulated to date. To determine whether a
deferred tax asset should be recognised in relation to the future tax deduction that these losses represent, the directors have considered the
estimated profits over a medium to long-term forecast and the events required to achieve such forecasts. Creo Medical UK limited (formally
AMlTd acquired in 2020) is forecast to make profits over the medium term and these profits would be available for Group relief. Therefore we
have recognised a tax asset in relation to element of profit expected to be earned in that entity.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Forecasts for Creo Medical limited continue to show tax losses for at least the medium term (to four years) as the Group continues to develop and
commercialise its products. Given the extent of uncertainty with forecasting over a longer-term horizon, it is determined that there is not the level
of convincing evidence that sufficient taxable profit will be available against which further tax losses or tax credits can be utilised. Thus, there is
considered to be insufficient certainty over the timing and amount of loss recoverability for any further deferred tax asset to be recognised.

Operating segments
An entity is required to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business
activities in which it engages and the economic environments in which it operates. As the Group’s global reach has expanded in the period,
management have exercised significant judgement in determining whether presenting segment information on an alternative basis would better
adhere to this core principle.

Whilst the operations in different geographical locations form a fundamental part of the Group’s long-term strategy, they are in the early stages of
development and the Group continues to focus on the development and commercialisation of its key range of unique endoscopic surgical devices
and CRoMA Advanced Energy Platform. In making their judgement, the directors considered the Group’s activities and the internal reporting
structures and information regularly reviewed by the entity’s chief operating decision-maker to make decisions about resources to be allocated
and assessing performance. After the assessment, the directors concluded that financial information at a consolidated Group level appropriately
reflects the business activities in which the Group is currently engaged, and the economic environment in which it operates. As explained in
Note 2 of the financial statements, as the Group continues to grow it is expected that the internal reporting structure will evolve in order to meet
the changing activities, goals and objectives of the business and therefore additional operating segments may be identified as appropriate in
future reporting periods.

Cancellation of Share Options
during the year Tranche 13a was cancelled with new awards being issued under Tranche 18. Management determined the Tranche 13 shares to have
been cancelled rather than modified, with the total charge incurred at the point of cancellation being the total charge should the cancellation not have
occurred. Currently this is estimated to be £206k, however if an exit event were to occur then the accelerated charge would be approximately £6.5m. If
management had treated this as a modification then the current charge of £23k with an accelerated charge of £4.5m if there was an exit event.

2. REVENUE AND OTHER OPERATING INCOME
The revenue split between the Group for 2021 was as follows:

(All figures £’000)

Creo Europe
Creo Core Products

Total

12 months to
31 december
2021

12 months to
31 december
2020

24,849
312

25,161

9,397
32

9,429

Creo core product revenue is revenues from the sale of its suite of devices and the CRoMA platform.

Creo Europe sales are sales of all other products within Europe.

At 31 december 2021 the Group had no unsatisfied or partially unsatisfied performance obligations under IFRs 15 (2020: £nil).

Segmental reporting
operating segments are identified on the basis of internal reporting and decision-making. Creo currently has one operating segment which is the
research, development and distribution of electrosurgical medical devices relating to the field of surgical endoscopy.

The Group has started the process of integrating the previous Albyn and Boucart brands into the Creo brand and offering customers our full suite of
products. As such the Group is still operating in a single segment. As the Group continues to grow we expect the internal reporting structure to
change to meet the changing goals and objectives of the business and additional operating segments may be identified in future reporting periods.

As there is only one reportable operating segment whole profit, expenses, assets, liabilities and cashflows are measured and reported on a basis
consistent with the financial statements, with no additional disclosures necessary.

Other operating income
other operating income relates to research grants. Income is recognised necessary to match it with the related costs in the profit or loss on a
systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate.
Furthermore, income is recognised only when there is reasonable assurance that the Company will comply with any conditions attached to the grant
and the grant will be received. Grant income received in the year was £52k (2020: £49k).

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

3. LOSS BEFORE TAX
The loss before income tax is stated after charging:

(All figures £’000)

depreciation – owned assets
depreciation – assets on hire purchase contracts
depreciation – right of use assets
Amortisation
Impairment of Intangible Assets
Research and development expenditure

4. AUDIT AND NON-AUDIT FEES
An analysis of auditors’ remuneration is as follows:

(All figures £’000)

Audit of Parent Company and Consolidation
Audit of Group subsidiaries

Audit fees

Audit-related assurance services (interim review)

Non-audit fees

5. STAFF NUMBERS AND COSTS
The cost of employees (including directors) during the period was made up as follows:

(All figures £’000)

Wages and salaries
social security costs
other pension costs
share-based payments

Total remuneration

The average monthly number of employees during the period was as follows:

(All numbers)

The average monthly number of employees during the period was as follows;
Research and development
Administration

Pension costs incurred in the year relate to all employees. The staging date for auto-enrolment was 1 July 2017.

6. DIRECTORS’ REMUNERATION

(All figures £’000)

directors’ remuneration
Pension
share-based payments expensed

Total Directors’ remuneration

12 months to
31 december
2021

12 months to
31 december
2020

782
–
651
1,129
–
12,869

582
36
321
658
141
10,193

31 december
2021

31 december
2020

120
136

256

45
126

171

12 months to
31 december
2021

12 months to
31 december
2020

16,122
2,530
742
2,564

21,958

10,007
1,229
566
728

12,530

12 months to
31 december
2021

12 months to
31 december
2020

184
55

239

54
17

12 months to
31 december
2021

12 months to
31 december
2020

2,735
82
1,123

3,940

2,376
73
404

2,853

directors’ emoluments disclosed above, including the fair value for share-based payment expenses, paid to the highest paid director in the period
was £1,190k (31 december 2020: £949k) including pension contributions of £28k. The share options exercised in the period by the highest paid
director was £nil (31 december 2020: £nil). There were Company pension contributions of £82k made to defined contribution schemes during the
current period (31 december 2020: £73k). No shares were received or receivable for any director in respect of long-term incentive schemes. No
shares options were exercised by the directors during the year. Total number of directors in the pension scheme at 31 december 2021 was 4.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

7. RESEARCH AND DEVELOPMENT EXPENDITURE
during the current and comparative years, research and development was a significant activity of the entity. Expenditure on research activities is
recognised in the statement of profit or loss as incurred.

8. SHARE-BASED PAYMENTS
At 31 december 2021 the Group has an established Enterprise Management Incentive (“EMI”) and non-EMI schemes (the “schemes”) under which
share options have been granted to certain officers, employees and certain suppliers. The schemes are equity-settled share-based payment
arrangements whereby holders of vested options are entitled to purchase shares in the Company at the market price of the shares at the grant date.

The schemes include both market and non-market based vesting conditions. The share options may be exercised from the date that they vest until
the 10th anniversary of the date of the grant. In addition to the performance-based vesting conditions the only vesting requirement is that the
recipient remains in employment with the Company with the exception of tranches 11 and 12 where employment is not a criteria. All options are to
be settled by the physical delivering of shares. details of the grants under these schemes are as follows:

Award Grant date

Number of options Vesting conditions

Exercise price

Fair value

Contractual
life of
options

04 January 2012

2,003,760 Continual service of employment over 3 years

0.16 to 0.22

0.08 to 0.10

10 years

06 december 2013

243,720 Continual service of employment over 3 years

14 July 2015

03 August 2015

04 August 2015

1,121,400 Continual service of employment over 3 years

670,680 Continual service of employment over 3 years

1,242,000 Continual service of employment over 3 years

216,000 Continual service of employment over 3 years

29 september 2016

1,944,000 Continual service of employment over 3 years

09 december 2016

5,907,896 Continual service of employment over 3 years

04 April 2018

875,902 Continual service of employment and market based

performance conditions

29 August 2018

1,746,718 Continual service of employment over 3 years and

non market based

18 october 2018

749,209 Non market based performance conditions

02 July 2018

1,000,000 Non market based performance conditions

0.21

0.17

0.76

1.13

1.54

0.76

1.26

0.09

0.11

0.12

0.11

0.48

10 years

0.58

10 years

0.84

1.60

0.67

10 years

17 october 2019

3,143,475 Non market and market based performance conditions

0.0001 to1.71

0.86 to 1.69

10 years

18 February 2020

490,000 Non market and market based performance conditions

23 July 2020

725,369 Continual service of employment over 3 years

04 & 27 January 2021

1,117,837 Continual service of employment over 3 years and

0.0001

2.01

0.51

1.18

10 years

non market based performance conditions

0.0001 to 1.92

0.97 to 2.17

10 years

14 June 2021

928,164 Non market and market based performance conditions

0.0001 to 2.06

0.81-1.84

10 years

23 November 2021

4,633,465 Market based performance conditions

0.0001

1.41

10 years

28,759,595

share option activity for the period ended 31 december 2021 and 31 december 2020 is presented below:

outstanding at start of period as previously stated
Granted during the period
Granted during the prior period
Forfeited during the prior period
Forfeited during the period
Cancelled during the period
Exercised during the period

outstanding at end of period
Exercisable at end of period

31 december 2021

31 december 2020

Number of options

Weighted average
exercise price

Number of options

Weighted average
exercise price

15,187,115
6,679,466
100,000
(78,947)
(104,858)
(2,772,130)
(247,209)

18,763,437
10,318,487

£0.66
£0.22
£1.71
£0.80
£1.58
£0.01
£0.28

£0.60
£0.74

14,519,776
1,215,369
–
–
–
(35,607)
(512,423)

15,187,115
8,997,828

£0.61
£1.20
£0.00
£0.00
£0.00
£1.54
£0.30

£0.66
£0.60

Weighted average remaining contractual life (in years)

of options outstanding at the period end

–

7.1

–

7.1

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

8. SHARE-BASED PAYMENTS continued
The estimated fair value of the share options was calculated by applying a Black-scholes model for shares with no market-based performance
conditions and a Monte Carlo model for those with a market-based performance condition. The model inputs for the current period option grants
were as follows:

Exercise price
share price at date of grant
Risk-free interest rate
Expected volatility
dividend yield
Contractual life of option (years)

31 december
2021

31 december
2020

0.0001 – 2.06
1.52 – 2.17

0.0001 – 2.01
1.73 – 2.05
0.1% – 0.1% 0.1% – 0.75%
33% – 50%
32% – 49%
0%
0%
10
10

Expected volatility was based on historical share price volatility for the 12 months to the grant date, which may not necessarily be the
actual outcome.

The weighted average share price of the shares exercised during the year was £1.65.

(All figures £’000)

Expense arising from share-based payment transactions

31 december
2021

31 december
2020

2,564

728

The following amounts for share-based payments are reflected in the above Consolidated statement of Profit and loss and other Comprehensive
Income in relation to directors:

(All figures £’000)

Professor Christopher Hancock
Craig Gulliford
Richard Rees
david Woods

31 december
2021

31 december
2020

361
393
285
84

1,123

131
152
121
–

404

during the year the Group implemented a sIP scheme for all UK employees. The shares purchased/issued during the year under the scheme are
as follows:

(All figures exact numbers)

Total shares in sIP scheme at 1 January
Partnership shares purchased
Matching shares issued

Total shares in sIP scheme at 31 december

2021

–
78,226
61,612

139,838

Matching shares for the additional partnership shares purchased under the sIP scheme in december 2021 were not issued until after the year end.

9. FINANCE EXPENSES AND FINANCE INCOME

(All figures £’000)

Finance income:
Bank interest
Fair value adjustment for derivatives

Total finance income

Finance costs:
Bank interest
Interest expense on lease liabilities
Fair value adjustment for derivatives
Unwind of the discount on lease liabilities
Unwind of the discount on deferred and contingent liabilities

Total finance costs

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

12 months to
31 december
2021

12 months to
31 december
2020

31
–

183
26
100
28
126

463

178
17

195

60
11
–
26
76

173

10. TAXATION
Recognised in the income statement:

(All figures £’000s)

Current tax:
Current year
Adjustments for prior years

Foreign tax:

Current tax credit

Deferred tax:
origination and reversal of temporary timing differences

Total tax credit

Reconciliation of effective tax rate:

(All figures £’000s)

loss for the period
Total credit

Loss excluding taxation

Tax using the UK corporation tax rate of 19% (2020: 19%)
Research and development
Movement in deferred tax not provided
Non-deductible expenses
Equity-settled share-based payments
different tax rates applied in overseas tax jurisdictions
losses Utilised
Fixed Asset differences
deferred tax asset recognised in the period
Adjustment for prior years

Total tax credit

12 months to
31 december
2021

12 months to
31 december
2020

Note

(3,879)
(100)

(3,241)
–

161

(3,818)

(3,200)

(1,926)

(5,744)

(3,146)

12 months to
31 december
2021

12 months to
31 december
2020

(24,595)
(5,744)

(30,339)

(20,316)
(3,146)

(23,462)

(5,764)
(2,180)
3,314
87
240
139
163
16
(1,659)
(100)

(5,744)

(4,458)
(1,475)
2,692
161
(136)
70
–
–
–
–

(3,146)

The Group has submitted R&d tax relief claims under the small or medium-sized enterprises (“sME“) scheme and £4,299k (2020: £3,345k) has
therefore been accounted as a tax credit in accordance with IAs 12 Income Taxes. In addition, the Group has also submitted R&d claims under the
large company (“RdEC“) scheme in relation to monies received from research grants. In accordance with IAs 20 Accounting for Government Grants,
an amount of £nil (2020: £1,839) has been accounted for ‘above the line’ as a reduction from the related expenditure in the statement of
comprehensive income.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Notes to the financial statements continued

11. LOSS PER SHARE
loss per share has been calculated in accordance with IAs 33 – Earnings Per share using the loss for the period after tax, divided by the weighted
average number of shares in issue.

Loss
loss attributable to equity holders of Company (basic) (£)

Shares (number)
Weighted average number of ordinary shares in issue during the period

Loss per share
Basic and diluted (£)

ordinary shares start of year (number)
Issued in year
Issue 1 – ordinary
Issued with months remaining
Issue 2 – ordinary
Issued with months remaining
Issue 3 – ordinary
Issued with months remaining
Issue 4 – ordinary
Issued with months remaining
Issue 5 – ordinary
Issued with months remaining
Issue 6 – ordinary
Issued with months remaining
Closing ordinary shares
Average ordinary shares

Basic EPS

12 months to
31 december
2021

12 months to
31 december
2020

(24,594,919)

(20,315,725)

164,433,455

155,797,600

(0.15)

(0.13)

157,891,181

150,378,758

49,209
8
3,000,000
6
61,612
5
19,899,184
3
108,000
1
90,000
–
181,099,186
164,433,455

26,316
11
114,947
10
7,000,000
9
72,000
4
299,160
1
–
–
157,891,181
155,797,600

(0.15)

(0.13)

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

12. INTANGIBLE ASSETS AND GOODWILL

(All figures £’000s)

Cost:
At 1 January 2020
Additions
Acquired on business combination
Transferred
Effect of movements in exchange rate

At 31 December 2020

Accumulated amortisation and impairment:
At 1 January 2020
Charge for period
Impairment

At 31 December 2020

Goodwill

–
–
18,546
–
(284)

18,262

–
–
–

–

Trade
name

Customer
relationships

supplier
relationships

development
costs
capitalisation

Computer
software

Assets under
construction

–
–
1,269
–
(20)

1,249

–
48
–

–
–
1,182
–
(21)

1,161

–
48
–

–
–
7,808
–
(109)

7,699

–
278
–

278

150
–
–
500
–

650

30
130
–

160

490

231
23
–
92
–

346

58
153
93

304

572
69
–
(592)
–

–
–
49

–

Total

953
92
28,805
–
(434)

29,416

88
657
142

887

28,529

Net book value at 31 December 2020

18,262

1,201

1,113

7,421

(All figures £’000s)

Cost:
At 1 January 2021
Additions
Acquired on business combination
Effect of movements in exchange rate

At 31 December 2021

Accumulated amortisation and impairment:
At 1 January 2021
Charge for period
Effect of movements in exchange rate

At 31 December 2021

Goodwill

18,262
–
1,467
(1,166)

18,563

–
–
–

–

Net book value at 31 December 2021

18,563

1,008

Trade
name

Customer
relationships

supplier
relationships

development
costs
capitalisation

Computer
software

Assets under
construction

Total

1,249
–
–
(80)

1,169

48
120
(7)

161

1,161
–
–
(74)

1,087

48
112
(6)

154

933

7,699
–
–
(491)

7,208

278
742
(39)

981

6,227

650
–
–
–

650

160
130
–

290

360

346
146
–
–

492

304
24
–

328

164

49
–
–
–

49
–
–

–

29,416
146
1,467
(1,811)

29,218

887
1,128
(52)

1,963

27,255

The amortisation of intangibles has been charged to administrative expenses in the Consolidated statement of Comprehensive Income.

The supplier relationship intangible arose on the acquisitions of Albyn and Boucart. The remaining amortisation period of the Albyn supplier relationships
is 103 months and the remaining amortisation period for the Boucart supplier relationships is 106 months.

Capitalised development costs
No assets have been transferred from assets under construction during the year. No development costs were capitalised during the year
(31 december 2020: £nil).

Assets under construction
There were no assets under construction in the year (31 december 2020: £69k).

Impairment of intangible assets
An impairment review of intangibles was carried out including consideration of potential climate related risks on the longer-term intangibles
including trade name, supplier relationships and customer relationships. No impairment to intangible assets were recognised during the year.

Goodwill impairment test
Goodwill assets considered significant in comparison to the Group’s total carrying amount of such assets have been allocated to cash generating
units or groups of cash generating units as follows:

(All figures £’000)

Albyn Group of CGUs
Boucart single CGU
Aber single CGU

31 december
2021

31 december
2020

15,136
1,959
1,467

18,563

16,170
2,092
–

18,262

due to the close proximity of the Aber acquisition to the year end no formal impairment assessment was carried out at the year end. An impairment
assessment will be carried out within 12 months of the acquisition of Aber.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Notes to the financial statements continued

12. INTANGIBLE ASSETS AND GOODWILL continued
Albyn Goodwill Assumptions
Goodwill arising on acquisition of Albyn has been allocated to a single CGU Group which consists of the seven subsidiary entities within the
Albyn Group, each being classified as a CGU unit. The recoverable amount of this CGU Group was based on value in use, estimated using
discounted cashflows. The key assumptions used in the calculation are shown in the table below:

Pre-tax discount rate
Terminal value growth rate
Budgeted revenue growth rate (average of next 5 years)

10.9%
2%
4%

The discount rate has been calculated based on the weighted average cost of capital for Albyn Medical, based on the capital asset pricing model.
In calculating the relevant inputs we considered historical and long-term market return studies, data from comparable companies within the industry
and other relevant external data.

We considered potential future impacts from climate change in the future and the impact these could have on the carrying value of each CGU in the
Group. Although a formal scenario planning has not yet been finalised we did not identify any indicators which we consider would have a material
impact on the assessment of the value in use of the CGU.

The growth rate was based on a five year forecast based on management expectations with revenue assumed to reduce to a 2% terminal growth
rate over the long term. The Group has conducted sensitivity analysis on the impairment testing. Management believe no reasonably possible
change in the key assumptions individually or a combination of for the group of CGUs would result in an impairment.

Boucart Goodwill Assumptions
Goodwill arising on acquisition of Boucart has been allocated to a single CGU. The recoverable amount of this CGU Group was based on value in
use, estimated using discounted cashflows. The key assumptions used in the calculation are shown in the table below:

Pre-tax discount rate
Terminal value growth rate
Budgeted revenue growth rate (average of next 5 years)

10.5%
2%
4%

The discount rate has been calculated based on the weighted average cost of capital for Boucart, based on the capital asset pricing model. In
calculating the relevant inputs we considered historical and long-term market return studies, data from comparable companies within the industry
and other relevant external data.

We considered potential future impacts from climate change in the future and the impact these could have on the carrying value of the CGU.
Although a formal scenario planning has not yet been finalised we did not identify any indicators which we consider would have a material impact on
the assessment of the value in use of the CGU.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

13. PROPERTY, PLANT AND EQUIPMENT

land &
Buildings

leasehold
Improvements

office
equipment

Fixtures
and
fittings

Motor
vehicles

Plant and
machinery

Assets under
construction

demo
Equipment

Right of Use
Asset leases

Total

(All figures £’000)

Cost:
At 1 January 2020
Acquired in business
combination
Additions
Transferred
disposals
Exchange rate
movements

At 31 December 2020

Accumulated

Depreciation:
At 1 January 2020
Acquired in business
combination
Charge for period
disposals

At 31 December 2020

Net book value at

31 December 2020

Cost:
At 1 January 2021
Acquired in business
combination
Additions
Transferred
disposals
Exchange rate
movements

–

–
–
–
–

–

–
–
–

–

–
4,507
–
–

–

At 31 December 2021

4,507

Accumulated

Depreciation:
At 1 January 2021
Acquired in business
combination
Charge for period
disposals
Exchange rate
movements

At 31 December 2021

Net book value at

–

–
52
–

–

31 December 2021

4,455

569

86
42
–
–

(2)

695

243

83
131
–

457

238

620

282
44
127
(54)

(5)

1,014

484

187
137
(53)

755

259

–

270
–
–
(86)

(5)

179

–

202
3
(86)

119

403
93
–
–

(7)

499

240
41
–

291

208

891

165
224
114
–

(3)

1,391

615

146
258
–

1,019

241

–
29
(241)
–

–

–
–
–

–

655
53
–
–

(12)

696

–

427
48
–

475

471

2,802

1,308
803
–
–

(116)

2,466

154

–
321
–

475

3,169
1,288
–
(140)

(150)

6,969

1,506

1,285
939
(139)

3,591

372

221

1,991

3,378

695

1,014

179

499

1,391

696

2,466

6,969

–
41
29
–

(25)

740

457

–
126
–

584

156

–
347
–
–

125

81
4
–
–

1,486

267

–
36
–
(22)

(27)

486

21
823
–
–

(86)

2,149

755

–
191
–

973

513

119

291

1,019

48
10
–

184

–
44
(12)

345

141

12
236
–

(8)

1,259

–
145
(29)
–

–

145

–

–
–
–

–

–
73
–
(1)

(48)

720

475

–
123
(1)

(62)

535

52
844
–
(134)

154
6,820
–
(157)

(103)

(161)

3,125

13,625

475

3,591

–
651
(28)

60
1,433
(41)

(8)

(21)

1,090

5,022

890

145

185

2,035

8,603

The Group purchased the Freehold land and buildings at the Chepstow site from their current lessor in addition to the building opposite for £4.25m.
The right of use asset of £134k which we previously recognised has been disposed of with the land and buildings recognised as their own assets on
the register. The buildings are depreciated over 40 years on a straight line basis and the freehold land will not be depreciated.

At 31 december 2021, the net carrying amount of leased equipment was £53k (2020: £73k).

The Group acquired assets in a business combination of £92k during the year.

Assets under construction for the year of £145k (2020: £29k) relate to leasehold improvements in our additional building at the Chepstow site.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

14. INVENTORIES

(All figures £’000)

Raw materials & consumables
Finished goods

Total inventories

31 december
2021

31 december
2020

2,188
6,316

8,504

1,044
5,768

6,812

These carrying values are stated net of impairment provisions of £2,285k (2020: £1,552k). Inventories of £732k (2020: £430k) were written down
during the period and the expense recognised in the income statement. The directors are of the opinion that the replacement values of inventories
are not materially different to the carrying values stated above.

15. TRADE AND OTHER RECEIVABLES

(All figures £’000)

Current:
Trade Receivables
Accrued other income
other debtors
Prepayments

Total current

Non-current:
other debtors

Total trade and other receivables

31 december
2021

Restated*
31 december
2020

3,876
66
518
370

4,830

146

4,976

4,237
35
88
233

4,593

112

4,705

* In the prior year the element of contingent consideration deemed to be remuneration under IFRs 3 was recognised as a liability on the balance
sheet. As the expense is required to be spread over the life of the employment a corresponding asset was also created with an amount released each
month to the P&l. We no longer consider it appropriate to recognise an asset on the balance sheet in relation to this transaction. We have therefore
restated the prior year balances to reduce the asset by £1,039k and have reduced our liability for the same amount, see note 17. The prior year
amount was £1,128k. There is no impact on the balance sheet at the start of the comparative period (01 January 2020). We will accrue the liability in
line with the employment contract until it expires.

An expected credit loss provision of £505k (2020: £337k) in relation to trade debtors has been booked during the year. specific impairments of £118k
were recognised during the year (2020: £110k). An expected credit loss provision was calculated for the other debtors balance and was deemed
immaterial and therefore not recognised.

16. DEFERRED TAX AND OTHER TAX RECEIVABLES
The accelerated capital allowances deferred tax liability set out below is expected to reverse over the life of the related fixed assets. deferred tax has
been calculated at a rate of 25% (2020: 19%).

The movement on the deferred tax account is as shown below:

(All figures £’000s)

Movement:
At 1 January
deferred Tax Asset Recognised
Tax charge recognised in profit and loss

Acquisition of subsidiaries
losses utilised in year
Exchange rate movements

At 31 December

31 december
2021

31 december
2020

1,522
(1,632)
(420)

(530)

–
745
(134)

–
–
54

1,452
–
16

1,522

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax
balances (after offset) for financial reporting purposes.

(All figures £’000s)

Balances:
Accelerated capital allowances
Intangible assets
Pension accruals and other temporary timing differences
Tax losses offset (see below)

(All figures £’000s)

Balances:
deferred tax asset
deferred tax liability

Net deferred Tax liability

31 december
2021

31 december
2020

–
2,069
(283)
(1,705)

150
2,554
(364)
(818)

1,522

31 december
2021

31 december
2020

(1,705)
1,786

(474)
1,996

1,522

There are unused trading losses at 31 december 2021 of approximately £46.4m (31 december 2020: £52.7m). A deferred tax asset of £0.75m has
been recognised in relation to these losses as Group believe they will be able to offset future profits from Creo Medical UK limited over the next
2 years. A remaining deferred tax asset of approximately £9.8m (31 december 2020: £9.8m) has not been recognised in respect of these tax losses
due to uncertainty in respect of its recoverability. A deferred tax asset of approximately £2.7m arises in respect of the share options that haven’t yet
been exercised. This has not been recognised due to uncertainty in respect of its recoverability.

Tax receivables at 31 december 2021 of £4.3m (31 december 2020: £3.0m) relate mainly to R&d tax credits. The Company has submitted R&d tax
credit claims for the periods presented in relation to its qualifying research and development expenditure and has taken the option of surrendering
the resulting losses and claiming an R&d tax credit in the form of immediate cash payments from HMRC.

17. TRADE AND OTHER PAYABLES

(All figures £’000)

Current:
Trade payables
social security and other taxes
VAT payable
other payables
Accrued expenses
derivative liability
PPE loan
deferred and Contingent Consideration

Total current

Non-current:

deferred and Contingent Consideration

Total trade and other payables

31 december
2021

Restated*
31 december
2020

3,538
470
–
1,099
4,714
100
1,676
4,221

2,459
295
161
1,852
3,737
–
1,790
3,474

15,818

13,767

–

15,818

1,873

15,641

* Current deferred and contingent consideration has been restated by £593k from £4,068k to £3,474k and non-current deferred and contingent
consideration has been restated by £446k from £2,318k to £1,873k. see note 15.

The PPE loan relates to a loan provided to the Group subsidiary Albyn Medical sl from the spanish Government for the procurement of PPE equipment
for spanish hospitals and other industries. The loan is interest-free and repaid once the PPE has been purchased in spain and the funds received. The
initial loan was for €4m of which €2m has been paid to date. As at 31 december 2021 the Group had €1.6m of PPE stock. Albyn purchase PPE using the
loan with suppliers based on an ‘arms length’ transaction. The PPE is then sold on to the end customer at a set price. Albyn do not have a mark up on
product however where larger quantities are purchased some element of profit is made. The risks and rewards are all with Albyn and therefore this has
been accounted for as a normal transaction as a principal. The proceeds received then go to pay back the loan provided by the government.

As at 31 december 2021 the Group has deferred consideration in relation to the Albyn Medical acquisition in 2020 of £2.0m. £1.1m of deferred
consideration was paid to the previous owners of Boucart during the year.

A contingent consideration liability of £1.7m has been recognised in the financial statements in relation to the acquisition of Albyn Medical sl in
2020. The Group considered it probable that the targets will be achieved and the provision will be paid in full.

A contingent consideration liability of £0.4m has been recognised in the financial statements in relation to the acquisition of Boucart Medial sRl
in 2020. The Group considered it probable that the targets will be achieved and the provision will be paid in full.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic Report
Notes to the financial statements continued

18. FINANCIAL INSTRUMENTS
Carrying amount of financial instruments
The amounts for all financial assets carried at fair value are as follows:

(All figures £’000)

Investments:
I.Q. Endoscopes

Foreign currency forward contracts:
Assets
liabilities

Reconciliation to cashflow movements

01 January 2021
Assumed in business combinations
Additions
Cashflow Principals
Cashflow Interest
Non-cash Changes Interest*
Non-cash Changes FX

31 December 2021

31 december
2021

31 december
2020

1,733

500

–
(100)

–
–

Gross loan

lease liabilities

8,554
44
100
(1,844)
(92)
60
–

6,822

2,011
–
868
(515)
–
40
(348)

2,056

* Non-cashflow changes relate to effective interest rate charge on the CCR loan and lease interest incurred on IFRs 16 leases.

Financial instruments measured at fair value
The fair value of forward exchange contracts is estimated by discounting the difference between the contractual forward price and the current
forward price for the residual maturity of the contract using a risk-free interest rate. The value of forward contracts in place as at 31 december 2021
was £100k liability (2020 £nil).

Financial risk management
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The main purpose of
the Company’s financial instruments is to finance the Company’s operations. The financial instruments comprise leases, foreign currency forward
contracts, bank loans and facilities, cash and liquid resources and various items arising directly from its operations, such as trade receivables and
trade payables. The main risks arising from the Company’s finance instruments are exchange rate risk and liquidity risk. The Company’s policies
on the management of liquidity and foreign currency risks are set out below.

Fair values of financial instruments
All financial assets and liabilities are held at amortised cost apart from forward exchange contracts, and the investment which are held at fair value.
Foreign exchange contracts changes go through the statement of profit or loss.

The entity made an additional investment in I.Q. Endoscopes during the year for £1,002k to retain its stake in the company. The investment was made
on 4 october 2021. The investment was fair valued at 31 december 2021.

(Amounts in £’000s)

Carrying Value as at 1 January 2021
Additional Investment
Fair Value Gain through oCI

31 December 2021

500
1,002
231

1,733

The Company measured the fair value of instruments which are categorised as level 2 in the fair value hierarchy, being the investment in I.Q.
Endoscopes as the price paid per share by other shareholders who also invested in the entity at the same time as the Group. As the investment
was made close to the year end we consider the fair value per share at the time of investment to be representative of the fair value of the shares at
31 december 2021.

(Amounts in £’000s)

shares owned 1 January 2021
Additional shares acquired during the year
Fair Value per share
Fair Value of investment
Cost of initial investments

Gain through OCI

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

3,411
4,148
£229
£1,733
(£1,502)

£231

We have made an irrevocable election to classify fair value changes of the investment in I.Q. Endoscopes through other comprehensive income
rather than through profit or loss, the impact of this being any changes in fair value will never be reclassified through the profit or loss account even
if the investment is disposed of. Management rationale for this treatment is that the investment is not being held for the purposes of future sale or to
receive returns. Instead the investment is to help develop their disposable endoscopy products and potential synergies this could have with the Creo
product range.

The Company has not disclosed the fair values for certain financial instruments such as short-term trade receivables and payables, because their
carrying amounts are a reasonable approximation of fair values. short and long-term interest bearing liabilities, as detailed in Note 19, are discounted
at the effective interest rate of the respective financial liability and their carrying value is considered to be a reasonable approximation of their
fair value.

Liquidity
The Company’s policy is to ensure that it has sufficient cash resources to cover its future trading requirements which is predominately sourced from
its shareholders and investors. short-term flexibility is available through current investor support via funding rounds held when required.

Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations
and arises principally from the Group’s receivables from customers and investments in debt securities. The credit risk in the period has not
significantly increased.

Trade Receivables and contract assets
The carrying amounts of financial assets and contract assets represent the maximum credit exposure. As at 31 december 2021 no investments in
debt securities or other contract assets were held and receivables from customers were £4,499k (2020: £4,573k).

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which
customers operate.

Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered.
The Group’s review includes external ratings, if they are available and review of financial statements. Where it is deemed the risk of the customer
defaulting may be high the Group will require the customer to pre-pay for items for a certain length of time before offering credit terms.

The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one and three months for
customers. The terms very depending on their individual characteristics such as credit risk assessment, geographical local and public or private
customers. The majority of the Group’s customers have been transacting with the Group for a number of years with no credit issues arising.

Expected credit loss assessment for trade receivables
The following table provides information about the exposure to credit risk and ECls for trade receivables from individual customers as at
31 december 2021.

(All figures £’000)

Current (not past due)
0-60 days
61-120 days
121-180 days
More than 180 days past due

Weighted
Average
loss

2%
10%
19%
32%
100%

Gross
Carrying
Amount

2,980
691
410
190
228

4,499

loss
Allowance

72
66
78
61
228

505

The Group uses an allowance matrix to measure the ECls of trade receivables consistent with IFRs 9. loss rates are calculated using historical
write-off data from the last 18 months to work out the probability of default based on the ageing of the receivable. At 31 december 2021 the ECl for
trade receivables was £505k (2020: £337k).

The movement in the allowance for impairment in respect of trade receivables and contract assets during the year was as follows:

(All figures £’000)

Balance at 1 January
loss allowance movement
specific amounts provided for

Balance at 31 december

2021

(447)
(58)
(118)

(623)

2020

–
(337)
(110)

(447)

specific amounts of £118k (2020: £110k) were provided for in the year relate to the specific customer debts which we deem to be credit impaired.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

18. FINANCIAL INSTRUMENTS continued
Foreign exchange risk
The Company currently purchases certain materials throughout the world in connection with research and development of its primary product. The
Company also has subsidiaries which operate in a different functional currency. The consequence of this is that the Company is exposed to
movement in foreign currency rates. liabilities within the Group are settled where possible using the currency of the liability to reduce foreign
exchange exposure. Forward foreign exchange contracts are used to manage the net foreign exchange exposure where appropriate.

19. INTEREST-BEARING LIABILITIES

(All figures £’000)

Current:
lease liabilities
Bank credit facilities
Bank loans

Non-current:
lease liabilities
Bank loan
Commercial loan

Lease liabilities are payable as follows:
less than one year
Between one and five years
More than five years

Bank borrowings are payable as follows:
less than one year
Between one and five years
More than five years

31 december
2021

31 december
2020

670
1,647
1,388

3,705

1,386
1,649
2,140

5,175

8,880

670
1,340
46

2,056

3,035
3,789
–

6,824

8,880

624
1,546
1,853

4,023

1,387
3,075
2,080

6,542

10,565

624
1,235
152

2,011

3,399
5,155
–

8,554

10,565

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

The terms and conditions of outstanding loans are as follows:

(All figures £’000)

Currency

Nominal interest rate

Year of
maturity

31 december 2021

31 december 2020

Face Value

Carrying Value

Face Value

Carrying Value

secured Bank loan

Unsecured Bank loan

Commercial loan

short-term Credit with Banks

lease liabilities

Total interest bearing liabilities

EUR

GBP

EUR

GBP

EURIBoR+2%

EURIBoR+2,5%

EURIBoR+2%

EURIBoR+1%

EURIBoR+2%

EURIBoR+1,9%

2022

2023

2022

2023

2022

2023

2022

2023

2025

2022

2023

2022

2023

2025

EURIBoR+1,75% 2025

0.44%

0.87%

0.46%

0.50%

2.50%

2.80%

1.45-1.75%

1.5%-4%

2.8%-5%

2021

2022

2021

2026

2021

2025

2021

2021–26

2021–24

168

134

168

126

503

101

503

293

101

503

335

101

251

503

168

335

342

2,055

1,760

1,658

729

13,095

217

215

193

208

151

208

257

260

265

–

2,140

1,645

1,223

833

8,880

179

143

179

134

537

107

537

313

107

537

358

107

268

537

179

358

–

339

329

267

326

280

107

330

135

346

347

352

–

342

2,055

1,620

1,771

729

342

2,080

1,546

1,575

436

13,271

10,565

The secured bank loans (other than the UK secured Bank loan) belong to Albyn Medical sl and are guaranteed by Elkargi. None of the loans, with
the exception of the commercial loan, have covenants attached to them. The commercial loan is provided by Cardiff Capital Region for the sum of
£2,055k with the first year interest free. The loan has a 1:1 cashflow covenant attached which becomes active on the third anniversary of the
commencement of the loan. The lease liabilities are detailed at Note 26.

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

GovernanceFinancial StatementsStrategic ReportNotes to the financial statements continued

20. PROVISIONS

(All figures £’000)

At 1 January 2021
Provisions made in the year
Provisions used in the year

At 31 December 2021
Non Current
Current

Warranties

dilapidations

legal & Tax

89
7
(7)

89
–
89

459
172
(221)

410
410
–

410

761
–
(578)

183
183
–

183

other

149
2
(26)

125
–
125

125

Total

1,458
181
(832)

807
593
214

807

Warranty provisions
Warranty provisions relate to Albyn own brand products and services provided and is based on historical warranty data associated with similar
products and services sold. Management expect the provision to be settled with 12 months of the year end.

Dilapidation provisions
Provisions have been made for the estimated restoration costs of the leased premises at our UK, spain, France, Germany and Belgium sites.

Provisions for dilapidations are inherently uncertain in terms of quantum and timing, not least because they involve negotiations with landlords at
future dates. The figures provided in the financial statements represent management’s best estimate of the likely outflows to the Group.

Legal and tax provisions
our tax due diligence raised some potential tax liabilities and fines which may arise in the future as a result of the business acquisition. A tax liability
was recognised at the year end within other creditors and so has been released from the provision assumed in the business combination.

Other provisions
other provisions include pensions provision of £92k as well as other staff benefit provisions which are required in local jurisdictions. Management
expect these liabilities to be settled within 12 months of the year end.

21. SHARE CAPITAL AND RESERVES

(All figures £’000)

Balance at start of period

Issue of share capital
Number of shares
Price per share (£)
share value (£’000)

Balance at 31 December

31 december
2021

31 december
2020

158

150

23,208,005
0.001
23

7,512,423
0.001
8

181

158

during the period 247,209 share options were exercised, with 3,000,000 shares being issued to an Employee Benefit Trust and 61,612 to the sIP. A
further 19,899,184 shares were issued as part of the capital raise during the year. The total number of issues in the period was 23,208,005 £0.001
ordinary shares. The Group has a single class of share: ordinary shares £0.001.

Share capital
share capital is the amount of nominal value of shares held by shareholders. At 31 december 2021 181,099,186 shares have been issued, each with
the nominal value of £0.001 equalling a share capital for the Company of £181,100. All ordinary shares rank as pari passu with regards to voting,
dividends and rights on winding up. All shares are fully paid.

Share premium
The share premium reserve comprises the difference between the nominal value and the value received on share issue offset by the costs directly
associated with obtaining the capital funding e.g. legal fees.

Merger reserve
The merger reserve reflects the difference between the existing share capital and premium of Creo Medical limited prior to share for share
exchange and the nominal value of shares issued. Refer to Note 1 Business combinations and basis of consolidation.

Share option reserve
The share option reserve reflects the cost to the Group of share options granted but not yet exercised. Refer to Note 8 share-based payments.

Retained earnings
Retained earnings including profit or loss for the year comprises the earned profit of the Group.

100

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Foreign exchange gain or loss reserve
The foreign exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations. Unrealised foreign exchange gains or losses from currency translations of foreign subsidiaries will go through other comprehensive
income and into the foreign exchange gain or loss reserve. on disposal of a foreign operation the gain or loss will become realised and recognised
as a profit or loss.

Investment reserve
Any loss or gain on our equity investments which we have elected to revalue through oCI is held in the investment reserve. This reserve will never
be recognised as a profit or loss even upon disposal of the investment. The reserve may be transferred to retained earnings one the investment is
disposed of.

22. CASH FROM SHARE ISSUE

(All figures £’000)

Share issue:
share options exercised
Issued to EBT Trust
Issued to sIP
share placing AIM 7 september 2021
Transaction costs AIM 7 september 2021

31 december
2021

31 december
2020

68
3
1
36,316
(2,180)

34,208

152
7
–
–
–

159

23. ACQUISITION OF SUBSIDIARY
Acquisition of Aber Electronics Limited
on 11 November 2021, the Group acquired 100% of the shares and voting interests in Aber Electronics limited.

Included in the identifiable assets and liabilities acquired at the date of acquisition of Aber are inputs (a warehouse, inventories) production
processes and an organised workforce. The Group has determined that together the acquired inputs and processes significantly contribute to the
ability to create revenue. The Group has concluded that the acquired set is a business.

Aber are the supplier and developer of key components for the CRoMA Advanced Energy Platform. Acquiring Aber enables the Group to mitigate
potential supply chain risks, control costs of the key components and ensure the timely development of the next generation Platform. The acquisition
is also expected to provide positive cashflows for the Group.

For the seven weeks ended 31 december 2021, Aber contributed revenue of £82k and profit of £14k to the Group’s results. If the acquisition had
occurred on 1 January 2021, management estimates that revenue would have been £650k, and profit for the year would have been £84k. In
determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of
acquisition, would have been the same if the acquisition had occurred on 1 January 2021.

A. Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred.

(All figures £’000)

Cash
Equity Instruments
settlement of pre-existing relationship

Total Consideration Transferred

1,412
380

1,792

i) Equity instruments issued
The fair value of the ordinary shares issued by Aber Electronics limited at 11 November 2021 was £17,920 per share.

ii) Contingent consideration
The Group has agreed to pay the previous directors of the company consideration of £1.2m if Aber delivers as set number of components within a
specified timeframe and key development milestones are met over the next 3 years.

Per IFRs 3 requirements this is required to be treated as remuneration. The liability will increase as milestones are met over the life of employment
with the amount being charge to the P&l. As at 31 december 2021 the P&l charge was £68k.

B. Acquisition-related costs
The Group incurred acquisition-related costs of £35k on legal fees and due diligence costs. These costs have been included in
‘administrative expenses’.

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GovernanceFinancial StatementsStrategic Report
Notes to the financial statements continued

23. ACQUISITION OF SUBSIDIARY continued
C. Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition. These numbers are
provisional as we have the option to update within 12 months if new information becomes available.

(All figures £’000)

Property, plant and equipment
Inventories
Trade receivables
Cash and cash equivalents
loans and borrowings
social security & other taxes
Trade and other payables

Total identifiable net assets acquired

Measurement of fair values

Assets acquired

Valuation technique

92
308
118
39
(47)
(64)
(121)

325

Property, plant
and equipment

Market comparison technique and cost technique: The valuation model considers market prices for similar items when they are
available, and depreciated replacement cost when appropriate. depreciated replacement cost reflects adjustments for physical
deterioration as well as functional and economic obsolescence.

Intangibles

We did not identify any intangibles which could be separated from goodwill and therefore no intangible assets were valued.

Inventories

Market comparison technique: The fair value is determined based on the estimated selling price in the ordinary course of
business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to
complete and sell the inventories.

D. Goodwill
Goodwill arising from the acquisition has been recognised as follows.

(All figures £’000)

Consideration transferred
Fair value of identifiable Assets

Goodwill

1,792
(325)

1,467

24. RELATED PARTY DISCLOSURES
As at 31 december 2021 the directors of the Company control 2.85% of the voting shares of the Company.

The remuneration of the directors of the Company is disclosed in the directors’ Remuneration Report and Note 6 above.

share options held by directors are detailed in the directors’ Remuneration Report.

Interests and related party transactions are disclosed below
Monkey Business Consultants s.l. is a company owned and managed by luis Collantes the CEo of the previous Albyn group and holds the remaining
5% of shares in the Company which will be purchased in 2022. For accounting purposes it is assumed the Group has 100% control. see accounting
policy in Note 1.

during the period total payments in the ordinary course of business to Monkey Business Consultants, s.l. consisted of £nil (2020: £11k).

Total remuneration to luis Collantes in the period was £364k (2020: £254k).

during the period the Group invested a further £1,001,709 in I.Q. Endoscopes in preference shares. As at 31 december 2021 the total fair value of the
shares was estimated to be £1,733,073. The Group controls 16.7% of the Company and is not deemed to have significant influence, therefore it has
not been classified as an associate.

ling Chen is the common law spouse of Christopher Hancock. The fees paid in the period to ling Chen totalled £23k (2020: £23k) for consultation
on the research and development projects throughout the year, with the balance payable at 31 december 2021 being £nil.

Aggregate remuneration for the period for all key management totalled £4,603k (31 december 2020: £3,279k).

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Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

(All figures £’000)

salary and other taxable benefits
Pension
sBP

25. ULTIMATE CONTROLLING PARTY
By virtue of the shareholding structure, there is no sole ultimate controlling party.

26. LEASES
The accounting policy for leases under IFRs 16 has been explained in Note 1.

12 months to
31 december
2021

12 months to
31 december
2020

3,100
82
1,421

4,603

2,668
73
537

3,278

Leases as lessee (IFRS 16)
The Group leases building facilities in the UK, Us, singapore, France, spain, Germany and Belgium. The leases typically run for a period of 3 to 10
years, with an option to renew the lease after that date. lease payments are renegotiated every five years to reflect market rentals. some leases
provide for additional rent payments that are based on changes in local price indices. For certain leases, the Group is restricted from entering into
any sub-lease arrangements.

The Group leases equipment under a number of leases, which were classified as finance leases under IAs 17.

The Group leases other equipment with contract terms of 1 to 5 years. These leases are short-term and/or leases of low-value items. The Group has
elected not to recognise right-of-use assets and lease liabilities for these leases.

Information about leases for which the Group is a lessee is presented below.

i) Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant
and equipment.

2021
All figures £’000

Balance at 1 January
depreciation Charge
Additions to right of use assets
disposals of right of use assets
Exchange difference

Balance at 31 December

land and
buildings

Plant and
machinery

Motor
Vehicles

1,620
(506)
847
(103)
(26)

1,832

136
(37)
–
–
(8)

235
(108)
–
–
(15)

112

Total

1,991
(651)
847
(103)
(49)

2,035

Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

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Notes to the financial statements continued

26. LEASES continued
ii) Lease liabilities

Maturity Analysis – contractual discounted cash flows (All figures £’000)

less than one year
one to five years
More than five years

Total discounted lease liabilities at 31 December

Lease liabilities included in the statement of financial position at 31 December

Current
Non-current

iii) Amounts recognised in profit or loss

2021 – leases under IFRs 16
All figures £’000

depreciation on right of use asset
Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases of low value assets

(670)
(1,340)
(46)

(2,056)

(670)
(1,386)

(2,056)

651
54
–
–

iv) Extension options
some property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are
exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise
the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant
changes in circumstances within its control. As at 31 december 2021 no lease extension is expected to be taken by the Group.

27. CAPITAL COMMITMENTS
The amounts contracted for but not provided for as at 31 december 2021 are £nil (31 december 2020: £nil).

28. SUBSEQUENT EVENTS
Heads of Terms signed
The Company has entered into non-binding heads of terms (the “HoTs”) with a number of parties which relate to the licensing of the Company’s
spydrBlade, Cool Plasma and MicroBlate technologies. As outlined previously, Creo is developing its business through a three tiered Build, Buy
and Partner strategy. Having already demonstrated execution on the Build and Buy elements, the Partner strategy aims to create shareholder value
through granting third-party access to Creo’s advanced energy technology in markets adjacent to those where the Company is already operating.
This includes fields such as laparoscopic surgery, robotically assisted surgery, and non-thermal plasma sterilisation.

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Parent Company statement of financial position

(All figures £’000)

Assets
Non-current assets
Investments in subsidiaries
Property, plant and equipment
Investments
other assets

Current assets
Trade and other receivables
Cash and cash equivalents

Total assets

Liabilities
Current Liabilities
Trade and other payables

Non-Current Liabilities
other liabilities

Total Liabilities

Shareholders’ equity
Called up share capital
share premium
Financial Assets at fair value through other comprehensive income
share option reserve
Accumulated losses

Total equity and liabilities

Note

31
32

As at
31 december
2021

As at
31 december
2020*

26,791
4,563
1,733
89,131

122,218

80
37,321

37,401

25,265
–
500
58,963

84,728

443
37,571

38,014

159,619

122,742

3,911

2,000

–

3,911

1,446

3,446

181
149,448
231
7,182
(1,334)

155,708

158
115,263
–
4,617
(742)

119,296

159,619

122,742

* The prior year comparative has been restated to show the split between non-current and current liabilities. The trade and other receivables and

trade and other payables for the prior year have also been restated. see Note 34 for more details.

The Company has taken the s408 exemption from presenting a separate profit and loss for the period.

These financial statements on pages 111 to 115 were approved by the Board of directors on 22 May 2022 and were signed on its behalf by:

Richard Rees
Director

Company registered number: 10371794

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Parent Company statement of changes in equity

(All figures £’000)

Balance at 1 January 2020

Total comprehensive income for the year
Profit for the financial year
other comprehensive income

Total comprehensive income

Transactions with owners, recorded directly in equity
Issue of share capital
Equity settled share-based payment transactions

Balance at 31 December 2020

Total comprehensive expense for the year
Profit for the financial year
other comprehensive income

Total comprehensive expense

Transactions with owners, recorded directly in equity
Issue of share capital
Equity settled share-based payment transactions

Called up
share capital

Accumulated
losses

Note

share
premium

150

(2,217)

115,112

–
–

–

8
–

1,475
–

1,475

–
–

–

–
–

152
–

158

(742)

115,264

Financial
Assets at fair
value through
other
comprehensive
income

–

–
–

–

–
–

–

share option
reserve

Total
equity

3,889

116,934

–
–

–

–
728

1,475
–

1,475

160
728

4,617

119,297

–
–

–

23
–

(592)
–

(592)

–
–

–

–
231

231

–
–

–

(592)
231

(361)

–
–

34,184
–

–
–

–
2,565

34,207
2,565

Balance at 31 December 2021

181

(1,334)

149,448

231

7,182

155,708

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Creo MediCal Group pl C ANNUAl R EPoRT AN d ACCo UNTs 2021

Parent Company notes to the financial statements

29. PARENT COMPANY FINANCIAL STATEMENTS
As permitted by section 408(3) of the Companies Act 2006, a separate statement of Comprehensive Income, dealing with the results of the
Parent Company, has not been presented. The Parent Company loss for the period ended 31 december 2021 is £592k (2020: profit £1,475k).

30. PARENT COMPANY ACCOUNTING POLICIES
To the extent that an accounting policy is relevant to both the Group and Company financial statements, refer to the Group financial statements for
disclosure of the accounting policy.

Basis of preparation
These financial statements were prepared in accordance with Financial Reporting standard 101 ‘Reduced disclosure Framework’ (“FRs 101”). In
preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international
accounting standards (“Adopted IFRss”), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out
below where advantage of the FRs 101 disclosure exemptions has been taken.

In these financial statements the Parent Company has taken advantage of the following disclosure exemptions under FRs 101:
• A Cash Flow statement and related notes;
• Comparative period reconciliations for share capital;
• disclosures in respect of transactions with wholly owned subsidiaries;
• Comparative period reconciliations for PPE;
• The effects of new but not yet effective IFRss;
• disclosures in respect of the compensation of Key Management Personnel;
• disclosures of transactions with a management entity that provides key management personnel services to the Company; and
• Certain disclosures required by IFRs 7 Financial Instrument disclosures.

As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRs 101 available in
respect of the following disclosures:
•
• Certain disclosures required by IAs 36 Impairment of Assets in respect of the impairment of goodwill and indefinite life intangible assets; and
• Certain disclosures required by IFRs 3 Business Combinations in respect of business combinations undertaken by the Company.

IFRs 2 share-Based Payments in respect of Group-settled share-based payments;

The accounting policies set out above have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in the next year, are discussed in Note 1 Critical accounting judgements and policy update.

Investments in subsidiaries are carried at cost less impairment.

31. INVESTMENTS

(All figures £’000)

Cost:
As at 1 January 2018
Capital Contribution
As at 31 december 2018
Capital Contribution
As at 31 december 2019
Capital Contribution
Albyn Acquisition
As at 31 december 2020
Capital Contribution
As at 31 december 2021

Investment
in subsidiary
companies

1
642
643
658
1,301
324
23,640
25,265
1,526
26,791

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GovernanceFinancial StatementsStrategic ReportParent Company notes to the financial statements continued

31. INVESTMENTS continued
The Company has the following investments in subsidiary companies:

subsidiary

domicile

status

Registered office address

Creo Medical limited

Creo Medical, Inc.

Trading

Creo Medical Innovations limited UK

Trading

Class of
shares held

ordinary

ownership

ownership
Type

100%

direct

Creo House, Unit 2 Beaufort Park, Beaufort Park
Way, Chepstow, Wales NP16 5UH

100 Reserve Road, suite B400, danbury, CT 06810,
UsA

ordinary

100% Indirect**

Creo House, Unit 2 Beaufort Park, Beaufort Park
Way, Chepstow, Wales NP16 5UH

ordinary

100% Indirect**

Creo Medical Ireland limited

Ireland

dormant

70 sir John Rogerson’s Quay, dublin 2, Ireland

ordinary

100% Indirect**

Creo Medical PTY

Australia

dormant

Colin Biggers & Paisley level 42 2 Park street
sydney, NsW 2000

ordinary

100% Indirect**

Creo Medical PTE ltd

singapore dormant

20A Tanjong Pagar Road, singapore (088443)

ordinary

100% Indirect**

Creo Medical sl
(formerly Albyn Medical sl)

Creo Medical sAs
(formerly Albyn Medical sAs)

spain

Trading

Cordovilla (Nevarra), Poligno Industrial Cordovilla,
calle d, Munero 1

ordinary

100%*

direct

France

Trading

9 Avenue Jean Prouve, 88100 sain-des-Vosges

ordinary

100%*

Indirect**

Creo Medical UK limited
(formerly Albyn Medical limited)

Premier Endoscopy

Trading

Kintail House, Beechwood Park, Inverness
IV2 3WB

ordinary

100%*

Indirect**

dormant

Creo House, Unit 2 Beaufort Park, Beaufort Park
Way, Chepstow, Wales NP16 5UH

ordinary

100%*

Indirect**

Creo Medical GmbH (formerly
Endo-Technik Wolfgang Griest
GmbH)#

Germany

Trading

Vertrieb und Handelmit medizinischen Geraten,
langenfeld

ordinary

100%*

Indirect**

Wiest Uropower limited

Germany

Trading

Creo House, Unit 2 Beaufort Park, Beaufort Park
Way, Chepstow, Wales NP16 5UH

ordinary

100%*

Indirect**

Boucart Medical sRl

Belgium

Trading

1070 Anderlecht, rue des Vétérinaires 42, Belgium ordinary

100% Indirect**

Aber Electronics limited

Trading

Creo House, Unit 2 Beaufort Park, Beaufort Park
Way, Chepstow, Wales NP16 5UH

ordinary

100% Indirect**

* Monkey Business Consulting sl retained 10% of the shares in Albyn as at 31 december 2021. A further 5% of the shares were purchased by the Company in March 2022. The Group has an obligation

to purchase the remaining 5% of shares by the end of 2023. For accounting purposes it is assumed the Group has 100% control see accounting policy in Note 1.

** Creo Medical limited holds 100% of the shares in these entities.

*** Creo Medical sl holds 100% of the shares in these entities.

# during the year Endo-Technik and Pauldrach merged to become Creo Medical GmbH.

Creo Medical Innovations limited (Company registration number: 11196260), Aber Electronics limited (Company registration number:07400511), Wiest Uropower limited (Company registration
number 05781601) and Creo Medical UK limited (Company registration number: sC128038) is exempt from the requirements to file audited financial statements by virtue of section 479A of the
companies act 2006. In adopting the exemption, Creo Medical PlC has provided a statutory guarantee to this subsidiary in accordance with section 479C of the companies Act 2006.

32. PARENT COMPANY FIXED ASSETS

(All figures £’000)

Cost:
At 1 January 2021
Additions

At 31 December 2021

Accumulated Depreciation:
At 1 January 2021
Charge for period

At 31 December 2021

land &
Buildings

Assets under
Construction

–
4,507

4,507

–
52

–
108

108

–
–

–

Total

–
4,615

4,615

–
52

Net book value at 31 December 2021

4,455

108

4,563

Assets under construction in the period relate to the improvements to the additional building purchased opposite of Creo House at Chepstow.

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33. PARENT COMPANY TRADE AND OTHER RECEIVABLES

(All figures £’000)

Current:
other debtors
social security and other taxes
Prepayments

Total current

Non-current:
Amount owed by subsidiary undertaking

Total non-current

Total trade and other receivables

31 december
2021

Restated*
31 december
2020

19
20
41

7
434
1

442

89,131

58,963

89,211

59,405

* other debtors in the prior year was £1,047k before restatement. see Note 15 for restatement of prior year debtor and creditor balances.

Amounts owed by subsidiary undertakings are unsecured and repayable on demand. An expected credit loss provision was calculated for the other
debtors and amounts owed by subsidiary balances; both were deemed immaterial and therefore not recognised.

34. PARENT COMPANY TRADE AND PAYABLES

(All figures £’000)

Current:
derivatives
other creditors

Total current

Non-current:
other creditors

Total trade and other payables

31 december
2021

Restated*
31 december
2020

100
3,811

3,911

–

3,911

–
2,000

2,000

1,446

3,446

* Prior year other creditors have been restated by £1,039k from £4,485k to £3,446k. see note 15 for restatement of prior year debtor and creditor

balances. In the Parent company, prior to this restatement there was an error in the classification between non-current and current liabilities of the
other creditors line in relation to this element of contingent consideration recognised as a liability in the prior year. Therefore the restatement is
split between current other creditors which have been reduced by £2,485k from £4,486k to £2,000k and non-current other creditors which have
been increased by £1,446k from £nil to £1,446k.

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Anything is possible
with the right approach

Creo Medical Group plc
Creo House
Unit 2, Beaufort Park
Beaufort Park Way
Chepstow
Wales NP16 5UH
United Kingdom

Tel: +44 (0) 1291 606005
Email: info@creomedical.com
www.creomedical.com