SDI Group Regulatory News (SDI)

SCIENTIFIC DIGITAL IMAGING PLC

Final Results for the year ended 30 April 2014

Cambridge, UK: Scientific Digital Imaging (AIM: SDI, "SDI" or the "Company"), the AIM quoted group that builds and sells scientific instruments based on digital imaging technology, predominantly for applications in the life sciences, announces today its final audited results for the year ended 30 April 2014.

Financial Highlights

· Revenue £7.0m (2013: £7.7m)

· Operating profit for the year of £123k before costs of acquiring Opus Instruments, costs of reorganisation, currency losses and share based payments (2013: £300k).

· Basic loss per share was 0.16p per share (2013: earnings 1.05p)

· Expenditure on research and development in the current year was £687k, representing 9.8% of Group sales (2013: £600k representing 7.8% of Group sales)

Operational Highlights

· Successful equity fundraising of £850,000 (before expenses) to enable a loan note repayment and to reinvest in the business

· The acquisition of Opus Instruments, which develops, manufactures and sells an infrared imaging system designed specifically for art conservators to capture high-resolution images behind the painting. The company brings profits and technology that can be used within our group of digital imaging companies

Commenting on the results, Ken Ford, Chairman of SDI said: "The Board expects SDI to make steady progress over the coming financial year as we continue to pursue our strategy of organic and acquisitive growth".

--ENDS--

FOR FURTHER INFORMATION

Scientific Digital Imaging Plc 01223 727144

Ken Ford, Chairman

Mike Creedon, Chief Executive Officer

www.scientificdigitalimaging.com

finnCap Ltd. 020 7220 0500

Ed Frisby/ Ben Thompson - Corporate Finance

Mia Gardner - Corporate Broking

JW Communications

Julia Wilson - Investor & Public Relations 0781 8430877

Note to Editors

About Scientific Digital Imaging Plc

Scientific Digital Imaging Plc (SDI) is focused on the application of digital imaging technology to the

needs of the scientific and technology community. Its principal subsidiary is Synoptics Limited, which

designs and manufactures special-purpose instruments for use mainly in the life sciences, supplying

customers in the academic, research and health sectors. Within Synoptics, the recently formed

Synoptics Health division has launched the Synoptics Health ProReveal system. This patented

system offers a highly sensitive fluorescence-based test to detect dirty surgical instruments in

hospitals and aims to reduce incidences of cross contamination of patients. Under the Atik

brand, SDI designs and manufactures high-sensitivity cameras for both astronomical and life science

applications. In addition, the recently acquired Opus Instruments, designs and manufactures an infrared imaging system specifically for art conservators to capture high-resolution images behind paintings.

 www.scientificdigitalimaging.com

STRATEGIC REPORT

Chairman's statement

Overview

During this period to April 2014 in competitive global trading conditions, Scientific Digital Imaging Plc ("SDI") reported a profit before, acquisition cost, reorganisation costs, currency losses and share based payments. Following a loss in the first half the Group delivered a profit in the second half achieved through the implementation of on-going cost efficiencies and the Group has continued to implement cost savings in the new financial year.

With the acquisition of Opus Instruments and advances in SDI's in-house product development programmes, we now have several newly launched and attractively priced automated systems in our product range for which demand is increasing and the Board is optimistic that SDI is positioned for growth.

Financial results

Revenue for the year ended 30 April 2014 was £7.0m (2013: £7.7m). This has resulted in an operating profit for the year of £123k (2013: £300k) before costs of acquiring Opus Instruments, costs of reorganisation, currency losses and share based payments. Basic loss per share was 0.16p and diluted loss per share was 0.16p.

The acquisition of Opus Instruments was completed towards the end of SDI's financial period and accordingly Opus trading will first have a full year effect in the year to April 2015. The Synoptics Health Division has made further sales of its ProReveal product, with 26 demonstration units sold around the world to date. The Division continues to target the key hospital washroom market sector and has had success with ProReveal in the decontamination products market sector re-engineering the test with a view to further adoption and SDI expects to make continued progress with ProReveal in the financial year to 30 April 2015.

Strategy

In the financial year SDI has focused on improving the underlying business. In the year, the Group acquired Opus Instruments, which develops, manufactures and sells an infrared imaging system designed specifically for art conservators to capture high-resolution images behind the painting. The company brings profits and technology that can be used within our group of digital imaging companies.

SDI continues to assess new businesses with complementary imaging product portfolios. SDI will also continue to invest in its current operations to take advantage of the under-exploited rapid microbiology testing and healthcare sectors where SDI's new products are currently well positioned for growth in the US markets.

Staff

On behalf of the Board, I would like to thank our staff for their efforts during the year.

Current Trading and Outlook

In the financial year to the end of April 2014, SDI recommenced its acquisition strategy and continued to make process improvements to maintain the Group's skill base and output capability. During the year, the Synoptics group invested in quality systems and achieved ISO 9001 certification. This demonstrates the group's commitment to achieving greater consistency and quality of its product portfolio and service offerings. The Group believes this will improve efficiency and productivity, as well as allow Synoptics' companies to submit applications for a wider number of tenders.

This will stand SDI in good stead in the coming year in North America where there is renewed awareness of our Synbiosis products as well as new interest in the Synoptics Health products too. To capitalise on this, Synbiosis and Synoptics Health Divisions have both appointed North American distributors that are actively marketing these portfolios via their sales forces and promotional campaigns. We will continue to promote our products globally but will focus on developing our North American market for Synoptics Health and Synbiosis unique ProReveal and ProtoCOL 3 technologies.

Opus Instruments has now achieved its first sales under SDI's ownership and the Board believes that this will form an important part of SDI's future growth.

Atik, our camera brand, has continued to grow its share of the astronomy market and continues to increase revenues for the fourth successive year. The new revenue stream, OEM sales, continues to expand its product portfolio with sales increasing year on year.

The Board expects SDI to make steady progress over the coming financial year as we continue to pursue our strategy of organic and acquisitive growth. We believe our growth in Asia will continue, driven by their need for excellent automation in the life sciences sector. With this and the renewed interest in our products in North America, particularly in the rapid microbiology testing and healthcare sectors, the Board has a positive view for success in the current financial year.

Ken Ford

Chairman

8 August 2014

Chief Executive's Operating Report

SDI designs and manufactures digital imaging technology for use by the scientific community, through its Synoptics brands (Syngene, Synoptics Health, Synbiosis, and Syncroscopy), the Artemis CCD Company brands (Atik Cameras and Artemis CCD Cameras) and the Opus Instrument brand (Osiris)

Synoptics

Synoptics designs and manufactures scientific instruments based on digital imaging, for the life science research, microbiology, healthcare and microscopy markets. The Divisions offer its products under marketing brands including G:BOX, PXi, ProtoCOL, AutoMontage and ProReveal, each targeting a different sector of these markets.

Syngene

Syngene remains the largest Synoptics' Division and accounted in the period for 80 percent of the Synoptics' turnover. The Division provides systems and software for visualising and analysing gels and blots used by scientists studying molecular biology and protein expression. Almost all research in biological sciences requires an understanding of molecular processes involving DNA, RNA and proteins, so the use of gel electrophoresis and Western blotting still underpins the work of many laboratories in this sector.

The market for image analysers is mature, with many companies offering this type of equipment. Syngene recognises that as well as being competitively priced it has to differentiate itself on service, which is why Syngene invested in gaining ISO 9001 certification this year and continues to provide good technical support for its products. In February 2014, VWR one of Syngene's biggest distributors in Europe, recognised Syngene with the best life science support award showing that in Europe, Syngene's customer and technical support is a competitive advantage.

As many companies are producing inexpensive imagers in this sector, Syngene has experienced pricing competition because research budgets continue to be restricted. This issue is being addressed by Syngene with the introduction of a new low cost imager, the T:Genius. Currently, this is the only commercial available imaging system where the software controlling it can be accessed remotely by tablet, allowing scientists to share results with peers in other labs anywhere in the world. This new imager was launched at the major international trade show, Analytica in Germany, where it received positive feedback from prospective customers and Syngene distributors. Syngene is expecting interest in this unique system to convert to sales in Europe and the US in the next quarter.

To ensure Syngene's higher end G:BOX imaging systems continue to be competitively priced and generate good gross margins, the product portfolio has been re-engineered to include new cameras. The result is that at ArabLab in 2014, Syngene introduced the new G:BOX Chemi XRQ gel doc system. This mid-range unit performs well with different gel and Western blot types and is winning sales in head to head comparisons against a major competitor's new imaging system. This imager is currently finding favour in European laboratories, where it is being sold to replace older Syngene units or competitor systems and Syngene expects good sales growth for this product in 2014 and 2015.

Two further high end imaging systems, the G:BOX Chemi XX6 and XX9 imagers have also been introduced in 2014 as a result of portfolio redevelopment. These units can image more complex 1D and 2D gels, as well as different blot types. They are popular in core facilities and are being purchased by prestigious research institutes with larger research budgets, such as the Karolinska Institute in Sweden.

With the combination of good North America and European sales and support teams now in place, competitively priced new imaging systems and the ability to tender for more contracts, Syngene believes the division is better placed to achieve its sales targets in the forthcoming year.

Synoptics Health

The Synoptics Health Division markets and supplies ProReveal, an automated viewer and fluorescence-based spray test to detect microgram amounts of protein remaining on surgical instruments after the decontamination process.ProReveal is the only commercial test on the market which complies with new recommendations for preventing iatrogenic variant Creutzfeldt - Jakob disease (vCJD) infections.

ProReveal is a disruptive technology and is unlike any other test for detecting proteins on surgical instruments because it utilises much more sensitive fluorescence instead of colorimetric detection. It offers a highly sensitive alternative to swabbing techniques and tests the whole instrument for protein, rather than just a small, swabbed area. Taking less than 5 minutes to carry out, ProReveal generates results as a visual display of the presence (or absence) of any protein and these results can be documented and archived as proof of process cleanliness. Promoting this alternative detection method has required a re-education process in Sterile Services Departments (SSDs) in hospitals, where the system is most applicable and uptake of the technology by SSDs has been slower than anticipated.

To date, 26 demonstration units have been sold globally. In the UK, Synoptics Health's UK distributor has installed a further two ProReveal systems during the period, one in Serchem, a major washroom detergent manufacturer, and a second to an ultrasonic bath decontamination supplier. Both suppliers are using the ProReveal as a validation tool for their decontamination products and processes and this is a market sector, which although smaller than the hospital washroom market, is embracing this new technology.

To capitalise on this untapped sector of decontamination product suppliers, Synoptics Health is actively marketing ProReveal to these manufacturers and the system is currently being trialled by a major international washer manufacturer for inclusion in every washer suite they install. Additionally, Synoptics Health has redesigned the ProReveal viewer software to include an analytics module and is also introducing a test diagnostic, called the ProReveal Tag. The software will provide information on the performance of different operatives, tray positions in washers, as well as different washers and reagents used in the decontamination process. The tag which is a stainless steel slide coated with a known amount of protein, will indicate how effectively the decontamination process is performing. Synoptics Health believes developing ProReveal to appeal to this sector will lead to further sales growth in the coming year and could encourage AEDs (Authorising Engineers Decontamination) in hospital research departments (a large untapped market) to review the technology too.

Synoptics Health continues to have a first mover advantage with ProReveal in the healthcare market sector internationally. To exploit this, Synoptics Health has appointed a network of six new distributors throughout Europe in the period. Since there has been interest in the product in North America, where there have been recent issues in 2013 with vCJD contamination via surgical instruments, Synoptics Health in 2014 partnered with a US distributor. The distributor has extensive experience of surgical instrument decontamination in US SSDs and a network of customers there that are keen to see the technology. Ultra Clean is actively promoting ProReveal at major trade shows and the system will be presented in a speaker session by an infection control expert at the Canadian Association of Medical Device Reprocessing (CAMDR) in October 2014.

The re-engineering of ProReveal to position the test as a validation diagnostic in combination with a stronger US and European presence will lead to better sector penetration and further sales of ProReveal in 2014 and into 2015.

Synbiosis

The Synbiosis Division provides systems for microbiologists to automatically count and measure microbial colonies with its ProtoCOL 3 and aCOLyte 3 brands. These instruments are used for microbiological testing in the food, water and pharmaceutical markets and benefit users by reducing labour costs, providing more reproducible results, and automatic recording data for audit purposes, an area which is becoming increasingly important as microbiological testing becomes more regulated.

In 2014, the ProtoCOL 3 automated high end colony counter with the addition of the Synstats statistical analysis software, continued to be popular. This software, which is compatible with new European Pharmacopoeia/US Pharmacopeia regulations allows microbiologists to rapidly obtain potency data from their zone measurements or colony count results and is making the ProtoCOL 3 system appealing to contract research, biotech and pharmaceutical companies that are testing or developing antibiotics and vaccines. To further promote the use of the SynStats software, Synbiosis has launched a training video via social media channels and this is being well received with existing and potential ProtoCOL 3 customers.

To capitalise on the application of ProtoCOL 3 in the fast growing vaccine and antibiotic development space, which is active in the US, Synbiosis has appointed Microbiology International, a well-established distributor of microbiology automation products as its North American distributor in 2014. MIL is actively promoting the ProtoCOL 3 under its EZ-Count brand via an online campaign and sales network. Synbiosis expects to see the results of this increased activity with sales growth in this territory throughout 2014 and into 2015.

In 2014, after the period Synbiosis entered the lucrative market of rapid microbiology testing with the launch of new software for the ProtoCOL 3 at the major US trade show, the American Society of Microbiology (ASM) annual meeting. The software used exclusively with the ProtoCOL 3 will automatically recognise and identify different types of microorganisms based on colony colour and was developed in collaboration with CHROMAgar, one of the world's largest suppliers of chromogenic media.

This product was well received at the ASM meeting because no other commercial colony counter currently in the microbiology market can both count and identify microorganisms simultaneously. Since the identification software provides ProtoCOL 3 with another competitive advantage, Synbiosis expect good sales growth of the ProtoCOL 3 especially in the large food, beverage and clinical sectors, where ProtoCOL 3 previously could not offer a rapid microbial identification product.

Syncroscopy

The Syncroscopy Division provides digital imaging software to microscope users. Its main product, AutoMontage is a software package that allows customers to overcome the severely limited depth of field in an optical microscope. In 2014, Syncroscopy introduced a new product for in-focus 3D microscope imaging, which can be attached to any microscope with a camera port. The system consists of a Scopepad 500, a touch screen microscope tablet with integrated camera and the Montage Pad App, derived from the AutoMontage software. Since the system offers an inexpensive, yet rapid method of generating perfectly in-focus images of 3D samples, Syncroscopy believes this will generate new sales revenue for the division.

Artemis CCD

Artemis CCD which was acquired by SDI in October 2008 designs and manufactures high-sensitivity cameras. These are sold to life science and industrial applications under its Artemis CCD brand and for deep-sky astronomy imaging as Atik.

Artemis CCD (brand)

During the past year, Artemis CCD brand continued its business with its established OEM customers and started to expand into a new product sector as well as extending its territorial reach. Over the last 12-18 months, growth has returned to the solar photovoltaic energy sector. The focus is on Asia with many European manufacturers of assembly lines quick to respond. Artemis CCD provides cooled CCD cameras ideal for electroluminescence testing of silicon solar cells, strings and panels. The appointment of a Taiwanese and Chinese distributor working in tandem with our direct sales in Europe provides a solid base for growth in a new sector, parallel with more traditional life sciences. In order to provide the most suitable product for the market, the VS range introduced last year has been upgraded to provide faster image acquisition times while maintaining high levels of image quality.

Atik

Atik sales increased during the year to give us our fourth successive year of growth. This growth was spread evenly over our established markets in Europe and North America. The introduction of improved sensors by Sony has enabled us to introduce new camera models based on current designs to meet customers' requirements for high performance and good value.

At the beginning of the year we identified Australia and Japan as countries where we had the potential to increase our presence. New dealerships have been established in both these countries and have resulted in sales to these areas more than doubling. With continued advertising and promotion we feel that we have the potential to see further growth in these markets.

Atik introduced two new platforms in 2013-14. The Atik One features an internal filter wheel which provides integrated solution for producing colour images and narrow band images from monochrome cameras. This reduces the complexity of what can prove a challenging hobby. The other new camera is the Atik GP which has a high frame rate and resolution to enable planetary imaging to be undertaken. In addition its sensitivity provides a cost effective guiding solution where the GP is used in addition to a main imaging camera. Atik has been able to introduce updates to its software which is provided to both new and existing customers.

Opus Instruments

Opus Instruments manufactures the Osiris infrared imaging system designed specifically for art conservators to capture high-resolution images of information not visible to the eye. The system of a camera linked to a microcontroller sends acquired infrared data to a PC via a USB connection, where it is assembled and displayed on screen into an image of the under drawing.

SDI acquired Opus Instruments in early 2014 because the company offers a niche technology, which is complementary with SDI imaging portfolio. To date, SDI has utilised its imaging expertise and will introduce a touch screen version of the Osiris system that will allow remote access to the software by tablet, so that art conservators can share results with colleagues in other galleries anywhere in the world. SDI has also appointed a sales manager for Opus Instruments and is actively promoting Osiris in Europe and the US, where many galleries and museums are expressing interest in seeing the re-engineered system.

Since Opus was acquired near the end of SDI's financial period, Opus's trading will have a full year effect in 2014/5 and the Board believes the redeveloped Osiris system and increased marketing activities will contribute to positive sales growth.

Summary

At Synoptics, Syngene has introduced the T:Genius and three new re-engineered G:BOX systems for image capture, for which there is increasing international interest. The Synbiosis ProtoCOL 3 continues to be popular and the new rapid microbiology identification software for this system will stimulate sales of this product in new and existing market sectors, especially in North America. The re-engineering of the ProReveal and the new global distribution network including a strong North American presence will see successes in the decontamination sector, ensuring forecast sales are positive.

Artemis CCD continues to make an increasing contribution to the SDI Group thanks to both intra-group revenues to Synoptics and to growth in its amateur astronomy market.

Finally, SDI has implemented significant cost savings over the last two years and will continue these on-going efficiencies into the new financial year

Mike Creedon

Chief Executive Officer

8 August 2014

Strategic review

Principal activity and business review

Scientific Digital Imaging Plc (SDI) is focused on the application of digital imaging technology to the needs of the scientific community. Its principal subsidiary is Synoptics Limited, which designs and manufactures special-purpose instruments for use mainly in the life sciences, supplying customers in the academic and research sectors. In October 2008 SDI acquired the entire share capital of Artemis CCD Limited and Perseu Comercio De Equipamento Para Informatica E Astronomia SA (Perseu) (now marketed under the brands Atik Cameras and Artemis CCD Cameras), companies that design and manufacture high-sensitivity cameras for both astronomical and life sciences applications and whose products are used in instruments manufactured by Synoptics Limited.

The Board intends to pursue a strategy of acquiring digital imaging or related companies, as well as seeking to generate organic growth. The Board believes there are many businesses operating within the market, a number of which have not achieved critical mass, and that this presents an ideal opportunity for consolidation. This strategy will be primarily focused within Europe but, where opportunities exist, acquisitions in the United States and elsewhere will also be considered. The acquisition of Artemis and Perseu represented the first step in the implementation of this strategy. The acquisition strategy continued with the recent acquisition of Opus Instruments.

The Chairman's Report and Chief Executive's Operating Report give an overview of the performance of the Group during the year and likely future developments.

Key Performance Indicators

The key financial performance indicators (KPI's) used to monitor the business include the order pipeline, revenue, gross profit, operating profit, cash and earnings per share. The KPI's are reviewed on a monthly basis against budget by the Directors and management in respect of changes within periods and changes between reporting periods.

The non-financial key performance indicator is to monitor research and development projects to project management targets.

Group Summary

Group revenue for the year decreased by 9.1% to £7.0m (2013: £7.7m).

Gross profit decreased to £4.0m (2013: £4.4m) with increased gross margins at 57.1% (2013: 56.9%).

Operating profit for the year was £123k (2013: £300k) before acquisition costs £28k (2013: nil), reorganisation costs of £22k (2013: £14k), currency losses £66k (2013: £2k) and share based payments of £6k (2013: £4k).

Investment in R&D

Total research and development in the current year was £687k, representing 9.8% of Group sales (2013: £600k representing 7.8% of Group sales). Under IFRS we are required to capitalise certain development expenditure and in the year ending 30 April 2014 £472k (2013: £430k) of cost was capitalised and added to the balance sheet. This expenditure represents the Group's investment in new product development. The amortisation charge for 2014 was £307k (2013: £247k). The carrying value of the capitalised development at 30 April 2014 was £802k (2013: £637k) to be amortised over three years.

Reorganisation Costs

The Board constantly carries out a thorough review of the operations and structures of the Group and £22k of costs from the review and reorganisation were incurred in 2014.

Earnings per Share

Basic loss per share for Group was 0.16p (2013: earnings 1.05p), diluted loss per share for the Group was 0.16p (2013: earnings 1.01p).  

Finance Costs and Income

Net financing expense was £39k (2013: £67k). Loan stock interest charges for the year were £11k (2013: £34k).

Taxation

The tax charge of £nil (2013: £21k) is largely due to the deferred tax charge in the Group, offsetting any current tax credits.

Cash Flow

During the year the Group improved cash flow, reporting a cash balance of £539k (2013: £388k) at the year end.

Funding and Deposits

The Group utilises short-term facilities to finance its operations. The Group has one principal banker with an invoice discounting facility and bank loan. Surplus funds are placed on short-term deposit.

The Group utilises long-term borrowings from bank loans, other loans and finance leases.

Principal risks and uncertainties

The following represents, in the opinion of the Board, the principal risks of the business. It is not a complete list of all the risks and the priority, impact and likelihood of the risks may change over time.

Dependence on key distributors

Failure to effectively manage our distributors of products could damage customer confidence and adversely affect our revenues and profits.

In order to mitigate this risk the Group has a team dedicated to maintaining close relationships with our distributors.

Competition

Competition from direct competitors or third party technologies could impact upon our market share and pricing.

In order to mitigate this risk the Group continues to invest in researching its markets and continues to offer new products to changing customer preferences. In addition the Group invests in research and development to maintain its competitive advantage.

Currency Translation

The results for the Group's overseas businesses are translated into Pounds Sterling at the average exchange rates for the relevant year. The balance sheets of overseas businesses are translated into Pounds Sterling at the relevant exchange rate at the year end. Exchange gains or losses from translating these items from one year to the next are recorded in other comprehensive income.

As with the majority of international companies, the Group's UK and overseas businesses purchase goods and services, and sell some of their products, in non-functional currencies. Where possible, the Group nets such exposures or keeps this exposure to a minimum. The Group's principal exposure is to US Dollar and Euro currency fluctuations

Going concern

The company's business activities, together with the factors likely to affect its future development, performance and position are set out within the Strategic report. The financial position of the company, its cash flows, liquidity position and borrowing facilities are described within the Strategic report. In addition, notes to the financial statements include the company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Board have prepared forecasts for the period to 30 April 2016. These reflect the sales projections for the recent acquisition, Opus Instruments Limited, new products coming on stream as a result of the Group's research and development activity and continued cost management. The Group meets its cash flow and borrowing requirements through an invoice discounting facility which is a 12 month rolling contract due for renewal in November 2014 and a bank loan. The Board's forecasts indicate that the Group will continue to trade within its existing facilities with scope to further manage its cost base if necessary. The Board are confident that continued focus on research and development, new product development and sales & marketing will deliver growth. Whilst there is no certainty in the current economic conditions with regard to the sales projections contained within the forecasts, the Board are confident that these are realistic in light of recent trading and have received no indication that the existing facility will not continue to be available during the forecast period. They consider that the Group will have adequate cash resources within its existing facilities to continue to trade for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Acquisition strategy

The Board plans to make acquisitions of businesses if the targets fit appropriately into the Group by strengthening our product range and existing technologies, offering new and attractive routes to markets, high performance and motivated management, and a proven track record.

The successful implementation of our acquisition strategy depends on our ability to identify targets, in completing the transactions, to achieve an acceptable rate of return, and to successfully integrate the business in a timely manner post acquisition.

An example of the acquisition strategy is the recent acquisition of Opus Instruments Limited. The deal provided SDI with an existing product, Osiris, which is used to examine works of art, but also with an infrared camera technology with other potential digital imaging applications. The acquisition is expected to be cash generative in the year ending April 2015.

Summary

The reorganisation of the Group is now complete and it is in a position to offer competitive products at competitive prices whilst achieving improved gross margins.

Mike Creedon

Chief Executive Officer

8 August 2014

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF CASHFLOWS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

note 1 SEGMENT ANALYSIS

Management consider that there is a single operating segment being the supply of digital imaging equipment, encompassing Synoptics three marketing brands: Syngene, Synbiosis, Syncroscopy and the Atik brand which is used within Synoptics brands and sold externally to the amateur astronomy market. Each of the brands have a number of products and whilst sales performance of each brand are monitored, resources are managed and strategic decisions made on the basis of the Group as a whole.

The geographical analysis of revenue by destination and non-current assets (excluding deferred tax) by location is set out below:

note 2 TaxATION

Reconciliation of effective tax rate

The Group takes advantage of the enhanced tax deductions for Research and Development expenditure in the UK and expects to continue to be able to do so.

note 3 Deferred tax

Deferred tax assets are recognised for tax losses available for carrying forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred tax assets of £537k (2013: £430k) in respect of losses. Total losses (provided and unprovided) totalled £3.1m (2013: £3.0m).

note 4 Borrowings

Borrowings are repayable as follows:

Bank finance relates to amounts drawn down under the Group's invoice discounting facility (£69k) and bank loans (£282k), secured by a fixed and floating charge over the Group's undertakings. The bank loan, taken out to finance the acquisition of Opus Instruments, is repayable in monthly instalments and attracts interest at a rate of 5.6% over base rate.

Loan stock of £368k was converted into 833,334 ordinary shares of 1 pence at a market price of 15 pence each and cash of £254k (includes outstanding loan interest of £11k), £50k of which was loaned back to the Group by a shareholder. This has been included under "Other loan", and is repayable between June 2014 and June 2018. Interest is charged at a rate of 9%.

note 5 Earnings per share

The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, excluding shares held by the Synoptics Employee Benefit Trust. All earnings per share calculations relate to continuing operations of the Group.

The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging Plc divided by the weighted average number of shares in issue during the year, as adjusted for dilutive share options.

The reconciliation of average number of ordinary shares used for basic and diluted earnings is as below:

In 2014, as the company has made a loss, the dilutive earnings per share is based on the basic earnings per share.

NOTE 6 FINANCIAL INFORMATION

The preliminary results for the year ended 30 April 2014 and the results for the year ended 30 April 2014 are prepared under International Financial Reporting Standards as adopted for use in the EU ("IFRS"). The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 30 April 2014.

The financial information set out above, which was approved by the Board on 8 August 2014, is derived from the full Group accounts for the year ended 30 April 2014 and does not constitute the statutory accounts given with the meaning of section 434 of the Company Act 2006. Whilst the audit report was not modified it, by way of emphasis, drew users attention to the disclosures regarding going concern set out in the strategic review section of the preliminary announcement. The group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2014, will be delivered to the Registrar of Companies in due course.

The Company's Annual General Meeting is due to take place at Botanic House, 100 Hills Road, Cambridge CB2 1PH on 23 September 2014 at 11:00 am.

The annual report and accounts, together with a notice of general meeting, will shortly be sent to shareholders and will be available on the Company's website, www.scientificdigitalimaging.com