INDITHERM plc
Annual Report
and
Financial Statements
2005 INDITHERM plc
Page
Inditherm at a Glance 1
Directors and Advisers 3
Chairman’s Statement 4
Chief Executive’s Review 6
Financial Review 10
Directors and Board Committees 11
Statement of Corporate Governance 12
Remuneration Report 14
Statement of Directors’ Responsibilities 17
Report of the Directors 18
Independent Auditors’ Report 20
Consolidated Profit and Loss Account 22
Consolidated Balance Sheet 23
Company Balance Sheet 24
Consolidated Cash Flow Statement 25
Notes Forming Part of the Financial Statements 26
Five Year Summary 37
Notice of Annual General Meeting 38
Contents Based near Rotherham, South Yorkshire, Inditherm plc designs, manufactures and installs heating
solutions using the Company’s innovative, patented, low voltage, carbon-based conductive
polymer technology (CPT). This provides a flexible heating material that can be fitted over a wide
variety of shapes, as well as laid out flat to heat large areas from above or below. Running from a
low voltage (6V to 50V) dc or ac power supply, it can reach temperatures of up to 120°C.
Applications for the technology are numerous but the Company is focusing on selected
applications and market areas where there are perceived to be significant growth opportunities.
Inditherm already has an established track record in industrial process industries, such as
confectionery, food and chemicals, where CPT is ideal for heating pipes, tanks, valves and pumps.
In addition, the Company is focused on producing heating solutions for utility water and waste
water treatment plants, medical (patient warming), concrete curing and Sports pitch heating.
Our Vision
To be perceived as the best in the world in our chosen markets.
Our Values
We believe in…
 having total integrity in all we do
 delighting our customers
 treating others with dignity and respect
 teamwork
 working professionally and delivering exceptional quality.
1
INDITHERM at a glance The Industrial Segment specialises in providing heating solutions for critical temperature
management and frost protection for pipelines, portable storage containers, tanks, valves and
pumps. Inditherm supplies many well-known multi-national companies in the food & beverage,
confectionery, pharmaceutical, chemical, oil & gas, and water utility industries. Inditherm uses
significantly less energy than traditional electrical trace heating, hot water or steam systems. In
addition, we have significant expertise in providing unheated insulation solutions. 
The Medical Segment specialises in warming solutions to prevent hypothermia and heat therapy
systems for the treatment of injuries and wounds. Patient warming products are primarily used in
operating theatres, recovery and intensive care, accident & emergency, and neo-natal units. They
offer improved performance, combined with significant cost savings over traditional technologies.
Products are sold internationally through a network of distributors.
The Construction Segment, working in conjunction with Sheffield Hallam University, has
developed solutions to accelerate concrete curing, along with concrete infrastructure heating and
frost protection solutions. Products are sold into construction industry applications, mainly
associated with concrete structures. 
The Sport Segment, which was created in 2005, specialises in sports pitch and golf course heating
for both grass and synthetic surfaces. Examples are three pitches at Chelsea Football Club’s
Training Academy in England. Not only is the Inditherm system far more reliable than traditional
systems, it uses a fraction of the energy. The Company also produces heated stadium seating. 
2
INDITHERM Business Segments Directors M S Abrahams (Chairman)
R Harpum
J H Markham
I D Smith
Secretary and I D Smith, Inditherm House, Houndhill Park, Bolton Road, 
registered Wath-upon-Dearne, Rotherham, S63 7LG
office
Company 3587944
number
Accountants and Tenon Limited, Charnwood House, Gregory Boulevard, 
business advisers Nottingham, NG7 6NX
Auditors Tenon Audit Limited, Charnwood House, Gregory Boulevard, 
Nottingham, NG7 6NX
Bankers HSBC, Montgomery Road, Wath Upon Dearne, Rotherham, S63 7QW
Nominated Collins Stewart Limited, 8th Floor, 88 Wood Street, London, EC2V 7QR
adviser and 
broker
Legal advisers Freeth Cartwright LLP, Cumberland Court, 80 Mount Street, 
Nottingham, NG1 6HH
Registrars Capita IRG Plc, Bourne House, 34 Beckenham Road, 
Beckenham, Kent, BR3 4TU
3
Directors and Advisers
INDITHERM plc Introduction
During 2005 our efforts were focused on developing strong market positions within the
four business segments of Industrial, Medical, Construction and Sport. Whilst the first
three segments grew, the lack of any pitch heating orders resulted in Sales being lower
than 2004. 
During the year substantial efforts were put into professionalising our business
processes. As a consequence, there has been an improvement in our operational quality
and response to customers. It has also enabled us to undertake larger or more complex
projects. 
An external survey was undertaken during the second half by an independent market
research firm. The research showed that the Company and its products are well regarded
by our customers but that potential customers tend to be conservative when switching
away from traditional heating technologies. However, once converted to Inditherm,
there is a high degree of satisfaction and confidence in both the Company and its
products. We believe that this explains the relatively slow take-up of the technology. 
On 9 December 2005, Inditherm announced that an approach had been made to the
Company which may or may not lead to an offer being made.
Since that time we have conducted meaningful talks with the party that made the
initial approach. As a result of our discussions, they have informed us that their
conclusion is that opportunities exist for deals to exploit Inditherm technology. These
include license and royalty agreements, technical collaboration and joint venturing.
However, the other party has also indicated it prefers exploring these alternative
structures to an outright purchase of the business.
Accordingly, offer talks have now terminated. Meanwhile discussions continue on the
other opportunities.
Results for the Year
Turnover for the year fell to £1,035k (2004: £1,598k), due to the lack of sports pitch
heating orders, which accounted for sales of £888k in 2004 and £30k in 2005. The
remaining businesses therefore grew by 42%.
The Industrial business showed continued growth of 30% in both small and larger orders
for industrial process heating solutions. Although our expectations for growth in water
utilities were not met, due to the slow start-up of the UK Asset Management Programme
(AMP4), we are now seeing demand pick up, as the Programme gathers momentum. 
The Medical business saw growth of 54%, with a steady flow of orders from overseas
distributors. After a slow first half in purchases from the NHS, these picked up in the
second half. At the end of the year we launched the new CosyTherm neo-natal
warming system, which has received a positive market response. 
The Construction business got off the ground in the year with a large order for concrete
curing blankets at London Heathrow’s new Terminal 5. 
The cost base was maintained with headcount being tightly controlled during the year.
Overheads before exceptional costs were £1,739k (2004: £1,694k) resulting in an
operating loss before exceptional costs of £1,402k (£1,176k). After restructuring and
exceptional costs of £50k (2004: £328k) and net interest income of £138k (2004: £182k),
the post-tax loss was £1,279k (2004: £1,306k).
4
INDITHERM plc
Chairman’s Statement The year end cash balance was £2,363k (2004: £3,590k). We believe that the Company
has sufficient funds to meet our current and medium term needs.
Dividends
As stated in previous years, it is the Board’s intention to devote the Company’s
financial resources to business development. This intention, which the Board believes
is in the shareholders’ best interests, has been pursued during 2005 and will continue
for the foreseeable future. The Board therefore does not expect to declare a dividend
during the Company’s continuing formative period.
Management 
Since the appointment last year of Richard Harpum as Chief Executive, there have
been a number of management changes. Colin Tarry, Technical and Business
Development Director, left the Company in June to pursue other interests. A new
Technical Manager was recruited in May and a new Sales & Marketing Director has
recently started to lead the selling efforts in Industrial and Construction.
Employees
We continue to invest in our workforce to ensure that we have the appropriate skills
with which to grow the business. The workforce is extremely flexible, which enables us
to respond quickly to customers’ needs and quickly develop new solutions to complex
heating problems. 
On behalf of the Board, I thank all our staff most sincerely for their continued support.
Outlook
Order intake for the first three months of 2006 shows a continuation of recent trends,
with a steady pickup in Industrial volumes. 
Our water utilities solutions are now gaining market acceptance and formal supplier
agreements with water utilities and AMP4 partners are in the process of being signed.
The launch of the new CosyTherm neo-natal heating mattress is expected to enhance the
growth prospects of the Medical segment.
Although the Construction business is in its infancy, it will be helped by work arising
from the European FP6 CRAFT grant with orders from consortium partners. 
Whilst we are pursuing several major pitch heating projects, we are not anticipating
carrying out any installations during 2006. 
Our growth continues but at a slower rate than originally envisaged. Accordingly, we
are reviewing strategic options for realising the value of our technology more quickly.
MARK ABRAHAMS
Chairman
28 March 2006
5
Chairman’s Statement (continued) Introduction
During 2005 we have concentrated on implementing the new business strategy
described in last year’s Report. This involved focusing on four business segments,
growing these businesses, developing new applications and standard product for these
sectors, improving our internal processes and continuing to train and develop our
people. 
There has been steady growth in the Industrial and Medical businesses and good initial
development of the Construction segment. Because we did not secure any pitch
heating orders, which accounted for £888k of sales last year, the total sales were lower
than 2004. 
Industrial 
Sales in this segment increased by 30% over 2004, mainly due to growth in process
heating orders. 
We made a decision to pursue larger orders, such as storage tanks, whilst not
neglecting the need to keep a strong flow of smaller orders; these have traditionally
acted as the seedbed from which larger orders have grown, as customers gain
confidence in our products and solutions. Whilst we saw substantial growth in smaller
orders, we saw less impact from larger projects, which generally have much longer
lead times. Although we successfully completed several larger projects, notably for
storage vessels and pipework heating in the food and chemicals sectors, several of the
larger opportunities have only recently been realised. 
To take advantage of the increasing emphasis on energy savings, fuelled by rising
energy costs, we are promoting the energy saving benefits of Inditherm to all our
customers. This work is already starting to bear fruit, as customers become
increasingly energy conscious. 
There was a major effort to develop more standard products, which has also resulted
in some new innovations, such as the prefabricated heated pipework system that is
now being installed at two leading confectionery manufacturing operations in the UK. 
We have strengthened the industrial sales organisation with the recruitment of a Sales
and Marketing Director and improved our selling processes and documentation.
The anticipated growth in water utility sales was not realised, as the time taken by the
utilities to establish the infrastructure required for the AMP4 Asset Management
Programme, which started in April, took much longer than expected. However, we
concentrated on building relationships with the new AMP4 partners, as well as
becoming registered as an approved supplier. I am pleased to report that we have now
started to receive orders.
A trial with Severn Trent Water to heat sewerage sludge lines, to stop them becoming
blocked, proved to be a total success. We are now in the process of capitalising on this
throughout the water utility industry. 
6
INDITHERM plc
Chief Executive’s Review Medical 
Medical orders increased by 54%. There was strong growth in export sales through the
increasing network of distributors, which was increased to eleven by the appointment
of six new distributors. A further four have already been appointed in 2006. 
Sales to the NHS were very slow in the first half year but picked up in the second half.
Nevertheless, NHS investment remains lower than we would like. To overcome some
of the barriers to entry, we developed a new leasing scheme, which has already
resulted in an order. 
Towards the end of the year we launched CosyTherm, a new neo-natal heating system
for use with premature or low birth-weight babies, or as a step-down from incubator
nursing, freeing up more expensive resources. There has been a very positive market
response, especially as our product fits well with modern clinical trends in nursing
new-born infants.
Construction 
After two years of joint research with the Centre for Infrastructure Management at
Sheffield Hallam University, the Construction business was set up at the beginning of
the year and was quickly rewarded with a substantial order for concrete curing
blankets for London Heathrow’s new Terminal 5. Although curing blankets are seen as
a good application for Inditherm, we are seeing much more market interest in heating
pre-cast concrete moulds. 
In conjunction with Sheffield Hallam University, we were awarded a grant from the
European FP6 CRAFT programme. The grant supports R&D to develop thermal curing
systems for pre-cast concrete manufacturing, based on Inditherm technology as the
heat source. The trans-European consortium of 13 development partners, called
LOVACS, is already well established and orders are being received.
Other opportunities in infrastructure heating are also being pursued, albeit as a lower
priority, so as not to lose focus on concrete curing applications.
Sport 
Following the installation of under-pitch heating systems at Falkirk Community
Stadium and Chelsea Football Club’s new Training Academy during 2004, we spent
2005 marketing the benefits of our system and have received significant levels of
interest from a number of clubs in the UK and Europe. However, because of the very
long lead times on most pitch heating projects, no further orders were obtained. 
The pitch heating business tends to be driven by new projects or a combination of
available financing and the replacement of existing, inefficient systems. Because the
Inditherm solution involves installing heating pads 300mm below the pitch surface,
projects are normally carried out in conjunction with major pitch refurbishment.
Nevertheless, Inditherm has now been specified on at least one major stadium project
and although we expect to receive at least one order during 2006, it is unlikely that any
projects will be undertaken during the year. 
7
Chief Executive’s Review (continued) Operations 
Substantial progress was made during the year to improve our operational
effectiveness, our internal processes and business systems. Where appropriate, some
automation was applied, not only to reduce costs but also to reduce variation and
improve quality. 
There was also a concerted effort to keep overhead expenses under tight control,
without sacrificing our promotional and marketing efforts. 
The new web site has been well-received and has started to generate a higher level of
enquiries from around the world. 
Independent market research conducted during the year showed that our customers
view our people as highly responsive and professional. 
Product Development 
Product development work was carried out in all main sectors during the year.
Substantial improvements were made to our Industrial products, notably the
development of more standard products, along with a new prefabricated pipework
heating system and innovative removable tank heating jackets. There were ongoing
improvements made to our Medical products, and CosyTherm was developed and
launched during the year. Development of Construction products remains mainly in
partnership with Sheffield Hallam University and the LOVACS Project partners. Sport
applications development has focused mainly on research into the effects of heating on
grass growth, plus the use of improved materials and innovative control systems. 
Outlook 
Industrial applications will remain the mainstay of the business for the coming year,
with growth anticipated in process heating, especially for large pipework and tank
heating systems. More widespread deployment of standard products will enable
growth in international sales through newly-appointed European distributors and
sales agents. 
We will also capitalise on the successful sewerage sludge line heating trials at Severn
Trent Water and other strong product offerings in the water utilities sector. Where
possible, we will take advantage of the opportunities arising from the AMP4
investment programme, which now appears to have started, a year later than
anticipated. 
Medical continues to be a key part of our business and whilst we will continue to see
growth in overseas markets, the UK tends to be more conservative due to capital
spending constraints. 
The Construction sector is expected to see growth in 2006, particularly for pre-cast
concrete curing applications. We intend to capitalise on the added benefits of EU
funding for these applications and an established base of development partners will
help to accelerate both technical and market development. The sector lends itself to the
deployment of standard heating pads that can be applied in a variety of applications. 
8
INDITHERM plc
Chief Executive’s Review (continued) Although we are targeting at least one pitch heating order during in 2006, this will not
be installed until the stadium is completed in 2007. In the meantime, we are
concentrating on getting Inditherm specified in other projects and are also seeking to
capitalise on any of the few short term opportunities that arise from time to time.
The challenges facing Inditherm in 2006 remain considerable but so are the
opportunities. At the year end there was a substantial value of quotes outstanding and
based upon our historical lead times and conversion rates, 2006 should be a much
better year than 2005. The encouraging factor is that customers are clearly gaining
confidence in Inditherm’s polymer technology and in our ability to deliver value-
added solutions that perform better than the alternatives. 
RICHARD HARPUM
Chief Executive
28 March 2006
9
Chief Executive’s Review (continued) Trading results
Sales in the year fell by £563k to £1,035k as a result of the absence of any Sports pitch
heating (£888k in 2004). Industrial sales continued to make steady progress with a 30%
year on year improvement, and Medical Sales improved 43%.
Total administration expenses before exceptional costs increased from £1,694k to
£1,739k which resulted from the planned investment in additional sales resources for
the Industrial and Medical business. Exceptional costs of £50k arose as a result of
payments for loss of office.
The operating loss of £1,452k is a reduction of £52k on the same period last year.
Cash resources generated net interest income for the year of £138k (2004: net income
£182k), giving a pre tax loss of £1,314k (2004: loss £1,322k).
Cash resources and Net assets
Net cash outflow from operations for the year was £1,340k (2004: £1,554k), reflecting
the operating loss. Working capital, excluding cash, remained relatively flat in the year.
Capital expenditure during the year was £60k (2004: £68k).
Net funds at the year end after deduction of hire purchase and factoring liabilities were
£2,358k (2004: £3,571k).
The £250k investment currently used as security for our current premises lease has
increased in value during the year and its market value of £286,937 is now greater than
cost. The market value adjustment that would previously have been applied if the
bond had been liquidated has been cancelled.
Shareholder funds amounted to £2,839k (2004: £4,104k), reflecting the retained loss and
the issue of 42,601 shares to employees under the employee savings based share option
scheme. 
Taxation
As the Company has continued to incur trading losses no corporation tax liability has
yet arisen. Accumulated tax losses to the end of 2005 of £4,044k (2004: £2,965k) are
available which should be recoverable against future trading profits. The Company’s
continuing investment in research and development has given rise to a tax credit
provision of £35,000 in the year on qualifying expenditure.
IAN D SMITH
Finance Director and Company Secretary
28 March 2006
10
INDITHERM plc
Financial Review Directors
Mark Abrahams (Aged 51, Chairman) *
Mark is currently the Chief Executive of Fenner Plc and was formerly non-executive
chairman of the Darby Group Plc. At Fenner he led a strategy of converting the group
from a power transmissions manufacturer to a world leader in reinforced polymers. He
is a Chartered Accountant and a Companion of the Institute of Management.
Richard Harpum (Aged 54, Chief Executive)
Richard joined the Company in September 2004. After an early Military career with the
Royal Engineers, during which he obtained a Masters Degree in Mechanical Sciences
from Cambridge University, Richard joined GEC Ltd and has held a number of
managing director and CEO roles in GEC Ltd, and FKI Babcock plc. He also worked as
a business consultant in the USA. He was most recently Group President of ABB’s
global metering businesses.
John Markham OBE (Aged 59) *
John joined the Company in March 2002. He has an honours degree in Chemical
Engineering and is a Fellow of the Institution. He is a Chartered Engineer and
Chartered Scientist. He was awarded the OBE in 1995 for services to British industry.
He has a wealth of experience in industries related to the Company’s products and
applications having spent 20 years with I.C.I. and more recently holding the position
of Chief Executive of Hickson International PLC.
Ian Smith (Aged 49, Finance Director)
Ian joined the Company in January 2004. He is a Chartered Accountant and qualified
Corporate Treasurer and has over 25 years’ international industrial experience gained
at both group and operating company level. Prior to joining Inditherm, Ian was
Finance Director for Portakabin Ltd and Holset Engineering Co Ltd the turbocharging
division of Cummins Engine Co Inc.
* Non-executive
Board Committees 
The principal standing committees appointed by the Board are as follows:
Audit committee Remuneration committee Nominations committee
Mark Abrahams Chairman John Markham Chairman Mark Abrahams Chairman
John Markham Mark Abrahams John Markham
Richard Harpum
11
Directors and Board Committees The Board is committed to the highest standards of corporate governance in relation to
its size and sets out below details of how it has applied the provisions of the Combined
Code considered appropriate.
Board Composition
The Board has two executive directors and two independent non-executive directors.
Details of the Board members are on page 11.
The Board meets regularly throughout the year and has a formal schedule of matters
specifically reserved for its decision.
The non-executive directors are considered by the Board to be independent of
management and free from any relationship which could materially interfere with the
exercise of their independent judgement. They receive a fixed fee for their services. 
If required, the directors are entitled to take independent legal advice and if the Board
is informed in advance, the cost of the advice will be reimbursed by the Company. The
Company Secretary’s services are available to all members of the Board.
Due to the current size of the Company the roles of Finance Director and Company
Secretary are carried out by one person.
Board Committees
The Board has three standing committees, the membership of which is set out on page 11.
Audit Committee
The Audit Committee meets as required, but at least twice a year. In addition to
reviewing the annual report and financial statements and the interim statement prior
to their submission to the Board for approval, it keeps the scope, cost effectiveness,
independence and objectivity of the external auditors under review. This includes
monitoring the level of non-audit fees.
The committee routinely meets for private discussion with the external auditors, who
attend its meetings, as required.
Remuneration Committee
The report of the Remuneration Committee is set out on page 14.
Nominations Committee
The Nominations Committee considers succession planning, reviews the structure,
size and composition of the Board and nominates candidates to fill Board vacancies.
Board Appointments
Any decision to appoint further directors to the Board is taken by the entire Board in a
formal meeting. Where it is deemed necessary , new members of the Board are provided
with appropriate training in respect of their roles and duties as a public company
director.
12
INDITHERM plc
Statement of Corporate Governance Relations with Shareholders
The Company places a great deal of importance on communication with its
shareholders.
John Markham has been identified as the Company’s Senior Independent Director. He
is available to shareholders who wish to raise any concerns that they have been unable
to resolve through other channels and to attend meetings between management and
major investors.
The notice of the AGM will be sent to shareholders at least 21 clear days before the
Meeting. At the forthcoming AGM, the Company will indicate the level of proxy voting
and members of the Board committees will be available to answer questions.
Internal Control
The directors acknowledge their responsibility for the Group’s systems of internal
control.
The Group maintains systems of internal control to provide reasonable but not
absolute assurance against material misstatement or loss.
The system of internal control is structured around an assessment of prioritisation of
the various risks to the business. The control environment is designed to address
particularly those risks that the Board considers to be material to the business, in
safeguarding the assets against unauthorised use or disposition and maintaining
proper accounting records which produce reliable financial information.
The Board has reviewed the effectiveness of the system of internal control for the
accounting period and the period to the date of approval of the financial statements.
The key features of the Group’s systems of internal control are as follows:
 An ongoing process of risk assessment to identify, evaluate and manage business
risks.
 Management structure with clearly defined responsibilities and authority limits.
 A comprehensive system of reporting financial results to the Board. 
 Quality control systems certified under ISO 9001. 
 Appraisal and authorisation of capital expenditure.
The Company does not currently operate an internal audit function. At the Audit
Committee meetings the Finance Director presents a formal report on internal controls
and a programme of work to ensure systems and processes are continuously
improved.
Going Concern
After making enquiries, the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. For
this reason, the going concern basis has been adopted in preparing the financial
statements.
13
Statement of Corporate Governance (continued) Responsibilities
The Committee is responsible for the determination of the remuneration policy of the
Group’s executive directors and senior executives.
Composition
The members of the Remuneration Committee (“The Committee”) during the year
were John Markham (Chairman of the Committee) and Mark Abrahams.
Directors’ service contracts
The executive directors have rolling 12 month contracts requiring 12 months written
notice to be given by either party. There are no provisions for compensation if there is
a change of control. The service contracts do not contain any provision for
compensation on early termination other than the notice period. The Committee will
seek to mitigate cost to the Company whilst dealing fairly with each individual case.
The Chairman and non-executive director are usually appointed for a fixed two year
term.
The details of the service contracts in relation to the executive directors and letters of
appointment in relation to the Chairman and non-executive director are:
Unexpired term Notice
At 31 December period
2005
Richard Harpum – 1 year
Ian Smith – 1 year
Mark Abrahams 23 months Fixed term
John Markham 2 months Fixed term
On the 24 February 2006 John Markham’s letter of appointment was extended for a
further two year period and will expire on 12 March 2008.
Remuneration of Non Executive Directors.
The remuneration for the non-executive directors is determined by the Board as a
whole and consists of fees for their services in connection with Board and Board
Committee meetings and, where relevant, for additional services such as chairing a
Board Committee. They are not eligible for pension scheme membership and do not
participate in any bonus scheme.
Non-executive directors do not participate in decisions about their own remuneration.
Executive Remuneration Policy
The Committee endeavours to offer competitive remuneration packages which are
designed to attract, retain and incentivise executive directors and senior executives
with the experience and necessary skills to operate and develop the Company’s
business to their maximum potential, thereby delivering the highest level of return for
the shareholders. 
14
INDITHERM plc
Remuneration Report Consistent with this policy, benefits packages awarded to executives are intended to be
competitive and comprising a mix of non-performance related and performance
related remuneration designed to incentivise them, but not to detract from the goals of
corporate governance.
The targeted composition of each director’s remuneration is as follows:
Non Performance related Performance related
Richard Harpum 67% 33%
Ian Smith 67% 33%
Remuneration components for executive directors
Remuneration packages are reviewed each year to ensure that they are in line with the
Group’s business objectives. No director participates in decisions about their own
remuneration package.
The main components in determining pay are as follows:
 Basic salary/fees and benefits
The basic annual salary is subject to an annual review which takes into account the
performance of the Company and the individual. Benefits comprise the provision
of a vehicle allowance, private healthcare insurance and a death in service
insurance scheme.
 Annual performance related bonus
Demanding annual performance targets, which are consistent with both the short
and long term objectives for the business, are set for executive directors which
must be achieved before the bonus is payable. The target bonus for achievement
of the annual budget for these measures is 35% and the maximum potential
payment for the annual bonus is 50% of basic annual salary, excluding benefits in
kind and pension contributions.
 Pensions
Executive directors receive pension contributions of 5% of salary to a stakeholder
or money purchase scheme.
 Executive share options schemes
Share options are granted to executive directors to encourage them to deliver
sustained, long term growth. Except in exceptional circumstances, the value of
options granted in any year will not exceed one times basic salary and the total
value of options outstanding will not exceed five times salary.
15
Remuneration Report (continued) Directors’ detailed emoluments
The emoluments of the directors of the Company were as follows:
Pension Benefits 2005 2004
Salary contribution in kind Total Total
£’000 £’000 £’000 £’000 £’000
M S Abrahams 35 – – 35 35
R Harpum 100 5 13 118 36
J H Markham 23 – – 23 21
I D Smith 78 4 13 95 88
C R Tarry 20 1 3 24 104
P J O’Grady –––– 50
111 111 111 111 111
256 10 29 295 334
222 222 222 222 222
Contributions to a defined contribution pension scheme were paid on behalf of three
directors (2004: four) during the year.
C R Tarry resigned as a director of the Company on 23 March 2005. 
C R Tarry left the Company on 31 May 2005 for which he received compensation for
loss of office of £48,750. At that date he held 206,863 share options, of which 103,092
share options granted under the terms of the Inditherm plc Enterprise Management
Incentive Scheme lapsed. Mr Tarry retained 103,770 share options issued under a Share
Option Agreement dated 10 December 2001. These options can be exercised at any time
up to seven days prior to the 10th anniversary of their issue.
Interests in share options
Details of options held by directors are set out below:
An analysis of the share options held by each director is set out below:
Date of Option 2005 2004
Grant Price Number Number
M S Abrahams 10/12/01 97p 207,540 207,540
R Harpum 29/09/04 97p 500,000 500,000
J H Markham 09/04/02 97p 30,000 30,000
I D Smith 02/04/04 52.5p 100,000 100,000
After an initial two year qualification period options are exercisable at any time up to
the tenth anniversary of the date of grant.
The market price of the Company’s share at 31 December 2005 was 34p: the range of
market prices during the year was 75p to 24p.
Employee Share Incentive Plan 
During the year I D Smith, participated in the Partnership share arrangement under the
terms of Inditherm plc’s Employee Share Incentive Plan. Under the terms of this
arrangement I D Smith invested the maximum permitted (£125 per calendar month) for
a period of 12 months ending 28 November 2005 at which time Mr Smith exercised his
rights to acquire 4,444 shares at the mid-market price prevailing at that date (33.75p).
16
INDITHERM plc
Remuneration Report (continued) Directors’ Interests in shares
The directors of the Company at the end of the year, and their interests in the 1p
ordinary shares of the Company were:
2005 2004
M S Abrahams 151,546 151,546
R Harpum 57,945 7,945
J H Markham 14,366 14,366
I D Smith 4,444 –
222 222
All directors’ interests are beneficially held. There have been no changes in the interests
set out above between 31 December 2005 and 28 March 2006.
JOHN H MARKHAM
Chairman, Remuneration Committee
28 March 2006
Statement of Directors’ Responsibilities
Company law requires the directors to prepare financial statements for each financial
year which give a true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that year. In preparing those financial
statements, the directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent;
 state whether applicable accounting standards have been followed subject to any
material departure disclosed and explained in the financial statements; and
 prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group will continue in business.
The directors are responsible for keeping proper accounting records which disclose
with reasonable accuracy at any time the financial position of the Group and to enable
them to ensure that the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the Group, and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
17
Remuneration Report (continued) The directors present their report together with the Group’s audited financial
statements for the year ended 31 December 2005.
Results and Dividends
The profit and loss account is set out on page 22 and shows the loss for the year.
The directors do not recommend the payment of an ordinary dividend.
Principal Activity and Business Review
The principal activity of the Group is the manufacture, sale, installation and licensing
of specialised heating materials. A review of the Group’s development during the year
and its prospects are given in the Chairman’s Statement on page 4.
Research and Development
The Group continues to invest in research and development, the costs of which have
been expensed to the profit and loss account.
Substantial Interests
At 28 February 2006 the Company had been notified of the following interests
(excluding the interests of the directors), which amounted to 3% or more of the issued
capital of the Company.
Shareholder Number of Percentage
shares holding
Cazenove Fund Management Limited 4,021,000 19.0%
AXA Investment Managers Limited 2,522,085 12.7%
Aviva plc 2,022,085 9.6%
Patrick O’Grady 2,009,536 9.5%
Allianz Cornhill Insurance plc 1,155,000 5.5%
Brymarc Limited 1,014,000 4.8%
222 222
Charitable and Political Donations
During the year the Group made no charitable or political donations.
Creditor Payment Policy and Practice
It is normally the Group’s policy to settle all trade creditors within the normal
commercial terms of trade agreed with each supplier. The number of days’ purchases
represented by trade creditors at the year end was 54 (2004: 60).
Financial instruments
The Group’s financial instruments comprise cash and various items such as trade
debtors, trade creditors etc. that arise directly from its operations. The main purpose of
these financial instruments is to finance the Group’s operations. As permitted by
FRS 13 short term debtors and creditors have been excluded from interest rate and
liquidity disclosures. The amount of foreign currency held is not considered to be
material and the Group does not consider the use of derivatives as appropriate.
18
INDITHERM plc
Report of the Directors
for the Year ended 31 December 2005 The main risk arising from the Group’s financial instruments is liquidity risk. The
Group ensures that it has sufficient cash resources available to meet all short term
cash requirements and to meet its capital expenditure programme for the foreseeable
future. 
At present the directors do not believe that the Group has significant interest rate or
foreign currency risk and consequently does not hedge against such risk. The Board
keeps these risks under regular review.
In the opinion of the Directors the fair values of the financial assets and liabilities are
not materially different from their book values.
Re-appointment of Auditors
Tenon Audit Limited have expressed their willingness to continue in office and a
resolution to reappoint them will be proposed at the annual general meeting.
Special Business
 Resolution 4 in the Notice of Annual General Meeting on page 38 renews the
authority of the directors to allot relevant securities. The nominal amount of
securities to which the authority relates is £15k, which represents approximately
7% of the Company’s current issued share capital. Such authority will expire at the
conclusion of the Annual General Meeting next following the passing of this
Resolution or if earlier fifteen months after the date of this Ordinary Resolution.
The directors have no present intention of exercising this authority.
 Resolution 5 waives the statutory pre-emption rights under s.89 of the Companies
Act 1985 in respect of the allotment of equity securities for cash. The nominal
amount of equity securities which may be issued without being offered to existing
shareholders is £15,000, as noted above for Resolution 4. There is no present
intention to make any such allotment of equity securities, but the directors
consider it desirable to maintain the flexibility afforded by this power.
 The directors believe that both of the above Resolutions are in the best interests of
the Company and shareholders and they therefore recommend shareholders to
vote in favour of the Resolution.
By order of the Board
IAN D SMITH
Secretary
28 March 2006
19
Report of the Directors (continued) We have audited the financial statements of Inditherm plc for the year ended
31 December 2005 which comprise the consolidated Profit and Loss Account,
consolidated Balance Sheet, company Balance Sheet, consolidated Cash Flow
Statement and the related notes. These financial statements have been prepared under
the historical cost convention and the accounting policies set out therein.
This report is made solely to the company’s members, as a body, in accordance with
Section 235 of the Companies Act 1985. Our audit work has been undertaken so that
we might state to the company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective Responsibilities of Directors and Auditors
The directors’ responsibilities for preparing the Annual Report and the financial
statements in accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the
Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the financial statements give a true and fair
view and are properly prepared in accordance with the Companies Act 1985. We also
report to you if, in our opinion, the Directors’ Report is not consistent with the financial
statements, if the company has not kept proper accounting records, if we have not
received all the information and explanations we require for our audit, or if
information specified by law regarding directors’ remuneration and transactions with
the company is not disclosed.
We read other information contained in the Annual Report, and consider whether it is
consistent with the audited financial statements. This other information comprises
only the  Report of the directors, the Chairman’s Statement, the Chief Executive’s
review, the Financial review, the Statement of Corporate Governance and the
Remuneration Report. We consider the implications for our report if we become aware
of any apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Basis of Audit Opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the group’s circumstances,
consistently applied and adequately disclosed.
20
INDITHERM plc
Independent Auditors’ Report to the Members of
Inditherm plc  We planned and performed our audit so as to obtain all the information and
explanations which we consider necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion:
 the financial statements give a true and fair view in accordance with United
Kingdom Generally Accepted Accounting Practice, of the state of the affairs of the
company and the group as at 31 December 2005 and of the loss of the group for
the year then ended, and 
 the financial statements have been properly prepared in accordance with the
Companies Act 1985.
TENON AUDIT LIMITED
Chartered Accountants 
and Registered Auditor
Nottingham
28 March 2006
21
Independent Auditors’ Report to the Shareholders of
Inditherm plc (continued) 2005 2004
Note £’000 £’000
T urnover 2 1,035 1,598
Cost of sales (698) (1,080)
111 111
Gross profit 337 518
Administrative expenses (1,789) (2,022)
Operating loss before exceptional costs (1,402) (1,176)
Exceptional costs 4 (50) (328)
111 111
Operating loss 4 (1,452) (1,504)
Interest receivable 139 186
Interest payable 5 (1) (4)
111 111
Loss on ordinary activities before taxation (1,314) (1,322)
Taxation credit from loss on ordinary activities 6 35 16
111 111
Sustained deficit for the year 18 (1,279) (1,306)
222 222
Loss per share – basic and diluted 7 (6.1)p (6.2)p
222 222
All amounts relate to continuing activities.
All recognised gains and losses are included within the profit and loss account.
22
INDITHERM plc
Consolidated Profit and Loss Account
for the Year ended 31 December 2005 2005 2004
Note £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 8 43 56
Tangible assets 9 270 294
111 111
313 350
Current assets
Stocks 11 200 224
Debtors: amounts falling due within
one year 12 292 468
Debtors: amounts falling due after
one year 12 – 39
Investment 13 250 250
Cash at bank and in hand 2,363 3,590
111 111
3,105 4,571
Creditors: amounts falling due
within one year 14 (311) (538)
111 111
Net current assets 2,794 4,033
111 111
Total assets less current liabilities 3,107 4,383
Creditors: amounts falling due
after more than one year 15 – (7)
Provision for liabilities 16 (268) (272)
111 111
Net assets 2,839 4,104
222 222
Capital and reserves – equity
Called up share capital 17 211 211
Share premium 18 7,423 7,409
Other reserve 18 50 50
Profit and loss account 18 (4,845) (3,566)
111 111
Shareholders’ funds 19 2,839 4,104
222 222
Approved by the Board on 28 March 2006 and signed on its behalf by:
R HARPUM I D SMITH
Director Director
23
Consolidated Balance Sheet
at 31 December 2005 24
INDITHERM plc
2005 2004
Note £’000 £’000 £’000 £’000
Fixed assets
Tangible assets 9 270 294
Investments in subsidiaries 10 – –
111 111
270 294
Current assets
Stocks 11 200 224
Debtors: amounts falling due within
one year 12 292 468
Debtors: amounts falling due after
one year 12 947 999
Investment 13 250 250
Cash at bank and in hand 2,363 3,590
111 111
4,052 5,531
Creditors: amounts falling due
within one year 14 (311) (538)
111 111
Net current assets 3,741 4,993
111 111
Total assets less current liabilities 4,011 5,287
Creditors: amounts falling due
after more than one year 15 – (7)
Provision for liabilities 16 (268) (272)
111 111
Net assets 3,743 5,008
222 222
Capital and reserves – equity
Called up share capital 17 211 211
Share premium 18 7,423 7,409
Other reserve 18 50 50
Profit and loss account 18 (3,941) (2662)
111 111
Shareholders’ funds 19 3,743 5,008
222 222
Approved by the Board on 28 March 2006 and signed on its behalf by:
R HARPUM I D SMITH
Director Director
Company Balance Sheet
at 31 December 2005 2005 2004
Note £’000 £’000 £’000 £’000
Net cash outflow from operating activities 20 (1,340) (1,554)
Returns on investments and servicing of finance
Interest received 139 186
Interest element of hire purchase payments (1) (4)
111 111
Net cash inflow from returns on investments
and servicing of finance 138 182
Taxation 35 16
Capital expenditure and financial investment
Purchase of tangible fixed assets (60) (92)
Sale of tangible fixed assets – 24
111 111
Net cash outflow from capital 
expenditure and financial investment (60) (68)
111 111
Net cash outflow before management 
of liquid resources and financing (1,227) (1,424)
Management of liquid resources
Decrease in cash on short-term deposit 21 1,208 1,034
Financing
Issue of shares 14 –
Capital element of hire purchase payments 21 (14) (33)
111 111
Net cash outflow from financing 0 (33)
111 111
Decrease in cash 21 (19) (423)
222 222
25
Consolidated Cash Flow Statement
for the Year ended 31 December 2005 1 Accounting Policies
The financial statements have been prepared under the historical cost convention and
are in accordance with applicable accounting standards. The following principal
accounting policies have been applied:
Basis of consolidation
The financial statements of the Group consolidate the financial statements of Inditherm
plc and its subsidiary undertakings up to 31 December 2005 using acquisition
accounting. The results of subsidiary undertakings acquired during a financial period
are included from the effective date of acquisition.
The Company has taken advantage of the exemption under Section 230 of the
Companies Act 1985 and has not presented its own profit and loss account. 
Turnover
Turnover represents sales to outside customers at the value of work done excluding
value added tax and trade discounts. Where appropriate, the recognition of income is
deferred according to the specific circumstances of material transactions.
Long term contracts are included in turnover on the basis of the sales value of the work
performed during the period by reference to the total sales value and stage of
completion of these contracts.
Intangible fixed assets
Purchased intellectual property rights are capitalised and amortised over the directors’
estimate of their useful economic life of 10 years. In addition, provision is made for any
impairment in value.
Research and development costs
Research expenditure is written off in the year in which it is incurred. 
Investments
Investments held as fixed and current assets are stated at cost less provision for any
impairment in value.
Tangible fixed assets
The cost of tangible fixed assets is the purchase price together with any incidental costs
of acquisition.
Depreciation is provided to write off the cost, less estimated residual values, of all fixed
assets evenly over their expected useful lives. It is calculated at the following straight
line rates:
Plant, machinery and office equipment – 20% – 33% per annum
Fixtures and fittings – 10% – 15% per annum
Motor vehicles – 25% per annum
26
INDITHERM plc
Notes Forming Part of the Financial Statements
for the Year ended 31 December 2005 1 Accounting Policies (continued)
Stocks
Stocks are valued at the lower of cost and net realisable value. Cost is based on the cost
of purchase on a first in, first out basis. Net realisable value is based on estimated
selling price less additional costs to completion and disposal.
Leasing and hire purchase commitments
Assets acquired under hire purchase contracts are capitalised in the balance sheet and
depreciated over their expected useful lives. The interest element is charged to the
profit and loss account over the term of the contract. Rentals in respect of operating
leases are charged to the profit and loss account on a straight line basis over the term
of the agreement.
Deferred taxation
The payment of taxation is deferred or accelerated because of timing differences
between the treatment of certain items for accounting and taxation purposes. Full
provision for deferred taxation is made under the liability method, without
discounting, on all timing differences that have arisen, but not reversed by the balance
sheet date, unless such provision is not permitted by FRS 19.
Financial instruments
In adopting Financial Reporting Standard 13: Derivatives and other financial
instruments, the group has not treated short term debtors and creditors as financial
assets and liabilities.
Pension costs
Contributions to the Group’s stakeholder pension scheme and to employees’ personal
pension schemes are charged to the profit and loss account in the year in which they
become payable.
Grants receivable
Revenue based grants are credited to the profit and loss account against related
expenditure whilst grants of a capital nature are treated as deferred income and are
transferred to the profit and loss account over the expected useful lives of the relevant
assets.
Warranty provision
The performance of products is warranted against clearly defined performance
specifications established by reference to the technical and development testing carried
out at the manufacturing facility in Rotherham and in the field.
A provision is made for future warranty costs based on the specific circumstances
pertaining to each contract. 
27
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 2 Turnover
All turnover, losses and net assets are wholly attributable to the principal activity of the
group being the manufacture, sale and installation of specialised heating products and
arose mainly within the United Kingdom.
3 Employees
2005 2004
£’000 £’000
Staff costs consist of:
Wages and salaries 988 840
Social security costs 104 89
Pension costs 24 18
111 111
1,116 947
222 222
Average number of persons including Executive Directors employed:
2005 2004
Number Number
Management and administration 6 6
Sales 7 6
Development 2 2
Production 15 13
111 111
30 27
222 222
4 Operating loss
2005 2004
£’000 £’000
This is arrived at after charging/(crediting):
Depreciation of owned assets 59 56
Depreciation of assets held under hire purchase contracts 20 23
Amortisation of intangible fixed assets 13 13
Loss on disposal of fixed assets 5 4
Operating lease costs – plant and machinery 2 7
– other operating leases 71 55
Auditors’ remuneration 14 15
Research and development 164 68
Exceptional costs
– Termination of Pegasus contract – 241
– Bad debt – 87
– Compensation for loss of office 50 –
Grant income (7) (40)
222 222
28
INDITHERM plc
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 5 Interest payable
2005 2004
£’000 £’000
Hire purchase 1 4
222 222
6 Taxation credit from loss on ordinary activities
(a) Analysis of credit in year
2005 2004
£’000 £’000
Current tax:
UK corporation tax credit 35 16
222 222
(b) Factors affecting tax charge for year 
The tax assessed for the year is different from the expected rate of corporation tax.
The differences are explained below:
2005 2004
£’000 £’000
Loss on ordinary activities before taxation (1,314) (1,322)
111 111
Loss on ordinary activities multiplied by expected 
rate of corporation tax of 19% (2004: 19%) (250) (251)
Effects of:
Depreciation in excess of capital allowances 16 7
Research and development tax credit (35) (16)
Trading losses carried forward 234 244
111 111
(35) (16)
222 222
(c) Factors that may affect future tax charges
This group has tax losses estimated at £4,044,000 (2004: £2,965,000) available for relief
against future trading profits.
7 Loss per share
The calculation of loss per ordinary share is based on losses of £1,279,000 (2004:
£1,306,000) and on a weighted average of 21,073,948 (2004: 21,069,980) ordinary shares
in issue during the year. The share options are anti-dilutive due to the loss in the year.
29
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 8 Intangible assets
Intellectual
Group property rights
£’000
Cost
At 1 January 2005 and 31 December 2005 136
111
Amortisation
At 1 January 2005 80
Provided for the year 13
111
At 31 December 2005 93
111
Net book value
At 31 December 2005 43
222
At 31 December 2004 56
222
9 Tangible assets 
Group and Company Plant,
Fixtures machinery ,
and office Motor
fittings equipment vehicles Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2005 225 121 94 440
Additions 6 29 25 60
Disposals – (21) – (21)
111 111 111 111
At 31 December 2005 231 129 119 479
111 111 111 111
Depreciation
At 1 January 2005 66 41 39 146
Provided for the year 25 27 27 79
Disposals – (16) – (16)
111 111 111 111
At 31 December 2005 91 52 66 209
111 111 111 111
Net book value
At 31 December 2005 140 77 53 270
222 222 222 222
At 31 December 2004 159 80 55 294
222 222 222 222
The net book value of tangible fixed assets includes an amount of £12,000
(2004: £32,000) in respect of assets held under hire purchase contracts.
30
INDITHERM plc
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 10 Fixed asset investments – Company
Investments in subsidiaries at cost:
£
At 1 January 2005 and 31 December 2005 104
222
Inditherm plc has the following wholly owned subsidiaries registered and operating in
Great Britain:
Name Nature of business Class of share
Inditherm (Medical) Limited Holding company for intellectual
property rights Ordinary
Inditherm (UK) Limited Dormant Ordinary
Inditherm Construction Limited   Dormant Ordinary
11 Stocks
Group and Company
2005 2004
£’000 £’000
Raw materials 197 209
Work in progress 3 15
111 111
200 224
222 222
12 Debtors
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Trade debtors 217 231 217 231
Amounts recoverable on contracts – 84 – 84
Amount owed by subsidiary undertaking – – 947 960
Other debtors 41 123 41 123
Prepayments 34 69 34 69
111 111 111 111
292 507 1,239 1,467
222 222 222 222
All amounts shown under debtors fall due for payment within one year, with the
exception of the amount owed by subsidiary undertaking £947,000 (2004: £960,000) and
a payment of £nil (2004: £39,000). 
31
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 13 Current asset investment
Unlisted investment – Group and Company £’000
At 31 December 2005 and 2004 250
222
The investment was made on 26 February 2002 and represents the cost of an unitised
International with Profits Bond with Axa Isle of Man Limited. The bond also include
life insurance on the lives of Mr P O’Grady and Mr C R Tarry, and would become
repayable on the death of the last life.
The current market value of the bonds as at 3 March 2006 are £286,937.
Under the terms of the bond early redemption would result in a surrender charge in
the first five years (currently 2%). Redemption on the 3 March 2006 would have
resulted in total charges of £5,724, leaving a net realisable value of £281,212. The
investment is carried on the balance sheet at cost. 
On the 26 February 2002 the bond was pledged as security to HSBC plc for a guarantee
issued to Highbridge (Houndhill) Industries Ltd for £142,920, being a rolling two years
rent on the manufacturing facility at Rotherham.
14 Creditors: amounts falling due within one year
Group and Company
2005 2004
£’000 £’000
Trade creditors 161 297
Other creditors 41 100
Taxation and social security 30 33
Obligations under hire purchase contracts 5 12
Accruals and deferred income 74 96
111 111
311 538
222 222
32
INDITHERM plc
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 15 Creditors: amounts falling due after more than one year
Group and Company
2005 2004
£’000 £’000
Obligations under hire purchase contracts – 7
222 222
Obligations under hire purchase contracts are due as follows:
2005 2004
£’000 £’000
Within one year 5 12
Between one and two years – 7
Between two and five years – –
111 111
5 19
222 222
Financial instruments
The Group’s financial instruments comprise cash and various items such as trade
debtors, trade creditors etc. that arise directly from its operations. The main purpose of
these financial instruments is to finance the Group’s operations. As permitted by
FRS 13 short term debtors and creditors have been excluded from interest rate and
liquidity disclosures. The amount of foreign currency held is not considered to be
material and the Group does not consider the use of derivatives as appropriate.
The main risk arising from the Group’s financial instruments is liquidity risk. The
Group ensures that it has sufficient cash resources available to meet all short term cash
requirements and to meet its capital expenditure programme for the foreseeable future. 
At present the directors do not believe that the Group has significant interest rate or
foreign currency risk and consequently does not hedge against such risk. The Board
keeps these risks under regular review.
In the opinion of the Directors the fair values of the financial assets and liabilities are
not materially different from their book values.
16 Provision for liabilities
Warranty Royalty Total
provision provision provision
£’000 £’000 £’000
Balance at 1 January 2005 30 242 272
Paid during the year – (13) (13)
Charge for the year 9 – 9
111 111 111
Balance at 31 December 2005 39 229 268
222 222 222
The royalty provision arises from the agreement with Pegasus Ltd dated 24 September
2003 whereby a 10% Royalty is payable in respect of qualifying medical sales. In the
event that qualifying medical sales fail to reach £2.5m in aggregate for the four year
period ending 23 September 2007 the remaining balance becomes payable.
33
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 17 Share capital 
Issued, called up and fully paid
Share
Ordinary premium
shares of (net of
lp each issue costs)
Number £’000 £’000
As at 1 January 2005 21,069,980 211 7,409
Issued during the period 42,601 – 14
1111 1111111
As at 31 December 2005 21,112,581 211 7,423
2222 222 222
Authorised share capital at
31 December 2005 and 2004 £’000
Ordinary shares of 1p only 78,000,000 780
Preference shares of £1 220,000 220
111
1,000
222
18 Reserves
Group
Share Profit
premium Other and loss
account reserve account
£’000 £’000 £’000
At 1 January 2005 7,409 50 (3,566)
Loss for the year – – (1,279)
Premium on shares issued 14 – –
111 111 111
At 31 December 2005 7,423 50 (4,845)
222 222 222
Company
Share Profit
premium Other and loss
account reserve account
£’000 £’000 £’000
At 1 January 2005 7,409 50 (2,662)
Loss for the year – – (1,279)
Premium on shares issued 14 – –
111 111 111
At 31 December 2005 7,423 50 (3,941)
222 222 222
34
INDITHERM plc
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 19 Reconciliation of movements in shareholders’ funds
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Loss for the year (1,279) (1,306) (1,279) (1,306)
Issue of share capital (including premium) 14 – 14 –
111 111 111 111
Net movement in shareholders’ funds (1,265) (1,306) (1,265) (1,306)
Opening shareholders’ funds 4,104 5,410 5,008 6,314
111 111 111 111
Closing shareholders’ funds 2,839 4,104 3,743 5,008
222 222 222 222
20 Reconciliation of operating loss to net cash outflow from operating activities
2005 2004
£’000 £’000
Operating loss (1,452) (1,504)
Depreciation and amortisation 92 92
Loss on disposal of fixed assets 5 4
Decrease/(Increase) in stocks 24 (155)
Decrease/(increase) in debtors 215 65
(Decrease)/increase in creditors (220) (70)
(Decrease)/Increase in provisions (4) 14
111 111
Net cash outflow from operating activities (1,340) (1,554)
222 222
21 Analysis of changes in net funds
31
1 January Cash December
2005 flow 2005
£’000 £’000 £’000
Cash at bank and in hand 3,590 (1,227) 2,363
Less: deposits treated as liquid resources (3,572) 1,208 (2,364)
111 111 111
18 (19) (1)
Obligations under hire purchase contracts (19) 14 (5)
Term deposits 3,572 (1,208) 2,364
111 111 111
3,571 (1,213) 2,358
222 222 222
35
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 22 Reconciliation of net cash flow to movement in net funds
2005 2004
£’000 £’000
Decrease in cash in year (19) (423)
Cash outflow from decrease in debt 14 33
Cash inflow from decrease in liquid resources (1,208) (1,034)
111 111
Decrease in net funds from cash flows (1,213) (1,424)
111 111
Net funds at the beginning of the year 3,571 4,995
111 111
Net funds at the end of the year 2,358 3,571
222 222
23 Commitments under operating leases    
As at 31 December 2005 annual commitments under non cancellable operating leases
as follows:
Group and Company
2005 2004
Land and Land and
Buildings Other Buildings Other
£’000 £’000 £’000 £’000
Operating leases which expire:
Within two to five years –2   –2
After five years 71 – 71 – 
222 222 222 222
24 Contingent liability
The Company has received revenue and capital grants totalling £133,000, of which
£6,663 has been recognised in the current year. Under certain conditions the grant may
become repayable if various targets are not achieved.
During the normal course of business the business offers warranties against clearly
defined performance specifications.
36
INDITHERM plc
Notes Forming Part of the Financial Statements (continued)
for the Year ended 31 December 2005 Profit and Loss
2005 2004 2003 2002 2001
£’000 £’000 £’000 £’000 £’000
Continuing income from 
product sales 1,035 1,598 616 483 277
Non recurring income – – – 200 200
Turnover 1,035 1,598 616 683 477
Gross profit 337 518 267 353 84
Overheads (1,739) (1,694) (951) (1,134) (519)
Operating loss before 
exceptionals (1,402) (1,176) (684) (981) (435)
Exceptional (costs)/income (50) (328) (134) 200 200
Loss on ordinary activities after 
taxation (1,279) (1,306) (786) (717) (212)
Loss per share – basic and 
diluted (6.1p) (6.2p) (7.2p) (6.08p) (3.0p)
111 111 111 111 111
Balance Sheet
Net current assets 2,794 4,033 5,311 1,057 1,966
Net assets 2,839 4,104 5,410 1,481 2,082
Net funds 2,358 3,571 4,995 738 2,103
111 111 111 111 111
37
Five Year Summary Notice is given that the 2006 Annual General Meeting of the Company will be
held at Wentbridge House Hotel, Wentbridge, Pontefract, West Yorkshire,
WF8 3JJ on Friday 28 April 2006 at 2.00 pm for the following purposes:
ORDINARY BUSINESS
1. To receive and adopt the accounts of the Company for the year ended 31
December 2005 together with the Directors’ Report and the Auditors’ Report
and to consider the recommendation of the directors that no dividend be
declared in respect of the year.
2. To reappoint Tenon Audit Limited as auditors of the Company until the
conclusion of the next general meeting of the Company at which accounts are
laid before the members and to authorise the directors to determine their
remuneration.
3. To re-appoint Mr Ian Douglas Smith, retiring by rotation, as director in
accordance with the provisions of the Articles of Association.
SPECIAL BUSINESS
To consider, and if thought if fit, pass the following resolutions, of which
Resolution 4 will be proposed as an ordinary resolution and Resolution 5 will
be proposed as a special resolution.
4. Generally and unconditionally to authorise the directors (subject to the
passing of Resolution 5 below and in substitution for all existing authorities)
to exercise all the powers of the Company to allot relevant securities, within
the meaning of Section 80 of the Companies Act 1985 (“the Act”) up to an
aggregate nominal amount of £15,000. Such authority will expire at the
conclusion of the Annual General Meeting next following the passing of this
Resolution or, if earlier, 15 months after the date of this Ordinary Resolution.
Nevertheless the Company may, before the expiry of the authority conferred
hereby, make an offer or agreement which would or might require relevant
securities to be allotted after the expiry of the authority conferred hereby and
the directors may allot the relevant securities, in pursuance of such offer or
agreement, as if the authority conferred hereby had not expired.
38
INDITHERM plc
Notice of Annual General Meeting 5. To empower the directors (subject to the passing of Resolution 4 above)
pursuant to Section 95 of the Act to allot equity securities (as defined in
Section 94 of the Act) pursuant to the authority conferred by Resolution 4 as
if sub-section (1) of Section 89 of the Act did not apply to the allotment of
equity securities for cash up to an aggregate nominal amount of £15,000.
By Order of the Board Registered Office:
I D SMITH Inditherm House
Secretary Houndhill Park
Bolton Road
28 March 2006 Wath-upon-Dearne
S63 7LG
Notes:
1. A member of the Company who is entitled to attend and vote at the meeting convened by this notice is entitled to appoint one or
more proxies to attend and, on a poll, to vote in his/her place. A proxy need not be a member of the Company. 
2. A form of proxy is enclosed. To be valid an instrument appointing a proxy and any power of attorney under which it is signed/or
a duly certified copy of it (failing previous registration with the Company), must be deposited at the office of the Company’s
registrar, Capita Registrars, the Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU by 2.00 pm on 26 April 2006. Completion
of the proxy does not preclude a member from subsequently attending and voting at the meeting in person if he or she so wishes.
3. The register of interests of the directors and their families in the share capital of the Company and copies of contracts of service of
directors with the Company or with any of its subsidiary undertakings will be available for inspection at the registered office of the
Company during normal business hours (Saturdays and public holidays excepted) from the date of this notice until the conclusion
of the AGM.
4. In accordance with regulation 41 of the Uncertificated Securities Regulations 2001, only those members entered on the Company’s
register of members not later than 2.00 pm on 26 April 2006 or, if the meeting is adjourned, shareholders entered on the Company’s
register of members not later than 48 hours before the time fixed for the adjourned meeting shall be entitled to attend and vote at
the meeting.
39
Notice of Annual General Meeting (continued)  Preliminary Announcement – March
 Annual General Meeting – April
 Half Year End – June
 Interim Announcement – September
 Year End – December
40
INDITHERM plc
Financial Calendar  Headquarters and Registered Office:
Inditherm House
Houndhill Park
Bolton Road
Wath-upon-Dearne
Rotherham, S63 7LG
Telephone: +44 (0) 1709 761000
Fax: +44 (0) 1709 761066
e-mail: sales@indithermplc.com
website: www.indithermplc.com