INDITHERM plc
Annual Report
and
Financial Statements 2004 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 15
Report of the Directors 16
Independent Auditor’s Report 18
Consolidated Profit and Loss Account 20
Consolidated Balance Sheet 21
Company Balance Sheet 22
Consolidated Cashflow Statement 23
Notes to the Financial Statements 24
Five Year Summary 35
Notice of Annual General Meeting 36
Contents 1
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.
These include pitch heating, medical (patient warming), utility water and waste water treatment
plants, tanks and concrete curing.  Inditherm already has an established track record in industrial
process industries, such as confectionary , food and chemicals, where CPT is ideal for heating pipes,
tanks, valves and pumps. 
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 Division specialises in providing heating solutions for critical temperature
management and frost protection for pipelines, portable storage containers, tanks, valves and
pumps. The principal markets include confectionary, food, chemical processing and water utilities.
Inditherm’s technology is ideal for wrapping around complex shapes, as well as for providing heat
over large, flat areas.
The Medical Division 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, and offer improved performance, combined with
significant cost savings over traditional technologies.
Sports pitch heating has been moved into the Construction Division and provides a solid state
solution for preventing frost and also for promoting grass growth. Not only is the Inditherm
system far more reliable than traditional mechanical systems, it uses only about 25% of the energy.
Working in conjunction with Sheffield Hallam University, the Division is also in the process of
developing solutions to accelerate concrete curing, along with concrete infrastructure heating and
frost protection solutions.
The Custom Division has two main roles: providing heating solutions for third party partners to
incorporate into existing or new end user products, and as the seedbed for new major product
lines that are then taken on by other Inditherm Divisions.
2
INDITHERM at a glance 3
Directors M S Abrahams (Chairman)
R Harpum
J H Markham
I D Smith
C R Tarry
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
Auditor 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, Cumberland Court, 80 Mount Street,
Nottingham, NG1 6HH
Registrars Capita IRG Plc, Bourne House, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU
Directors and Advisers
INDITHERM plc 4
INDITHERM plc
Introduction
Following the successful fund-raising in 2003, Inditherm has made considerable
progress on several fronts. Most significantly, we entered the football pitch heating
market with two major contracts for Chelsea Football Club and Falkirk Community
Stadium.  Both installations represented challenges as we gained technical experience.
However, these projects are now fully operational and provide a platform for future
growth.  The concentration of resource on the football pitch market and particularly the
two projects undertaken, diverted resources away from other activities and resulted in
slower sales growth than originally anticipated.
Good progress was made by the Medical business with the establishment of direct
sales in the UK and a number of overeas distributors.
During the year we used our financial resources to expand our skills base, particularly
on the commercial front. This has given rise to an increased cost base which resulted in
a large loss for the year.
Results for the Year
Turnover for the year increased by 159% to £1,598k (2003: £616k), mainly due to the
large Chelsea contract, worth £775k.  Unlike previous years, we did not see a sharp
increase in Industrial orders during the last quarter, with many potential prospects
being delayed into 2005.  I am pleased to report that some of these have now borne
fruit.  We also moved into the water utilities market, where Inditherm’s solution offers
significant benefits and energy savings over alternative technologies. Medical sales
increased in the second half, mainly due to the strengthening of the Medical
management and sales team.
The cost base was increased through the addition of key people aimed at promoting
sales, resulting in an operating loss of £1,176k before exceptional items (2003: £684k).
After exceptional costs of £328k, relating to the termination of the Pegasus Distribution
Agreement, a provision for a doubtful debt and net interest income of £182k (2003:
£16k), the pre-tax loss was £1,306k (2003: £786k).
The year end cash balance was £3,590k (2003: £5,047k).
Dividends
As stated in previous years, the Board does not expect to declare a dividend during the
Company’s continuing formative period.
Management
In 2004 we took significant strides to strengthen management with the appointment of
Richard Harpum as Chief Executive. Richard was previously President of ABB
Metering and has also held senior positions in FKI Babcock and GEC. Since this
appointment, Colin Tarry has been Business Development and Technical Director but
resigned as a Director on the 23rd March 2005. He will be leaving the company later
this year to pursue other interests. He will be available to the company in respect of the
technology and has signed a confidentiality agreement.
Chairman’s Statement 5
Pat O’Grady retired as a Director of the Company and has agreed to an exclusive long-
term consultancy in respect of Inditherm technology.
I would like to thank both Pat and Colin for their efforts in the formative years of the
Company.
In recent weeks the team has been strengthened with three key appointments: a
Divisional Director responsible for the Medical business; a Technical Manager and a
Projects Director who between them will undertake Colin Tarry’s work.
Employees
We continue to invest in and expand our workforce to ensure that we have the
appropriate skills with which to grow the business. The workforce is extremely flexible
and has worked very hard during the year to deal with significant fluctuations in
demand, especially during the manufacture and installation of the heating pads for the
Chelsea contract.  On behalf of the Board, I thank all our staff members most sincerely
for their dedication.
Operations & Strategy
The concentration of resource on the football pitch projects and future opportunities
was considerable.  Whilst this showed positive results with significant future potential,
the order flow from other markets was disappointing. This has highlighted the need to
focus on market segments where our value proposition is most compelling.
Accordingly, we have reshaped the sales force to target certain parts of the Industrial
market, whilst increasing resources aimed at selling into the Medical market.  This new
strategy is expected to take six to twelve months to demonstrate the significant
potential that we believe is offered by Inditherm technology in these markets.
Outlook
Effort is now being focused on the pitch heating, medical, water utility and
construction markets, where we continue to see major potential.  Significantly, we have
recently won our first order for an accelerated concrete curing heating system, where
we are demonstrating the substantial cost savings derived from using Inditherm
technology.  We believe this could be a platform for significant growth.
The water utility market is another area where we can demonstrate the value of
Inditherm technology and the planned capital spend in that industry over the next four
years represents a new opportunity.
The year has started with volumes well ahead of last year, albeit that this represents
slower growth than planned.  Much work has been undertaken to establish the new
strategy which we believe will begin to show benefits from the second half of this year.
MARK ABRAHAMS
Chairman
24 March 2005
Chairman’s Statement (continued) 6
INDITHERM plc
Introduction
2004 was a period of intense change for Inditherm, with the main challenge being to
design, manufacture and install the pitch heating systems at Chelsea Football Club’s
training ground and at Falkirk Community Stadium.  Both projects were successfully
completed, albeit with some major challenges to overcome en route.  There was little
growth in the core industrial business, and a disappointing final quarter, which has
traditionally been strong.  However, we have found new industrial applications in the
water utilities market, where our technology offers significant benefits over alternative
heating solutions and is being well-received by the market. 
Following the termination of an exclusive agreement with a third party distributor in
2003, we effectively had to re-build our Medical business. We have put in place new
management and a sales team and achieved a 255% increase in sales over the previous
year.  
Following two years of joint development with Sheffield Hallam University, our
Construction business started to generate orders in 2005.
Strategy
Towards the end of the year, a full review of the business and its strategy was
undertaken and a number of key conclusions drawn from this review:
● Because of the compelling attraction of the Inditherm conductive polymer
technology (CPT), the number of potential applications can be overwhelming. It is
therefore vital to identify and focus on only those applications where there is a
clear market opportunity, such as sports pitch heating, water utilities and medical. 
● Until now, the industrial business has adopted a custom design approach to each
application. However, it is clear that there are significant opportunities for
standardisation, which will not only reduce costs, but make it easier to establish
new market channels and distributors both in the UK an overseas. 
● Although Inditherm is not always the most price competitive solution in the
market, the operational benefits and energy savings can lead to significant lifetime
cost savings compared to other technologies. 
● There is room for improvement in the way we execute projects and customer
contracts.
● Lack of product development and other resources mean that our ability to exploit
fully our CPT technology in the short term is resource limited.  Until we can afford
to build the team, we therefore need to concentrate on those areas that will bring
the quickest return for the minimum effort.
The business strategy was revised to position ourselves in markets and applications
where we can achieve rapid growth, without having to add significant resources or
spend significant time developing new applications or markets.  A detailed analysis
identified the following as the key areas of focus for the next two years:
● Industrial solutions, but with a shift in focus to standard products, such as mobile
and static tanks, and on key accounts where our technology is already well
accepted, UK investment remains robust and the contracts are generally larger.  
Chief Executive’s Review 7
● UK water utilities, where we have a clear competitive advantage and the
opportunity to offer more standard products. 
● Medical, notably in heated mattresses for patient warming, both in the UK and
overseas.  Having standard products makes exporting attractive.
● Sports pitch heating, both in the UK and Europe, and where the Inditherm
solution offers an improved solution and significant energy savings over
traditional hot water and cable systems.  
● Construction, notably in accelerating concrete curing.
Our other key strategies are to enhance operational excellence, develop new markets,
especially for standard products at home and overseas, and to continue to train and
develop our people. 
In summary, these applications generally require heating over often large, flat areas,
where other technologies are substantially less effective.
Industrial Solutions
Sales of Industrial products increased by 8% over 2003, partly as a result of the move
into the water utilities market in the second half.  The final quarter, normally strong in
the confectionary and food sectors, was disappointing, with low levels of orders
received.  We are strengthening the industrial sales organisation and streamlining our
selling processes, so as to improve performance in 2005.   
The recent move into water utilities is expected to enable us to take advantage in the
second half of 2005 of the new AMP4 spending round that starts in April 2005.  We
have developed solutions that are significantly superior to traditional approaches, not
only in the mode of operation but also in energy savings.   The main areas are in
heating chemical dosing lines and chemical tanks, and supplying removable heated or
insulated jackets for pumps, valves and pipework. 
Medical
Medical sales increased by 255%, with the recruitment of a new sales team and a
Commercial Director, who has since been promoted to Divisional Director.  Sales in
previous years were mainly to our sole distributor, with whom we ended our exclusive
arrangement towards the end of 2003. This has necessitated developing market
channels and demonstrating to hospitals that the Inditherm patient warming solution
has significant advantages over traditional air warming and other technologies. 
Although the medical industry is inherently conservative, there has been significant
interest in the Inditherm heated mattresses, not only because clinical trials have shown
that patient warming improves recovery, but also that Inditherm is a superior solution.
In addition, hospitals find that they can get a payback in about 6 months using
Inditherm, compared to other systems that use disposable products. Although we see
Medical as a core part of our business, market inertia means that it will take time to
grow this business sector to its full potential. 
Good progress was made in establishing new overseas distributorships, which we
expect will lead to significant sales growth in 2005. 
Chief Executive’s Review (continued) 8
Pitch Heating 
The main growth in the business in 2004 came from the two contracts at Falkirk
Community Stadium and Chelsea Football Club’s training grounds in Surrey.  These
have enabled us to prove that Inditherm is a superior technology to established
techniques in a number of ways.  Firstly, with no moving parts, the system is inherently
reliable compared to mechanical solutions. In addition, the control system gives
groundsmen the ability to manage temperatures in different zones of the pitch. We have
also seen improved grass growth. Finally, the energy savings are significant, typically
being 75% better than alternatives; our measurements show that during the winter
months, savings can be substantial. 
Although all pitch heating systems are likely to be bespoke, these two projects have not
only proved that the concept works but have also given us a significant level of data and
expertise in this application.  There is now significant interest from several clubs in the
UK and Europe, who are planning to install pitch heating systems during the next two
years and who are recognising the advantages that Inditherm offers over alternative
systems.
Construction
Throughout the year we continued to work with the Centre for Infrastructure
Management at Sheffield Hallam University on heating applications associated with
concrete and other areas in the construction industry, notably railway infrastructure.
There are a number of avenues of research taking place, notably in accelerating concrete
curing, and embedding Inditherm polymer within concrete for infrastructure warming.  
During early 2005, we started to receive orders for trials for concrete curing systems and
these should enable us to gather data on how strong a value proposition the Inditherm
solution is.  We are also carrying out trials in a number of railway-related applications.
Custom Products
In the past, Custom products have absorbed significant development effort, and some
have graduated to new business lines; the notable examples in 2004 were pitch heating
and concrete curing.  Sales of food heating bags and other products have progressed
during the year but we are limiting ongoing development efforts, concentrating on
those products that offer rapid returns over the next two years.   
We are being ruthless in assessing new market “opportunities”. However, it is important
to analyse these carefully up front to ensure that we do not miss any that can result in
quick wins. 
Future Developments
The key activities over the coming months will be to exploit our CPT technology in
those areas where we perceive there to be the greatest growth potential. Considerable
efforts are being put into water utilities ahead of the AMP 4 spending round, which
starts in April.  Other Industrial sales will focus on key accounts, larger projects and
more standard products.  
INDITHERM plc
Chief Executive’s Review (continued) 9
We anticipate steady pitch heating sales in 2005 to some well-known clubs and as a new
entrant in this market, we will also use the year to consolidate our reputation. The
prospects for 2006 are encouraging, as we are already getting involved in a number of
stadia and training pitch projects where there is strong interest in our solution.
As our patient warming solution is clearly superior, and with a strong sales
infrastructure now in place, we anticipate that Medical sales will grow strongly , from the
modest base established this year.   
Although the market potential has still to be proved, we are optimistic about the
opportunities in the Construction sector.
The challenges facing Inditherm in 2005 are demanding but the opportunities are
exciting. 2004 was a year of radical change in our business model and we are now well
positioned to exploit our targeted market sectors. However, these will take time to
develop, as customers gain confidence in Inditherm’s polymer technology and in our
ability to deliver value-added solutions. 
RICHARD HARPUM
Chief Executive
24 March 2005
Chief Executive’s Review (continued) 10
INDITHERM plc
Trading Results
Sales for the Year
Industrial Sales for the year showed an increase of 8% over the same period last year,
whilst Medical Sales were up 255%.
Pitch heating contracts income for the year was £888k and represented 55% of all Sales.
Gross Profit for the year was up 94% to £518k. The Gross Profit in percentage terms fell
from 43% to 32% reflecting competitive pricing on the Falkirk pitch heating contract,
£75k of abnormal development costs associated with entry into the pitch heating
market and reduced margins in the traditional Industrial segment.
Administration expenses before exceptional items increased during the year from
£951k in 2003 to £1,694k in 2004 reflecting the additional costs associated with building
the Industrial and Medical sales teams and increasing the marketing and selling costs.
The business will increasingly see returns on this investment in the year ahead.
The operating loss before exceptional items of £1,176k is an increase of £492k on the
same period last year.
Exceptional costs of £87k resulted from the provision against debt due to the company
from a business partner on the Falkirk pitch heating contract. The collection of this debt
is being pursued in the courts. With the termination of the Pegasus agreement, all costs
have now been expensed resulting in an exceptional charge in the year of £241k.
Cash resources generated net interest income for the year of £182k (2003: net income
£16k), giving a pre tax loss of £1,322k (2003: £802k).
Cash Resources and Net Assets
Net cash outflow from operations for the year was £1,538k (2003: £495k), reflecting the
operating loss incurred plus an increase in working capital of £8k (2003: increase £14k)
and an outflow of £136k arising from the payment of creditors associated with the cash
placing expenses incurred in late 2003.
Capital expenditure during the year was £92k (2003: £33k).
Net funds at the year end, after deduction of hire purchase liabilities, were £3,571k
(2003: £4,995k). Cash and short term deposits totalled £3,590k (2003: £5,047k). 
The £250k current asset investment is used as security for our current premises.
Shareholder funds amounted to £4,088k (2003: £5,410k).
Taxation
As the Company has continued to incur trading losses, no corporation tax liability has
yet arisen. Accumulated tax losses to the end of 2004 of £2,965k (2003: £1,681k) 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 £16k in the year on qualifying expenditure.
IAN D SMITH
Finance Director and Company Secretary
24 March 2005
Financial Review 11
Directors
Mark Abrahams (Aged 50, 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 53, 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 58) *
John joined the company in March 2002. He is a Chartered Engineer with a degree in
chemical engineering and 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 twenty years with I.C.I. and more recently holding the
position of Chief Executive of Hickson International PLC. John is currently Chief
Executive of C6 Solutions Ltd.
Ian Smith (Aged 48, 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 in a wide range of industries. Ian has most
recently been Finance Director for Portakabin Ltd and Holset Engineering Co Ltd the
turbocharging division of Cummins Engine Co Inc.
Colin Tarry (Aged 45, Business Development and Technical Director)
Colin joined the company in 1999, and has extensive experience in growing technology
businesses in international markets. A production engineer by training, he has 15 years
experience at board level in successful turnaround and start up businesses in both the
UK and USA. He also has been a member of group acquisition and strategy panels for
technology divisions of Penny and Giles Plc and Bowthorpe Plc.
* Non-executive
Board committees
The principal standing committees appointed by the Board are as follows:
Audit committee Remuneration committee Nomination committee
Mark Abrahams Chairman John Markham Chairman Mark Abrahams Chairman
John Markham Mark Abrahams John Markham
Richard Harpum
Directors and Board Committees 12
INDITHERM plc
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 those provisions considered
appropriate to the Group’s circumstances:
Board Composition
The Board has three 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.
Nomination Committee
The Nomination 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.
Statement of Corporate Governance 13
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 working 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. The Board keeps
this requirement under review in relation to the size and complexity of the business.
Going Concern
After making enquiries, and taking into account the risks of becoming established with
a new technology in the Company’s formative years, 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.
Statement of Corporate Governance (continued) 14
INDITHERM plc
Composition
The members of the Remuneration Committee (“The Committee”) are set out on page
11. The Committee is responsible for the determination of the remuneration policy of
the group’s executive directors and senior executives.
Details of each individual director’s remuneration and share options are included in
note 4 to the financial statements and those of directors’ shareholdings are set out in
the Report of the Directors.
Policy on Remuneration of Executive Directors and Senior Executives
Remuneration Policy
The Committee endeavours to offer competitive remuneration packages which are
designed to attract, retain and motivate executive directors and senior executives of the
highest calibre. 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:
● Basic salary/fees and benefits
Salary ranges are reviewed annually and when an individual changes position or
responsibility. Benefits comprise the provision of a vehicle allowance, private health
insurance and a death in service insurance scheme.
● Annual bonus
Annual performance targets for executive directors are set which are consistent
with both the short and long term objectives for the business. The bonus scheme
includes individual objectives and targets linked to the group’s performance for its
key performance indicators. The maximum potential payment for the annual bonus
is 50% of basic annual salary, excluding benefits in kind and pension contributions,
although additional bonuses may be paid for the achievement of particular strategic
goals. 
● 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.
Details of share options outstanding are included in note 4 on page 26.
Service contracts
R Harpum and ID Smith have service contracts requiring 12 months’ written notice
given by either party.
C Tarry will be resigning from the board on 1st June 2005 and his service contract will
terminate on the 10th November 2005.
Remuneration Report 15
Directors’ pension policy
Executive directors receive pension contributions of 5% of salary to a stakeholder or
money purchase scheme.
Non-executive directors
The remuneration for the non-executive directors 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 of the group’s bonus or
incentive schemes. The non-executive directors have service contracts for a fixed
period of 2 years.
M. A. Abraham’s service contract runs from 19th November 2003 to 18th November
2005.
J.H. Markham’s service contract runs from 1st March 2004 to 28th February 2006.
The non-executive directors do not participate in decisions about their own terms of
appointment or remuneration package.
JOHN H MARKHAM
Chairman, Remuneration Committee
24 March 2005
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.
Statement of Directors’ Responsibilities
Remuneration Report (continued) 16
INDITHERM plc
The directors present their report together with the Group’s audited financial
statements for the year ended 31 December 2004.
Results and Dividends
The profit and loss account is set out on page 20 and shows the result 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.
Directors
The directors of the Company at the end of the year, and their interests in the ordinary
share capital of the Company were:
Ordinary Ordinary
shares shares
of lp each of lp each
2004 2003
Number Number 
M S Abrahams 151,546 151,546
R Harpum (appointed 14 September 2004) 7,945 –
J H Markham 14,366 14,366
I D Smith – –
C R Tarry 297,500 297,500
222 222
Substantial Interests
At 18 March 2005 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 3,596,000 17.1%
Axa Investment Managers Limited 2,717,085 12.9%
Aviva Plc 2,022,085 9.6%
Patrick O’Grady 2,009,536 9.5%
RBSI Custody Bank 1,782,085 8.5%
Allianz Cornhill Insurance plc-Equity fund 1,203,128 5.7%
Brymarc Limited 1,014,000 4.8%
222 222
Report of the Directors
For the Year ended 31 December 2004 17
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 60 (2003: 78).
Re-appointment of Auditors
On 28 February 2005 our auditors, Blueprint Audit Limited, changed their name to
Tenon Audit Limited and have signed the audit report in their new name.
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 5 in the Notice of Annual General Meeting on page 36 renews the
authority of the Directors to allot relevant securities. The nominal amount of
securities to which the authority relates is £15,000, which represents approximately
7% of the Company’s current issued share capital. This authority will expire at the
earlier of either the 2006 Annual General Meeting or 15 months from the date the
Resolution is passed. The Directors have no present intention of exercising this
authority.
● Resolution 6 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 5. 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
24 March 2005
Report of the Directors (continued) 18
INDITHERM plc
We have audited the financial statements of Inditherm plc for the year ended
31 December 2004 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 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 United Kingdom Auditing Standards.
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 Directors’ Report, 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.
Independent Auditors’ Report to the Shareholders of
Inditherm plc 19
Basis of Audit Opinion
We conducted our audit in accordance with United Kingdom Auditing Standards
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.
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 of the state of the
affairs of the company and the group as at 31 December 2004 and of the result of the
group for the year then ended and have been properly prepared in accordance with the
Companies Act 1985.
TENON AUDIT LIMITED
Chartered Accountants
and Registered Auditor
Nottingham
24 March 2005
Independent Auditors’ Report to the Shareholders of
Inditherm plc (continued) 20
INDITHERM plc
2004 2003
Note £’000 £’000
T urnover 2 1,598 616
Cost of sales (1,080) (349)
111 111
Gross profit 518 267
Administrative expenses (2,022) (1,085)
Operating loss before exceptional items (1,176) (684)
Exceptional costs 5 (328) (134)
111 111
Operating loss 5 (1,504) (818)
Interest receivable 186 23
Interest payable 6 (4) (7)
111 111
Loss on ordinary activities before taxation (1,322) (802)
Taxation credit from loss on ordinary activities 7 16 16
111 111
Sustained deficit for the year 19 (1,306) (786)
222 222
Loss per share - basic and diluted 8 (6.2)p (7.2)p
222 222
All amounts relate to continuing activities.
All recognised gains and losses are included within the profit and loss account.
Consolidated Profit and Loss Account
For the year ended 31 December 2004
The notes on pages 24 to 34 form part of these financial statements. 21
2004 2003
Restated
Note £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 56 69
Tangible assets 10 294 309
111 111
350 378
Current assets
Stocks 12 224 69
Debtors: amounts falling due
within one year 13 468 572
Debtors: amounts falling due
after one year 13 39 –
Investment 14 250 250
Cash at bank and in hand 3,590 5,047
111 111
4,571 5,938
Creditors: amounts falling due 
within one year 15 (538) (627)
111 111
Net current assets 4,033 5,311
111 111
Total assets less current liabilities 4,383 5,689
Creditors: amounts falling due 
after more than one year 16 (7) (21)
Provision for liabilities and charges 17 (272) (258)
111 111
Net assets 4,104 5,410
222 222
Capital and reserves - equity
Called up share capital 18 211 211
Share premium 19 7,409 7,409
Other reserve 19 50 50
Profit and loss account 19 (3,566) (2,260)
111 111
Shareholders’ funds 20 4,104 5,410
222 222
Approved by the Board on 24 March 2005 and signed on its behalf by:
R HARPUM I D SMITH
Director Director
Consolidated Balance Sheet
at 31 December 2004
The notes on pages 24 to 34 form part of these financial statements. 22
INDITHERM plc
2004 2003
Restated
Note £’000 £’000 £’000 £’000
Fixed assets
Tangible assets 10 294 309
Investments in subsidiaries 11 – –
111 111
294 309
Current assets
Stocks 12 224 69
Debtors: amounts falling due within one year 13 468 572
Debtors: amounts falling due after
one year 13 999 974
Investment 14 250 250
Cash at bank and in hand 3,590 5,046
111 111
5,531 6,911
Creditors: amounts falling due within
one year 15 (538) (627)
111 111
Net current assets 4,993 6,284
111 111
Total assets less current liabilities 5,287 6,593
Creditors: amounts falling due after
more than one year 16 (7) (21)
Provision for liabilities and charges 17 (272) (258)
111 111
Net assets 5,008 6,314
222 222
Capital and reserves - equity
Called up share capital 18 211 211
Share premium 19 7,409 7,409
Other reserve 19 50 50
Profit and loss account 19 (2,662) (1,356)
111 111
Shareholders’ funds 20 5,008 6,314
222 222
Approved by the Board on 24 March 2005 and signed on its behalf by:
R HARPUM I D SMITH
Director Director
Company Balance Sheet
at 31 December 2004
The notes on pages 24 to 34 form part of these financial statements. 23
2004 2003
Notes £’000 £’000 £’000 £’000
Net cash outflow from operating activities 21 (1,554) (495)
Returns on investments and servicing
of finance
Interest received 186 23
Interest paid – (1)
Interest element of hire purchase payments (4) (6)
111 111
Net cash inflow from returns on investments
and servicing of finance 182 16
Taxation 16 16
Capital expenditure and financial investment
Purchase of tangible fixed assets (92) (33)
Sale of tangible fixed assets 24 38
111 111
Net cash (outflow)/inflow from capital 
expenditure and financial investment (68) 5
111 111
Net cash outflow before management of
liquid resources and financing (1,424) (458)
Management of liquid resources
Decrease/(increase) in cash on
short-term deposit 22 1,034 (3,764)
Financing
Issue of shares – 5,268
Expenses paid in connection with
share issues – (553)
Capital element of hire purchase payments 22 (33) (31)
Movement on factoring account 22 – (69)
111 111
Net cash (outflow)/inflow from financing (33) 4,615
111 111
(Decrease)/increase in cash 23 (423) 393
222 222
Consolidated Cash Flow Statement
For the year ended 31 December 2004
The notes on pages 24 to 34 form part of these financial statements. 24
INDITHERM plc
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 2004 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.
Depreciation
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% per annum
Fixtures and fittings – 10% - 15% per annum
Motor vehicles – 25% per annum
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.
Notes Forming Part of the Financial Statements
For the year ended 31 December 2004 25
1 Accounting Policies (continued)
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.
Employee share schemes
Provision is made for National Insurance contributions on options granted on or after
6 April 1999 under unapproved share option schemes. Provision is made at the
prevailing rate on the difference between the period end share value and the grant
price, being the best estimate of the ultimate liability at each period end.
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.
Aprovision is made for future warranty costs based on the specific circumstances
pertaining to each contract.
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 predominately within the United Kingdom.
Notes forming part of the financial statements (continued)
For the year ended 31 December 2004 26
3 Employees
2004 2003
£’000 £’000
Staff costs consist of:
Wages and salaries 840 535
Social security costs 89 52
Pension costs 18 8
111 111
947 595
222 222
Average number of persons including Executive Directors employed:
2004 2003
Number Number
Management and administration 6 5
Sales 6 3
Development 2 2
Production 15 10
111 111
29 20
222 222
4 Directors
The emoluments of the directors of the company were as follows:
Pension
contrib- Benefits 2004 2003
Salary ution in kind Total Total
£’000 £’000 £’000 £’000 £’000
M S Abrahams 35 – – 35 11
R Harpum 30 2 4 36 –
K A Lees – – – – 161
PJ O’Grady 33 3 14 50 72
J H Markham 21 – – 21 13
I D Smith 73 4 11 88 –
C R Tarry 86 4 14 104 99
111 111 111 111 111
278 13 43 334 356
222 222 222 222 222
Contributions to a defined contribution pension scheme were paid on behalf of
4 directors (2003: 3) during the year.
An analysis of the share options held by each director is set out below:
Date of Option 2004 2003
Grant Price Number Number
M S Abrahams 10/12/01 97p 207,540 207,540
R Harpum 29/09/04 97p 500,000 –
J H Markham 09/04/02 222p 30,000 30,000
I D Smith* 02/04/04 52.5p 100,000 –
C R Tarry 10/12/01 97p 206,863 206,863
Outstanding options are exercisable within ten years of the date of grant. 27
4 Directors (continued)
*I D Smith, participates in the Partnership share arrangement under the terms of
Inditherm plc’s Share incentive plan. Under the terms of this arrangement ID Smith
invests the maximum permitted (£125 per calendar month) for a period of 12 months. If
the share price, at the end of 12 months, is 74.5p or above Mr Smith will acquire 2,013
ordinary 1p shares. If the share price is below 74.5p the number of shares issued is
increased to a maximum of 7,500 ordinary 1p shares.
5Operating loss
2004 2003
£’000 £’000
This is arrived at after charging/(crediting):
Depreciation of owned assets 56 46
Depreciation of assets held under hire purchase contracts 23 26
Amortisation of intangible fixed assets 13 15
Loss on disposal of fixed assets 4 –
Operating lease costs – plant and machinery 7 14
– other operating leases 55 32
Auditors’ remuneration 15 15
Research and development 68 66
Exceptional costs
– Termination of Pegasus contract 241 45
– Provision for doubtful debt 87 –
– Reorganisation of finance function – 89
Grant income (40) (23)
222 222
6 Interest payable
2004 2003
£’000 £’000
Bank overdraft and loans – 1
Hire purchase 4 6
111 111
4 7
222 222
Notes forming part of the financial statements (continued)
For the year ended 31 December 2004 28
7 Taxation credit from loss on ordinary activities
(a) Analysis of credit in year
2004 2003
£’000 £’000
Current tax:
UK corporation tax (16) (16)
222 222
(b) Factors affecting tax credit for year
The tax assessed for the year is different from the expected rate of corporation tax. The
differences are explained below:
2004 2003
£’000 £’000
Loss on ordinary activities before taxation (1,322) (802)
111 111
Loss on ordinary activities multiplied by
expected rate of corporation tax of 19% (2003: 19%) (251) (152)
Effects of:
Expenses not deductible for tax purposes – 3
Depreciation in excess of capital allowances 7 11
Research and development tax credit (16) (16)
Trading losses carried forward 244 138
111 111
(16) (16)
222 222
(c) Factors that may affect future tax charges
The group has tax losses estimated at £2,965,000 (2003: £1,681,000) available for relief
against future trading profits.
8 Loss per share
The calculation of loss per ordinary share is based on losses of £1,306,000 (2003:
£786,000) and on a weighted average of 21,069,980 (2003 : 10,967,935) ordinary shares
in issue during the year. The share options are anti-dilutive due to the loss in the year.
9 Intangible fixed assets
Intellectual
Group property rights
£’000
Cost
At 1 January 2004 and 31 December 2004 136
111
Amortisation
At 1 January 2004 67
Provided for the year 13
111
At 31 December 2004 80
111
Net book value
At 31 December 2004 56
222
At 31 December 2003 69
222 29
10 Tangible fixed assets
Group and Company Plant,
Fixtures machinery ,
and office Motor
fittings equipment vehicles Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2004 209 79 132 420
Additions 11 54 27 92
Transfers 5 (5) – –
Disposals – (7) (65) (72)
111 111 111 111
At 31 December 2004 225 121 94 440
111 111 111 111
Depreciation
At 1 January 2004 40 25 46 111
Provided for the year 24 20 35 79
Transfers 2 (2) – –
Disposals – (2) (42) (44)
111 111 111 111
At 31 December 2004 66 41 39 146
111 111 111 111
Net book value
At 31 December 2004 159 80 55 294
222 222 222 222
At 31 December 2003 169 54 86 309
222 222 222 222
The net book value of tangible fixed assets includes an amount of £32,000
(2003: £67,000) in respect of assets held under hire purchase contracts.
11 Fixed asset investments - Company
Investments in subsidiaries at cost:
£
At 1 January 2004 and 31 December 2004 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 Ordinary
property rights
Inditherm (UK) Limited Dormant Ordinary
Inditherm Construction Limited Dormant Ordinary
Notes forming part of the financial statements (continued)
For the year ended 31 December 2004 30
12 Stocks
Group and Company
2004 2003
£’000 £’000
Raw materials 209 69
Work in progress 15 –
111 111
224 69
222 222
13 Debtors
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Trade debtors 231 249 231 249
Amounts recoverable on contracts 84 – 84 –
Amount owed by subsidiary undertaking – – 960 974
Other debtors 123 293 123 293
Prepayments 69 30 69 30
111 111 111 111
507 572 1,467 1,546
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 £960,000 (2003: £974,000) and
£39,000 (2003: £Nil) of retentions held in respect of pitch heating contracts which is due
for payment in 2006.
14 Current asset investment
Unlisted investment – group and company £’000
At 31 December 2004 and 2003 250
222
The investment was made on 26 February 2002 and represents the cost of a unitised
International with Profits Bond’s with Axa Isle of Man Limited. The bonds also include
life insurance on the lives of Mr P O’Grady and C Tarry, and would become repayable
on the death of the last life.
The value of the bonds as at 8 February 2005 are £282,830.
Under the terms of the bond early redemption would result in a surrender charge in
the first 5 years (currently 4%) and a Market value adjustment. Redemption on the
8 February 2005 would have resulted in total charges of £56,848, leaving a net realisable
value of £225,982. There is no intention at present to realise the investment.
On the 26 February 2002 the bond was pledged as security to HSBC plc for a guarantee
to Highbridge (Houndhill) Industries Ltd as security for £142,920 being a rolling two
years rent on the manufacturing facility at Rotherham. 31
15 Creditors: amounts falling due within one year
Group and Company
2004 2003
Restated
£’000 £’000
Trade creditors 297 190
Other creditors 100 136
Taxation and social security 33 21
Obligations under hire purchase contracts 12 31
Accruals and deferred income 96 249
111 111
538 627
222 222
16 Creditors: amounts falling due after more than one year
Group and Company
2004 2003
£’000 £’000
Obligations under hire purchase contracts 7 21
222 222
Obligations under hire purchase contracts are due as follows:
2004 2003
£’000 £’000
Within one year 12 31
Between one and two years 7 17
Between two and five years – 4
111 111
19 52
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.
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.
The fair values of the financial assets and liabilities are not materially different from
their book values.
Notes forming part of the financial statements (continued)
For the year ended 31 December 2004 32
17 Provision for liabilities and charges
Warranty Royalty Total
provision provision provision
£’000 £’000 £’000
Balance at 1 January 2004 8 250 258
Paid during the year – (8) (8)
Charge for the year 22 – 22
111 111 111
Balance at 31 December 2004 30 242 272
222 222 222
The warranty provision was last year included in creditors but has been reallocated
this year into provisions. The comparative has been changed as a result.
The royalty provision arises from the agreement with Pegasus Ltd dated 24 September
2003 whereby a 10% Royalty is payable in respect of 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
18 Share capital
Issued, called up and fully paid
Share
Ordinary premium
shares of (net of
lp each issue costs)
Number £ £’000
Share capital at 31 December 2004 and 2003 21,069,980 210,700 7,409
2222 222 222
Authorised share capital at
31 December 2004 and 2003 1,000,000
222
19 Reserves
Group
Share Profit
premium Other and loss
account reserve account
£’000 £’000 £’000
At 1 January 2004 7,409 50 (2,260)
Loss for the year – – (1,306)
111 111 111
At 31 December 2004 7,409 50 (3,566)
222 222 222
Company
Share Profit
premium Other and loss
account reserve account
£’000 £’000 £’000
At 1 January 2004 7,409 50 (1,306)
Loss for the year – – (1,322)
111 111 111
At 31 December 2004 7,409 50 (2,662)
222 222 222 33
20 Reconciliation of movements in shareholders’ funds
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Loss for the year (1,322) (786) (1,322) (785)
Issue of share capital (including premium) – 5,268 – 5,268
Expenses of share issue – (553) – (553)
111 111 111 111
Net movement in shareholders’ funds (1,322) 3,929 (1,322) 3,930
Opening shareholders’ funds 5,410 1,481 6,314 2,384
111 111 111 111
Closing shareholders’ funds 4,088 5,410 4,992 6,314
222 222 222 222
21 Reconciliation of operating loss to net cash outflow from operating activities
2004 2003
£’000 £’000
Operating loss (1,504) (818)
Depreciation and amortisation 92 87
Loss on disposal of fixed assets 4 –
Increase in stocks (155) (6)
Decrease/(increase) in debtors 65 (290)
(Decrease)/increase in creditors (70) 282
Increase in provisions 14 250
111 111
Net cash outflow from operating activities (1,554) (495)
222 222
22 Analysis of changes in net funds
31
1 January Cash December
2004 flow 2004
£’000 £’000 £’000
Cash at bank and in hand 5,047 (1,457) 3,590
Less: Term deposits treated as liquid resources (4,606) 1,034 (3,572)
111 111 111
441 (423) 18
Obligations under hire purchase contracts (52) 33 (19)
Term deposits 4,606 (1,034) 3,572
111 111 111
4,995 (1,424) 3,571
222 222 222
Notes forming part of the financial statements (continued)
For the year ended 31 December 2004 34
23 Reconciliation of net cash flow to movement in net funds
2004 2003
£’000 £’000
(Decrease)/increase in cash in year (423) 393
Cash outflow from decrease in debt 33 100
Cash (inflow)/outflow from
(decrease)/increase in liquid resources (1,034) 3,764
111 111
(Decrease)/increase in net funds from cash flows (1,424) 4,257
111 111
Net funds at the beginning of the year 4,995 738
111 111
Net funds at the end of the year 3,571 4,995
222 222
24 Commitments under operating leases
As at 31 December 2004 annual commitments under non cancellable operating leases
were as follows:
Group and Company
2004 2003
Land and Land and
Buildings Other Buildings Other
£’000 £’000 £’000 £’000
Operating leases which expire:
Within two to five years –2 –7 
After five years 71 – 55 –
222 222 222 222
25 Contingent liability
The Company has received a grant of £133,000, of which £40,000 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. 35
Profit and Loss
2004 2003 2002 2001 2000
£’000 £’000 £’000 £’000 £’000
Continuing income from
product sales 1,598 616 483 277 161
Non recurring income – – 200 200 –
Turnover 1,598 616 683 477 161
Gross profit 518 267 353 84 94
Overheads (1,694) (951) (1,134) (519) (412)
Operating loss before
exceptionals (1,176) (684) (981) (435) (317)
Exceptional (costs)/income (328) (134) 200 200 –
Loss on ordinary activities
after taxation (1,306) (786) (717) (212) (329)
Loss per share - basic
and diluted (6.2p) (7.2p) (6.8p) (3.0p) (4.7p)
111 111 111 111 111
Balance Sheet
Net current assets/(liabilities) 4,017 5,311 1,057 1,966 (121)
Net assets/(liabilities) 4,088 5,410 1,481 2,082 (64)
Net funds/(debt) 3,571 4,995 738 2,103 (168)
111 111 111 111 111
Five year Summary 36
INDITHERM plc
Notice is given that the 2005 Annual General Meeting of the Company will be
held at Wentbridge House Hotel, Wentbridge, Pontefract, West Yorkshire
WF8 3JJ on Thursday 28 April 2005 at 10.30 am for the following purposes:
ORDINARY BUSINESS
1. To receive and adopt the accounts of the Company for the year ended
31 December 2004 together with the Director’s 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 re-appoint 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 John Henry Markham, retiring by rotation, as director in
accordance with the provisions of the Articles of Association.
4. To confirm the recommendation of the directors that Mr Richard Harpum,
who was appointed as a director during the year since the previous annual
general meeting, be re-appointed as a director. 
SPECIAL BUSINESS
To consider, and if thought fit, pass the following resolutions, of which
Resolution 5 will be proposed as an ordinary resolution and Resolution 6 will
be proposed as a special resolution
5. Generally and unconditionally to authorise the Directors (subject to the
passing of Resolution 6 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.
Notice of Annual General Meeting 37
6. To empower the directors (subject to the passing of Resolution 5 above)
pursuant to Section 95 of the Act to allot for cash equity securities (as defined
in Section 94 of the Act) pursuant to the authority conferred by Resolution 5
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
24 March 2005 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 10.30am on 25 April 2005. 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 10.30 am on 26 April 2005 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.
Notice of Annual General Meeting (continued) 38
● Preliminary Announcement - March
● Annual General Meeting - April
● Half Year End - June
● Interim Announcement - September
● Year End - December
INDITHERM plc
Financial Calendar 39
For use by holders of ordinary shares of 1p each in Inditherm plc in respect of the 2005 Annual General
Meeting to be held at Wentbridge House Hotel, Wentbridge, Pontefract, West Yorkshire WF8 3JJ on Thursday
28 April 2005 at 10.30 am and at any adjournment thereof.
I/We.....................................................................................................................................................................................
of ..........................................................................................................................................................................................
being (a) Member(s) of Inditherm plc, hereby appoint...............................................................................................
of ..........................................................................................................................................................................................
or failing him the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the
2005 Annual General Meeting of the Company to be held on Thursday 28 April 2005 and at any adjournment
thereof.
I/We direct the proxy to vote on the business of the Meeting as indicated below. If no specific direction as to
voting is given, the proxy/proxies will, at his/her discretion, vote or abstain as he/she decides on any matter
arising at the Meeting.
Ordinary Business For Against
1. Adoption of Directors’ report and accounts
2. Reappointment of Tenon Audit Limited
3. Reappointment of John Henry Markham
4. Re-election of Richard Harpum
Special Business
5. Authority to allot shares
6. Waiver of Pre-emption rights
Signed ........................................................................ .....................................................................................
Name/s...................................................................... .....................................................................................
On this............................................................................day of .................................................................................2005
NOTES:
1. Members entitled to attend and vote at the Annual General Meeting are entitled to appoint one or more proxies to attend and, upon
a poll, vote in their place. A proxy need not be a member of the Company.
2. To be valid a proxy form together with any power of attorney or other written authority under which it is signed or a duly certified
copy of it (failing previous registration with the Company) must be lodged with the Company’s registrar, Capita Registrars, the
Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU by 10.30am on 26 April 2005. Completion and return of proxy forms will
not preclude shareholders from attending and voting at the Meeting in person should they wish to do so.
3. Only holders of ordinary shares or their proxies are entitled to attend and vote at the Annual General Meeting.
4. In the case of a corporation this form of proxy must be given under its common seal, or signed by two directors or by a director and
the secretary, or signed on its behalf by an attorney or a duly authorised officer of the corporation.
5. In the case of joint holders, any one of them may sign but the names of all joint holders should be stated. The vote of the senior who
tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders and for this
purpose seniority will be determined by the order in which names stand in the register of members.
Proxy Form for Annual General Meeting BUSINESS REPLY SERVICE
Licence No. MB122
Capita Registrars
34 Beckenham Road
Beckenham 
Kent
BR3 4TU
Second Fold
Third Fold
First Fold  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