LEADING TECHNOLOGY
ANNUAL REPORT 2004
ANNUAL REPORT 2004
POWER PROTECTION
WIDE REACH
TOTAL SOLUTIONS 14 AUGUST 2003 
POWER CUT BLACKS OUT NEW YORK CITY
28 AUGUST 2003 
POWER CUT CAUSES CHAOS IN LONDON
23 SEPTEMBER 2003 
POWER CUT FROM COPENHAGEN TO STOCKHOLM
28 SEPTEMBER 2003 
POWER CUT ACROSS ITALY
THE FUTURE 
DEGRADING POWER QUALITY WORLDWIDE CHLORIDE SOLUTIONS
PROTECT CRITICAL
APPLICATIONS
WORLDWIDE
ANNUAL REPORT 2004 1 2 ANNUAL REPORT 2004
POWER PROTECTION
THROUGH RIGOROUS FOCUS ON INNOVATION, FLEXIBILITY AND RELIABILITY,
CHLORIDE IS THE SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS.
ITS STRENGTHS DERIVE FROM APPLYING INNOVATIVE TECHNOLOGIES AND
INDUSTRY -LEADING CUSTOMER SERVICE TO THE PROTECTION OF CRITICAL
APPLICATIONS WORLDWIDE.
CONTENTS
3 HIGHLIGHTS
4 CHAIRMAN’S STATEMENT
6 CHIEF EXECUTIVE’S REVIEW
16 FINANCIAL REVIEW
20 BOARD OF DIRECTORS
21 DIRECTORS’ REPORT
25 CORPORATE GOVERNANCE 
29 REMUNERATION REPORT
35 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
36 INDEPENDENT AUDITORS’ REPORT
37 CONSOLIDATED PROFIT AND LOSS ACCOUNT
38 BALANCE SHEETS
39 CONSOLIDATED CASH FLOW STATEMENT
40 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
41 NOTES TO THE ACCOUNTS
66 PRINCIPAL SUBSIDIARY UNDERTAKINGS
67 FIVE YEAR SUMMAR Y
68 SHAREHOLDER INFORMATION, SECRETARY AND ADVISERS ANNUAL REPORT 2004 3
HIGHLIGHTS
> Sales up to £153.2 million (2003: £143.0 million), representing 
7% growth
> Double digit growth in service sales reflects the success of the
Total Solutions approach 
> Operating profit (before goodwill amortisation of £2.7 million
(2003: £2.6 million)) up 19% to £8.4 million (2003: £7.1 million) 
> Adjusted earnings per share before goodwill amortisation 
up 20% at 2.37p (2003: 1.98p). Basic EPS up 43% at 1.26p 
(2003: 0.88p)
> Dividend up 3.1% at 1.65p per share (2003: 1.6p), reflecting the
Board’s growing confidence in the prospects for the Company’s
chosen markets
> Operating cash flow remains strong at £11.8 million (2003:
£11.9 million) before a special contribution of £1.5 million 
(2003: £nil) to the UK pension fund 
> Power crises in North America, UK, Italy and Scandinavia increase
awareness of the need for power protection in an environment 
of degrading power quality and reliability
> Recent signs of improving opportunities in all business streams 
TURNOVER
£million
2003 2004
143.0
153.2
up 7%
OPERATING PROFIT
Before goodwill amortisation  £million
2003 2004
7.1
8.4
up 19%
EARNINGS PER SHARE
Adjusted basis  pence
2003 2004
1.98
2.37
up 20%
DIVIDEND PER SHARE  
pence
2003 2004
1.6
1.65
up 3.1% OVERVIEW This has been a year of good progress for Chloride. I am pleased
to announce that despite a difficult trading environment the Group continues 
to outperform the overall market, and has achieved sales growth of 7% for 
the year.We also achieved a 19% increase in operating profit before goodwill
amortisation, driven by margin improvements across the business as we
continued to reduce costs, grow higher-margin service revenues and improve
efficiencies in product manufacturing and distribution.
This performance demonstrates that Chloride is well positioned to achieve
further sales and profit growth through focused management and targeted
investment, in markets which are now expected to improve.
INVESTING FOR THE FUTURE In the last three years, we have responded 
to the market downturn by reducing our cost structure, aligning our resources
with more profitable market sectors and developing our Total Solutions approach
to meet our customers’ needs. At the same time, we have continued to invest 
for the future of the business through product development and strengthening 
of our management information systems, as well as developing partnerships in
the growing Eastern Europe and Middle East markets, and investing for long-
term growth in China.These actions are delivering results.
Power protection remains an attractive worldwide market and we are well
placed to compete for business in our chosen markets. In Europe, we received
from Frost & Sullivan, the principal market research company in the power 
protection industry, their 2004 award for “Leadership in the European Medium
to Large UPS Market”.The award cited our ability to address those sectors with
growth potential against a background of market decline following the downturn
in telecoms-related business.
FINANCIAL Total sales for the year increased by 7% to £153.2 million (2003:
£143.0 million). Operating profit before goodwill amortisation was up 19% to
£8.4 million (2003: £7.1 million) after absorbing revenue investment costs of
£0.8 million in China. Margins once again improved across all our operations,
reflecting the Group’s continued focus on driving cost savings and improving
efficiencies, as well as continued growth of higher-margin service revenues.
Profit before tax and goodwill amortisation increased by 19% to £7.6 million
(2003: £6.3 million), generating adjusted earnings per share of 2.37p – an increase
of 20%.
Reported profit before tax was £4.9 million (2003: £3.7 million) and basic 
EPS was 1.26p (2003: 0.88p).
Operating cash flow continued to be strong, at £11.8 million (2003:
£11.9 million) before a special contribution of £1.5 million (2003: £nil) to the 
UK pension fund. After considerable capital investment across the business 
the net debt at the end of the year was £14.4 million (2003: £8.8 million) 
with gearing on shareholders’ funds at 28% (2003: 16% restated).
4 ANNUAL REPORT 2004
CHAIRMAN’S STATEMENT
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS DIVIDEND The Board recommends a final dividend of 0.85p per share 
(2003: 0.8p).This increased dividend reflects the Board’s growing confidence 
in the prospects for the market and our ability to deliver further improvements 
in performance.Together with the interim dividend of 0.8p (2003: 0.8p),
this gives a full-year dividend of 1.65p (2003: 1.6p), an increase of 3.1% on 
the prior year.
The final dividend will be paid on 27 July 2004 to shareholders on the register
at 2 July 2004.
PEOPLE On behalf of the Board, I would like to thank all our employees for
their hard work and commitment over the past year. At this year’s AGM we 
will be proposing a resolution to adopt a new Performance Share Plan. Awards
under this plan will further align the interests of the management with those 
of shareholders, while at the same time recognising the latest ABI guidelines 
on share incentive schemes. Details of the Performance Share Plan are set out 
in the circular to shareholders accompanying the Annual Report and Accounts.
OUTLOOK The last three years have been challenging for Chloride as 
the market suffered a sharp decline, followed by continuing low levels 
of capital investment, notably in the telecoms, information technology and
commercial sectors. However, our confidence in the underlying growth drivers
for power protection solutions – our customers’ absolute requirement to
protect mission-critical applications against a backdrop of degrading power
quality – remains strong, and there are now early signs that the market is
beginning to recover. Our actions in realigning the business to respond to 
the changing environment have left us well placed to leverage any upturn 
in the market.
We will maintain our focus on market sectors where we are well positioned,
continue to invest in industry-leading technology and customer service, and
remain committed to driving further operating efficiencies as we deliver 
value to our customers and shareholders worldwide.
NORMAN BROADHURST
ANNUAL REPORT 2004 5 MARKET DYNAMICS The power protection market has experienced
significant challenges in the past three years as a result of the sharp decline 
in capital investment across many sectors, particularly in telecoms, information
technology and industry. Nevertheless, the key market drivers remain in place.
Following the damaging power cuts that occurred in North America, the UK,
Italy and Scandinavia in 2003, there is growing awareness that degrading 
power quality is a serious risk both to business continuity and to critical 
public infrastructure.We note that during the London power cut, our power
protection installations provided uninterrupted power for the emergency 
lighting systems on London Underground, helping the safe evacuation of
thousands of passengers.
Market research carried out by Frost & Sullivan indicates that following 
two years of declining revenues, the worldwide market for UPS is now 
regaining momentum, and is projected to grow at a CAGR of c.6% between
2004 and 2010. It is anticipated that factors such as an upswing in capital
investment as economies improve, opportunities in emerging markets and
increased awareness of degrading power quality as a threat to business
continuity will drive this growth. Chloride’s approach of focusing our sales
resources on the key growth sectors such as transport, healthcare, leisure,
and oil and gas; developing our higher-margin service business; continuing 
to control costs and improve efficiencies; and maintaining a strong balance 
sheet and positive cash flow, will enhance financial performance in an 
improving trading environment.
“The world UPS market is forecast to grow… as a result of an increased awareness
regarding power abnormalities, increased digitalisation of processes, and lack of
sufficient and reliable power availability.”
(Frost & Sullivan World UPS Market Report 2004)
PERFORMANCE Chloride has delivered improved performance despite 
the pressures of a highly competitive market. Sales were increased by 7% 
and operating profit was up by 19% after absorbing the additional costs 
of our investment in China.The underlying operating profit before goodwill
amortisation excluding China was increased by 31%.
6 ANNUAL REPORT 2004
CHIEF EXECUTIVE’S REVIEW
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS
WORLD UPS MARKET FORECAST
CAGR (2004–2010): c.6%
Source: Frost & Sullivan World UPS Market Report 2004.
03 04 05 06 07 08 09 10
+4.2%
+4.6%
+5.9%
+6.0%
+6.4%
+6.4%
+6.4% The growth in operating profit was achieved from increased sales volume,
improved product margins, and rigorous control of costs.The improvement 
in the product contribution margin was a significant achievement against the
background of severe pressure on prices. Overall the contribution margin 
also benefited from the continued growth in higher-margin service revenues.
Improved performance was achieved in all business streams, with both sales
revenue and operating profit ahead of last year in Uninterruptible Power
Supplies, Industrial Systems, Power Conditioning and Telecoms Systems.
A major strength of Chloride is its ability to convert profits into cash.
Operating cash flow before the special contribution to the UK pension fund 
was again strong, with cash conversion at 141% of operating profit before
goodwill amortisation (2003: 168%).
SALES The return to sales growth was achieved in difficult market conditions,
by focusing our resources on those territories and market sectors which
provided the most favourable opportunities.The success of this approach 
was recognised by Frost & Sullivan in their 2004 award to Chloride for 
“Market Leadership in the European Medium to Large UPS Market”.
In geographic terms we achieved above-market growth of 7% in our major
market of EMEA and 24% growth in Asia Pacific. Our sales in the Americas 
were flat.
Product sales were up by 6% with good growth in infrastructure projects and
the financial services, petrochemical and medical sectors. Sales in the telecoms
sector started to recover as the main telecoms operators started to increase
investment in their networks. Manufacturing continued to be a difficult sector,
mainly in Europe where the depressed economic conditions adversely affected
capital investment.
Important contracts implemented during the year included the Network Rail
and Cross Channel Link rail infrastructure projects; Bank of Bilbao, Spain, and
Agriculture Bank, China, in financial services; the Sakhalin Island gas production
facility in Russia; hospital projects in the UK and the Middle East; and a large 
data centre for Vodafone in Germany.
ANNUAL REPORT 2004 7
SALES IN MARKET SECTORS
1
2
3
4
5
6
7
8
9
1 Service 27%
2Telecom 17%
3 Manufacturing and
construction 13%
4Government/health 11%
5 Other 9%
6 Energy and
petrochemicals 9%
7 Financial services 5%
8Transport 5%
9Retail 4% Service sales continued to grow strongly with sales growth in the year of 11%.
This underlines the importance of after-sales support to our Total Solutions
approach, which is becoming a key criterion in the selection of power
protection suppliers by blue-chip customers.The increase in service sales was
underpinned by improvements to our offering, including further development 
of our LIFE remote monitoring and diagnostic system, a new range of flexible
support services to match customer requirements, and the implementation 
of a power quality audit capability.
LEADING SOLUTIONS Excellent customer service is at the core of our
Total Solutions approach and allows us to respond swiftly to our customers’
needs. Our industry-leading remote monitoring and diagnostic system is an
important component of our Total Solutions approach. An updated, web-
enabled version was launched during the year under the LIFE.net brand.
This enhanced system enables any potential problems with a customer’s 
power supply or applications to be identified and dealt with by Chloride 
service specialists through a greater use of internet and e-mail 
communication.The success of this enhanced system is reflected 
in an increase in LIFE connections of 16% on an annual basis.
Chloride is at the forefront of innovation in the power quality industry.
During the year we invested in product development to bring new products
based on industry-leading technology to market.These include:
● high power 90-Net and mid range 70-Net UPS systems, with the benefit
of vector digital control technology;
● 50 amp rectifiers for telecoms systems;
● line interactive power conditioned UPS systems, uniquely suited to
telecoms applications, as the telecoms operators develop new services
such as VoIP;
● updated connectivity software for parallel UPS systems; and
● the new Apodys range of modular industrial systems products.
8 ANNUAL REPORT 2004
CHIEF EXECUTIVE’S REVIEW continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS 
INCREASE IN LIFE  
CONNECTIONS
2001 2002 2003
3,280
3,957
4,883
2004
5,681
INCREASE IN SERVICE REVENUE
2000 2001 2002 2003 2004
+26.7%
+61.1%
+12.8%
+13%
+11% Chloride Industrial Systems launched the Apodys product range at the end of
the first half of the year, and the first systems are now in operation, providing a
compact, robust and technically advanced solution for use in even the harshest
environments.This innovative development expands our proprietary Vector
digital control technology into industrial systems, to provide modular, cost-
efficient products with flexible configuration, smaller footprint and enhanced
performance.We are pleased that the Apodys solution has been chosen 
by EnCana (UK) Ltd, the operator of the North Sea Buzzard field, to support
safety and process-critical loads at the main wellhead platform.
All these product and service developments give us confidence that we have
again improved our Total Solutions offering and are well positioned to grow 
sales further during the coming year.
WIDE REACH We continue to invest in developing the capabilities of our
Shanghai-based telecom power systems company, Chloride Masterguard Power
Systems (CMPS).This business, like many others in the region, was severely
affected by the “SARS effect”, which was more prolonged than the epidemic
itself. During the year we have focused on the introduction of a competitive
range of telecoms power systems and UPS products that will put us in a better
position as the market recovers.We are confident that CMPS will provide an
effective platform from which to expand our business in China for telecom
power systems, UPS and industrial systems.
During the year we have also developed relationships with a number of
important partners in Middle Eastern states including Jordan and Kuwait,
to enable us to benefit from increased commercial activity in the region.
We have had considerable success in developing our UPS business in Russia 
and Eastern Europe and anticipate further opportunities with the accession 
of the East European states to the European Union.
Our distribution hub in Duisberg, Germany has resulted in increased efficiency 
in our international logistics network.We are now starting up a similar logistics
hub in Madrid which will improve inventory and logistics management in the
Iberian Peninsula.
PROSPECTS Our Total Solutions approach covering a broad range of
applications, strong blue-chip client base, wide international reach and
commitment to delivering excellence and innovation to our customers 
underpin our continuing ability to capture market share, build margins,
increase profit and generate cash.
We enter the new financial year with greater confidence as economic conditions
start to improve and with evidence of increased spending in the telecoms,
information technology and petrochemical sectors. Although we expect to see
only a gradual recovery in the short term, we firmly believe our Total Solutions
approach will provide the platform to drive growth in sales and operating profit,
and deliver further value to our shareholders.
KEITH HODGKINSON
ANNUAL REPORT 2004 9
SALES IN INTERNATIONAL MARKETS
EMEA 73%
Americas 15%
Asia Pacific 12% SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS
LEADING TECHNOLOGY
BUZZARD PROJECT, UK
The Buzzard field is operated by EnCana (UK) Ltd and will be developed using three
bridge linked platforms.This is one of the largest fields to be developed offshore in
the North Sea in over ten years.
Chloride Power Protection has been awarded the contract to supply a dual redundant
UPS and battery-monitoring system to support safety and process-critical loads at 
the main wellhead platform.The Excor Apodys range of UPS has been selected for
this duty.
10 ANNUAL REPORT 2004 COMP USA, NORTH AMERICA
For CompUSA, a major retailer of consumer electronics products, the efficient flow of
information from its 230 stores across the USA is essential to maintaining profitability.
When CompUSA undertook a major technology upgrade to its LAN/WAN, replaced
its PBX systems with VoIP systems and added Wi-Fi in each of its stores, it chose
Oneac power conditioned UPS systems to ensure clean, uninterrupted power to 
these mission-critical systems.
WEMBLEY STADIUM, UK
The new 90,000 seater Wembley Stadium will be the most spectacular football
stadium in the world, built to the highest specifications and using the latest technology.
Electrical contractor for the project Phoenix Electrical has awarded Chloride UK 
the contract to supply a robust network of UPS systems across all four stands.
The UPS will provide 4.3MVA of backup across the entire stadium for mission-
critical equipment such as emergency lighting, exit signs and PA systems.
ANNUAL REPORT 2004 11 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS
TOTAL SOLUTIONS
NEW CROSS HEART HOSPITAL, UK
This year Chloride completed an innovative power protection solution for the state
of the art Cardiac Services Centre at New Cross. Chloride’s design and consultancy
skills resulted in an advanced UPS solution, providing lifetime cost savings for the end
user, while Chloride’s LIFE.net remote monitoring and field support capability gives
unrivalled security for this critical application.
Following its success at New Cross, Chloride has also been awarded a contract 
to supply power protection for the prestigious development at University College
Hospital, London.
12 ANNUAL REPORT 2004 DUBLIN LIGHT RAIL TRANSIT, EIRE
Chloride has been chosen as the preferred power protection supplier to the Dublin
Light Rail Transit project – a modern, rail based urban transport system, due to be
inaugurated in summer 2004.
The Chloride solution meets stringent safety and environmental requirements and
provides protection for signalling, and auxiliary equipment for communication and
control, as well as safety barriers.
UNICREDIT BANK, ITALY
Unicredit Bank is the largest bank in Italy, with over 2,800 branches. Building on 
its position as a long term supplier to this blue-chip customer, Chloride has won 
a three-year contract to provide service and maintenance for the bank’s entire
installed base of over 1,000 UPS units.
This contract demonstrates the strength of Chloride’s solutions offering and its ability
to develop long term customer relationships in the financial sector, where continuous
power is an essential business requirement.
ANNUAL REPORT 2004 13 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS
WIDE REACH
TEATRO LA FENICE,VENICE, ITALY
The restoration of the Fenice Opera House following the devastating fire of 1996 
has taken years of painstaking work, resulting in a magnificent reconstruction of the
original 18th century building.
Despite its historical appearance, the new building is supported by the latest
technology, including power protection provided by Chloride Italy, to safeguard 
the building’s electrical and safety systems.
14 ANNUAL REPORT 2004 © Michele Crosera, Fondazione Teatro La Fenice UNISYS DATA CENTRE,AUSTRALIA
In 2004 Chloride completed its latest power protection project for Unisys – this 
time for the new Unisys data centre in Sydney,Australia. Chloride was selected on the
basis of its proven ability to deliver an advanced technical solution, based around the
latest 90-Net technology, together with its systems design and project management
capabilities. Backed up by 24 hour monitoring through LIFE.net, and local service
support, this project demonstrates the success of Chloride’s state of the art power
protection solutions in delivering reliable, high quality power to mission critical
applications.
SINGAPORE EXPRESSWAY
When completed, the 12km Kallang/Paya Lebar dual carriage expressway will 
have 75% of its length constructed below ground.This presented the Singaporean
Land Transport Authority with extensive safety requirements, including ventilation,
traffic management, fire protection, lighting and communication systems. Beating 
tough competition, Chloride was selected to provide the power protection system,
comprising 60 UPS units, to protect the mission critical safety systems.
ANNUAL REPORT 2004 15 16 ANNUAL REPORT 2004
> The drivers for growth – degrading power supplies (as 
witnessed by recent power blackouts in the USA and Europe) 
and increasingly critical application needs – remain strong
> Chloride’s Total Solutions approach reduces risk and improves 
business profitability
> High quality of earnings as service revenues and cash returns
remain strong
> Strong market positions held in Europe and good footprints 
in developing markets
> Cost base reduced and supply chain improvements continue 
to be made
> Adjusted EPS before goodwill amortisation 20% up on prior year.
Basic EPS up 43% at 1.26p (2003: 0.88p)
> Dividend up at 1.65p, providing a yield of 3% at the balance 
sheet date
> Strong operating cash flow at 141% of operating profit before
special contribution to the UK pension fund of £1.5 million
> Profits grown but shareholders’ funds reduced by exchange
translation impact.
> Unutilised committed facilities of c.£32 million available for further
investment opportunities
TOTAL SHAREHOLDER RETURNS Following the downturn in the stock
market two years ago, and the continuing improvement in Company profitability,
shareholder value has risen in line with the Small Cap Index.We continue to
monitor regularly our performance in terms of Total Shareholder Returns (TSR) 
as determined by the growth in both the share price and the dividend. During
2004 world stock markets have improved. Chloride has also improved and the
strong fundamental drivers for growth have seen its share price rise from a trough
of 29p at the beginning of the year to over 60p before settling at just under 50p
at the year end.
Management continues to believe that the return to increases in value in the
longer term will be driven by the increasingly poor quality of electricity supply
around the world and the growing need for power protection solutions in
critical applications.This confidence is again reflected in the dividend, which 
the Board recommends rise to 1.65p (a 3% yield at 31 March 2004).
FINANCIAL PERFORMANCE Total sales for the year increased by 7% 
to £153.2 million (2003: £143.0 million). Adjusted operating profit was up 19%
to £8.4 million (2003: £7.1 million) after absorbing development costs in China
of £0.8 million. After goodwill amortisation of £2.7 million, operating profit 
was £5.7 million (2003: £4.5 million) and profit on ordinary activities after 
tax was £2.6 million (2003: £2.0 million). After dividends of £3.9 million (2003:
£3.8 million) the loss retained for the year was £0.9 million (2003: £1.7 million
retained loss).
FINANCIAL REVIEW
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 17
CASH FLOW/EBITDA Cash management remains crucial to performance.
Turning profits into cash enables healthy reinvestment in the businesses. Cash
flow from continuing operating activities was again healthy at £10.3 million,
after a one-off contribution to the UK pension scheme of £1.5 million, a result 
of strong credit control and collections, strong growth in service revenues and
streamlining the supply chain to reduce inventory.The business model should
continue to provide good cash returns.
CAPITAL EXPENDITURE AND INVESTMENTS Tangible fixed asset capital
expenditure in the year was c.£8 million.The Group’s R&D and manufacturing
site in Chicago was purchased for c.£3.0 million, and the upgrade of the
Industrial Systems site in Lyon begun with £0.4 million (out of a total of
£1.5 million) of improvements to testing and customer facilities. In addition,
further upgrading of systems to support the speed and efficiency of customer
interfaces cost £1.5 million.
The employee benefit trust (EBT) holds 11.2 million shares to satisfy the
potential exercise of certain incentive share options.The net acquisition cost 
of £10.5 million has been restated as a prior year adjustment to reserves in
accordance with revised UK generally accepted accounting principles (UITF 38).
See note 23 to the financial statements.
ACQUISITION On 21 February 2003, Chloride acquired from Siemens China
Ltd 51% of the shares of Siemens Telecom Power Supply Ltd, now renamed
Chloride Masterguard Power Systems Limited (CMPS), for an undisclosed 
sum. Since then, Chloride’s shareholding has been increased to 68% by further
investment in CMPS. The joint venture partner, Shanghai Communications
Service Company, a subsidiary of China Mobile Communication Corporation 
in Shanghai, continues to hold the remaining 32% of the shares.
SHAREHOLDERS’ FUNDS Following the adoption of UITF 38 and the
consequential restatement of EBT shares (of £10.5 million) as a deduction 
from shareholders’ funds (of £10.5 million), and despite the growth in profits,
the sizeable dividend and the impact of foreign exchange have again led to 
a small reduction in shareholders’ funds to £50.9 million.
EBITDA/CASH FLOW
      EBITDA £million        Cash flow £million
2002 2003 2004
8.2
2.7
10.1
11.9
12.1
11.8*
SHAREHOLDERS’ FUNDS*
£million
2002 2003 2004
56.0
55.4
50.9
Mar 
2002
May Jul Jan Sep Nov Mar
2003
May Jul Jan Sep Nov Mar
2004
50
60
70
80
90
100
110
120
130
£
TOTAL SHAREHOLDER RETURN
       Chloride           FTSE Small Cap Index (excluding Investment Companies)
*Before special contribution to the UK pension fund 
of £1.5 million.
* Profits grown but shareholders’ funds reduced by
exchange translation impact. ACCOUNTING POLICIES AND PRESENTATION During the year,
there have been two new accounting standards issued: UITF 38 (see investment
section above) and an amendment to FRS 5 (Reporting the Substance of
Transactions) requiring revenue to be linked more strictly to the performance 
of a service or provision of goods rather than the receipt of cash. Chloride’s
revenue recognition policy already complies with this requirement.
The thrust remains towards the introduction of International Accounting
Standards (“IAS”) as of April 2005 and the restatement of the related prior year.
We have undertaken an initial assessment with Deloitte of the key areas 
of impact of IAS.These have been identified as employee share and option
incentive schemes, pensions and related deferred tax, research and
development, and foreign exchange and interest rate hedging.We shall 
provide further details in the coming year.
RISK MANAGEMENT AND COMPLIANCE WITH GUIDELINES FOR
CORPORATE GOVERNANCE The Turnbull guidelines seek to align business
objectives with risk management such that the business can ensure that there 
is an ongoing embedded process for managing and reporting on key risks.
Directors are responsible for maintaining a sound system of internal control 
that provides reasonable but not absolute assurance that a company will not 
be hindered in achieving its business objectives by circumstances that are not
foreseen. Ongoing reporting against these identified risks enables the Board 
to make the statement on pages 27 and 28.The Company’s risk control
procedures have enabled the business to remain on a sound footing.
TREASURY AND OBJECTIVES AND POLICIES
Management of financial risk The major financial risks faced by the Group are
liquidity risk, currency risk and interest rate risk.The Board of Chloride Group
PLC regularly reviews these risks and approves written policies covering the 
use of financial instruments to manage risk and overall risk limits.
The Company continues to operate a central treasury management service 
in accordance with the policies and procedures approved by the Board.This 
function operates to reduce risk and cost and no transactions are undertaken
on a speculative basis.The trading of financial instruments within the Company 
is confined to central Treasury.
Core facilities and net liquid funds The Company’s management policy
regarding liquidity risk is to ensure that it always has sufficient committed
facilities available to meet its foreseeable needs. At 31 March 2004 the
Company had committed term facilities of £45 million of which £32 million
remain undrawn. All of these undrawn facilities are on loan agreements that
expire in a period of greater than one year.
At 31 March 2004, the Company had net debt of £14.4 million representing
on demand borrowings of £8.7 million, most of which relates to the hedging of
our overseas operations, finance lease obligations of £0.5 million and committed
borrowings of £15.2 million, less cash and short-term deposits of £10.0 million.
In its principal overseas companies the Company has on demand overdraft 
and bill discounting facilities to provide local funding for operating and working
capital requirements. Drawings under these facilities provide a partial hedge
against assets held in local currencies.The funding structures of our UK and
overseas operations are regularly reviewed with the objective of achieving 
the optimal post-tax financing cost.
18 ANNUAL REPORT 2004
FINANCIAL REVIEW continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS 
CORE FACILITIES AND NET LIQUID FUNDS
       Net liquid funds £million          Core facilities available £million
2000
-17.2
45.0
2001
36.0
4.9
2002
23.0
-8.1
2003
23.5
-8.8
2004
32.0
-14.4 The Company also has adequate foreign exchange contract and engagement
facilities for its day-to-day commercial and exposure matching needs.
Of the £8.7 million of on demand borrowings at 31 March 2004, £0.8 million 
is guaranteed by Chloride Group PLC.The committed term facilities are
guaranteed by Chloride Group PLC and contain common financial covenants
regarding interest cover, a ceiling on net debt and minimum consolidated
shareholders’ funds. It is Group policy to manage the consolidated balance 
sheet so as to operate at all times well within covenanted restrictions.
Currency risk The Company’s management policy on foreign currency
exposure requires subsidiaries to hedge transactional currency exposures 
against the currency in which their results are measured. Net exchange
exposures continue to be hedged at transactional level using the forward 
foreign exchange market.
Apart from optimising expenses and interest on local borrowings, the Group
does not believe, as an internationally based business, that it is appropriate to
hedge other aspects of its profit and loss account translation exposure.There was
a positive exchange impact of £0.7 million on operating profit during the year.
Net assets are held in a number of currencies and translated at year-end rates.
This is explained more fully in the accounting policy.The resulting exposures 
are managed where practicable by matching local currency assets with local
currency borrowings.
Non-sterling currencies of primary importance to the Group moved as follows
in the year:
Impact on
operating
2004 2003 % 2004 2003 % profit
Year end Year end change Average Average change £m
US dollars 1.81 1.57 +15% 1.69 1.54 +9% -0.1
Euro 1.50 1.46 +3% 1.44 1.56 -8% +0.8
T otal +0.7
Interest rate risk The Company’s policy is to review the ratio of fixed rate 
debt to total outstanding debt on an ongoing basis to minimise the risk of 
major interest rate fluctuations over the medium to long term, and to hedge
such exposure through the use of interest rate swaps.
At 31 March 2004, the Company had a ratio of fixed rate debt to total
outstanding debt of approximately 31%. As of 31 March 2004 the Company 
had fixed £7.2 million of euro denominated borrowings at an average fixed rate
of 4.9%.The remainder of borrowings are at floating rate and predominantly
EURIBOR based.The weighted average remaining period as at 31 March 2004
for which the above debt was fixed was 19 months.
Credit risk The Company controls credit risk by entering into financial
instruments or placing deposits only with highly credit rated authorised
counterparties. Counterparty positions are monitored on a regular basis 
to ensure that internally set limits are not broken.
Use and fair value of financial instruments At 31 March 2004, outstanding
forward contracts existed with a gross book value totalling £14.2 million in
respect of its actual transaction exposures.There is no significant difference
between the book and fair value of these forward foreign exchange contracts 
or of the above mentioned interest rate swaps at 31 March 2004. In addition to
these forward contracts the Group is exposed to foreign exchange movements
on its overseas borrowings. At 31 March 2004 there were £17.0 million of
foreign currency borrowings (providing a partial hedge against assets held 
in local currencies).
At 31 March 2004, outstanding interest swaps existed with a gross book value
of £6.0 million.There was no significant difference between the book and fair
market values of these interest swaps at 31 March 2004.
Tax rate The tax charge in 2004 represents an effective rate of 30.0% 
(2003: 27.0%). As the Company grows in profitability and tax losses are 
gradually used up, we anticipate that this rate will rise.
NEIL WARNER
ANNUAL REPORT 2004 19 Norman N Broadhurst FCA FCT Non-Executive Chairman
Chairman of the Remuneration and Nomination Committees
Member of the Audit Committee
A non-executive director since March 1998, and Chairman since August 2001.
He is also Chairman of Freightliner Limited and a non-executive director of
Cattles plc, United Utilities Plc, Old Mutual plc and Tomkins plc. He was Finance
Director of Railtrack plc from 1994 until his retirement in 2000. Age 62
Keith H Hodgkinson FCMA Chief Executive
Member of the Nomination Committee
Joined the Board in December 1991 and was confirmed as Chief Executive 
in March 1992. His previous career was with GEC plc where he held a number 
of senior appointments. He is a non-executive director of De La Rue plc. Age 60
Angus S J Fraser MA MBA Non-Executive Director
Senior Independent Director
Chairman of the Audit Committee
Member of the Remuneration and Nomination Committees
Joined the Company in 1976 and became an executive director in 1984.
A non-executive director since 1988, he is also Chairman of Alpha Plus 
Holdings Limited, non-executive Deputy Chairman of Bertam Holdings PLC 
and a non-executive director of Shepherd Building Group Limited and
Technology Enterprise Kent Limited. Age 59
Robin S Southwell BA OBE FRAeS Non-Executive Director
Member of the Audit, Remuneration and Nomination Committees
A non-executive director since January 2002, he is a senior executive of EADS –
European Aeronautic Defence and Space Company, Chairman of Bookajet
(formerly Ourjet) Limited and Chief Executive of Airtanker Limited. He was
Chief Executive of W S Atkins PLC until October 2002 and his previous career
included a number of senior appointments with BAe Systems plc. Age 44
Neil W Warner BA FCA MCT Finance Director
Joined Chloride and was appointed to the Board as Finance Director in 1997.
He was with Ocean Group PLC (now Exel plc) for six years from 1990,
following appointments in his earlier career with BICC Group PLC (now Balfour
Beatty plc), ALCOA and PricewaterhouseCoopers. He is a non-executive
director of Dechra Pharmaceuticals PLC. Age 51
John A C Wheeler BA Non-Executive Director
Member of the Audit, Remuneration and Nomination Committees
A non-executive director since May 1999. He is a director of S130 Limited,
a maritime leisure company. He was formerly Managing Director, Fujitsu Services,
Commercial Business, and Chief Executive of neosnetworks. His previous career
included senior appointments with British Telecom. Age 53
20 ANNUAL REPORT 2004
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS 
BOARD OF DIRECTORS 
Norman Broadhurst Keith Hodgkinson Angus Fraser Robin Southwell Neil Warner John Wheeler PRINCIPAL ACTIVITIES The principal activities during the year under review
were the manufacture and sale of power protection solutions.
RESULTS AND DIVIDENDS The results for the year and the financial
position at 31 March 2004 are shown in the consolidated profit and loss
account on page 37 and the balance sheets on page 38.The Chief Executive’s
review, starting on page 6, comments on operating performance and the future
development of the business, whilst the financial review, on pages 16 to 19,
covers the consolidated results, financial position and policies.
Profit on ordinary activities after taxation for the financial year was £2.6 million
(2003: £2.0 million). After dividends of £3.9 million (2003: £3.8 million) the
retained loss for the year was £0.9 million (2003: £1.7 million retained loss).
DIRECTORS Biographical details of the directors are set out on page 20.
Messrs Broadhurst, Fraser, Hodgkinson and Southwell retire by rotation at the
forthcoming Annual General Meeting and, being eligible, offer themselves for 
re-election.
Of the directors proposed for re-election, Mr Hodgkinson has a contract 
of service requiring him to give six months’ notice and entitling him to receive
12 months’ notice. Messrs Broadhurst, Fraser and Southwell do not have service
contracts with the Company.
The interests of the directors in the ordinary shares of the Company were 
as shown in note 8 of the notes to the accounts on page 46 and in the
remuneration report on page 34.
DIRECTORS’ INTERESTS IN CONTRACTS No director had, during the
year, a material interest in any contract or arrangement with the Company 
or any of its subsidiaries such as would fall to be disclosed pursuant to statutory
or other requirements.
POLICY ON PAYMENT OF CREDITORS Appropriate terms and
conditions are agreed for transactions with suppliers and payment is generally
made on these terms subject to compliance by suppliers.
The aggregate amount owed by the Company to trade creditors due 
within one year at the financial year end represented approximately 30 days
(2003: 29 days) of the aggregate amount invoiced by suppliers during the year.
The respective figure on a consolidated basis was approximately 69 days (2003:
79 days), reflecting different payment practices in the various countries in which
Chloride operates.
CHARITABLE AND POLITICAL DONATIONS During the year donations
of £2,870 (2003: £2,145) were made to charitable organisations which are
associated with employees or closely linked with the communities in which the
Company operates.
No political donations were made.
INTERESTS IN VOTING SHARES At 20 May 2004, the Company had 
been notified of the following interests of 3% or more in the Company’s
ordinary shares:
Number of % of issued
Name of holder shares shares
Deutsche Bank 44,678,000 18.0
Prudential plc *35,410,000 14.2
AEGON UK plc 10,084,000 4.1
Legal & General 9,842,000 4.0
Standard Life 7,649,000 3.1
Royal Bank of Scotland plc 7,478,000 3.0
* Includes 11,600,000 shares which are also included in the interests notified by Deutsche Bank and 2,702,000 shares which
are included in the interests notified by Royal Bank of Scotland plc.
ANNUAL REPORT 2004 21
DIRECTORS’ REPORT EMPLOYEE BENEFIT TRUST In June 1997, the Company established the
Chloride Group Employee Benefit Trust (the Trust) to acquire ordinary shares 
in the Company to satisfy rights to shares arising on the exercise of executive
share options.
During the year, the Trust made the following transfers out of the Company’s
ordinary shares:
Number of
shares
Balance at 1 April 2003 11,242,920
Transferred out (50,000)
Balance at 31 March 2004 11,192,920
No shares were purchased by the Trust during the year.
The Trust is funded by interest-free loans from the Company.The cost of 
the shares held by the Trust was £10.5 million and the market value was 
£5.4 million at 31 March 2004. Mourant & Co Trustees Limited, as trustee of 
the Trust, has waived all past and future dividends on ordinary shares held by
the Trust except to the extent of 0.0001% of each dividend payable per share.
QUEST In March 2001, the Company established a qualifying employee share
ownership trust (Quest) to meet certain future obligations of the Company
relating to share options awarded under the Chloride savings-related share
option schemes.
During the year the following transfers out were made:
Number of 
shares 
Balance at 1 April 2003 26,232 
Transferred out (26,232)
Balance at 31 March 2004 – 
Following legislative changes, arrangements are in hand to wind up the Quest.
RESEARCH AND DEVELOPMENT Investment in research and
development is considered to be key to further improvement of the Company’s
competitive position. Market-driven programmes to improve existing products
and to develop new products and applications receive high priority.
Development engineers work closely with applications and software engineers
and sales and marketing staff in the operations to ensure that development 
is focused on the Company’s key markets.The Company has research and
development departments specialising in the development of power protection
solutions at Chicago, USA (power conditioners and software); Bologna, Italy and
Erlangen, Germany (AC power protection products); Lyon, France (industrial
systems) and Dol de Bretagne, France (DC power protection products).
CORPORATE SOCIAL RESPONSIBILITY
Business policies Chloride has adopted a statement of business policies 
and responsibilities which recognises the importance of social, ethical and
environmental responsibility in all aspects of its operations.The statement
confirms Chloride’s global commitment to ethical practices, and to compliance
with health and safety and environmental standards that match or exceed 
the standards imposed by law in the countries in which it operates.
The Board recognises the need to review and manage risks to the short and
long term value of the business arising from social, ethical and environmental
matters. Compliance with the statement of business policies and responsibilities
is therefore reviewed annually as part of the risk identification process outlined 
in the corporate governance report.
22 ANNUAL REPORT 2004
DIRECTORS’ REPORT continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  The Chloride Board takes full responsibility for compliance with health and
safety and environmental standards and the Finance Director is responsible 
for reporting on these issues at Board level. A committee of senior managers,
including the Finance Director, Group Risk Manager, Director for Personnel and
Company Secretary, co-ordinates the monitoring and audit of health and safety
and environmental practices throughout the Group. In each operating company,
local management is tasked with ensuring compliance with Group policy and
compliance with local legislation and regulation, with the aid of appropriately
qualified employees and/or external consultants.
External risk control consultants are also employed on a Group basis to provide
an independent audit of compliance with environmental and health and safety
standards at the Company’s principal sites on an ongoing basis.The reports of
the risk control consultants are reviewed by local and Group management and
appropriate action is taken in accordance with their recommendations.
Environmental policy Chloride acknowledges the importance of good
environmental practice to minimise the impact of its activities on the environment.
It is the Company’s policy to comply with standards that match or exceed
environmental legislation in all countries in which it operates and to adopt
responsible environmental practices.To achieve these objectives on a consistent
basis, the Company’s policy of achieving compliance with the ISO 14001
environmental management standard has been extended to include all main
Sales and Service operations, in addition to its production sites.
The Company has six principal sites where production activities are carried out:
Bologna, Italy; Erlangen, Germany; Dol de Bretagne and Lyon, France; Chicago,
USA; and Shanghai, China. Such activities mainly involve the assembly and testing
of electronic products. Progress has been made during the year and, in addition
to Masterguard Germany and Chloride Masterguard Power Systems, China, our
operation at Bologna, Italy, has achieved ISO 14001 certification.
During the year, the first of our Sales and Service sites, at Madrid, Spain, was 
also certified as complying with the ISO 14001 standard. Further progress is
expected at a number of other sites during the year commencing 1 April 2004.
Initiatives which benefit the environment and result in cost savings to the
Company are encouraged.These include waste recycling and reduction of
energy and materials consumption. As an international Group with 20 principal
sites in 14 countries, our requirement for air travel has been considerably
reduced by the use of videoconferencing facilities at 12 sites.
Health and safety The Company recognises the primary importance of ensuring
the health and safety of its employees. Its policy is to manage its activities so that
employees are not exposed to unnecessary or unacceptable risks to their health
and safety, and to comply with the relevant legal and regulatory standards in
each of the territories in which it operates. In each of the principal production
centres, there is a designated senior manager responsible for health and safety.
Policies and procedures are documented and in each such location there is
either a Works Council or Health and Safety Committee, which meets regularly
to consider health and safety issues. Health and safety training is provided where
necessary, particularly in relation to battery handling and working with electricity.
During the year, 411 working days (approximately 0.1% of the total) were lost 
due to work-related accidents.There were no claims against the Company’s
Employer’s Liability policy arising out of the current Group businesses.
Employees Chloride’s policy is to provide equal recruitment and other
opportunities for all employees, regardless of sex, religion, race or disability.
We endeavour to provide all possible help to retain employees who have
become disabled while working for the Group. It is the practice to encourage
lines of employee communications at local level through appropriate means,
such as works councils, briefing groups, workshops and newsletters.
ANNUAL REPORT 2004 23 The Company is committed to developing and motivating its people and, in the
UK, participates in the Investor in People scheme.There is a programme to help
employees acquire professional and technical qualifications that are relevant to
their jobs.
The Company has an ongoing employee training programme – “Achieving
Service Excellence” – to promote the customer care ethos throughout the
organisation, as well as training programmes to support and promote the
Company’s solutions offerings.
Outstanding achievement among the sales staff is recognised by the award 
of prizes at an annual sales conference.
MARKET VALUE OF LAND AND BUILDINGS The Company’s interests 
in freehold land and buildings were professionally valued as at 31 March 2004
on an open market basis. Having regard to this valuation, the directors are 
of the opinion that the values at which the Company’s interest in land and
buildings are included in the balance sheet are fairly stated.
The directors are of the opinion that the Company’s interests in short-term
leaseholds are fairly stated in the balance sheet.
PURCHASE OF OWN SHARES No shares were purchased by the
Company during the period under review pursuant to the proposal approved
by shareholders at the 2003 Annual General Meeting for the Company generally
to be authorised to purchase its own ordinary shares. Nevertheless, the Board
believes it is appropriate to seek renewal at the forthcoming Annual General
Meeting of such an authority for a further year, although it has no present
intention of utilising such authority. Accordingly a resolution to this effect 
is included as item 8 in the notice of meeting on page 4 of the accompanying
circular. If the resolution is passed, the Board undertakes that such authority will
be exercised only if it results in an increase in earnings per share and is in the
best interests of the shareholders generally.
AUDITORS On 1 August 2003, Deloitte & Touche transferred their business 
to Deloitte & Touche LLP , a limited liability partnership incorporated under the
Limited Liability Partnership Act 2000.The Company’s consent has been given 
to treating the appointment of Deloitte & Touche as extending to Deloitte &
Touche LLP with effect from 1 August 2003 under the provisions of Section
26(5) of the Companies Act 1989. A resolution to reappoint the auditors,
Deloitte & Touche LLP , will be proposed at the Annual General Meeting.
By order of the Board
S WILLIAMS
Secretary
27 May 2004
24 ANNUAL REPORT 2004
DIRECTORS’ REPORT continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  COMPLIANCE WITH THE COMBINED CODE The Board recognises its
accountability to shareholders and is committed to maintaining high standards 
of corporate governance.The Board considers that, throughout the year under
review, the Company has complied with the current version of the Combined
Code on Corporate Governance (the Hampel Code).
The new Combined Code, as published by the Financial Reporting Council 
in July 2003 (the 2003 FRC Code) will apply to the Company in respect of 
its 2004/05 financial year. In anticipation of this, the Board has reviewed its
processes and procedures and made appropriate changes in the light of the
revised Code Provisions. It has also identified those areas where compliance
with the Code Provisions of the 2003 FRC Code is not considered appropriate
for Chloride as a smaller company.The report on the application of the
principles of the Hampel Code set out below has been extended to include 
an explanation of the Board’s view on these issues.
APPLICATION OF THE PRINCIPLES OF THE HAMPEL CODE This
report explains how the Company has applied the principles of the Hampel
Code to its activities.
Board The Company currently operates with a Board of six directors
comprising the non-executive Chairman, three non-executive directors, including
the Senior Independent Director, and two executive directors.The size of the
Board and the balance between executives and non-executives are considered
appropriate to the Company’s size and scope of activities and provide for
effective operation.
A schedule of formal meetings of the Board, the Audit Committee and the
Remuneration Committee is arranged each year in line with the Company’s
management reporting, and interim and annual reporting. During the year, the
Board met formally seven times. In addition, the Board held discussions with 
the executive directors and senior operational managers on strategy, business
development, and other topics important to the Company’s progress. During
the year, the directors had a 100% attendance record in respect of Board
meetings and meetings of the committees of which they were members.
The Board has reserved to itself powers relating to matters that it considers
significant to the Group’s business, operational and financial risks.These include
the approval of corporate policies, strategy, plans and budgets; major acquisitions
and disposals of companies or businesses; major investment and financial
decisions; appointments to the Board; executive remuneration policy and major
management or organisational changes.
The Chairman and Chief Executive have defined roles, providing for a division 
of responsibilities between them, which have been documented and approved
by the Board.
The Board considers that all the non-executive directors are independent 
of management and free of any business or other relationship that could
materially interfere with the exercise of their independent judgement.
The non-executive directors are appointed for fixed terms and the unexpired
terms of appointment are set out in the remuneration report on page 29.
Each non-executive director has been appointed for a term or successive terms
totalling less than nine years, with the exception of Mr Fraser who joined the
Board in 1984.The Board recognises that under both the Hampel Code and 
the 2003 FRC Code, length of service is one of the factors that might mitigate
against a director being regarded as independent. It has therefore reviewed 
the position again and confirms its view that Mr Fraser has demonstrated 
his independence of management and the independence of his judgement
throughout the year. In addition the Board, and in particular the other non-
executives who come from different business backgrounds, value the depth 
of knowledge of the Company and its market sectors that enables Mr Fraser 
to make a positive contribution to the Board.
Under the Company’s articles of association all directors below the age of 65
are required to submit themselves for re-election every other year. Directors
aged 65 or over must submit themselves for re-election each year. Given that
the directors are already subject to re-election at least every other year,
Mr Fraser has not been requested to submit himself for re-election on 
an annual basis, as recommended by the 2003 FRC Code.
ANNUAL REPORT 2004 25
CORPORATE GOVERNANCE All the directors have access to the advice and services of the Company
Secretary and senior managers generally, and may take independent professional
advice at the Company’s expense if they consider it necessary to do so in the
furtherance of their duties.
The Board has developed a process for reviewing its effectiveness, led by the
Chairman, which is based on a combination of written reviews by individual
directors, discussion with the Chairman and review by the Board as a whole.
This process has been undertaken during the year.The Audit and Remuneration
Committees have also conducted reviews of their effectiveness, using a similar
process and led by the Committee Chairmen.
During the year, the Chairman and Mr Fraser have been reappointed for terms
of three and two years respectively, following a rigorous review of performance
and on the recommendation of the Nomination Committee.
The non-executive directors held one meeting during the year with the
Chairman, without the executive directors present.
Board committees The Board has three standing committees – the Audit,
Remuneration and Nomination Committees.The Board has reviewed
membership of these committees and has confirmed its view that, as a smaller
company, it is appropriate that all the non-executives should participate as
members of these committees, so that they are fully involved in monitoring 
the governance issues affecting the Company, including executive remuneration,
succession planning and risk management.There is therefore no provision for
fixed periods of membership of the committees, as recommended by the 2003
FRC Code.The Board also considers that the Chairman should continue his
membership of the Audit and Remuneration Committees. He brings relevant
financial experience to the Audit Committee, which is valuable to those
committee members without a financial background. He also has wide
experience of best practice on remuneration issues through his directorships 
of several listed companies, including FTSE 100 companies, and therefore the
Board appreciates his leadership on remuneration issues, as Chairman of the
Remuneration Committee.
Audit Committee The Audit Committee comprises Mr A S J Fraser
(Committee Chairman), Mr N N Broadhurst, Mr R S Southwell and 
Mr J A C Wheeler. It held three meetings during the year, one of which 
was dedicated to review of risk control issues.
The Audit Committee:
● monitors the integrity of the financial statements of the Company, reviewing
the annual and interim reports in detail to ensure that they present 
a balanced assessment of the Company’s position and prospects which 
is understandable to shareholders and potential investors;
● reviews the effectiveness of the Company’s internal controls and risk
management systems, as described on pages 27 and 28, and in conjunction
with the external auditors, considers the accounting policies adopted by 
the Company;
● keeps under review the Company’s whistle-blowing arrangements;
● oversees the relationship with the external auditors.The Committee makes
recommendations to the Board on the appointment of the external auditors,
approves their remuneration, monitors their independence and objectivity,
monitors the effectiveness of the audit process and sets the policy on the
employment of external auditors for non-audit work; and
● makes recommendations to the Board on the requirement for an internal
audit function and reviews the effectiveness of internal audit.The internal
audit function is carried out under the supervision of the Group Risk
Manager, who provides regular reports on these activities and meets with 
the Audit Committee Chairman before each Committee meeting.
Remuneration Committee The Remuneration Committee met three times
during the year and comprises Mr N N Broadhurst (Committee Chairman),
Mr A S J Fraser, Mr R S Southwell and Mr J A C Wheeler.
The Remuneration Committee determines the policy for remuneration of the
executive directors and designated senior managers. It determines individual
remuneration packages for the executive directors and designated senior
managers, and considers all aspects of executive directors’ service agreements,
26 ANNUAL REPORT 2004
CORPORATE GOVERNANCE continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  pensions and related matters. It makes recommendations to the Board on the
design of share incentive plans and exercises all powers and discretions of the
directors in connection with the Company’s savings-related and executive share
option schemes.
Fees of the non-executive Chairman and the non-executive directors are
determined by the Board.
The Remuneration Committee is responsible for compliance with the
Combined Code in determining executive directors’ remuneration.The
Remuneration Committee report on pages 29 to 34 demonstrates how 
Chloride applies the principles of the Combined Code relating to level 
and make-up of remuneration and to disclosure.
Nomination Committee During the year the composition and terms of
reference of the Nomination Committee were reviewed. It now comprises 
Mr N N Broadhurst (Chairman), Mr K H Hodgkinson, Mr A S J Fraser,
Mr R S Southwell and Mr J A C Wheeler. Its responsibilities have been extended
to include, in addition to making recommendations to the Board of proposed
new appointments of executive and non-executive directors, succession 
planning for directors and senior executives, and making recommendations on
reappointment of non-executive directors at the end of their period of office.
Relations with shareholders Relations with shareholders receive the highest
priority.The Company promotes dialogue with institutional shareholders and
analysts through regular meetings following the announcement of interim 
and final results and responds positively to invitations to enter into dialogue
whenever it considers it to be in the best interests of shareholders generally 
to do so. All directors are available to attend meetings with shareholders if
requested.The Chairman and Senior Independent Director attend analysts’
presentations, and the Chairman also attends meetings with institutional
shareholders when possible.Trading statements are issued when deemed
necessary. At the Annual General Meeting there is an opportunity, following 
the formal business, for informal communication between investors and
directors. In addition, information, including the presentations made to
institutional shareholders and analysts, is readily available to shareholders 
on the Company’s website – www.chloridegroup.com.
INTERNAL CONTROLS The directors are responsible for the Company’s
system of internal control which aims to: safeguard the Company’s assets;
ensure that proper accounting records are maintained; ensure compliance 
with statutory and regulatory requirements; and ensure the effectiveness and
efficiency of operations, including the assessment and management of risk.
A system of internal control is designed to manage rather than eliminate risk 
of failure to achieve business objectives and can provide only reasonable and
not absolute assurance, particularly against misstatement or loss.
Chloride has a well established and embedded framework of internal financial
and operational control for identifying, evaluating and managing the risks faced
by the Company.This framework has been in place throughout the year under
review, and up to the date of approval of the annual report.The key elements 
of this review process, which included a specific assessment by the Board for 
the purpose of the annual report and accounts, and complies with the Turnbull
guidance,“Internal Control Guidance for Directors on the Combined Code”
published in September 1999, are as follows:
Directors have responsibility for reviewing the strategy and monitoring the
conduct of the Company.The directors and the executive management of 
the Company are accountable for their conduct and performance within the
agreed strategies. A management structure exists with clearly defined lines 
of responsibility and the appropriate levels of delegation.
The Company and its operations are subject to a detailed annual budget
process and ongoing formal capital investment appraisal process. Actual
performance during the year is monitored monthly against budget, forecast 
and previous year, and full year forecasts are updated at regular intervals during
the year, based on trended historical data and realistic macroeconomic forecasts.
These forecasts and results are presented to the Board regularly.The Chief
Executive and Finance Director each prepare Board reports monitoring
performance and actions to achieve objectives.
ANNUAL REPORT 2004 27 The Company and its subsidiaries operate control procedures designed 
to ensure complete and accurate accounting of financial transactions, and 
to limit the risk of loss of assets or fraud. Measures taken include physical
controls, segregation of duty in key areas and internal reviews and checks.
The identification, mitigation and monitoring of material risks are primarily 
the responsibility of operating company management. During the budget 
and reporting cycle general managers and financial controllers are required 
to identify risks the business is exposed to, assess any potential impact and 
put in place actions to reduce them.These are also reviewed on a Company-
wide basis with significant risks reported to the Audit Committee which are
then monitored throughout the year.
Key functions such as tax, treasury, insurance, legal, personnel and systems 
are controlled centrally.
EXTERNAL AUDIT The external auditors are engaged to express an 
opinion on the Company’s annual report and accounts.They independently 
and objectively review management’s reporting of the operational results 
and financial position.They also review and test the systems of internal 
control and the data contained in the annual report and accounts to the 
extent necessary for expressing their audit opinion.
INTERNAL AUDIT The Board has reviewed the need for an internal 
audit function and has appointed a Group Risk Manager who is considered 
to fulfil this function.The Group Risk Manager scopes and manages reviews of
operations, which are undertaken by him and by other central staff. After each
site visit, the Group Risk Manager provides reports to management and the
Chairman of the Audit Committee, who also has access to the Group Risk
Manager’s detailed reports and working papers.
GOING CONCERN The directors confirm that they expect that the
Company has adequate resources to continue in operational existence for 
the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the accounts.
28 ANNUAL REPORT 2004
CORPORATE GOVERNANCE continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  This report is presented in accordance with the relevant provisions of the
Combined Code on Corporate Governance (the Combined Code) and 
the Directors’ Remuneration Report Regulations 2002 (the Regulations).
The Regulations require the auditors to report on the “auditable part”
of the remuneration report.The audited information has therefore been
separately highlighted.
The Board is responsible for executive remuneration policy and setting 
non-executive fees including the Chairman’s fees. Responsibility for agreeing
remuneration policy with the Board and determining the remuneration packages
of executive directors and other senior executives has been delegated to the
Remuneration Committee.The members of the Remuneration Committee are
N N Broadhurst (Chairman) and the following non-executive directors who 
are considered by the Board to be independent of management: A S J Fraser,
R S Southwell and J A C Wheeler.
During the year, the Remuneration Committee received advice on remuneration
of executive directors and senior executives from the Chief Executive and the
Director of Personnel, neither of whom take part in the determination of their
own remuneration. Advice was also received from the Company Secretary 
in relation to the Company’s share option plans. Advice was obtained from 
New Bridge Street Consultants LLP , who were appointed by the Remuneration
Committee to advise on executive remuneration and long-term incentive
arrangements.
NON-EXECUTIVE DIRECTORS 
Policy on remuneration The fees of non-executive directors and the non-
executive Chairman are determined by the Board within limits authorised 
by the shareholders and in accordance with the articles of association of the
Company.The policy is to set fees at the median level relative to companies
with a comparable market capitalisation. Fees do not contain any performance-
related element and the non-executive directors do not participate in the
Chloride Pension Scheme or in the share option schemes. Non-executive
directors have no entitlement to compensation for early termination of their
term of appointment.
Details of fees paid to non-executive directors, including the Chairman, are
included in the table headed “Summary of remuneration” on page 33.
Term of appointment The non-executive directors are appointed for specified
terms of three years or less.Their letters of appointment have no contractual
notice period, but the appointment of each non-executive director is subject 
to re-election by shareholders on retirement by rotation, which occurs every
two years, or every year in the case of a director aged 65 or over. Details of 
the commencement date and duration of the current letters of appointment 
for non-executives are as follows:
Date of the current Unexpired term
Non-Executive Director letter of appointment of appointment
N N Broadhurst 31 March 2004 38 months
A S J Fraser 31 March 2004 26 months
R S Southwell 21 January 2002 8 months
J A C Wheeler 25 May 2003 24 months
EXECUTIVE DIRECTORS 
Policy on remuneration The policy is to provide a combination of salary,
short and long-term incentives and benefits, which form a competitive and
appropriate total remuneration package. Performance-related remuneration in
the form of annual bonus and share options comprises a significant proportion
of the total remuneration opportunity but is only receivable if stretching
performance targets, which require substantial improvement in financial
performance, are achieved.
ANNUAL REPORT 2004 29
REMUNERATION REPORT COMPONENTS OF THE REMUNERATION PACKAGE
Base salary The base salary of each executive director is determined taking 
into account the responsibilities and performance of the individual together 
with independently furnished information on rates for similar jobs in comparable
industry sectors. In particular, base salaries recognise salary levels in a group of
comparably sized companies in the electronics sector and other similar sectors.
Details of salaries, bonuses and benefits paid to executive directors are included
in the table headed “Summary of remuneration” on page 33.
Annual bonus Chloride operates annual incentive plans for certain employees,
including executive directors. Eligibility for inclusion in such schemes and the
measures of performance to be used are decided annually, taking account of 
key business issues. For the year under review and for 2004/05, the measure
applicable to the incentive plans for executive directors is actual adjusted
earnings per share compared with the previous year. For the executive directors,
the maximum award under the annual incentive plan is 75% of base salary.
Bonus amounts earned up to 50% of base salary are paid in cash and any
bonuses earned above this level are deferred into shares which are released
two years after the award, subject to the executive remaining in the Company’s
employment. As bonuses earned under this plan to date have not exceeded
50% of base salary, neither of the executive directors is currently entitled to
shares in the Company under this plan. Bonuses earned by the executive
directors under annual incentive plans are not pensionable.
Benefits in kind The taxable benefits provided to executive directors are use 
of a fully-expensed car or car allowance, life insurance and medical cover.
Pensions The executive directors are eligible to be considered for augmented
entitlements under the final salary section of the Chloride 1996 Pension
Scheme.The 1996 Pension Scheme is a funded, contributory, Inland Revenue
approved, occupational pension scheme, which is contracted into the State
Earnings Related Pension Scheme. It provides a pension of up to two-thirds 
of final pensionable earnings, depending on service.The 1996 Pension Scheme
also provides for dependants’ pensions and lump sums on death in service.
The table headed “Pension entitlements” on page 33 shows the retirement
benefits, excluding voluntary contributions, which accrued under the defined
benefit section of the Chloride 1996 Pension Scheme to Mr Hodgkinson and 
Mr Warner during the period under review, together with the total accrued
annual pension to which each director would be entitled under defined benefit
arrangements on leaving service.
The pension benefits of Mr Hodgkinson and Mr Warner are capped 
under legislation and both Mr Hodgkinson and Warner now receive salary
supplements in lieu of contributions to funded unapproved retirement benefit
arrangements.The amount of these payments is shown in the table on page 33
headed “Summary of remuneration”.
EXECUTIVE SHARE OPTION SCHEMES 
Policy The Board believes that the potential for increased share ownership
which is provided by share-based incentive schemes is an important element 
in promoting a closer alignment of the interests of shareholders and executive
directors.The policy is to make annual grants of share options. In addition the
Board encourages executive directors to build and maintain holdings of shares 
in the Company.
Current scheme The current scheme is the Chloride Group 2001 Executive
Share Option Scheme (ESOS). Options granted under this scheme up 
to 31 March 2004 are normally exercisable between the third and tenth
anniversaries of the date of grant, on condition that the Company’s adjusted
earnings per share growth over a period of at least three consecutive financial
years from the date of grant exceeds the growth in the UK Retail Prices 
Index by:
● 3% a year compound for options over shares worth up to 100% of annual
remuneration (base salary plus bonus);
● 4% a year compound for options over shares worth over 100% but not
more than 150% of annual remuneration; and
● 7% a year compound for options over shares worth over 150% of annual
remuneration.
30 ANNUAL REPORT 2004
REMUNERATION REPORT continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  If these targets are not satisfied by the fifth anniversary of grant, the share options
lapse. Adjusted earnings per share as disclosed in the report and accounts was
chosen as the basis for the performance condition as achievement of the
growth in EPS necessary before options may be exercised would require a
substantial improvement in the Company’s underlying financial performance.
Proposed introduction of the performance share plan and changes to the
ESOS The Remuneration Committee has reviewed the policy on share options
with its independent advisers, New Bridge Street Consultants LLP , and consulted
with its largest institutional shareholders.This has resulted in a proposal, details
of which are set out in the letter and notice of meeting accompanying the
report and accounts, to introduce the Chloride Group PLC Performance Share
Plan (PSP), in conjunction with changes to the ESOS. Following approval of the
PSP by shareholders at the Annual General Meeting in July 2004, the policy will
be to make annual grants of share options under the ESOS, together with
annual awards under the PSP .
There will be a combined individual limit on the aggregate value of awards that
can be made to a participant under both ESOS and PSP in any financial year.
The combined individual limit will be 2.0 times base salary per annum.Within
this combined limit a mix of ESOS options and PSP awards can be made and
for this purpose two ESOS options will be equal to one PSP award.The effect 
is that a participant cannot receive more value under a combination of ESOS
and PSP grants than he could under only one plan.
Under PSP , awards may be granted to participants, including the executive
directors, which will become exercisable if stretching total shareholder return
(TSR) performance targets, underpinned by EPS growth targets, are met over 
a fixed performance period of three financial years.The TSR target compares 
the Company’s TSR with that of constituents of the FTSE Small Cap Index
(excluding investment banks) and will reward good relative performance.
The annual limit on awards under the PSP will be 1.0 times base salary.
In addition to the introduction of the PSP , the Company intends to make the
following changes to the ESOS:
● If performance targets are not met at the third anniversary of the date 
of grant, there will be no retesting and the options will lapse.
● The maximum value of annual grants will be reduced from 2.0 times annual
remuneration (base salary and bonus) to 2.0 times annual basic salary
(subject to the combined limit described above).
● Annual base salary will be used instead of annual remuneration to determine
the applicable performance targets within the range set out above.
These changes will come into effect for options granted under the ESOS 
from 1 April 2004. A copy of the letter and notice of meeting setting out 
further details of the PSP can be found on the Company’s website,
www.chloridegroup.com.
Previous executive share option schemes Prior to the Chloride Group 2001
Executive Share Option Scheme, the Company operated the Chloride Group
1994 Share Option Scheme and the 1996 Share Option Scheme, under 
which Inland Revenue approved options and, in the case of the 1996 Scheme
unapproved options, were granted to executive directors as well as senior
executives and are still exercisable. No further options will be granted under the
1994 or 1996 schemes.The outstanding entitlements of the executive directors
under all schemes are set out in the table on page 34 headed “Shares under
option”. Options granted under the 1994 and 1996 Schemes are normally
exercisable between the third and tenth anniversaries of the date of grant,
subject to meeting the performance measures stated in the notes to the table
headed “Shares under option” on page 34.
ANNUAL REPORT 2004 31 SAVINGS-RELATED SHARE OPTION SCHEMES The Company has two
outstanding savings-related schemes, the 1987 Scheme, under which options
were last granted in August 1997, and the 1997 Scheme. Under the 1997
Scheme, options – which are available to eligible UK employees who contract to
save a specified monthly amount – are not normally exercisable until the expiry
of three or, depending on an individual’s initial election, five or seven years from
the contract start date.The entitlements of the executive directors under these
Schemes are set out in the table on page 34 headed “Shares under option”.
CONTRACTS OF SERVICE Each of the executive directors has a rolling
contract of employment, terminable on 12 months’ notice if terminated by the
Company and six months’ notice if terminated by the director.
Mr Hodgkinson and Mr Warner last signed a contract of employment on 
1 December 1991 and 23 April 1997 respectively. In the event of termination by
the Company, each of the executive directors would be entitled to 12 months’
salary, pension benefits, payments in lieu of FURBS and benefits in kind. In an
appropriate case the Company would have regard to the departing director’s
duty to mitigate loss. However, in the event of dismissal following a change of
control of the Company, each executive director would be entitled to receive 
a prescribed payment made up of 12 months’ salary and benefits including 
a bonus payment of 20% of basic salary.
No compensation payments were made to executive or non-executive
directors during the year.
POLICY ON EXTERNAL APPOINTMENTS OF EXECUTIVE
DIRECTORS The current policy is that executive directors should not take 
on more than one major outside appointment and then only with the prior
approval of the Board. Fees associated with any such appointment will 
normally be retained by the individual.
TOTAL SHAREHOLDER RETURN The graph set out below shows the
performance of the Company over the last five financial years in terms of 
total shareholder return (TSR), relative to the FTSE Small Cap Index excluding
Investment Companies.The Company has selected this as the comparator
because the Company is a constituent of this index and has used it as a
performance benchmark for a number of years.The graph demonstrates 
the comparative TSR in terms of annual movements.
32 ANNUAL REPORT 2004
REMUNERATION REPORT continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS 
31 March 
1999
31 March 
2000
31 March 
2001
31 March 
2002
31 March 
2003
31 March 
2004
0
50
100
150
200
£
TOTAL SHAREHOLDER RETURN
Value of a hypothetical £100 holding over five years
         Chloride           FTSE Small Cap Index (excluding Investment Companies) AUDITED INFORMATION
Summary of remuneration 2004
Fees/ Performance 
basic related Salary Other 2003
salary bonus supplement benefits Total T otal
£000 £000 £000 £000 £000 £000
Chairman
N N Broadhurst 73.0 – – – 73.0 68.0
Chief Executive
K H Hodgkinson 314.0 117.7 161.3 41.7 634.7 548.1
Executive director
N W Warner 208.0 78.0 54.5 2.3 342.8 303.2
Non-executive directors
A S J Fraser 27.0 – – – 27.0 24.3
R S Southwell 24.0 – – – 24.0 21.8
J A C Wheeler 24.0 – – – 24.0 21.8
Aggregate remuneration 670.0 195.7 215.8 44.0 1,125.5 987.2
Payments listed in the column entitled “Salary supplement” represent payments made to Mr Hodgkinson and Mr Warner in lieu of FURBS.
Performance-related bonuses are earned in respect of the year under which they are shown but are not paid until the following year.
Pension entitlements Transfer value
Annual (less directors’
pension Increase in T otal contributions)
accruing accrued accrued Transfer Transfer represented Increase in 
Years and months in 2003/04 pension pension at value at value at Directors’ by the annual transfer value 
of pensionable excluding during the 31 March 31 March 31 March contributions pension accruing (less directors’
service at inflation* year 2004 2003 2004 in 2003/04 in 2003/04 contributions)
31 March 2004 £ £ £ £ £ £££
K H Hodgkinson 12 years 4 months 1,531 1,990 20,354 344,795 387,317 4,950 23,548 37,572
N W Warner 6 years 11 months 2,541 2,924 18,262 184,099 233,586 4,950 27,550 44,537
* Additional annual pension accrual in 2004, gross of inflation, was: Mr K H Hodgkinson – £1,990 and Mr N W Warner – £2,924.
The transfer values shown in the above table are a liability of the Chloride 1996 Pension Scheme.The above table combines the disclosures required by the Listing
Rules of the Financial Services Authority and the Directors’ Remuneration Regulations 2002.
ANNUAL REPORT 2004 33 Shares under option The directors’ interests in share options are as follows: Number of ordinary shares under option Normal exercise period
Date Option At 1 April (Lapsed)/granted At 31 March
of grant price 2003 2003/04 Note 2004 From T o
Directors’ entitlements under executive share option schemes
K H Hodgkinson 26.06.1998 48.75p 400,000 – 1 400,000 26.06.2001 25.06.2008
26.07.1999 78.5p 200,000 – 2 200,000 26.07.2002 25.07.2009
30.05.2000 135.5p 616,000 – 2 616,000 30.05.2003 29.05.2010
13.08.2001 70.0p 415,000 – 3 415,000 13.08.2004 12.08.2011
06.06.2002 44.5p 550,000 – 3 550,000 06.06.2005 05.06.2012
05.06.2003 35.0p –600,000 3 600,000 05.06.2006 04.06.2013
2,181,000 600,000 2,781,000
N W Warner 26.07.1999 78.5p 559,000 – 2 559,000 26.07.2002 25.07.2009
30.05.2000 135.5p 80,000 – 2 80,000 30.05.2003 29.05.2010
13.08.2001 70.0p 280,000 – 3 280,000 13.08.2004 12.08.2011
06.06.2002 44.5p 375,000 – 3 375,000 06.06.2005 05.06.2012
05.06.2003 35.0p –400,000 3 400,000 05.06.2006 04.06.2013
1,294,000 400,000 1,694,000
T otal 3,475,000 1,000,000 4,475,000
Directors’ entitlements under savings-related share option schemes
K H Hodgkinson 03.07.2002 37.5p 44,133 – 44,133 01.10.2007 31.03.2008
44,133 – 44,133
N W Warner 03.07.2002 37.5p 44,133 (44,133) 4 – 01.10.2007 31.03.2008
03.07.2003 30.5p – 52,213 52,213 01.10.2008 31.03.2009
44,133 8,080 52,213
T otal 88,266 8,080 96,346
All options were granted for nil consideration.
1Performance condition met.
2Performance condition requires the Company’s share price to outperform the FTSE Small Cap ex Inv Co Index in six out of any nine consecutive months from the 28th month 
following the date of grant and for growth in the Company’s adjusted earnings per share to exceed that of the UK Retail Prices Index over a period of at least three years.
3Performance condition is the 2001 Scheme condition outlined above at the start of this section.
4 Lapsed on 16 June 2003.
5 No options were exercised by the executive directors during the year.The mid-market price of an ordinary share as at 31 March 2004 was 48.5p (2003: 29p).
The mid-market price ranged during the year from a low of 28p (2003: 23.5p) to a high of 61.5p (2003: 51.5p).
The Report was approved by the Board on 27 May 2004 and signed on its behalf by
NORMAN BROADHURST
34 ANNUAL REPORT 2004
REMUNERATION REPORT continued
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  United Kingdom 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 Company and Group and of the profit or loss of the Group for
that period. In preparing the financial statements, the directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and estimates that are reasonable and prudent;
● state whether applicable accounting standards have been followed; 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
Company and Group and enable them to ensure that the financial statements
comply with the Companies Act 1985.They are also responsible for the system
of internal controls, safeguarding the assets of the Company and Group and
hence for taking reasonable steps for the prevention and detection of fraud 
and other irregularities.
ANNUAL REPORT 2004 35
STATEMENT OF DIRECTORS’ RESPONSIBILITIES TO THE MEMBERS OF CHLORIDE GROUP PLC We have audited the
financial statements of Chloride Group PLC for the year ended 31 March 2004
which comprise the consolidated profit and loss account, consolidated balance
sheets, consolidated cash flow statement, consolidated statement of total
recognised gains and losses, reconciliation of movements in shareholders’ funds,
notes to the consolidated cash flow statement, the accounting policies and the
related notes 1 to 30.These financial statements have been prepared under 
the accounting policies set out therein.We have also audited the information 
in the part of the directors’ remuneration report that is described as having
been audited.
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 auditors’ 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, of our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As
described in the statement of directors’ responsibilities, the Company’s directors
are responsible for the preparation of the financial statements in accordance
with applicable United Kingdom law and accounting standards.They are also
responsible for the preparation of the other information contained in the annual
report including the directors’ remuneration report. Our responsibility is to audit
the financial statements and the part of the directors’ remuneration report
described as having been audited in accordance with relevant United Kingdom
legal and regulatory requirements and auditing standards.
We report to you our opinion as to whether the financial statements give 
a true and fair view and whether the financial statements and the part of the
directors’ remuneration report described as having been audited have been
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 and other members of the Group is not disclosed.
We review whether the corporate governance statement reflects the
Company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules of the Financial Services Authority,
and we report if it does not.We are not required to consider whether the
Board’s statements on internal control cover all risks and controls, or form an
opinion on the effectiveness of the Group’s corporate governance procedures
or its risk and control procedures.
We read the directors’ report and the other information contained in the
annual report for the above year as described in the contents section, including
the unaudited part of the directors’ remuneration report, and consider the
implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the financial statements.
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 and the part of the
directors’ remuneration report described as having been audited. 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 circumstances of the Company and the Group,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements 
and the part of the directors’ remuneration report described as having been
audited 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 and the
part of the directors’ remuneration report described as having been audited.
OPINION In our opinion:
● the financial statements give a true and fair view of the state of affairs of the
Company and the Group at 31 March 2004 and of the profit of the Group
for the year then ended; and
● the financial statements and part of the directors’ remuneration report
described as having been audited have been properly prepared in
accordance with the Companies Act 1985.
DELOITTE & TOUCHE LLP
Chartered Accountants and Registered Auditors
London, 27 May 2004
36 ANNUAL REPORT 2004
INDEPENDENT AUDITORS’ REPORT
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 37
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March
2004 2003
Before Before
goodwill Goodwill goodwill Goodwill 
amortisation amortisation Total amortisation amortisation Total
Notes £000 £000 £000 £000 £000 £000
T urnover 3 153,171 – 153,171 142,967 – 142,967
Cost of sales (90,090) – (90,090) (85,961) – (85,961)
Gross profit 63,081 – 63,081 57,006 – 57,006
Distribution expenses (27,734) – (27,734) (25,073) – (25,073)
Administrative expenses (26,953) (2,654) (29,607) (24,871) (2,587) (27,458)
Operating profit 8,394 (2,654) 5,740 7,062 (2,587) 4,475
Net interest payable 5 (835) – (835) (725) – (725)
Profit on ordinary activities before taxation 3, 4 7,559 (2,654) 4,905 6,337 (2,587) 3,750
Tax on profit on ordinary activities 6 (2,281) – (2,281) (1,712) – (1,712)
Profit on ordinary activities after taxation 2 5,278 (2,654) 2,624 4,625 (2,587) 2,038
Minority interests 25 353 – 353 48 – 48
Profit for the financial year 5,631 (2,654) 2,977 4,673 (2,587) 2,086
Dividends 9 (3,916) (3,777)
Loss retained 23 (939) (1,691)
Earnings per 25p ordinary share 10
Adjusted 2.37p 1.98p
Basic 1.26p 0.88p
Diluted 1.25p 0.88p
There are no material differences between reported and historical cost profits and losses.
The information on pages 37 to 66 inclusive forms part of these accounts. 38 ANNUAL REPORT 2004
BALANCE SHEETS
at 31 March
Group Company
2003 2003
as restated as restated
2004 (see note 23) 2004 (see note 23) 
Notes £000 £000 £000 £000
Fixed assets
Goodwill 14 35,547 41,069 – –
Tangible assets 15 18,168 14,158 469 423
Investments 16 – – 95,016 87,983
53,715 55,227 95,485 88,406
Current assets
Stocks 17 26,077 29,040 – –
Debtors 18 53,437 49,948 56,037 44,897
Cash at bank and in hand 26c 9,992 16,662 – 2,378
89,506 95,650 56,037 47,275
Creditors: amounts falling due within one year
Borrowings 21 8,039 22,398 9,081 –
Other 19 56,235 57,028 20,602 26,841
Net current assets 25,232 16,224 26,354 20,434
Total assets less current liabilities 78,947 71,451 121,839 108,840
Creditors: amounts falling due after one year
Borrowings 21 15,034 1,888 12,999 –
Other 19 404 708 – –
Provisions for liabilities and charges 20 13,031 13,625 1,719 1,719
Net assets 50,478 55,230 107,121 107,121
Capital and reserves
Called-up share capital 22 62,136 62,048 62,136 62,048
Share premium account 23 2,979 2,942 2,979 2,942
Own shares 23 (10,500) (10,519) (10,500) (10,519)
Revaluation reserve 23 951 921 15 15
Profit and loss account 23 (4,620) 51 52,491 52,635
Equity shareholders’ funds 50,946 55,443 107,121 107,121
Minority interests 25 (468) (213) – –
Total capital employed 50,478 55,230 107,121 107,121
Approved by the Board on 27 May 2004.
K H HODGKINSON N W WARNER
Director Director
The information on pages 37 to 66 inclusive forms part of these accounts.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 39
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March
2004 2003
as restated (see note 23)
£000 £000 £000 £000
Cash flow from operating activities 10,308 11,852
Returns on investments and servicing of finance
Interest received 653 1,227 
Interest paid (1,446) (1,903)
Interest element of finance lease rentals (42) (49)
Net cash outflow from returns on investments and servicing of finance (835) (725)
Taxation (2,537) (2,298)
Capital expenditure and financial investment
Purchase of tangible fixed assets (8,414) (2,546)
Disposal of tangible fixed assets 331 554 
Net cash outflow from capital expenditure and financial investments (8,083) (1,992)
Acquisitions and disposals
Purchase of businesses (444) (482)
Deferred consideration – (76)
Net cash outflow from acquisitions and disposals (444) (558)
Equity dividends paid (3,791) (3,786)
Cash (outflow)/inflow before use of liquid resources and financing (5,382) 2,493
Management of liquid resources
Net decrease in short-term deposits 10,111 3,413
Financing
Issue of ordinary share capital 125 112
Net sale of own shares 19 106
(Decrease)/increase in bank advances due within one year (18,937) 7,715 
Increase/(decrease) in other loans due beyond one year 13,334 (14,136)
Net increase in discounted trade bills 250 304
Capital element of finance lease rental payments (84) (157)
Net cash outflow from financing (5,293) (6,056)
Decrease in cash in the period (564) (150)
Reconciliations of operating profit to net cash flow from operating activities and of net cash flow to movement in net debt, together with an analysis of net debt and
other supporting information to the consolidated cash flow statement, are given in note 26 to the accounts on page 62.
The information on pages 37 to 66 inclusive forms part of these accounts. 40 ANNUAL REPORT 2004
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 March
2004 2003 
£000 £000 
Profit for the financial year 2,977 2,086
Currency translation differences on foreign currency net investments (3,702) 890
Total recognised (losses)/gains since last annual report (725) 2,976
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
for the year ended 31 March
2003
as restated
2004 (see note 23)
£000 £000
Profit for the financial year 2,977 2,086
Dividends (3,916) (3,777)
Exchange adjustments (3,702) 890
New share capital issued 88 112
Share premium thereon 37 –
Movement in respect of own shares 19 105
Net decrease in equity shareholders’ funds (4,497) (584)
Opening equity shareholders’ funds (as previously reported) 65,962 66,651
Prior year adjustment (note 23) (10,519) (10,624)
Opening equity shareholders’ funds (as restated) 55,443 56,027
Closing equity shareholders’ funds 50,946 55,443
The information on pages 37 to 66 inclusive forms part of these accounts.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 41
NOTES TO THE ACCOUNTS
for the year ended 31 March
1  ACCOUNTING POLICIES
New accounting requirements The Company has adopted UITF Abstract 38, Accounting for ESOP Trusts, during this year.This Abstract requires companies to account 
for shares owned by employee benefit trusts as a reduction in equity shareholders’ funds rather than as fixed asset investments. Full details of the impact on the
Company’s financial statements are shown in note 23.
Basis of accounting The accounts have been prepared under the historical cost convention, as modified by the revaluation of certain land and buildings, and have been
prepared in accordance with applicable accounting standards and the Companies Act 1985.
Basis of consolidation The consolidated accounts include the accounts of the parent company and all its subsidiary undertakings for the year ended 31 March 2004.
In the case of subsidiary undertakings acquired or sold during the year the results are dealt with from the effective date of their acquisition or to the effective date 
of their sale. Acquisitions are dealt with under the acquisition method.
Goodwill represents the excess of fair value of the consideration given over the fair value of the separable net assets acquired. Goodwill in respect of acquisitions made
prior to 1 April 1998 was either written off directly against reserves or, alternatively, was capitalised and amortised over an appropriate period. Goodwill in respect of
acquisitions made since 1 April 1998 is shown as an asset (in accordance with FRS 10 (Goodwill and Intangible Assets)) and each acquisition is assessed to determine 
the useful economic life of the business and goodwill. As required by FRS 10, the directors have reviewed the useful economic life of goodwill and have concluded that 
it should be written off over 20 years from acquisition, except where specific circumstances suggest shorter periods.
Goodwill is subject to review at the end of the year of acquisition and at any other time when the directors believe that impairment may have occurred. Any impairment
is charged to the profit and loss account in the period in which it arises.
Foreign currencies For the purposes of consolidation, the results and cash flows of non-UK undertakings are translated into sterling at average exchange rates.
The balance sheets of non-UK undertakings are translated into sterling at the exchange rates ruling at the balance sheet date. Differences arising on the retranslation 
of opening balance sheets at the closing exchange rates are taken to reserves.
On consolidation and in the accounts of Group undertakings, certain foreign currency loans and forward foreign exchange contracts and options are matched with
overseas investments and the translation differences arising on these are offset in reserves.The translation differences on unmatched foreign currency loans are taken 
to the profit and loss account together with exchange differences arising on transactions denominated in foreign currencies.
T urnover represents the amounts, excluding VAT and similar sales-related taxes, receivable by the Group for goods and services supplied to outside customers in the
ordinary course of business.Turnover is recognised when persuasive evidence of an arrangement with a customer exists, products have been delivered or services have
been rendered and collectability is reasonably assured.
Revenue on long-term contracts is recognised under the percentage to completion method of accounting and is calculated based on the ratio of costs incurred to date
compared with the total expected costs for that contract.
Stocks are valued at the lower of cost and net realisable value. Cost is generally determined on a first in, first out basis and, in the case of products manufactured by the
Group, consists of direct material and labour costs together with related factory overheads.
Taxation The charge for taxation is based on the results for the year. Credit is taken for advance corporation tax charged in previous years to the extent that it is
determined recoverable against short-term corporation tax liabilities.
Deferred tax is recognised on timing differences that have originated but not reversed at the balance sheet date except in the circumstances set out below.This deferred
tax is measured at the average tax rates that are expected to apply at the time in which differences are expected to reverse. 42 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
1  ACCOUNTING POLICIES continued
Deferred tax assets are only recognised to the extent that it is considered more likely than not that there will be suitable taxable profits from which the reversal of the
underlying timing differences can be deducted.
No deferred tax is recognised in respect of the potential unaccrued distribution of the retained earnings of overseas subsidiaries nor in respect of the gain arising from
revalued fixed assets.
Depreciation is provided on all tangible fixed assets other than freehold land. It is calculated to write off the cost of the asset or, in the case of assets which have been
revalued, the revalued amount on a straight line basis over its expected useful life.The rates generally in use are as follows:
Freehold buildings 2% to 5%
Leasehold buildings 2% to 5% (or over remaining life of lease if shorter)
Plant, machinery and other equipment 5% to 40%
Revaluation of properties Prior to 31 March 1999, freehold and leasehold properties were revalued on a regular basis. Any material overall surplus over book value was
credited to the revaluation reserve and any material overall deficit below book value was charged to the profit and loss account in the year of revaluation.
Following the adoption of FRS 15 (Tangible Fixed Assets) in the year to 31 March 2000, no further revaluation will take place and values have been frozen at the valuation
as set out in note 15.
Fixed asset investments are shown at cost less provision for impairment where appropriate.
Research and development expenditure is written off in the year in which it is incurred.
Profit/loss on disposal of fixed assets Profits and losses on the disposal of fixed assets represent the difference between sales proceeds and the net carrying amount,
being historical cost or valuation as applicable (less subsequent depreciation or any provisions made). Any surplus previously taken to revaluation reserve is released
through reserves at the time of disposal.
Leased assets Assets held under finance leases are recorded at the fair value of the asset, with an equivalent liability categorised, as appropriate, under creditors due
within or after one year.The asset is depreciated over the shorter of the lease term and its useful economic life. Finance charges are allocated to accounting periods 
over the period of the lease. All payments under operating leases are charged to the profit and loss account as rentals fall due.
Pensions Most Group undertakings have pension or retirement benefit arrangements.These vary but are appropriate to the legal requirements and local practices of 
the countries concerned. In the United Kingdom these arrangements are funded externally, in accordance with defined benefit plans. In other cases suitable provisions 
are made on a similar basis.
Pension costs for defined benefit schemes are accounted for in accordance with Statement of Standard Accounting Practice number 24, with additional disclosures 
as required by the transitional arrangements of FRS 17 (Retirement Benefits).
In all countries the levels of funding or provisions are regularly reviewed to ensure that they are adequate and appropriate in relation to local requirements.
Employment share schemes No cost is recognised in the profit and loss account in respect of awards made under SAYE option schemes.
The cost of awards made under the Group’s share based compensation schemes is based on the intrinsic value of the awards and is charged to the profit and loss
account over the related period of employment.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 43
2  PROFIT FOR THE FINANCIAL YEAR
As permitted by section 230 of the Companies Act 1985, the profit and loss account of the Company is not presented as part of these accounts. Of the Group
consolidated profit for the financial year, a profit of £3,772,000 (2003: £1,628,000) is dealt with in the accounts of the Company.
3  SEGMENTAL INFORMATION
Segmental profits/(losses) are shown at the level of profit on ordinary activities before interest. Central costs have been fully allocated. Unallocated net assets/(liabilities)
include non-operating assets and liabilities and provisions, dividend creditors, finance lease obligations and cash balances and borrowings.
The Company derives its revenue and profits from a single class of business, power protection.
Turnover, net assets and profit by source
2004 2003
T urnover Turnover Net
Net assets/ 
Third assets/ Profit/ Third (liabilities) Profit/ 
Total party (liabilities) (loss) Total  party (as restated) (loss)
£000 £000 £000 £000 £000 £000 £000 £000
Europe 126,706 121,399 22,755 8,278 122,985 115,142 19,654 6,966 
Americas 21,925 20,858 5,568 727 21,870 21,085 3,237 41 
Asia and Australasia 11,106 10,914 3,055 (611) 7,935 6,740 2,077 55 
Inter-segment adjustments (6,566) – – – (9,823) – – – 
Continuing operations 153,171 153,171 31,378 8,394 142,967 142,967 24,968 7,062 
Goodwill and amortisation 35,547 (2,654) 41,069 (2,587)
Unallocated net liabilities (16,447) (10,807) –
153,171 153,171 50,478 142,967 142,967 55,230
Profit on ordinary activities before interest 5,740 4,475 
Net interest payable (835) (725)
Profit on ordinary activities before taxation 4,905 3,750
Third party turnover by market destination
2004 2003
£000 % £000 %
Europe 102,305 67 98,889 69
Americas 22,712 15 22,877 16
Asia and Australasia 23,110 15 16,078 11
Africa 5,044 3 5,123 4
153,171 100 142,967 100 44 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
4  PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2004 2003
£000 £000
The profit on ordinary activities before taxation is stated after charging the following:
Depreciation (at average exchange rates during the year) 3,677 3,079
Amortisation of goodwill 2,654 2,587
Audit fees, including Company £78,000 (2003: £76,000) 264 242
Operating lease rentals – plant and machinery 668 715
– other 2,261 2,173
Research and development expenditure 5,076 4,517
Fees paid to Deloitte & Touche LLP for non-audit but related advisory services to the Company and its subsidiary undertakings amounted to £118,000 (2003: £88,000).
These fees are mainly in respect of tax advisory services and accountancy advice. All such fees must be reported to the Audit Committee and prior approval is required
from the Chairman of the Audit Committee for any projects above specified limits.
5  NET INTEREST PAYABLE
2004 2003
£000 £000
Bank loans and overdrafts (1,388) (1,846)
Finance leases and hire purchase contracts (42) (49)
Other (58) (57)
(1,488) (1,952)
Interest receivable and similar income 653 1,227
Net interest payable (835) (725)
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 45
6  TAXATION
a) Analysis of charge based on profit for the year
2004 2003
£000 £000
Current tax
United Kingdom:
UK corporation tax on profits at 30% (2003: 30%) 2,901 1,527
Double tax relief (2,453) (1,053)
Advance corporation tax displaced – 492
448 966
Foreign tax 919 821
Adjustment in respect of prior years – UK tax 150 (225)
– foreign tax (109) (96)
Total current tax 1,408 1,466
Deferred tax
Origination and reversal of timing differences – trading
– current year 828 129
– prior year 45 117
Total deferred tax 873 246
Tax on profit on ordinary activities 2,281 1,712
ACT written off in previous years amounting to £9,183,000 (2003: £9,183,000) is available to reduce taxation on trading profits in future years.There was no utilisation 
of ACT in the year (2003: £nil).
The foreign tax charge includes tax withheld from remittances to the UK of £64,000 (2003: £58,000).
The Company has tax losses amounting to approximately £22 million (2003: £25 million) of which £2.2 million (2003: £2.2 million) has been taken into account 
in calculating deferred tax. 46 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
6  TAXATION continued
b) Factors affecting tax charge for the year The differences between the current tax charge and the amount calculated by applying the standard rate of UK corporation
tax (30%) to the profit before tax are as follows:
2004 2003
£000 £000
Profit before tax 4,905 3,750
Tax on profit arrived at by applying the standard rate of UK tax (30%) 1,472 1,125
ACT written back – 492
Expenses not allowable for tax (including goodwill amortisation) 1,033 1,168
Foreign exchange loss on inter-company balances – (754)
Overseas losses not tax relieved 538 597
Brought forward overseas losses utilised (503) –
Differences arising on overseas earnings – trading 176 261
Tax underprovided/(overprovided) in prior years 41 (321)
Other differences (1,349) (1,102)
1,408 1,466
7  DIRECTORS’ REMUNERATION AND PENSION ENTITLEMENTS
Information relating to the remuneration and pension entitlements of directors is contained in the remuneration report on page 33.
8  DIRECTORS’ INTERESTS IN SHARES
Information relating to the directors’ interests in shares under option is contained in the remuneration report on page 34.The directors’ interests in shares are as follows:
31 March 2004 1 April 2003
Number of Number of
ordinary ordinary
Shares shares shares
N N Broadhurst 10,000 10,000
A S J Fraser 30,000 30,000
K H Hodgkinson 804,091 802,361
R S Southwell – –
N W Warner 206,176 206,176
J A C Wheeler – –
In addition to the interests disclosed above, all of which are beneficial, Mr Hodgkinson and Mr Warner are each regarded as having a technical interest in the ordinary
shares in the Company held by the Chloride Group Employee Benefit Trust (see page 22). Neither of them is, however, entitled to receive from the Trust more shares 
than may be allocated to him upon exercise of options under executive share option schemes shown above.The Trust held 11,192,920 shares on 31 March 2004 
(2003: 11,242,920).
Note There have been no changes in the holdings of the directors between 31 March and 20 May 2004.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 47
9  DIVIDENDS
2004 2003
£000 £000
Paid 0.80p per share on 9 December 2003 (2002: 0.80p) 1,897 1,883
Proposed 0.85p per share to be paid on 27 July 2004 (2003: 0.80p) 2,019 1,894
3,916 3,777
The trustees of the Chloride Group Employee Benefit Trust have waived their right to receive dividends. Accordingly the amounts shown above for 2004 are net 
of dividends of £184,683* (2003: £180,306).
* Assuming no change to the issued capital or the shareholding of the Chloride Group Employee Benefit Trust between 20 May 2004 and the record date.
10  EARNINGS PER SHARE
2004 2003
million million
Weighted average number of 25p ordinary shares – basic and adjusted 237.1 236.6
Adjusted for shares under option 0.2 –
Weighted average number of 25p ordinary shares – diluted 237.3 236.6
£000 £000
Profit for basic and diluted earnings per share calculations 2,977 2,086
Goodwill amortisation 2,654 2,587
Profit for adjusted earnings per share calculation 5,631 4,673
Earnings per share – adjusted 2.37p 1.98p
– basic 1.26p 0.88p
– diluted 1.25p 0.88p
The weighted average number of shares excludes shares held by the Chloride Group Employee Benefit Trust and the Chloride Quest.
The directors consider that the adjusted earnings per share figures more accurately reflect the underlying performance of the business. 48 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
11  PENSIONS
Pension costs continue to be accounted for under Statement of Standard Accounting Practice (SSAP) 24. Disclosures are provided under both SSAP 24 and FRS 17
(Retirement Benefits).
The Company has a number of pension or retirement benefit arrangements, which are established to meet local legal requirements and practices in the countries 
in which it operates.The total pension cost for the year was £1,103,000 (2003: £1,419,000) and the Company has a provision of £4,690,000 (2003: £4,322,000) 
in its balance sheet to meet the unfunded liabilities of these arrangements.
Defined benefit schemes are operated in the UK and Germany.The bases of these schemes are as follows:
UK On 1 September 1996 the Company set up a hybrid pension scheme with both defined benefit and defined contribution sections (the Chloride 1996 Scheme).
At that date the pension entitlements of active members of the pre-existing Chloride UK Pension Scheme were transferred to this new scheme.The Chloride UK Pension
Scheme was then wound up and, as a consequence, the current and future liabilities relating to the pensioners and deferred pensioners at that time were transferred to
Legal & General Assurance (Pensions Management) Ltd.The defined benefit section of the Chloride 1996 Scheme has been closed to new members since 1 April 1998.
Germany In Germany the Company operates a defined benefit scheme which, in accordance with local practice, is unfunded. Provision for future liabilities is made in the
balance sheet in accordance with advice given by independent actuaries.
a) Disclosures under SSAP 24 The net charge in the UK of £221,000 comprises £517,000 (2003: £536,000) for the regular cost of meeting future benefits less a variation
credit of £301,000 (2003: £49,000) relating to the spread of unallocated scheme surpluses, together with contributions in respect of the defined contribution scheme.
The actuarial valuation of the Chloride 1996 Scheme as at 1 April 2002, which showed a surplus of £1.2 million over accrued past service liabilities, was carried out 
using the projected unit method. It was assumed that the annual rate of return on investments would exceed the annual rate of increase in pensionable pay by three
percentage points, and exceed the annual rate of growth in present and future pensions by four and a half percentage points.
The charge in Germany of £146,000 (2003: £458,000) represents the increase in the provision for future benefits arising in the year as advised by independent actuaries.
Pension costs relating to other schemes worldwide have been determined in accordance with local practice using appropriate accounting policies.
b) Disclosures under FRS 17 In the UK and Germany the Company operates defined benefit schemes for which actuarial valuations have been updated by independent
qualified actuaries to assess the liabilities of the schemes at 31 March 2004 in accordance with FRS 17.The main assumptions used were:
2004 2003 2002
UK Germany UK Germany UK Germany
%% %%%%
Rate of increase in salaries 4.75 2.50 4.5 2.5 4.7 3.0
Rate of increase in pension payments 2.75 2.50 2.5 2.5 2.7 1.5
Discount rate 5.50 5.25 5.5 5.25 6.0 6.0
Inflation 2.75 1.25 2.5 1.25 2.7 1.5
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 49
11  PENSIONS continued
The net assets/liabilities of the UK scheme and the liabilities of the German scheme at 31 March 2004 were as follows:
2004 2003 2002
UK Germany Total UK Germany Total UK Germany Total
Long-term expected rate of return
Equities 8.0% n/a n/a 8.0% n/a n/a 8.0% n/a n/a 
Gilts 4.7% n/a n/a 4.6% n/a n/a 5.3% n/a n/a 
Other 4.0% n/a n/a 3.5% n/a n/a 3.5% n/a n/a 
£000 £000 £000 £000 £000 £000 £000 £000 £000
Market value of assets
Equities 13,900 – 13,900 10,600 – 10,600 15,400 – 15,400
Gilts 3,900 – 3,900 2,200 – 2,200 2,000 – 2,000 
Other ––– – – – 500 – 500 
Total market value of assets 17,800 – 17,800 12,800 – 12,800 17,900 – 17,900 
Present value of pension liabilities (23,800) (2,539) (26,339) (21,000) (2,394) (23,394) (18,200) (1,674) (19,874)
Deficit in the scheme (6,000) (2,539) (8,539) (8,200) (2,394) (10,594) (300) (1,674) (1,974)
Related deferred tax assets 1,800 1,016 2,816 2,460 838 3,298 90 585 675 
Net pension liabilities (4,200) (1,523) (5,723) (5,740) (1,556) (7,296) (210) (1,089) (1,299)
In the UK the contribution rate for 2004 was 18.5% of pensionable earnings.The Company and its UK subsidiaries also contributed £1.5 million to the UK fund on 
28 May 2003.
2004 2003
£000 £000
Analysis of the amount charged to operating profit
Current service cost 1,061 1,015
Past service cost – –
Total operating charge 1,061 1,015
Analysis of the amount credited to net financial income
Expected return on pension scheme assets 925 1,250
Interest on pension liabilities (1,227) (1,142)
Net financing (charge)/credit (302) 108
Total profit and loss account charge 1,363 907
Analysis of the amount recognised in statement of total recognised gains and losses
Actual return less expected return on pension scheme assets 2,310 (5,500)
Experience gains and losses arising on the scheme liabilities (73) 30
Changes in assumptions underlying the present value of the liabilities (1,040) (2,312)
Actuarial gain/(loss) recognised in the statement of total recognised gains and losses 1,197 (7,782) 50 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
11  PENSIONS continued
2004 2003
£000 £000
Movement in deficit during the year
Deficit in schemes at the beginning of the year (10,594) (1,974)
Current service cost (1,061) (1,015)
Contributions 2,221 69
Past service cost – –
Finance (expense)/income (302) 108
Actuarial gain/(loss) 1,197 (7,782)
Deficit in schemes at end of the year (8,539) (10,594)
History of experience gains and losses
Difference between the expected and actual return on the schemes’ assets:
Amount £000 2,310 (5,500)
Percentage 13.0 (43.0)
Experience gains and losses on the schemes’ liabilities:
Amount £000 (73) 30
Percentage (0.9) 0.1
Total amount recognised in the statement of recognised gains and losses
Amount £000 1,197 (7,782)
Percentage 14.0 (33.3)
12 EMPLOYEE INFORMATION
At 31 March 2004 the total number of the Group’s employees, including executive directors, was 1,396 (2003: 1,418).The average number of persons employed during
the year is analysed below:
2004 2003
£000 £000
Europe – including 166 in the UK (2003: 180) 1,035 1,040
Americas 206 209
Rest of the world 173 99
1,414 1,348
Employment costs (including those relating to executive directors) were as follows:
2004 2003
£000 £000
Wages and salaries 35,545 34,402
Social security costs 8,100 7,008
Other pensions costs (see note 11) 1,103 1,419
44,748 42,829
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 51
13  RELATED PARTY TRANSACTIONS
The Company makes a service charge to the UK pension scheme in respect of pensions administration, office accommodation and related service costs.The total service
charge for the year was £96,000 (2003: £92,950).
At 31 March 2003 the Company had receivable and payable balances with its two non-wholly owned subsidiaries, Chloride Masterguard Power Systems Limited and
Chloride Koexa SA, of £624,000 (2003: £509,000) and £11,000 (2003: £nil) respectively. During the year these companies purchased goods from fellow subsidiaries to
the value of £723,000 (2003: £491,000).
14  GOODWILL
2004 2003
£000 £000
Cost at 1 April 64,878 63,148
Acquisitions – 1,088
Other adjustments (2,868) 642
Cost at 31 March 62,010 64,878
Accumulated amortisation:
At 1 April 23,809 21,222
Charge for year 2,654 2,587
At 31 March 26,463 23,809
Net book value at 31 March 35,547 41,069
Other adjustments relate primarily to exchange differences.
During the year the Company contributed capital of £444,000 to Chloride Masterguard Power Systems Limited.This has resulted in an increase in the percentage 
of its ownership from 58% to 68%.There was no material impact on goodwill. 52 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
15  TANGIBLE FIXED ASSETS
Group
Short
leasehold
Freehold land land and Plant and Company
and buildings buildings machinery Total Total 
£000 £000 £000 £000 £000
Cost or valuation:
At 1 April 7,607 2,634 19,080 29,321 1,476
Exchange rate adjustments (195) (81) (775) (1,051) –
Capital expenditure 3,508 288 4,266 8,062 227
Disposals and adjustments –47 (1,223) (1,176) (1)
At 31 March 10,920 2,888 21,348 35,156 1,702
Accumulated depreciation:
At 1 April 1,666 1,111 12,386 15,163 1,053
Exchange rate adjustments (41) (90) (556) (687) –
Charge for the year 296 354 2,844 3,494 180
Disposals and adjustments –4 (986) (982) –
At 31 March 1,921 1,379 13,688 16,988 1,233
Net book value:
At 1 April 2003 5,914 1,523 6,694 14,158 423
At 31 March 2004 8,999 1,509 7,660 18,168 469
Notes
a) In the above table, the net book value for the Group includes £493,000 (2003: £588,000) in respect of tangible fixed assets held under finance leases, and the
depreciation charge for the year includes £67,000 (2003: £204,000) in respect of these assets.
b) The tangible fixed assets of the Company comprise plant and machinery, including motor vehicles and office equipment.
c) If land and buildings had not been revalued the Group net book values would have been:
Leasehold land 
Freehold land and buildings
and buildings Short lease 
£000 £000
Historical cost 10,635 2,676
Accumulated depreciation thereon 2,002 1,248
8,633 1,428
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 53
15  TANGIBLE FIXED ASSETS continued
Freehold land and buildings were professionally valued at open market value on an existing use basis in 1993, with subsequent additions at cost as follows:
Freehold land 
and buildings 
£000 
Group
Valuation at 1993 1,425
Cost 9,495
Cost and valuation at 31 March 2004 10,920
16  INVESTMENTS
Company
2004 2003
£000 £000
Subsidiary undertakings
Cost:
At 1 April 109,615 95,532
Additions 7,033 14,083
Disposals and adjustments – –
At 31 March 116,648 109,615
Amounts written off:
At 1 April 21,632 21,632
Movements in the year – –
At 31 March 21,632 21,632
Net book value at 31 March 95,016 87,983
The principal subsidiary undertakings at 31 March 2004 are shown on page 66. 54 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
17  STOCKS
Group
2004 2003
£000 £000
Raw materials and components 10,201 13,134
Work in progress 4,637 4,963
Finished goods 11,239 10,943
26,077 29,040
There is no material difference between the current replacement cost and the historical cost of stocks.
18  DEBTORS
Group Company
2003
(as restated
2004 2003 2004 see note 23)
£000 £000 £000 £000
Amounts falling due within one year
Trade debtors 41,829 39,846 – –
Discounted trade bills 5 342 – –
Due from subsidiary undertakings – – 54,000 43,757
Other debtors 3,630 4,380 278 174
Prepayments and accrued income 784 397 446 124
Tax receivable 1,114 1,006 – 200
Deferred tax 1,080 1,248 491 642
48,442 47,219 55,215 44,897
Amounts falling due after more than one year
Pension prepayment 1,835 58 822 –
Tax receivable 1,619 1,000 – –
Deferred tax 1,541 1,671 – –
Total debtors 53,437 49,948 56,037 44,897
The deferred tax asset relates to short-term timing differences and overseas brought forward tax losses.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 55
19  CREDITORS
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Amounts falling due within one year
Obligations under finance leases 96 110 – –
Payments received on account 149 136 – –
Trade creditors 22,246 24,140 1,244 620
Discounted trade bills 855 632 – –
Amounts owing to subsidiary undertakings – – 14,191 21,223
UK corporate tax and foreign taxes 8,406 9,000 770 735
Other taxation and social security 4,973 2,267 121 117
Other creditors 6,717 7,863 1,140 1,039
Accruals 10,775 10,916 1,118 1,212
Dividends payable 2,018 1,964 2,018 1,895
56,235 57,028 20,602 26,841
Group
2004 2003
£000 £000
Amounts falling due after more than one year
UK corporate tax and foreign taxes 7 8
Obligations under finance leases 397 479
Other creditors – 221
404 708 56 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
20  PROVISIONS FOR LIABILITIES AND CHARGES
Pensions Deferred 
Deferred and similar purchase 
tax obligations consideration Other Total 
£000 £000 £000 £000 £000
Group
At 1 April 170 4,322 119 9,014 13,625
Exchange rate adjustments (4) (112) – (526) (642)
Profit and loss account 601 619 – 475 1,695
Utilised in the year – (139) (119) (1,389) (1,647)
At 31 March 767 4,690 – 7,574 13,031
Company
At 1 April ––– 1,719 1,719
Profit and loss account 100 – – (84) 16
Utilised in the year ––– (16) (16)
At 31 March 100 – – 1,619 1,719
Deferred taxation is provided in respect of timing differences, principally related to capital allowances in the UK and overseas tax accounting requirements. No provision 
is included in respect of the potential liability for tax amounting to £128,000 (2003: £211,000) before potential loss relief that would arise if properties included at
valuation in the Group balance sheet were to be sold at these valuation amounts. After loss relief there is no potential net liability (2003: £nil).
The provision for pensions and similar obligations relates mainly to the liability in Italy and Germany for certain unfunded employee retirement entitlements.
Other provisions mainly relate to product warranty, contractual and other obligations for continuing and disposed businesses.The timing of the utilisation of these
provisions is uncertain except for product warranties which are anticipated to be utilised within the next three years.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 57
21  BORROWINGS
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Borrowings are repayable as follows:
Due on demand or under one year
Bank 8,039 22,398 9,081 –
8,039 22,398 9,081 –
Other borrowings due after one year:
Due over one and under two years 13,225 108 12,999 –
Due over two and under five years 1,252 1,251 – –
Due over five years 557 529 – –
15,034 1,888 12,999 –
Included in the above is a loan of £6.0 million (2003: £16.8 million) at a fixed rate of interest of 4.91% (2003: 4.81%) per annum for a period of three months and a loan
of £2.2 million (2003: £0.9 million) at a fixed rate of interest of 2.30% per annum for seven years.
In the Group and Company balance sheets, borrowings and cash balances have been offset where the legal right of offset exists.The Company’s articles of association
limit the external borrowings of the Company and its subsidiary undertakings to an amount equal to twice the share capital and consolidated reserves.
At 31 March 2004 the Group had £45.0 million of committed facilities (2003: £43.2 million), of which £32.0 million (2003: £23.5 million) was unutilised. Of this amount,
£nil expires within one year (2003: £28.2 million), £15.0 million expires within one to two years (2003: £nil) and £30.0 million (2003: £15 million) expires after two years.
22  SHARE CAPITAL
Group
2004 2003
£000 £000
Authorised:
Equity
Ordinary shares of 25p each: 329,752,000 (2003: 329,752,000) 82,438 82,438
82,438 82,438
Issued:
Equity
Ordinary shares of 25p each 248,543,424 (2003: 248,192,546) 62,136 62,048
62,136 62,048
The increase in the issued ordinary share capital of the Company is due to the exercise during the year of executive and savings-related share options over a total 
of 350,878 shares.
As at 31 March 2004, there were 17,840,000 ordinary shares (2003: 15,179,000) under option under executive share option schemes and 1,624,080 (2003: 1,416,279)
under option under the Company’s savings-related share option schemes. 58 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
22  SHARE CAPITAL continued
The following table shows aggregate option entitlements under the executive share option schemes outstanding at 31 March 2004. It also includes information as to
whether performance measures are applicable and, if so, whether they have yet been met.
Status of
Number of shares performance measure(s)
Date of grant Option price 31 March 2004 31 March 2003 as at 31 March 2004
1994 Scheme
03.08.1994 30.5p 133,000 163,000 met
20.12.1995 25p 99,000 99,000 met
30.07.1997 33p 115,000 160,000 met
28.11.1997 39p 34,000 34,000 met
26.06.1998 48.75p 103,500 103,500 met
02.12.1998 49.5p 110,000 110,000 met
26.07.1999 78.5p 61,500 61,500 under measurement
29.10.1999 80.25p 55,000 55,000 under measurement
31.05.2000 135.5p 56,014 122,434 under measurement
25.07.2000 184.5p – 16,260 under measurement
31.10.2000 206.0p 61,047 61,047 under measurement
1996 Scheme
29.08.1996 35p 80,000 130,000 met
30.07.1997 33p 75,000 194,000 met
28.11.1997 39p 91,000 91,000 met
26.06.1998 48.75p 1,190,500 1,190,500 met
02.12.1998 49.5p 135,000 135,000 met
05.01.1999 58.25p 250,000 250,000 under measurement
26.07.1999 78.5p 2,281,500 2,281,500 under measurement
29.10.1999 80.25p 550,000 550,000 under measurement
30.05.2000 135.5p 2,795,986 2,894,566 under measurement
25.07.2000 184.5p – 83,740 under measurement
30.10.2000 206.0p 308,953 358,953 under measurement
2001 Scheme
13.08.2001 70p 2,324,000 2,439,000 under measurement
13.08.2001 70.52p 130,000 230,000 under measurement
06.06.2002 44.5p 3,070,000 3,090,000 performance measurement
03.07.2002 42p 275,000 275,000 not yet started
05.06.2003 35p 3,065,000 not yet started
27.06.2003 43p 390,000 not yet started
17,840,000 15,179,000
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 59
22  SHARE CAPITAL continued
The following table shows entitlements outstanding under the savings-related share option schemes as at 31 March 2004.
Three, five or Number of shares Normal exercise
seven year options Date of grant Option price 31 March 2004 31 March 2003 period
1987 Scheme
Seven year 01.08.1997 25p 49,920 59,280 01.10.2004 to 31.03.2005
1997 Scheme
Five year 17.07.1998 39p – 183,110 01.10.2003 to 31.03.2004
Seven year 17.07.1998 39p 7,000 7,000 01.10.2005 to 31.03.2006
Five year 25.06.1999 59.75p 89,808 94,326 01.10.2004 to 31.03.2005
Seven year 25.06.1999 59.75p 101,484 101,484 01.10.2006 to 31.03.2007
Three year 28.06.2000 119.25p – 16,404 01.10.2003 to 31.03.2004
Five year 28.06.2000 119.25p 11,603 17,263 01.10.2005 to 31.03.2006
Three year 29.06.2001 82.75p 13,107 13,575 01.10.2004 to 31.03.2005
Five year 29.06.2001 82.75p 10,196 18,353 01.10.2006 to 31.03.2007
Three year 03.07.2002 37.5p 174,489 370,057 01.10.2005 to 31.03.2006
Five year 03.07.2002 37.5p 187,122 439,562 01.10.2007 to 31.03.2008
Seven year 03.07.2002 37.5p 95,865 95,865 01.10.2009 to 31.03.2010
Three year 03.07.2003 30.5p 608,960 – 01.10.2005 to 31.03.2006
Five year 03.07.2003 30.5p 240,175 – 01.10.2007 to 31.03.2008
Seven year 03.07.2003 30.5p 34,351 – 01.10.2009 to 31.03.2010
1,624,080 1,416,279 60 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
23  RESERVES
Share Profit 
premium Own Revaluation Other and loss Total
account shares reserve reserves account reserves
£000 £000 £000 £000 £000 £000
Group
At 1 April – as previously stated 2,942 – 921 (29,573) 29,624 3,914
Prior year adjustment (see note below) – (10,519) – 29,573 (29,573) (10,519)
At 1 April – as restated 2,942 (10,519) 921 – 51 (6,605)
Exchange rate adjustments – – 30 – (3,732) (3,702)
Premium on shares issued 37–––– 37
Movements in respect of own shares – 19––– 19
Retained loss for the year –––– (939) (939)
At 31 March 2,979 (10,500) 951 – (4,620) (11,190)
Company
At 1 April – as previously stated 2,942 – 15 – 52,635 55,592
Prior year adjustment (see note below) – (10,519) – – – (10,519)
At 1 April – as restated 2,942 (10,519) 15 – 52,635 45,073
Premium on shares issued 37–––– 37
Movements in respect of own shares – 19––– 19
Retained loss for the year –––– (144) (144)
At 31 March 2,979 (10,500) 15 – 52,491 44,985
“Own shares” represent 11,192,920 (2003: 11,242,920) ordinary shares in the Company held by the Chloride Group Employee Benefit Trust, as noted in the directors’
report on page 22, having a market value at 31 March 2004 of £5.4 million (2003: £3.3 million).The Trust holds these shares to meet long-term commitments in relation 
to employee share plans.
UITF Abstract 38,“Accounting for ESOP Trusts”, has been adopted in the year.This Abstract requires companies to account for shares owned by employee benefit 
trusts (which amounted to £10.5 million as at 31 March 2003) as a reduction in equity shareholders’ funds rather than as fixed asset investments. Comparatives have 
been adjusted accordingly.The adoption has had no impact on profit in either the current or prior year. Net sales/(purchases) of shares by the Trust, which were 
previously shown in the cash flow within capital expenditure and financial investment, are now shown within the financing section. For the Company the impact 
of adopting the Abstract has been to reduce current assets – debtors as at 31 March 2003 by £10.5 million with the shares owned by the Employee Benefit Trust 
being accounted for as a reduction in equity shareholders’ funds as presented within “Own shares” above.The Group has also taken the opportunity to simplify the 
presentation of its group reserves by amalgamating “other reserves” with the profit and loss account reserve as presented above.
The cumulative amount of goodwill resulting from acquisitions which has been written off to reserves is £26.3 million comprising £6.3 million which was previously
written off to the profit and loss account reserve and £20.0 million which was previously included within “other reserves” (2003: £26.3 million).
The retained profits of foreign subsidiary undertakings, if distributed as dividends, would be liable to UK and/or foreign taxes and subject to double tax relief.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 61
24  MINORITY INTERESTS
2004 2003
£000 £000
At 1 April (213) 48
Acquisition 98 (213)
Exchange differences – –
Profit and loss account (353) (48)
At 31 March (468) (213)
25  FINANCIAL COMMITMENTS
2004 2003
£000 £000
a) Net finance lease obligations repayable:
Within one year 96 110
Over one and under two years 79 90
Over two and under five years 230 234
Over five years 88 154
493 588
b) The Group is committed to make payments totalling £2,825,000 (2003: £2,081,000) in the following year in respect of operating leases which expire:
Plant and machinery
and other
Land and buildings operating leases
2004 2003 2004 2003
£000 £000 £000 £000
Within one year 716 403 170 162
Over one and under five years 499 326 370 307
After five years 1,070 883 – –
2,285 1,612 540 469 62 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
26  CASH FLOW STATEMENT SUPPORTING INFORMATION
a) Reconciliation of net cash flow to movements in net funds 2004 2003
£000 £000
Decrease in cash in the period (564) (150)
Net cash inflow from increase in debt and lease financing 5,437 6,274
Cash inflow from decrease in liquid resources (10,111) (3,413)
Change in net funds resulting from cash flows (5,238) 2,711
Debt and finance leases acquired with subsidiary – (451)
Exchange rate translation differences (346) (2,981)
Decrease in net funds in the period (5,584) (721)
Net debt at 1 April (8,845) (8,124)
Net debt at 31 March (14,429) (8,845)
b) Reconciliation of operating profit to net cash flow 2004 2003
£000 £000
Operating profit 5,740 4,475
Depreciation 3,677 3,079
Amortisation 2,654 2,587
Book loss on sale of tangible fixed assets 221 12
Decrease in stocks 1,892 3,100
(Increase)/decrease in debtors (5,002) 3,555
Increase/(decrease) in creditors and provisions 1,126 (4,956)
Cash inflow from operating activities 10,308 11,852
c) Analysis of net debt Exchange At
At 1 April translation 31 March
2003 Cash flow differences 2004
£000 £000 £000 £000
Cash 6,174 3,907 (467) 9,614
Overdrafts (2,520) (4,471) 83 (6,908)
Debt due within one year (19,878) 18,937 (190) (1,131)
Debt due after more than one year (1,888) (13,334) 188 (15,034)
Discounted trade bills (633) (250) 28 (855)
Finance lease obligations (588) 84 11 (493)
Liquid resources 10,488 (10,111) 1 378
Net debt (8,845) (5,238) (346) (14,429)
Liquid resources comprise short-term bank and money market deposits. In the Group balance sheet, cash at bank and in hand comprises the amounts for cash and liquid
resources stated in the above table.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 63
27  CURRENCY AND INTEREST RATE EXPOSURE OF FINANCIAL ASSETS AND LIABILITIES
The currency and interest rate exposure of the financial assets and liabilities of the Group at 31 March was:
2004 2003
Assets Liabilities Net Assets Liabilities Net
£000 £000 £000 £000 £000 £000
Sterling 459 (7,414) (6,955) 9,539 (328) 9,211
Euro 5,197 (11,434) (6,237) 4,201 (23,683) (19,482)
US dollars 2,360 (2,925) (565) 1,150 – 1,150
Other 1,976 (1,793) 183 1,772 (863) 909
9,992 (23,566) (13,574) 16,662 (24,874) (8,212)
Of which – cash 9,992 – 9,992 16,662 – 16,662
– borrowings falling due within one year – (8,039) (8,039) – (22,398) (22,398)
– borrowings falling due after more than one year – (15,034) (15,034) – (1,888) (1,888)
– obligations under finance leases – (493) (493) – (588) (588)
9,992 (23,566) (13,574) 16,662 (24,874) (8,212)
At 31 March 2003 the Group did not have any interest-free borrowings (2003: nil). All amounts shown above are at floating interest rates based on the relevant national
LIBOR equivalents, with the exception of £7.2 million euro denominated borrowings (2003: £17.7 million), which are fixed at an average rate of 4.9% (2003: 4.7%) (see
note 21). At March 2004 the ratio of fixed rate debt to total outstanding debt was approximately 31% and the weighted average remaining period for which this debt
was fixed was 19 months.
Details of the Group’s treasury objectives and policies are set out on pages 18 and 19 in the financial review.
As permitted by FRS 13 short-term debtors and creditors have been excluded from the above statement. 64 ANNUAL REPORT 2004
NOTES TO THE ACCOUNTS continued
for the year ended 31 March
28  FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is defined as the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed and willing parties, excluding
accrued interest, and is calculated by reference to market rates discounted to current value.
For borrowings not at fixed rates of interest, the carrying amount is approximately equal to the fair value.
Accordingly, the Group believes that there is no material difference between the carrying amount and the fair value of its financial instruments (cash at bank or bank
borrowings).
The fair value of foreign exchange contracts entered into to provide hedging against transactional exposure represents the estimated net effect of closing out all
outstanding contracts at 31 March 2004. On this basis fair value would have been £177,000 less than book value (2003: £66,000). As substantially all outstanding forward
contracts at 31 March 2004 and 31 March 2003 have value dates of less than 12 months, these fair value amounts would be expected to be materially recognised in the
following year.
The fair value of interest rate swaps entered into to provide hedging against interest rate risk on outstanding debt represents the effect of revaluing these swaps over
their remaining lives at the floating rate at 31 March 2004. On this basis, fair value would have been £177,000 less than book value (2003: £146,000), which would be
expected to be realised in the following year.
There are no other unrecognised gains or losses on instruments used for hedging. Forward contracts outstanding at 31 March 2004 amounted to £14.2 million 
(2003: £11.0 million).The book value of these forward contracts was £nil (2003: £nil). Interest rate swaps in respect of outstanding debt at 31 March 2004 amounted 
to £6.0 million (2003: £16.8 million).
As permitted by FRS 13, short-term debtors and creditors have been excluded from the above statement.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 65
29  CURRENCY ANALYSIS OF NET ASSETS 
2004 2003
Operating Dividends Net cash/ T otal
assets and other (borrowing) Total (as restated)
£000 £000 £000 £000 £000
Sterling 3,191 (2,018) (6,955) (5,782) 20,339
Euro 19,564 (855) (6,237) 12,472 (2,410)
US dollars 5,568 – (565) 5,003 4,387
Other 3,055 – 183 3,238 2,985
Sub total 31,378 (2,873) (13,574) 14,931 25,301
Unallocated 35,547 – – 35,547 29,929
Total net assets 66,925 (2,873) (13,574) 50,478 55,230
Net currency assets are hedged where practicable by matching local currency assets with local currency borrowings.There are no material unhedged transactional
currency exposures in the Group.
30  CONTINGENT LIABILITIES
Contingent liabilities of the Group amounting to £5,570,000 (2003: £4,414,000) are mainly in respect of bank performance bonds, operating leases and other contractual
commitments.Those of the Company amounting to £2,540,000 (2003: £2,252,000) are mainly in respect of guarantees of leases, borrowings, bank performance bonds
and other contractual commitments of subsidiary undertakings. No losses are expected to arise. 66 ANNUAL REPORT 2004
PRINCIPAL SUBSIDIARY UNDERTAKINGS
at 31 March
Company Country of incorporation Principal activity
Chloride Electronics Limited England Sales and service, power protection solutions
Chloride España, S.A.U. Spain Sales and service, power protection solutions
Chloride France S.A. France Manufacture, sales and service, power protection solutions
Chloride Power Protection Pty Limited Australia Sales and service, power protection solutions
Chloride Masterguard Power Systems Limited China Manufacture, sales and service, telecom power systems 
and power protection solutions
Chloride Portugal – Artigos Electronicos, Limitada Portugal Sales and service, power protection solutions
Chloride Power Protection (Thailand) Limited Thailand Sales and service, power protection solutions
Chloride S.p.A. Italy Manufacture, sales and service, power protection solutions
Continuous Power International Limited England Sales and service, power protection solutions
Masterguard do Brasil Limitada Brazil Sales and service, power protection solutions
Masterguard GmbH Germany Manufacture, sales and service, power protection solutions
Masterguard Güç Kaynaklari Limited Sirketi Turkey Sales and service, power protection solutions
Oneac Corporation US Manufacture, sales and service, power conditioning solutions
SAED S.A. (Chloride Telecom Systems) France Manufacture, sales and service, telecom power protection solutions
UP Systems, Incorporated US Sales and service, power protection solutions
Notes
1 The results of each subsidiary undertaking are included in the consolidated Group results for 2003/04.
2 Except in the case of Chloride Power Protection Pty Limited, which has a class of preference shares in issue, shares in these principal subsidiary undertakings are
ordinary shares or their local equivalent.
3 Except in the case of Chloride Masterguard Power Systems Limited, the entire ordinary share capital of these principal subsidiary undertakings is held directly by 
the Company, or indirectly by one of the Company’s subsidiaries.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS  ANNUAL REPORT 2004 67
FIVE YEAR SUMMARY
for the year ended 31 March As restated (see note 23)
2004 2003 2002 2001 2000
Notes £000 £00 £000 £000 £000
T urnover
Continuing operations 153,171 142,967 148,967 166,271 108,345
Discontinued operations – –– 25,467 43,175
T otal 153,171 142,967 148,967 191,738 151,520
Operating profit before goodwill amortisational and exceptional items
Continuing operations 8,394 7,062 5,040 15,782 11,737
Discontinued operations – –– 1,027 2,804
T otal 8,394 7,062 5,040 16,809 14,541
Goodwill amortisation (2,654) (2,587) (3,029) (2,862) (450)
Exceptional items – – (19,627) – –
Operating profit/(loss) 5,740 4,475 (17,616) 13,947 14,091
Profits/(losses) on sale or termination of operations – –– 19,054 (842)
Profit/(loss) on ordinary activities before interest 5,740 4,475 (17,616) 33,001 13,249
Net interest (payable)/receivable (835) (725) (559) (551) (253)
Profit/(loss) on ordinary activities before taxation 4,905 3,750 (18,175) 32,450 12,996
Tax on profit/(loss) on ordinary activities (2,281) (1,712) (862) (15,791) (4,849)
Attributable to minority interests 353 48 (33) – –
Profit/(loss) for the financial year 2,977 2,086 (19,070) 16,659 8,147
Capital expenditure 8,083 1,992 2,263 6,246 7,891
Assets employed
Fixed assets and investments 53,715 55,227 55,851 69,636 60,876
Net current assets 1 11,192 8,848 8,348 4,453 14,075
Net assets employed 1 64,907 64,075 64,199 74,089 74,951
Source of finance
Equity shareholders’ funds 50,946 55,443 56,027 78,973 57,793
Minority interests (468) (213) 48 – –
Net borrowings/(cash) 14,429 8,845 8,124 (4,884) 17,158
Source of finance 1 64,907 64,075 64,199 74,089 74,951
Debt:equity ratio 2 28.3% 16.0% 14.5% – 29.7%
Earnings per 25p ordinary share
Adjusted 2.37p 1.98p 1.41p 4.80p 4.00p
Basic 1.26p 0.88p (8.05p) 7.04p 3.45p
Diluted 1.25p 0.88p (8.05p) 7.00p 3.39p
Net dividend per ordinary share 1.65p 1.60p 1.60p 1.60p 1.40p
Return on net assets 3 37.2% 32.6% 18.7% 53.9% 62.4%
Notes
1 For the purpose of this summary: a) net current assets comprise current assets, less cash balances and other creditors and provisions for liabilities and charges b) net borrowings, which comprise bank overdrafts 
and bank loans less cash balances, have been excluded from net assets employed and treated as a source of finance.
2 Debt:equity represents net borrowings as a percentage of shareholders’ funds.
3 This represents the profit on ordinary activities before interest excluding exceptional items and goodwill amortisation expressed as a percentage of the average of the net assets employed less goodwill. 68 ANNUAL REPORT 2004
SHAREHOLDER INFORMATION, SECRETARY AND ADVISERS
SHAREHOLDERS’ ENQUIRIES Matters relating to shareholdings, such as a request for a replacement share certificate, notification of a change of name 
or address, enquiries regarding dividend payments or amalgamation of shareholdings should be addressed, quoting reference 489, to Lloyds TSB Registrars, whose 
contact details are set out below.The Registrar’s website address for a range of shareholder services is www.shareview.co.uk.
GIFTING Y OUR SHARES If you wish to transfer shares as a gift, perhaps to another member of your family, please apply for an appropriate transfer form 
to the Company’s secretarial department at the address set out below. Completed transfer forms should be returned to the Registrar, quoting reference 489.
If you have a small number of shares and would like to donate them to charity through ShareGift, please ask the Company’s secretarial department for a ShareGift
transfer form. Completed ShareGift transfer forms should be returned direct to ShareGift,The Orr Mackintosh Foundation, 46 Grosvenor Street, London W1K 3HN.
UK CAPITAL GAINS TAX Section 35 of the Taxation of Chargeable Gains Act 1992 provides for the rebasing of capital gains tax at 31 March 1982 in relation 
to assets held on that date and disposed of after 5 April 1988.The date of 31 March 1982 is also relevant in determining the indexation allowances.The respective 
market values of Chloride securities on 31 March 1982 were as follows:
Ordinary shares held at 31 March 1982 25.5p
Ordinary shares derived from the conversion of 7.5% cumulative convertible preference shares in August 1987 23.9p
Or, for shareholders who were at that time taxed under section 34 of the Finance (No. 2) Act 1975 
in respect of the capitalisation issue connected with the conversion 33.1p
LOW-COST SHARE DEALING SERVICES Low-cost share dealing services are available to private investors, in respect of purchases or sales of shares 
in the Company through:
● The Share Centre Limited. Details of the service may be obtained by telephoning The Share Centre Limited on 01296 414144.
● Stocktrade, a division of Brewin Dolphin Securities Limited. Details of the service may be obtained by telephoning Stocktrade on 0845 601 0995 and quoting
reference LOW C0124.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS 
Secretary and registered office
Susan Williams
Abford House, 15 Wilton Road. London SW1V 1LT
Registered in England number 35389
Telephone +44 (0)20 7834 5500
Facsimile +44 (0)20 7630 0563
E-mail enquiries@chloridegroup.com
Website www.chloridegroup.com
Advisers
Auditors
Deloitte & Touche LLP
Banks
Fortis Bank
Bank of Scotland
Royal Bank of Scotland
HSBC
Stockbroker and financial adviser
UBS Limited
Registrars
Lloyds TSB Registrars
The Causeway,Worthing
West Sussex BN99 6DA
Telephone 0870 600 3970 (from UK)
+44 121 415 7047 (from outside UK) Designed and produced by C&FD. Printed in England by Westerham Press ISO 14001.This report is printed in vegetable-based inks on paper which 
is made from 50% chlorine-free pulp from plantation forests, and from 50% recycled and de-inked fibres.It can be recycled and is bio-degradable. Abford House
15 Wilton Road
London SW1V 1LT
www.chloridegroup.com
ANNUAL REPORT 2004